Donald Trump is clearly seething over the term ‘TACO’ (Trump always chickens out) – a phrase that has characterised financial market trading over the past few months.
It suggests that for all the president’s bluster and threats during his on-off trade war to date, he rarely follows through.
When asked by a reporter about TACO in late May, as his “liberation day” escalation remained on pause, he declared it a “nasty” question and said he wanted negotiations.
Mr Trump wants a deal but to effectively bully America’s trading partners into agreeing better terms.
It’s a playbook that has defined his time in the White House and, as things stand, more than 20 nations and territories, including Japan and South Korea, face heightened tariffs of up to 40% on their exports to the US from 1 August.
Financial markets don’t really believe it. Stock markets, for example, are still hovering near or at record levels in both the US and in Europe. The FTSE 100 closed above 9,000 points for the first time on Monday evening. TACO is ingrained in those values.
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But are markets in for a shock, especially when it comes to the fight with America’s single largest trading partner, the European Union? It was created, Mr Trump has previously claimed, to “screw” the United States.
It’s fair to say there was great optimism in the EU earlier this month that a deal, similar to that agreed between the US and UK, was looming to avert the worst of a threatened 30% baseline tariff from 1 August.
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Explained: The US-UK trade deal
But the mood music in Brussels changed at the back end of last week and now EU diplomats are even briefing that a broader range of retaliation measures is being considered beyond additional tariffs on US goods.
The seriousness of this fight should not be underestimated.
EU figures show trade in goods and services between the bloc and the US account for almost a third of all global trade, at a value in 2024 alone of €1.68trn (£1.45trn).
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Trump ‘reigniting global trade war’
EU Trade Commissioner Maros Sefcovic has warned that a 30% tariff would “practically prohibit” the bloc’s transatlantic trade, according to remarks via diplomats reported by the Reuters news agency.
We’re told that, even if time runs out, a truce could theoretically be agreed soon after 1 August.
Much will depend on the EU’s response.
Does it go down the route taken by the UK and not retaliate, pending the conclusion of talks?
There is growing pressure on Brussels to call Mr Trump’s bluff.
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Trump tariff threats all ‘bluster’
The EU has a package of tariffs on €21bn of US goods ready to go from 6 August. An additional package is yet to be finalised.
France is demanding US services are hit too, with even Germany now saying such an escalation should be considered.
The so-called “anti-coercion” instrument, as it’s known, would also potentially allow the bloc to limit US companies’ access to financial service markets in the EU.
So what happens after 1 August could be even more explosive.
But there is every reason to believe that a tit-for-tat escalation is unlikely, at least for long.
The very reason Donald Trump rowed back on his “liberation day” tariffs in April, allowing 90 days for talks, was likely the dire financial market reaction that followed news of the widespread duties.
You have a president demanding interest rate cuts (at a time when inflation is on the rise due to the impact of tariffs) in a bid to boost flagging economic growth.
Mr Trump says his trade war is all about boosting US manufacturing jobs but, at the end of the day, no powerbase of voters is going to accept a threat to the value of their investments for long.
No big US company will stand by and see its sales suffer.
Gaza City residents say Israel carried out intense overnight bombardments as it prepares a controversial offensive to take control of the area.
Sixty-thousand reservists are being called up after Benjamin Netanyahu‘s security cabinet approved the plan earlier this month.
UN chief Antonio Guterres has warned of more “death and destruction” if Israel tries to seize the city, while France’s Emmanuel Macron said it would be a “disaster” that would lead to “permanent war”.
Hundreds of thousands of people could end up being forcibly displaced – a potential war crime, according to the UN’s human rights office.
Gaza’s health ministry said at least 70 people had been killed in Israeli attacks in the past 24 hours, including eight people in a house in the Sabra suburb of Gaza City.
Israel currently controls about 75% of the Gaza Strip, but Prime Minister Netanyahu has said Israel must take Gaza City to “finish the job” and defeat Hamas.
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Mr Netanyahu and his ministers are due to meet on Thursday to discuss the plans, according to Israeli media.
