Trump trade war: Why a figure of 48% is important as escalation nears

Published

2 months ago

April 1, 2025

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Here is a number to lodge in your brain in the coming weeks and months: 48%.

Last year a group of economists carried out an an analysis on the economic impact of the Iron Curtain; how much trade actually took place from east to west in spite of all the restrictions during the Cold War. They came to the conclusion that, at its height in 1951, “the Iron Curtain represented a tariff equivalent of 48%”.

As the world limbers up ahead of what Donald Trump calls his “liberation day”, that figure is worth keeping in your mind.

Right now, the average dutiable rate of tariffs on China is somewhere between 30% and 40%. But in the event that the president imposes another 20% of tariffs on China, the level of tariffs between these two trade partners will rival or possibly exceed those Iron Curtain levels.

No-one is sure what will happen next. What number will the President choose for his next round of tariffs? 10%? 20%? Or the 25% rate he has favoured for steel, aluminium and cars? Will the next round of tariffs announced this week be imposed on every country? Will they just be imposed on the so-called “dirty fifteen” the Treasury Secretary has talked about? Who, for that matter, are the “dirty fifteen”?

We don’t know the answers to these questions. Nor do other world leaders like Keir Starmer. Nor, for that matter, do many in the White House, it seems.

But, back to that number at the top. The tariffs being talked about by the president and his colleagues are now approaching serious levels. Once you start facing cumulative tariffs approaching 50% then, as we saw during the Cold War, many countries stop trading altogether.

And with those kinds of charges looming it’s no surprise many businesses and traders are taking radical steps to try to prepare for the coming months of chaos. Consider two examples.

The first is to be found if you look at the exports (transfers is probably a better word in this case) of gold from the UK to the US. Up until a few months ago these flows averaged about £22m a month. Then, as traders fretted about the imposition of tariffs and controls on everything (including gold), there was a totally unprecedented exodus of gold bars from the UK to the US – £1.2bn in December and £6.1bn in January. These numbers, it goes without saying, are totally unprecedented. We’ve never seen outflows like this before.

The other data point (somewhat related) is to be found by looking at the US balance of payments. Remember the whole point of these tariffs is to try to eliminate (or at least reduce) America’s trade deficit with the rest of the world. President Trump wants the country to produce more goods and import less.

But in the past year, the US trade deficit has literally doubled. Up from £67bn in January last year to £131bn this January. Again, this is unprecedented. It’s a hallmark of the fact that importers were scrambling to bring as much stuff into the country as possible (not just gold, but machinery, metals, cars, electronics – everything) before tariffs got imposed.

The great irony, then, is that the first impact of the Trump tariffs has been to send the trade deficit in the opposite direction from the one the President is aiming for. It will, of course, lurch back the other way in the coming months. But where it ends is anyone’s guess. In the meantime, more chaos and instability awaits. Hold onto your hats.

US

James Comey: Trump says ex-FBI director’s seashells post ‘meant assassination’

Published

1 hour ago

May 17, 2025

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James Comey: Trump says ex-FBI director's seashells post 'meant assassination'

A former FBI director has been interviewed by the US Secret Service over a social media post that Republicans say was a call for violence against President Donald Trump.

James Comey, who led the FBI from 2013 until he was fired in 2017 by Mr Trump during his first term in office, shared a photo of seashells appearing to form the numbers “86 47”.

He captioned the Instagram post: “Cool shell formation on my beach walk.”

Some have interpreted the post as a threat, alleging that 86 47 means to violently remove Mr Trump from office, including by assassination.

What does ’86 47′ mean?

The number 86 can be used as a verb in the US. It commonly means “to throw somebody out of a bar for being drunk or disorderly”.

One recent meaning of the term is “to kill”, according to the Merriam-Webster Dictionary, which said it had not adopted this meaning of 86 “due to its relative recency and sparseness of use”.

The number has previously been used in a political context by Matt Gaetz, who was President Donald Trump’s pick for attorney general but withdrew from consideration following a series of sexual misconduct allegations.

Mr Gaetz wrote: “We’ve now 86’d…” and listed political opponents he had sparred with who ended up stepping down.

Meanwhile, 47 is supposedly representing Mr Trump, who is the 47th US president.

Mr Comey later removed the post, saying he thought the numbers “were a political message” and that he was not aware that the numeric arrangement could be associated with violence.

“I didn’t realise some folks associate those numbers with violence. It never occurred to me, but I oppose violence of any kind, so I took the post down,” Mr Comey said.

Mr Trump rejected the former FBI director’s explanation, telling Fox News: “He knew exactly what that meant. A child knows what that meant… that meant assassination.”

Donald Trump Jr accused Mr Comey of “casually calling for my dad to be murdered”.

