Why Trump blinked in US-China trade war

Published

1 month ago

May 12, 2025

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Of all the fronts in Donald Trump’s trade war, none was as dramatic and economically threatening as the sky-high tariffs he imposed on China.

There are a couple of reasons: first, because China is and was the single biggest importer of goods into the US and, second, because of the sheer height of the tariffs imposed by the White House in recent months.

In short, tariffs of over 100% were tantamount to a total embargo on goods coming from the United States’ main trading partner. That would have had enormous economic implications, not just for the US but every other country around the world (these are the world’s biggest and second-biggest economies, after all).

Trump latest: US and China slash tariffs in trade war de-escalation

So the truce announced on Monday by treasury secretary Scott Bessent is undoubtedly a very big deal indeed.

In short, China will still face an extra 30% tariffs (the 20% levies cast as punishment for China’s involvement in fentanyl imports and the 10% “floor” set on “Liberation Day”) on top of the residual 10% average from the Biden era.

But the rest of the extra tariffs will be paused for 90 days. China, in turn, has suspended its own retaliatory tariffs on the US.

The market has responded as you would probably have expected, with share prices leaping in relief. But that raises a question: is the trade war now over? Now that the two sides have blinked, can globalisation continue more or less as it had before?

That, it turns out, is a trickier and more complex question than it might first seem.

For one thing, even if one were to assume this is a permanent truce rather than a suspended one, it still leaves tariffs considerably higher than they were only last year. And China faces tariffs far higher than most other countries (tot up the existing ones and the Trump era ones and China faces average tariffs of around 40%, while the average for most countries is between 8% and 14%, according to Capital Economics).

In other words, the US is still implementing an economic policy designed to increase the cost of doing business with China, even if it no longer attempts to prevent it altogether. The fact that last week’s trade agreement with the UK contains clauses seemingly designed to encourage it to raise trade barriers against China for reasons of “security” only reinforces this suspicion. The trade war is still simmering, even if it’s no longer as hot as it was a few days ago.

And more broadly, the deeper impact of the trade rollercoaster in recent months is unlikely to disappear altogether. Companies remain more nervous about investing in factories and expansions in the face of such deep economic instability. No-one is entirely sure the White House won’t just U-turn once again.

That being said, it’s hard not to escape the conclusion that the US president has blinked in this trade war. In the face of a potential recession, he has pulled back from the scariest and most damaging of his tariffs, earlier and to a greater extent than many had expected.

World

Why hastily declared ceasefires tend to be fragile

Published

17 hours ago

June 24, 2025

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Why hastily declared ceasefires tend to be fragile

Ceasefires that are suddenly declared tend to be pretty fragile.

Stable ceasefires usually require a lot of preparation so that everyone on both sides knows what is supposed to happen, and – more importantly – when.

And they normally agree on how it will be monitored so one side cannot seize a quick advantage by breaking it suddenly.

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Without such preparations, and sometimes even with them, ceasefires will tend to be breached – perhaps by accident, perhaps because one side does not exercise full control over its own forces, perhaps as a result of false alarms, or even because a third party – a guerrilla group or a militia, say – choose that moment to launch an attack of their own.

The important question is whether a ceasefire breach is just random and unfortunate, or else deliberate and systemic – where someone is actively trying to break it.

Either way, ceasefires have to be politically reinforced all the time if they are to hold.

All sides may need to rededicate themselves to it at regular intervals, mainly because, as genuine enemies, they won’t trust each other and will remain naturally suspicious at every twitch and utterance from the other side.

This is where an external power like the United States plays a critical part.

If enemies like Israel and Iran naturally distrust each other and need little incentive to “hit back” in some way at every provocation, it will take US pressure to make them abide by a ceasefire that may be breaking down.

Appeals to good nature are hardly relevant in this respect. An external arbiter has to make the continuance of a ceasefire a matter of hard national interest to both sides.

And that often requires as much bullying as persuasion. It may be true that “blessed are the peacemakers”.

World

Five key takeaways from Volodymyr Zelenskyy’s interview with Sky News

Published

17 hours ago

June 24, 2025

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Five key takeaways from Volodymyr Zelenskyy's interview with Sky News

Volodymyr Zelenskyy has given a wide-ranging interview to Sky News in which he was asked about the prospect of Russia attacking NATO, whether he would cede land as part of a peace deal and how to force Vladimir Putin to the negotiating table.

The Ukrainian president spoke to chief presenter Mark Austin.

Here are the five key takeaways from their discussion.

NATO ‘at risk of attack’

Mr Zelenskyy said plans for NATO members to increase defence spending to 5% of GDP by 2035 are “very slow” and warned Russia could attack a NATO country within five years to test the alliance.

“We believe that, starting from 2030, Putin can have significantly greater capabilities,” he said. “Today, Ukraine is holding him up, he has no time to drill the army.”

But while Mr Zelenskyy conceded his ambition to join NATO “isn’t possible now”, he asserted long term “NATO needs Ukrainians”.