Military spokesperson Effie Defrin said earlier that “preliminary operations and the first stages of the attack” had begun – with troops operating on the outskirts of Gaza City.
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Aftermath of fresh Israeli strikes on Gaza
Residents said shelling has intensified in the Sabra and Tuffah neighbourhoods and that those fleeing have gone to coastal shelters or to central and southern parts of the Strip.
The decision to stay or leave is an agonising choice for many.
“We are facing a bitter-bitter situation, to die at home or leave and die somewhere else, as long as this war continues, survival is uncertain,” said father of seven Rabah Abu Elias.
“In the news, they speak about a possible truce, on the ground, we only hear explosions and see deaths. To leave Gaza City or not isn’t an easy decision to make,”
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Sky’s Adam Parsons explains what is in the new Israel-Hamas ceasefire deal.
Most of the Israeli reservists being summoned are not expected to be in a frontline combat role and the call-up is set to take a while.
The window could give mediators more time to convince Israel to accept a temporary ceasefire.
Hamas has already agreed to the proposal – envisaging 10 living hostages and 18 bodies being released in return for a 60-day truce and the freedom of about 200 Palestinian prisoners.
Israel hasn’t officially responded, but insists it wants all 50 remaining hostages released at once. Only 20 of them are still believed to be alive.
The war started nearly two years ago when a Hamas terror attack killed about 1,200 people and kidnapped around 250.
More than 62,000 Palestinians have been killed in the war, according to Gaza’s health ministry.
The figure doesn’t break down how many were Hamas members, but it says women and children make up more than half.
Two more people also died of starvation and malnutrition in the past 24 hours, the ministry said on Thursday, taking the total to 271, including 112 children.
COGAT, the body controlling aid into Gaza, said 250 aid trucks entered on Wednesday, with 154 pallets air-dropped.
Police, pathologists and grave diggers have started the exhumation of 27 shallow graves in Kenya’s Kilifi County.
The remains are believed to be of followers of a deadly cult in Chakama Ranch, a part of the Shakahola Forest.
In 2023, more than 400 mass graves were discovered in the same forest, all members of controversial preacher Paul Mackenzie’s church. They were encouraged to starve themselves to death to get into heaven.
It remains one of the world’s worst cult-related tragedies. Mackenzie is still in jail and faces numerous charges of terrorism, child torture and murder.
Image: Six bodies were exhumed in Chakama Ranch, a part of the Shakahola Forest, today
The remote forest has again been turned into a crime scene.
Morticians were seen carrying out body bag after body bag, some containing the remains of children believed to have been starved to death.
State pathologist Dr Richard Njoroge said this is just the beginning, as investigators expect to find many more bodies: “Today we managed to exhume six.
“Of the six graves, we found five bodies and then also around that area we found ten different scattered body parts, scattered in different places on the surface.”
Eleven suspects have already been arrested in connection with these deaths and will appear in court on Friday.
Police are investigating links to Mackenzie and members of his Good News International Church.
At the exhumation today, pathologists said they were still working to identify the bodies of those exhumed from Mackenzie’s cult.
“We had 453 at the closure of that exercise, I think, we released around 33 or 34 last time. So, from there are 419 remaining,” Dr Njoroge explained.
Police have encouraged families in the area with missing loved ones to come forward and provide their DNA samples, as efforts to identify the dead continue.
Kenya is grappling with a rise in religious extremism and many churches operating informally.
Parliament passed several preliminary bills aimed at regulating religious organisations last year, but implementation has stalled after resistance from church leaders.
Blindfolded and under armed guard, a captured ISIS fighter is brought before us.
When the blindfold is removed, he doesn’t look surprised to see a camera crew and several counterterrorism officers, one of whom interrogated him when he was first caught.
The 24-year-old militant is on death row in Somalia awaiting execution by firing squad, having been accused of being an ISIS commander, as well as a sniper and a member of a two-man bomb squad.
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Watch the documentary – Hunting for ISIS: A warning from Africa
US and Somali commanders say ISIS is running its global headquarters in Puntland’s caves, financing its activities worldwide.
