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It might be nine months away – but the race to the US presidential election has well and truly begun.

The first step in deciding which candidate will get their party’s nomination begins in Iowa on Monday evening.

Since 1972, the midwestern state has been the first to hold its caucus – which has routinely acted as a litmus test for how candidates will fare later along the campaign trail.

But with the Democrats not voting at their Iowa event this year – and Donald Trump’s multiple brushes with the law, this year’s proceedings may not be straightforward.

Here we look at what happens in Iowa, what a caucus is, and whether the winners will be the ones to watch.

What is a caucus – and how does it work?

The road to a US presidential election is long, beginning almost exactly a year before the incumbent is inaugurated with a star-studded ceremony at the White House.

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It begins with primaries and caucuses – two ways Democrats and Republicans begin the process of nominating a candidate.

Iowa explainer graphic

The vast majority of states hold primaries, but Iowa and some other, traditionally Republican states opt for caucuses instead.

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While primaries are like mini-elections, whereby party members can cast their vote at any point throughout the day, or sometimes by post, caucuses must be attended in person.

Primaries are run by the state whereas caucuses are organised by the parties themselves.

Caucuses take place at precinct, district, and state level in places such as schools, churches, and community centres.

Democrat caucus in Iowa, February 2020
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Democrat caucus in Iowa, February 2020

Those who attend listen to speeches made on behalf of each potential candidate by their campaign representatives. Caucus-goers then vote for their preferred candidate and these are tallied in a matter of hours.

Primaries and caucuses can be open or closed, with the former allowing anyone to take part and the latter restricted to party-registered voters.

The outcome of the caucus or primary determines how many delegates each candidate gets to represent them at the party’s national convention in the summer.

At the convention, the candidate with the most delegates becomes the presidential nominee, but if there is no clear winner at primary or caucus level, the delegates vote again at the convention.

Republicans at the Iowa caucus in February 2020
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Republicans at the Iowa caucus in February 2020

Why does Iowa go first?

Iowa has long been a traditionally Republican state, with its current governor, House representatives and senators all belonging to the GOP.

But from the 1950s, Democrats have had more of a presence there.

With the increasing influence of trade unions came calls for the state’s cities to get better political representation, more in line with rural areas.

The Democratic National Convention centre in Chicago, August 1968. Pic: AP
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The Democratic National Convention centre in Chicago, August 1968. Pic: AP

Anti-war protesters outside the DNC in Chicago, 1968. Pic AP
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Anti-war protesters outside the DNC in Chicago, 1968. Pic: AP

Then after the Democratic National Convention of 1968, where protests over the Vietnam War resulted in a protester’s death and hundreds of injuries, Democrats in Iowa demanded reform of the state caucus system – to move power away from party bosses and more into the hands of grassroots activists.

This saw separate conventions created at state and district level, which elongated the caucus process and meant the whole thing had to start earlier.

As such, since 1972 Iowa has been what is commonly referred to as “first in the nation”.

Why has it become so important?

Iowa’s “first in the nation” status means it often acts as an initial performance indicator for nominee candidates.

“The results in Iowa sends a signal to the rest of the country on the tenor of each of the candidates and whether they really will have the chance of proceeding on,” Jim McCormick, emeritus professor of American politics and US foreign policy at Iowa State University, tells Sky News.

This was capitalised on in its first year, when South Dakota’s senator George McGovern realised Iowa would be first and made a particular effort there – with him going on to win the nomination for the Democrats.

Ahead of the next election in 1976, Jimmy Carter’s campaign team honed in on Iowa, which gained nationwide media coverage and ultimately helped propel him to the White House.

Jimmy Carter in Iowa, 1976. Pic: AP
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Jimmy Carter in Iowa, 1976. Pic: AP

From then on, every US president since Carter, aside from Bill Clinton in 1992 and Joe Biden in 2020, has finished within the top three of the Iowa caucus.

Barack Obama often credits his win there with his election to the presidency in 2008.

