Donald Trump’s tariffs will have consequences for globalisation, the US economy and geopolitics

Published

1 week ago

April 2, 2025

admin

For decades, trade and trade policy has been an economic and political backwater – decidedly boring, seemingly uncontroversial.

Trade was mostly free and getting freer, tariffs were getting lower and lower, and the world was becoming more, not less, globalised.

But alongside those long-term trends, there were some serious consequences.

Trump latest: US president announces sweeping global trade tariffs

Mature, developed economies like the UK and US became ever more reliant on cheap imports from China and, in the process, saw their manufacturing sectors shrink.

Large swathes of the rust belt in the US – and much of the Midlands and North of England – were hollowed out.

And to some extent that’s where the story of Donald Trump’s “Liberation Day” really began – with the notion that free trade and globalisation had a darker side, a side he wants to remedy via tariffs.

He imposed a set of tariffs in his first term, some on China, some on specific materials like steel and aluminium. But the height and the breadth of those tariffs were as nothing compared with the ones we have just heard about.

Not since the 1930s has the US so radically increased the level of tariffs on all nations across the world. Back then, those tariffs exacerbated the Great Depression.

It’s anyone’s guess as to what the consequences of these ones will be. But there will be consequences.

Consequences for the nature of globalisation, consequences for the US economy (tariffs are exceptionally inflationary), consequences for geopolitics.

And to some extent, merely knowing that little bit more about the White House’s plans will deliver a bit of relief to financial markets, which have fretted for months about the imposition of tariffs. That uncertainty recently reached unprecedented levels.

But don’t for a moment assume that this saga is over. Nothing of the sort. In the coming days, we will learn more – more about the nuts and bolts of these policies, more about the retaliatory measures coming from other countries.

We will, possibly, get more of a sense about whether some countries – including the UK – will enjoy reprieves from the tariffs.

To paraphrase Churchill, this isn’t the end of the trade war, or even the beginning of the end – perhaps just the end of the beginning.

Politics

Some good news for the British economy – but the celebration might not last long

Published

3 hours ago

April 11, 2025

admin

Some good news for the British economy - but the celebration might not last long

We’ve been waiting for a while for the Office for National Statistics to deliver us some good news on the British economy – and today it came.

Output grew by 0.5% in February, up from zero growth in January and higher than the 0.1% forecast by economists.

Some usual caveats apply. Monthly data can be volatile and prone to revision – but it can go up as well as down.

While publishing the latest figures, the ONS also revised up its January figure from -0.1% to zero.

It’s clear that, across the economy, sectors performed robustly.

The big surprise was manufacturing.

Business surveys told us that UK factories were on their knees, anxious about Trump’s tariffs and impending tax rises that came into effect in April.

Yet the production sector grew by 1.5% – led by pharmaceuticals, metals and transport equipment. Businesses have been resilient.

The chancellor will be pleased, but the celebrations are likely to be fleeting.

The world has already moved on, with Donald Trump unleashing policy chaos on the global economy.

Britain is now facing a 10% tariff on exports to the US and there will be pockets of acute stress, particularly for our car manufacturers, who have been hit with a 25% tariff.

They export more to the US than any other country in the world. Indeed, some of the growth in manufacturing may have been driven by businesses rushing to do deals before tariffs came into force.

The tariffs alone on the UK will be painful – but the most significant damage is likely to come from a slowdown in the global economy.

The US and China are engaged in a tit-for-tat trade war and that will have negative spillovers, especially for an open economy like ours. We won’t escape the fallout.

Businesses here in the UK might curtail hiring and investment in response, their hesitancy compounded by uncertainty over what Donald Trump might do next.

Consumers may also retreat, especially if the pound weakens and imports become more expensive, causing inflationary consequences.

So, while we’ve finally been given something to cheer, darker days beckon. We should enjoy it while it lasts.

Politics

New York bill proposes legalizing Bitcoin, crypto for state payments

Published

3 hours ago

April 11, 2025

admin

New York bill proposes legalizing Bitcoin, crypto for state payments

A New York lawmaker has introduced legislation that would allow state agencies to accept cryptocurrency payments, signaling growing political momentum for digital asset integration in public services.

Assembly Bill A7788, introduced by Assemblyman Clyde Vanel, seeks to amend state financial law to allow New York state agencies to accept cryptocurrencies as a form of payment.