Muthar Hamid Qaayid is from Yemen and came to Somalia via a sea route where we’ve witnessed how challenging it is to halt the flow of militant travellers.
He insists he wasn’t an active participant in the two-man bomb squad – and seems entirely unbothered about the situation he now finds himself in.
“I didn’t press the button,” he says. “I just looked. The other man made the bomb and set it off. I didn’t come here to kill Muslims.”
His partner blew himself up as he was planting the bomb in Bosaso city centre and realised he had been discovered.
Officers believe he detonated it prematurely.
The man in front of us was injured, and we are told he had incriminating bomb-making equipment with him.
I ask him if he has regrets about his involvement and joining the militant group.
“I don’t regret anything,” he says, smiling. “Even if you take me out of the room now and execute me, I don’t regret anything.” Again, another smile.
“If they shoot me or hang me, I don’t mind. In the end, I don’t care.”
Tellingly, he says his family does not like ISIS. “If they found me here, they’d be upset,” he says.
Despite persistent questions, he doesn’t shift much. “I’m not thinking,” he insists. “There’s nothing. I’m just waiting for death.”
Image: The ISIS militant speaks to Sky’s Alex Crawford
I ask if he’d heard of people being killed by the bombs he’s accused of planting.
“Yes, but they don’t kill all people,” he insists.
But what about killing anyone, I suggest, slightly puzzled.
“They don’t kill everyone,” he continues. There’s a pause. “Only infidels”.
Infidels is a term many recruits use to describe those who simply don’t agree with their strict interpretation of Sharia – that can include Muslims as well as other religions.
Officials show us multiple foreign passports recovered from ISIS cave hideouts in Puntland and from those they’ve captured or killed.
Image: Passports seized from ISIS hideouts and fighters
There are passports for whole families from South Africa, including children, as well as ones from Germany, Saudi Arabia, Venezuela, and Bahrain.
There are also handfuls of IDs which show European faces.
Since a Puntland army offensive was launched last December, just five of the 600 ISIS fighters killed have been Somalis, says Mohamed Abdirahman Dhabancad, Puntland’s political affairs representative.
‘The main target was to rule the world’
The second prisoner brought before us is from Morocco and is much more talkative.
Usman Bukukar Bin Fuad insists he was duped by ISIS and says he only travelled to Somalia because he’d heard he could make money.
Image: Usman Bukukar Bin Fuad claims he only dug caves for ISIS
“Instead, I ended up digging caves,” he says. “It was difficult to escape but when they told me to put on a suicide vest to kill Puntland forces, I said this is not what you told me I would be doing – and I escaped.”
He says he was given a weapon but never used it – a claim not believed by his captors.
“I never joined any fight,” he insists. “I had my weapon [AK47] but I just did normal duties taking supplies from location to location and following orders.”
He says he met the ISIS leader in Somalia, Abdul Qadir Mumin, several times.
“He used to visit all the ISIS camps and encourage them to fight.”
“And he’d reassure us all about going to heaven,” he adds.
It seems to lend credence to the belief that Mumin is still alive and operating – up until a few months ago anyway.
He says he was given training in sniping (which he didn’t finish) and map reading, which was interrupted when the Puntland military offensive began.
He says he travelled over from Ethiopia with six Moroccans, before meeting an Algerian recruit.
Fellow militants in the ISIS mountain stronghold were from countries including Tunisia, Libya, Tanzania, Kenya, Turkey, Argentina, Bangladesh, Sweden, and Iraq.
“The main target or focus was to rule the world,” he says. “Starting with this region as one of the gates to the world, then Ethiopia and the rest of the world.
“I heard so much talk about sending ISIS fighters to Bosaso, Ethiopia or Yemen. Sending people to other parts of the world and ruling the world was all part of the plan.”
The captives’ information has added to the belief that Puntland and Somalia is just the tip of a huge ISIS problem which is spreading and is able to cause terror in a range of ways.
Alex Crawford reports from Somalia with specialist producer Chris Cunningham and Richie Mockler. Photography by Chris Cunningham