Barack Obama meets supporters in Iowa ahead of the caucus in 2008
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Barack Obama meets supporters in Iowa ahead of the caucus in 2008

But historically, coming first in the caucus has not guaranteed winning the party nomination, particularly among Republicans.

As such, there have only been three times when the winner of the Iowa caucus has gone on to win the Republican nomination.

Iowa has proportionately more white and elderly people than many other states, so despite efforts made by campaign teams, the result there can still turn out to be misleading.

Poor weather in January and the timing of the event can also lead to low turnout, with only 30% of registered Republicans taking part in 2016, the last time the race was competitive.

But Prof McCormick argues: “International observers have a tendency to look to New York, Washington DC, and Los Angeles to see what the US is all about.

“But Iowa is so-called ‘flyover country’, which is more reflective of the values of middle America. So even with its demography and relatively small ethnic minorities, the message that comes out of Iowa is consequential.”

To that effect, the Iowa caucus has consistently succeeded in getting weaker candidates who perform badly to pull out of the overall race.

Votes counted for Democratic candidates at the Iowa caucus 2020
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Votes counted for Democratic candidates at the Iowa caucus 2020

What’s happening this year?

Although both parties are holding their Iowa caucuses on Monday, only the Republican one is important this year.

In 2020, the Iowa Democratic caucus was plagued with technical issues, mainly around a new app, and failed to produce a clear winner.

The result had to be recanvassed and the series of blunders resulted in the resignation of state party chairman Troy Price.

Consequently, this year’s Democratic caucus will not include a nominee ballot. This will happen via a postal vote beginning on 12 January and ending on 5 March instead.

Joe Biden is largely seen as uncontested, being so far ahead of the other major candidates, Dean Phillips and Marianne Williamson, in the polls.

But Republicans will be voting on their preferred candidate at 7pm, with only registered party members and those aged 18 or over come election day allowed to take part at one of 1,700 local precincts.

As has been the case since the 1980s, the ballot will be carried out in secret.

Conditions are expected to be -19C (-2F) in the state on Monday, likely preventing many of its 600,000 registered Republicans from getting to the event, particularly those in rural areas.

Who’s in the running and what about Trump?

Despite multiple ongoing legal fights, Donald Trump is still dominating the polls.

While Ron DeSantis was long tipped to be his main competitor, former UN ambassador Nikki Haley has now surpassed the Florida governor in polling.

Former UN Ambassador Nikki Haley, right and Florida Gov. Ron DeSantis, left, pointing at each other during the CNN Republican presidential debate at Drake University in Des Moines, Iowa, Wednesday, Jan. 10, 2024. (AP Photo/Andrew Harnik)
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Nikki Haley and Ron DeSantis take part in a debate in Iowa

According to Prof McCormick, Mr Trump’s performance in Iowa is likely to determine whether either of the other two stand a chance of beating him to the nomination stage.

“Given that Trump has a very large lead, this is going to be an important signal to other states about whether there really is a chance of forestalling his getting the nomination,” he says.

While Ms Haley appears to have outperformed Mr DeSantis in the Iowa debates, her success in the caucus will depend on how well-organised her campaign team has been across the state, he adds.

“She’s been very well organised in New Hampshire (the next primary after Iowa), but in Iowa she’s been concentrating on people in the suburbs, because they are the people who will be able to get to the caucuses.

“DeSantis keeps saying he’s visited all 99 counties in Iowa – so he’s booking everything on it.

“But a lot of his support will come from rural counties, evangelical Christians, and older voters, who may not be able to get to the caucus sites in -26C.”

Mr DeSantis has also suffered from high staff turnover in his campaign team, weaker debate performances than Ms Haley, and having some views that are similar to Mr Trump’s, Prof McCormick adds.

These factors combined mean there is a greater risk of a poor result and him being forced to bow out.

Mr Trump, by contrast, skipped the debates, and took part in a Fox News town hall event instead.

As well as the economy, issues caucus-goers will be focused on include state laws recently passed on transgender and abortion rights, along with agricultural exports.