It could permit state agencies to accept payments in Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), according to the bill’s text.

According to the bill, state offices could authorize crypto payments for “fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts,” as well as penalties, special assessments and interest.

Cryptocurrency legislation is becoming a focal point in New York, with Bill A7788 marking the state’s second crypto-focused legislation in a little over a month.

In March, New York introduced Bill A06515, aiming to establish criminal penalties to prevent cryptocurrency fraud and protect investors from rug pulls.

Crypto-focused legislation has gathered momentum since US President Donald Trump took office on Jan. 20, with Trump signaling during his campaign that his administration intends to make crypto policy a national priority, as well as making the US a global hub for blockchain innovation.

New York may mandate state “service fee” on crypto payments

If passed, the bill would mark a significant shift in how New York handles digital assets. It would allow state entities to integrate cryptocurrency into the payment infrastructure used for collecting public funds.

The proposal also includes a clause allowing the state to impose a service fee on those choosing to pay with crypto. According to the text, the state may require “a service fee not exceeding costs incurred by the state in connection with the cryptocurrency payment transaction.” This could include transaction costs or fees owed to crypto issuers.

Assembly Bill A7788 has been referred to the Assembly Committee for review and may advance to the state Senate as the next step.

New York’s legislation comes shortly after the state of Illinois passed a crypto bill to fight fraud and rug pulls, after the recent wave of insider schemes related to memecoins, Cointelegraph reported on April 11.

Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set

Politics

Swedish MP proposes Bitcoin reserve to finance minister

Published

4 hours ago

April 11, 2025

admin

Swedish MP proposes Bitcoin reserve to finance minister

A member of Sweden’s parliament proposed adding Bitcoin to the country’s foreign exchange reserves, suggesting increased openness to cryptocurrency adoption in Europe following recent moves by the United States.

Swedish MP Rickard Nordin issued an open letter urging Finance Minister Elisabeth Svantesson to consider adopting Bitcoin (BTC) as a national reserve asset.

“Sweden has a tradition of a conservative and carefully managed foreign exchange reserve, mainly consisting of foreign currencies and gold,” Nordin wrote in a letter registered on April 8, adding:

“At the same time, there is a rapid development in digital assets, and several international players regard bitcoin as a custodian and a hedge against inflation. In many parts of the world, bitcoin is used as a means of payment and as security against rising inflation.”

“It is also an important way for freedom fighters to handle payments when under the oppression of authoritarian regimes,” he added.

The Swedish proposal echoes a recent move by the United States. In March, President Donald Trump signed an executive order to create a national Bitcoin reserve funded by cryptocurrency seized in criminal investigations rather than purchased through market channels.

The order authorized the Treasury and Commerce secretaries to develop “budget-neutral strategies” to buy more Bitcoin for the reserve, provided there were no additional costs to taxpayers.

The governor of the Czech National Bank has also considered Bitcoin as part of a potential diversification strategy for the country’s foreign reserves, Cointelegraph reported on Jan. 7.

European lawmakers silent on Bitcoin legislation amid CBDC push

European lawmakers have remained mostly silent on Bitcoin legislation despite Trump’s historic executive order and Bitcoin’s economic model favoring the early adopters.

The lack of Bitcoin-related statements may stem from Europe’s focus on the launch of the digital euro, a central bank digital currency (CBDC), James Wo, the founder and CEO of venture capital firm DFG, told Cointelegraph, adding:

“This highlights the EU’s greater emphasis on the digital euro, though the recent outage in the ECB’s Target 2 (T2) payment system, which caused significant transaction delays, raised concerns about its ability to oversee a digital currency when it struggles with daily operations.”

ECB President Christine Lagarde is pushing ahead with the digital euro’s rollout, expected in October. Lagarde has emphasized that the CBDC will coexist with cash and offer privacy protections to address concerns about government overreach.

“The European Union is looking to launch the digital euro, our central bank digital currency, by October this year,” Lagarde said during a news conference, adding:

“We are working to ensure that the digital euro coexists with cash, addressing privacy concerns by making it pseudonymous and cash-like in nature.”

This is in stark contrast to the approach of the US, where Trump has taken a firm stance against CBDCs, prohibiting “the establishment, issuance, circulation, and use” of a US dollar-based CBDC.