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People bathe in the sun under parasols on a beach near the city of Larnaca, Cyprus, on August 11, 2024.
HARD NUMBERS: UAE carries Cyprus’ water, China toughens trade stance, Trump admin ignores court order, Americans expect price hikes, Germany’s economy remains stagnant, South Korea’s ex-leader indicted
15,000: The United Arab Emirates is literally helping Cyprus navigate troubled waters by providing portable desalination plants to the Mediterranean island free of charge so it can supply enough water to the deluge of tourists set to visit this summer. The Emirati nation’s plants will reportedly produce 15,000 cubic meters of potable water per day. It’s unclear if the UAE is receiving anything in return – it seems happy to go with the flow.
$582 billion: China informed the United States that it must “completely cancel all unilateral tariff measures” if it hopes to begin talks over trade. Beijing had previously said that it was open to talks, without preconditions. However, on Friday, Reuters reported that Beijing would exempt some critical goods from its 125% and is asking its firms to identify imports they need to continue functioning --- though it stopped short of publicly making the first move in trade war de-escalation. Total trade between the two superpowers was $582 billion in 2024, but the sweeping new tariffs that each has slapped on the other is likely to force this number down.
2: In the latest clash between the Trump administration and the courts on immigration, the White House moved a Venezuelan man from Pennsylvania to Texas — possibly preparing to deport him — right after a judge ruled that the government couldn’t remove him from the commonwealth or the United States. The man, who wasn’t formally named, had been employed as a construction worker in Philadelphia for two months before his arrest in February on suspicion of being part of Venezuela’s Tren de Aragua gang.
77%: The price isn’t right: 77% of Americans expect President Donald Trump’s tariff plan to raise consumer prices, with 47% believing that consumer prices will “increase a lot,” according to an AP-NORC poll. Despite those numbers, 4 in 10 Americans still approve of Trump’s handling of the economy and trade negotiations.
0: In the wake of Trump’s tariffs, Germany announced on Thursday it was downgrading its predicted economic growth rate — the economy depends heavily on manufacturing exports — from 0.3% to 0.0%. If the prediction holds, 2025 will be the third straight year of stagnation for Europe’s largest economy.
217 million: Former South Korean President Moon Jae-in was indicted on Thursday on bribery charges, alleging that he received 217 million won ($151,705) from the founder of a low-cost airline. No, it wasn’t Turkish Airlines but Eastar Jet.President Donald Trump at a bilateral meeting with China's President Xi Jinping during the G20 leaders summit in Osaka, Japan, on June 29, 2019.
Trump promises to be “very nice” with China – but Beijing won’t be flattered
On Wednesday, Donald Trump said he would deliver a “fair deal” with China. He also said he’d be “very nice” to the country after meeting with major retailers. CNN reports the retailers gave the president a “blunt message” about the risks of a prolonged trade war with China, warning shop shelves could “soon be empty.”
Beijing, however, denied that there are any ongoing talks and told the US it must cancel its unilateral tariffs before China will broker any negotiations.
Trump is now promising a substantial drop in tariffs on China, which currently sits at 145%, though he says he won’t drop them to zero. Meanwhile, Treasury Secretary Scott Bessentsays there won’t be a tariff reduction without a trade deal, and that it could take two or three years before the US manages to rebalance its trade with its rival, citing the past precedent of Japan, with whom it took a decade to rebalance trade volumes.
On Wednesday, markets were up on the China expectations and news, further buoyed by Trump’s comment that he had “no intention” of firing Federal Reserve chair Jerome Powell. But don’t bank on a long-term comeback or market stability. Earlier in the week, stocks were down with indices closing roughly 2.5% lighter than they started the day after Trump called Powell “Mr.Too Late” and “a major loser” as he pressed for interest rate cuts he claims will buoy the economy amid declining consumer confidence and a growing recession risk.
Containers on a cargo ship are seen at an industrial port in Tokyo, Japan April 3, 2025.
Beijing tries to woo an uninterested Tokyo over joint tariff fight
Chinese Premiere Li Qiang sent Japanese Prime Minister Shigeru Ishiba a letter asking that they “fight protectionism together,” according to local reports Tuesday, as both countries face potentially disastrous US tariffs.
“I don’t know what the equivalent in Japanese for ‘chutzpah’* is, but I think the Japanese bureaucrats will snicker a bit to themselves,” says David Boling, Eurasia Group’s director for Japan and Asian trade. “China has a tendency when relations with the US are not going well to suddenly become much more positive in their approach to Japan.”
China is Japan’s largest trading partner but a highly distrusted neighbor from a national security perspective. Japan launched trade talks with the United States last week, and Boling says Tokyo is determined to strike a deal.
“The United States is just too important as an ally and trading partner, and even if talks break down, they’re not going to look to China first,” he says.
What’s more, Ishiba faces a crucial election in the upper house of the Diet, Japan's legislature, in July, right around when the US tariff pause is due to expire. With his political life on the line, we’re watching for an agreement in principle to be sealed with the US soon.
*Chutzpah is 厚かましさ (astukamashi-sa), if you were curious.
The Graphic Truth: The foreigners who hold US debt
The US is the world’s biggest debtor, with more than $35 trillion of securities outstanding.