Donald Trump at a Fox News town hall in Iowa, 10 January. Pic: AP
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Donald Trump at a Fox News town hall in Iowa, 10 January. Pic: AP

So is this year’s Iowa caucus really ‘one to watch’?

The short answer is yes.

Prof McCormick stresses: “If Trump comes out with a very large lead in Iowa, that should be taken as a very good indicator he’ll get the nomination.

“But if Trump doesn’t get at least 50% of the vote – and either Haley or DeSantis come up close, even within a 10-point margin, that really raises a question about his ‘slam dunk’ ability to dominate the process – and we could be looking at a different story.”

But beyond the nomination, Trump’s future is still uncertain, he adds.

“The Biden campaign has indicated they’ll be focused on Trump’s persona rather than a lot of the national issues. So he’ll be handicapped even if he gets the nomination.”

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While efforts by states such as Georgia and Maine to bar him from running are considered likely to be struck out by the Supreme Court, it is still unclear whether the lawsuits against him would prevent him from returning to the White House.

But if an Iowa win does see him secure the nomination, his supporter base is still very large, which means Monday’s caucus could end up having consequences far beyond the US.

Prof McCormick says: “Every time he’s been indicted, his popularity has gone up.

“So if Trump succeeds in getting voter turnout in Iowa that suggests we could see a foreign policy at odds with what Biden has been pursuing, which, given his attitudes towards NATO, Ukraine, and Russia, would be a huge concern for a lot of people.”

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Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem

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Financial markets were always going to respond to Trump tariffs but they're also battling with another problem

Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.

The damage it will do is obvious: costs for companies will rise, hitting their earnings.

The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

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He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

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These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

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Stock markets suffer sharp drops after Donald Trump announces sweeping tariffs

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Stock markets suffer sharp drops after Donald Trump announces sweeping tariffs

Stock markets around the world fell on Thursday after Donald Trump announced sweeping tariffs – with some economists now fearing a recession.

The US president announced tariffs for almost every country – including 10% rates on imports from the UK – on Wednesday evening, sending financial markets reeling.

While the UK’s FTSE 100 closed down 1.55% and the continent’s STOXX Europe 600 index was down 2.67% as of 5.30pm, it was American traders who were hit the most.

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All three of the US’s major markets opened to sharp losses on Thursday morning.

A person works on the floor at the New York Stock Exchange in New York, Monday, March 31, 2025. Pic: AP
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The S&P 500 is set for its worst day of trading since the COVID-19 pandemic. File pic: AP

By 8.30pm UK time (3.30pm EST), The Dow Jones Industrial Average was down 3.7%, the S&P 500 opened with a drop of 4.4%, and the Nasdaq composite was down 5.6%.

Compared to their values when Donald Trump was inaugurated, the three markets were down around 5.6%, 8.7% and 14.4%, respectively, according to LSEG.

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Worst one-day losses since COVID

As Wall Street trading ended at 9pm in the UK, two indexes had suffered their worst one-day losses since the COVID-19 pandemic.

The S&P 500 fell 4.85%, the Nasdaq dropped 6%, and the Dow Jones fell 4%.

It marks Nasdaq’s biggest daily percentage drop since March 2020 at the start of COVID, and the largest drop for the Dow Jones since June 2020.

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The latest numbers on tariffs

‘Trust in President Trump’

White House press secretary Karoline Leavitt told CNN earlier in the day that Mr Trump was “doubling down on his proven economic formula from his first term”.

“To anyone on Wall Street this morning, I would say trust in President Trump,” she told the broadcaster, adding: “This is indeed a national emergency… and it’s about time we have a president who actually does something about it.”

Later, the US president told reporters as he left the White House that “I think it’s going very well,” adding: “The markets are going to boom, the stock is going to boom, the country is going to boom.”

He later said on Air Force One that the UK is “happy” with its tariff – the lowest possible levy of 10% – and added he would be open to negotiations if other countries “offer something phenomenal”.

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How is the world reacting to Trump’s tariffs?

