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China has, as expected, hit back at Donald Trump’s imposition of a 10% tariff on its exports to the United States.

Beijing has slapped levies of between 10-15% on a range of energy products that imports from the US.

But what has surprised observers – particularly when Mr Trump kicked off the trade war over the weekend – has been the president’s comparatively lenient treatment of China and, moreover, Beijing’s calm response.

While America’s two closest neighbours, Canada and Mexico, were hit with 25% tariffs (falling to 10% for Canadian energy exports) – since put on ice – China was merely hit with a 10% levy.

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That struck many observers as curious since China is regarded as a bigger trade adversary by the US than Mexico and Canada, with the latter traditionally seen as a close friend to the US, particularly through the pair’s involvement in the ‘Five Eyes’ security alliance along with Australia, New Zealand and the UK.

The big question raised by this is what motivated Mr Trump to do this.

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The thinking is that the president was trying to bring China to the negotiating table and that, by initially hitting a close ally like Canada harder, he was trying to send a message to China’s leaders as to what they might face further down the line.

That impression was reinforced by Mr Trump’s overnight description of his 10% tariff on China as an “opening salvo”.

Why is China so calm?

That is not the only curiosity concerning this affair.

The other is the relatively calm response from Beijing. While Canada immediately responded with retaliatory measures and Mexico indicated that it would, China merely murmured in the first instance about taking “necessary countermeasures” and indicated that it would raise a complaint about the US with the World Trade Organisation.

Since then, Beijing has of course hit back with tariffs of its own on US energy imports, as well as launching an antitrust investigation into Google and adding the parent company of Tommy Hilfiger and Calvin Klein on a blacklist of “unreliable entities”.

That gives Chinese president Xi Jinping something to take back off the table if, as expected, he speaks to Mr Trump in coming days as the pair seek to de-escalate this row.

But it all feels relatively restrained and raises the question of why China has responded in this way.

There is certainly a view in Beijing that, with Mr Trump’s first moves, China got off rather lightly compared with the Canadians and Mexicans.

That sanguine response may also indicate that Beijing knows it has other weapons it can deploy other than retaliatory measures.

Cards in China’s back pocket

For a start, China owns $769bn worth of US Treasury bonds. Dumping some of those aggressively – while hurting the Chinese – would push up America’s implied borrowing costs.

Alternatively, Beijing could allow its currency, the renminbi, to weaken on the foreign exchange markets, just as it did during Mr Trump’s first term of office.

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Trump tariffs: What is America’s trade position?

Either way, Mr Trump’s latest measures are unlikely to change the way Chinese businesses operate, particularly the country’s manufacturers.

They have become accustomed over several years, dating back to Mr Trump’s first term, to aggression from the US. They have adapted the way they do business accordingly, for example by shipping a lot of their exports to the US via third countries, most notably Vietnam.

Chinese businesses relieved

Even Chinese companies specifically targeted by Mr Trump – the e-commerce giants Temu and Shein – may not be too badly affected.

They were both singled out as the president closed the so-called “de minimis” loophole, dating back to 1938, which allows goods worth less than $800 to be sent directly to US consumers without incurring import duties or rigorous customs inspections.

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This has been a constant thorn in the side of US retailers and its removal helps explain why, for example, shares of Walmart were on Monday spared the spanking meted out to other US stocks.

Yet Shein and Temu are said to be taking the news calmly.

They may even be calculating that this is a short-term squall that will soon blow over – or calculating that, such is the enormity of their buying power and supply chains, they can simply ship inventory elsewhere in the meantime or even just warehouse it.

It is also worth noting that Shein, having been banned by India in 2020, has just begun selling in the country again.

Overall, then, Chinese businesses have reacted with relief to what has happened. They know it could have been worse.

It explains why, even though the Chinese economy is presently misfiring, the authorities in Beijing have reacted relatively calmly to what Mr Trump has done.

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Judge pauses Donald Trump’s plan to put thousands of USAID workers on leave

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Judge pauses Donald Trump's plan to put thousands of USAID workers on leave

A federal court has paused aspects of a plan by Donald Trump to dismantle the US Agency for International Development (USAID) and put roughly 2,700 of its staff on leave.

District judge Carl Nichols, who was nominated by the US president during his first term, agreed with legal arguments from the largest government workers’ union and an association of foreign service workers.

They sued to stop Mr Trump’s administration attempting to close USAID, which distributes billions of dollars of humanitarian aid around the world.

