Donald Trump’s sweeping tariffs wiped trillions from global stocks yesterday, with American markets suffering their steepest declines since the start of the pandemic. The S&P 500 dropped 4.8%, losing nearly $2.5trn; Apple lost more than $300bn in value; and the FTSE 100 fell 1.6%. Trump said last night that Keir Starmer was “very happy” with Britain’s relatively mild 10% tariff rate. South Korea’s president, Yoon Suk Yeol, has been removed from office after the country’s constitutional court upheld his impeachment, saying he “violated the basic principles of a democratic state” when he briefly declared martial law in December. A presidential election will be held in the next 60 days. Bruce Springsteen will release more than 70 never-before-heard songs later this year. Tracks II: The Lost Albums, due in late June, will consist of tunes that the legendary rocker created between 1983 and 2018, but only played in private for his close friends.

Trump’s worldview is stuck in the 1960s

The way to understand Donald Trump’s tariff regime is to think about the name he gave it, says Fareed Zakaria in The Washington Post. “Liberation Day.” He thinks the US has been taken advantage of by the rest of the world, painting a picture of a “hollowed-out country with empty factories, unemployed workers and stagnant wages”. The reality, of course, is the opposite. The “real economic story” of the past three decades is that the US has surged ahead of its rivals. “In 2008, the US economy was about the same size as the eurozone’s; now, it is nearly twice the size.” American wages are around 40% higher than the rest of the advanced industrial world, up from a 20% gap in 1990. America’s poorest state, Mississippi, “has a higher per capita GDP than Britain, France or Japan”.

Trump’s worldview is stuck in the 1960s, when America was a great manufacturing power. He doesn’t seem to care that in tech and services, the fastest-growing and most critical spheres of the global economy, the US is dominant. Hence why he has based his tariffs on trade deficits in goods and not services. For him, the “huge surpluses” the US runs on the latter – the likes of banking, law, software, movies and music – simply don’t count. Above all, he doesn’t seem to realise that the only reason he can carry out Liberation Day – America’s “unrivalled economic power” – undermines his entire rationale for doing it. In the short term “everyone will suffer”. But in the medium to long run other nations will just start “trading around the US”, not least with China. Ultimately “countries around the world need growth, and that means trade”. With or without America.

🇨🇳🤝 China is already pitching itself as a “guardian of free trade”, says James Palmer in Foreign Policy. On Sunday, the Chinese, Japanese and South Korean trade ministers met for the first time since 2019 and agreed to “co-operate closely” on a new free trade deal. It seems improbable, but with the US pitting itself against the rest of the world, China is starting to look like an “appealing ally”.