Economist warns of ‘spiral of doom’

The turbulence in the markets from Mr Trump’s tariffs “just left everybody in shock”, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston, told Reuters.

He added that the economy could go into recession as a result, saying that “a lot of the pain, will probably most acutely be felt in the US and that certainly would weigh on broader global growth as well”.

Meanwhile, chief investment officer at St James’s Place Justin Onuekwusi said that international retaliation is likely, even as “it’s clear countries will think about how to retaliate in a politically astute way”.

He warned: “Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession.”

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Tariffs about something more than economics: power

It comes as the UK government published a long list of US products that could be subject to reciprocal tariffs – including golf clubs and golf balls.

Running to more than 400 pages, the list is part of a four-week-long consultation with British businesses and suggests whiskey, jeans, livestock, and chemical components.

Meanwhile, Prime Minister Sir Keir Starmer said on Thursday that the US president had launched a “new era” for global trade and that the UK will respond with “cool and calm heads”.

It also comes as Canadian Prime Minister Mark Carney announced a 25% tariff on all American-imported vehicles that are not compliant with the US-Mexico-Canada trade deal.

He added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy.”

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Trump’s tariffs are about something more than economics: power

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Trump's tariffs are about something more than economics: power

Tanking stock markets, collapsing world orders, devastating trade wars; economists with their hair ablaze are scrambling to keep up.

But as we try to make sense of Donald Trumps’s tariff tsunami, economic theory only goes so far. In the end this surely is about something more primal.

Power.

Understanding that may be crucial to how the world responds.

Yes, economics helps explain the impact. The world’s economy has after all shifted on its axis, the way it’s been run for decades turned on its head.

Instead of driving world trade, America is creating a trade war. We will all feel the impact.

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Donald Trump says he is settling scores, righting wrongs. America has been raped, looted and pillaged by the world trading system.

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But don’t be distracted by the hyperbole – and if you think this is about economics alone, you may be missing the point.

Above all, tariffs give Donald Trump power. They strike fear into allies and enemies, from governments to corporations.

This is a president who runs his presidency like a medieval emperor or mafia don.

It is one reason why since his election we have seen what one statesman called a conga line of sycophants make their way to the White House, from world leaders to titans of industry.

The conga line will grow longer as they now redouble their efforts hoping to special treatment from Trump’s tariffs. Sir Keir Starmer among them.

President Trump’s using similar tactics at home, deploying presidential power to extract concessions and deter dissent in corporate America, academia and the US media. Those who offer favours are spared punishment.

His critics say he seeks a form power for the executive or presidential branch of government that the founding fathers deliberately sought to prevent.

Whether or not that is true, the same playbook of divide and rule through intimidation can now be applied internationally. Thanks to tariffs

Each country will seek exceptions but on Trump’s terms. Those who retaliate may meet escalation.

This is the unforgiving calculus for governments including our own plotting their next moves.

The temptation will be to give Trump whatever he wants to spare their economies, but there is a jeopardy that compounds the longer this goes on.

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Chinese Vice President Han Zheng gestures to Britain's Chancellor of the Exchequer Rachel Reeves following a photo session at the Great Hall of the People in Beijing, Saturday, Jan. 11, 2025. (Florence Lo/Pool Photo via AP)
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Could America’s traditional allies turn to China? Pic: AP

Malcolm Turnbull, the former Australian prime minister who coined the conga line comparison, put it this way: “Pretty much all the international leaders I have seen that have sucked up to Trump have been run over. The reality is if you suck up to bullies, whether it’s global affairs or in the playground, you just get more bullying.”

Trading partners may be able to mitigate the impact of these tariffs through negotiation, but that may only encourage this unorthodox president to demand ever more?

Ultimately the world will need a more reliable superpower than that.

In the hands of such a president, America cannot be counted on.

When it comes to security, stability and prosperity, allies will need to fend for themselves.

And they will need new friends. If Washington can’t be relied on, Beijing beckons.

America First will, more and more, mean America on its own.

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