Justice department official Brett Shumate told Judge Nichols that about 2,200 USAID employees would be put on paid leave under the administration’s plans.

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What is USAID?

“The president has decided there is corruption and fraud at USAID,” said Mr Shumate.

It echoes comments President Trump made on Friday in a post on Truth Social accusing USAID – without evidence – of corruption and spending money fraudulently.

But Karla Gilbride, a lawyer for the unions, argued the plans were unlawful: “The major reduction in force, as well as the closure of offices, the forced relocation of these individuals were all done in excess of the executive’s authority in violation of the separation of powers.”

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Judge Nichols’s order, which is in effect until 14 February, blocks Mr Trump’s administration from implementing plans to place the 2,200 USAID workers on paid leave from Saturday.

It also reinstates some 500 employees who had already been furloughed.

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And there will be a ban on relocating USAID humanitarian workers stationed outside the US, after overseas staff were ordered to return home within 30 days.

Judge Nichols will consider a request for a longer-term pause at a hearing scheduled for next week.

But he rejected other requests from the unions to reopen USAID buildings and restore funding for agency grants and contracts.

Soon after being inaugurated, Mr Trump ordered all US foreign aid be paused to ensure it is aligned with his “America First” policy.

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The dismantling of USAID has largely been overseen by Elon Musk, who is spearheading the president’s effort to cut costs and bureaucracy.

US secretary of state Marco Rubio insists the government will continue providing foreign aid, “but it is going to be foreign aid that makes sense and is aligned with our national interest”.

Friday’s ruling is the latest setback in the courts for the Trump administration.

Judges have temporarily paused other controversial policies, including one offering financial incentives for federal workers to resign and another ending American citizenship for anyone born in the US if their parents are in the country illegally.

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Day 20: Inside Trump’s White House

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Day 20: Inside Trump's White House

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Twenty days into Donald Trump’s second term, US correspondents James Matthews and Mark Stone are joined by Washington DC cameramen Ed Young and Michael Herd to take a step back and discuss what it’s like covering the White House under President Trump compared to President Biden.

They also share some of the moments they got close (perhaps too close) to the most powerful man in the world.

You can email James, Martha and Mark on trump100@sky.uk

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Wreckage found in Alaska for missing Bering Air plane carrying 10 people

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Wreckage found in Alaska for missing Bering Air plane carrying 10 people

A small plane which crashed in western Alaska with 10 people on board has been found and the US Coast Guard (USCG) says there were no survivors.

The Bering Air flight left Unalakleet at 2.38pm on Thursday but contact was lost less than an hour later, the firm’s operations director David Olson said.

On Saturday, in a post on X, the coastguard said: “USCG has ended its search for the missing plane after the aircraft was located approx 34 miles southeast of Nome. 3 individuals were found inside and reported to be deceased.

“The remaining 7 people are believed to be inside the aircraft but are currently inaccessible due to the condition of the plane. Our heartfelt condolences are with those affected by this tragic incident.”

The Cessna 208B Grand Caravan – carrying a pilot and nine adult passengers – was flying across Norton Sound when tracking site Flightradar24 reported it at 5,300ft before contact was lost.

It was travelling from Unalakleet, a community of about 690 people in western Alaska, to Nome, a gold rush town just south of the Arctic Circle.

The flight time is normally just under an hour.

Mike Salerno, a spokesperson for the US Coast Guard, said rescuers were searching the aircraft’s last known location by helicopter when they spotted the wreckage. They lowered two rescue swimmers to investigate.

Nome in Alaska.
Pic: AP
Image:
The plane was heading to Nome, just south of the Arctic Circle. Pic: AP

In a post on Facebook, Nome’s fire department issued an update: “The Nome Search and Rescue Team is spooling up with assistance from the Alaska Air National Guard with recovery efforts.

“From reports we have received, the crash was not survivable. Our thoughts are with the families at this time.”

On Friday, Lieutenant Benjamin McIntyre-Coble, from the Alaskan coastguard, explained that the plane suffered a rapid loss of altitude and speed, according to radar data, but did not expand on the potential cause.

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Weather in Unalakleet at take-off time was -8.3C (17F) with fog and light snow, according to the US National Weather Service.

Bering Air serves 32 villages in western Alaska and air travel is often the only option of travelling long distances in rural parts of the US state, especially in winter.

It comes soon after two major air accidents in the US in recent weeks.

Sixty-seven people were killed when a jet and helicopter collided in Washington DC and seven died when a medical plane crashed in Philadelphia.

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