US Homeland Security Secretary Kristi Noem confirmed in a post on X that Mr Comey had been interviewed as part of “an ongoing investigation” but gave no indication of whether he might face further action.

The Secret Service is part of the Department of Homeland Security.

White House deputy chief of staff Taylor Budowich said Mr Comey had put out “what can clearly be interpreted as a hit on the sitting president of the United States”.

“This is deeply concerning to all of us and is being taken seriously,” Mr Budowich wrote on X.

Another White House official James Blair said the post was a “Clarion Call (…) to terrorists & hostile regimes to kill the President of the United States as he travels in the Middle East”.

Mr Trump fired Mr Comey in May 2017 for botching an investigation into 2016 democratic presidential nominee Hillary Clinton, the White House said at the time.

While Mr Comey was the director of the FBI, the agency opened an investigation into possible collusion between the Trump 2016 presidential campaign and Russia to help get Mr Trump elected.

US

Trump officials considerTV show where immigrants compete for US citizenship

Published

1 hour ago

May 17, 2025

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Trump officials considerTV show where immigrants compete for US citizenship

The Trump administration is considering a TV show whereby immigrants compete for the prize of US citizenship, the Department for Homeland Security has confirmed.

It would see contestants compete in tasks across different states and include trivia and “civic” challenges, according to the producer who pitched the idea.

Participants could battle it out to build a rocket at NASA headquarters, Rob Worsoff suggested.

Confirming the administration was considering the idea, Department for Homeland Security spokeswoman Tricia McLaughlin said: “We need to revive patriotism and civic duty in this country, and we’re happy to review out-of-the-box pitches. This pitch has not received approval or rejection by staff.”

It comes amid hardline immigration measures implemented by President Donald Trump on his return to office in January.

Since being back in the White House he has ordered “mass deportations” and used the Alien Enemies Act to deport alleged gang members to countries in Central and South America.

Mr Worsoff, who is a Canadian-American citizen, said his pitch was inspired by his own naturalisation process.

He cautioned that those who “lost” the gameshow would not be punished or deported but said the details of how it would work would be down to TV networks and federal officials.

The producer said the US was in need of “a national conversation about what it means to be American”.

He said the show, if accepted by a network, would “get to know” contestants and “their stories and their journeys”, while “celebrating them as humans”.

Meanwhile, the Department for Homeland Security has asked for 20,000 National Guard troops from various states to assist with its efforts rounding up illegal immigrants.

Currently, the federal Enforcement and Removals Operations agency only has around 7,700 staff – but the boost would help fulfil Mr Trump’s inauguration promises.

The Trump administration has already recruited 10,000 troops under state and federal orders to bolster the US-Mexico border.

Some have now been given the power to detain migrants within a newly militarised strip of land just adjacent to it.

US

‘Mass casualty event’ declared as tornadoes hit Kentucky and Missouri

Published

4 hours ago

May 17, 2025

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'Mass casualty event' declared as tornadoes hit Kentucky and Missouri

At least 21 people have died after tornadoes hit two US states, according to local officials.

Fourteen people have died in Kentucky, its governor Andy Beshear said, while seven have died in Missouri.

The weather system also saw tornadoes tear through Wisconsin, leaving hundreds of thousands of people without power.

In the city of St Louis, five people were confirmed dead and more than 5,000 homes were damaged, mayor Cara Spencer said on Saturday.

The storm system originally hit Scott County, 130 miles south of St Louis, on Friday, killing two people, Sheriff Derick Wheetley said.

The devastation that ensued saw roofs torn off buildings, blown-out windows, toppled trees, and power lines.

St Louis mayor Cara Spencer said: “Our city is grieving tonight. The loss of life and the destruction is truly, truly horrendous.”

Dozens of people are believed to have been injured and in hospital, but the exact numbers in Missouri have not been confirmed.

Kentucky officials described the situation there as a “mass casualty event” after the weather system tore across Laurel County late on Friday.

Several people were taken to hospital, buildings were damaged, and a car flipped over on a busy highway, local officials reported.

Laurel County Sheriff’s Office spokesman Gilbert Acciardo said rescuers had “been on the ground all night looking for possible survivors”.

Kentucky governor Mr Beshear wrote on X that the number of dead in the state was likely to increase from 14 “as we receive more information”.

Further devastation expected in other states

The National Weather Service warned of further devastation hitting Texas, Kansas, and Oklahoma on Saturday.

“Severe thunderstorms producing large to very large hail, damaging gusts, and a couple of tornadoes are expected across the southern Plains,” it said on its website.

The Midwest tornadoes were also expected to hit Illinois, eventually stretching to New Jersey and the Atlantic coast.