US support ‘may be reduced’

Asked about his views on the Israel-Iran conflict, and the impact of a wider Middle East war on Ukraine, Mr Zelenskyy accepted the “political focus is changing”.

“This means that aid from partners, above all from the United States, may be reduced,” he said.

“He [Putin] will increase strikes against us to use this opportunity, to use the fact that America’s focus is changing over to the Middle East.”

On the subject of Mr Putin’s close relationship with Iran, which has supplied Russia with attack drones, Mr Zelenskyy said: “The Russians will feel the advantage on the battlefield and it will be difficult for us.”

Ukraine war latest: Kyiv launches attacks inside Russia

Trump and Putin ‘will never be friends’

Mr Zelenskyy was sceptical about Mr Putin’s relationship with Donald Trump.

“I truly don’t know what relationship Trump has with Putin… but I am confident that President Trump understands that Ukrainians are allies to America, and the real existential enemy of America is Russia.

“They may be short-term partners, but they will never be friends.”

On his relationship with Mr Trump, Mr Zelenskyy was asked about whether he felt bullied by the US president during their spat in the Oval Office.

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“I believe I conducted myself honestly. I really wanted America to be a strong partner… and to be honest, I was counting on that,” he said.

In a sign of potential frustration, the Ukrainian president added: “Indeed, there were things that don’t bring us closer to ending the war. There were some media… standing around us… talking about some small things like my suit. It’s not the main thing.”

Putin and peace talks

Mr Zelenskyy was clear he supported both a ceasefire and peace talks, adding that he would enter negotiations to understand “if real compromises are possible and if there is a real way to end the war”.

But he avoided directly saying whether he would be willing to surrender four annexed regions of Ukraine, as part of any peace deal.

“I don’t believe that he [Putin] is interested in these four regions. He wants to occupy Ukraine. Putin wants more,” he said.

“Putin is counting on a slow occupation of Ukraine, the reduction in European support and America standing back from this war completely… plus the removal of sanctions.

“But I think the strategy should be as follows: Pressure on Putin with political sanctions, with long-range weapons… to force him to the negotiating table.”

Russia ‘using UK tech for missiles’

On Monday, Mr Zelenskyy met Sir Keir Starmer and agreed to share battlefield technology, boosting Ukraine’s drone production, which Mr Zelenskyy described as a “strong step forward”.

But he also spoke about the failure to limit Russia’s access to crucial technology being used in military hardware.

He said “components for missiles and drones” from countries “including the UK” were being used by Russian companies who were not subject to sanctions.

“It is vitally important for us, and we’re handing these lists [of Russian companies] over to our partners and asking them to apply sanctions. Otherwise, the Russians will have missiles,” he added.

World

At least 25 people killed after Israeli forces open fire near aid trucks in Gaza, witnesses say

Published

17 hours ago

June 24, 2025

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At least 25 people killed after Israeli forces open fire near aid trucks in Gaza, witnesses say

At least 25 people have been killed after Israeli forces opened fire towards people waiting for aid trucks in Gaza, according to witnesses and hospitals.

The Awda hospital in the Nuseirat refugee camp, which received the victims, said the Palestinians were waiting for the trucks on a road south of Wadi Gaza.

Witnesses told the Associated Press (AP) news agency Israeli forces opened fire as people were advancing to be close to the approaching trucks.

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The Awda hospital said another 146 Palestinians were wounded. Among them were 62 in a critical condition, who were transferred to other hospitals in central Gaza, it added.

In the central town of Deir al-Balah, the Al Aqsa Martyrs hospital said it received the bodies of six people who were killed in the same incident.

“It was a massacre,” one witness, Ahmed Halawa, said.

He said tanks and drones fired at people, “even as we were fleeing – many people were either martyred or wounded”.

Another witness, Hossam Abu Shahada, said drones were flying over the area, watching the crowds. Then there was gunfire from tanks and drones, leaving a “chaotic and bloody” scene as people attempted to escape.

He said he saw at least three people lying on the ground motionless and many others wounded as he fled.

The Israeli military did not immediately comment on the reports.

Philippe Lazzarini, the head of the UN’s Palestinian refugee agency, described the aid delivery mechanism in Gaza as “an abomination that humiliates and degrades desperate people”.

He added: “It is a death trap, costing more lives than it saves.”

A spokesperson for the UN’s Human Rights Office said: “The weaponisation of food for civilians, in addition to restricting or preventing their access to life-sustaining services, constitutes a war crime and, under certain circumstances, may constitute elements of other crimes under international law.”

Around 56,000 Palestinians have been killed during the Israel-Hamas war in Gaza, according to the territory’s Hamas-run health ministry. The ministry says more than half of the dead were women and children, but does not distinguish between civilians and militants in its count.

The war began after Hamas attacked Israel on 7 October 2023, when militants stormed across the border and killed around 1,200 people, mostly civilians, and took another 251 hostages. Most of the hostages have been released in ceasefire agreements.