About a quarter of that is held by foreign investors, a detail which has drawn considerable attention since Donald Trump began walloping the world with tariffs to rebalance US trade ties and military alliances. That’s because if countries upset – or merely uneasy – about Trump’s policies sell those securities in response, the debt servicing costs for the US rise. This is no small matter on $35 trillion worth of paper.
In fact, one widely held explanation for Trump’s abrupt suspension of the “Liberation Day” tariffs on April 9 was that wary bond investors had begun to sell US Treasuries: In the week of April 11, yields on 10-year US treasuries saw their biggest leap in a quarter of a century, a sign that creditors were dropping US sovereign debt fast.
Could countries weaponize US debt more directly? China, Trump’s biggest trade war target, is the second largest foreign US creditor, officially holding more than $750 billion.
A selloff could be devastating. But analysts say it would be hard to find enough buyers for a sale that is both swift and large enough to catch the US off guard.
And even if it were possible, a seller would risk their own financial security as well global economic health by kneecapping the US. In other words: It would be, in financial terms, the nuclear option.
The graphic above looks at which countries hold the most US sovereign debt. Note that the last official data precede “Liberation Day” and that they depend on official reporting. Some countries may hold more than what is listed here via third parties.
Chinese President Xi Jinping meets with Cambodia's Prime Minister Hun Manet (not pictured) at the Peace Palace in Phnom Penh, Cambodia, April 17, 2025.
China warns world against harmful US trade deals
Chinese President Xi Jinping launched a tour of Southeast Asia this month, visiting key trade partners and calling for an “open and cooperative international environment” that rejects “tariff abuse.” But given the reliance of countries like Vietnam and Cambodia on US markets, Beijing may need more than words.
What comes next: Major players are kicking off talks with the US, with Japan starting last week and South Korea meant to commence within days, and Vice President JD Vancemeeting with Indian Prime Minister Narendra Modi in New Delhi on Monday.
Keep your eye on smaller players: Kenyan President William Ruto arrives in Beijing Tuesday, as his burgeoning economy faces strain from US aid clawbacks. For economies in the developing world like his, taking Beijing’s side might be the best hedge available.Two DHL delivery vans deliver parcels in Maximilianstrasse in Munich, Germany, on Feb. 20, 2025.
Companies respond to Trump’s trade crackdown
The ripple effects of US President Donald Trump’s tariff policies continue to impact global supply chains. On Saturday, transport company DHL announced it would suspend international shipments over $800 to American consumers, citing that new tariff rules had overwhelmed its processing systems. Automaker Ford said it was “adjusting” its exports of vehicles like the F-150 Raptor, Lincoln Navigator, and Mustang to China, due to the impact of tariffs. And China’s Xiamen Airline reportedly returned a Boeing 737 MAX, freshly painted in company colors – the latest casualty of that country’s ongoing trade war with the US.
Other countries are opting for negotiation over retaliation. Italian Prime Minister Giorgia Meloni visited Washington on Friday hoping to talk EU trade with Trump, but found the US President was “in no rush” to strike a deal. This week, South Korea will enter into tariff talks, hoping to avert the 25% reciprocal tariff Trump announced, and then paused, in early April.
What else is expected in the next few days? On Tuesday, the IMF is set to release global growth forecasts – and is expected to both lower expectations for growth in tariffed countries while raising expectations for inflation. A day later, coordinated purchasing manager indexes from most major economies will be released, offering a first look at the early impacts of tariffs and trade threats on economic activity.US President Donald Trump attends a Cabinet meeting at the White House in Washington, D.C., on April 10, 2025.
China strikes back at the US with massive tariffs of its own
Wednesday’s tariff respite is firmly in the rearview mirror, as China announced on Friday it was raising its duty on US imports to an astronomical 125%, taking effect Saturday. The announcement came less than 24 hours after the White House clarified that the new levy on Chinese imports would be 145%.
With US President Donald Trump’s collision course with the rest of the world on hold — the EU delayed its planned retaliatory levies Thursday — his fully-fledged trade war with China now has the spotlight to itself. Whereas he dropped tariffs on other countries on Wednesday, the commander-in-chief raised them on Beijing three times within one week, with the White House clarifying on Thursday that the rate is now 145%. After a brief delay, China has now responded in kind.
And just like that. These extraordinary levies are already affecting businesses. US firms have started canceling orders and some Chinese companies are putting staff on temporary leave. Trans-pacific shipping bookings have plunged. The March inflation figures released Thursday suggested that US price growth was easing, but the data was taken before the new China tariffs were implemented. With the levies accelerating skyward, it’s only a matter of time before US prices follow suit.
Markets suffer again. The laws of gravity applied to the markets Thursday — before China announced its latest retaliation — with stocks reversing again as the reality of Trump’s new world trade order set in for investors. The S&P 500 dropped 3.5%, the Dow Jones Industrial Average fell 1,000 points, and the dollar lost ground against the major Asian currencies. On top of all this, Democrats are now questioning whether the president and his allies engaged in insider trading this week. Wednesday’s comeback looks like a fever dream.
The dust won’t settle. Trump acknowledged Thursday that there would be “transition problems” with the markets, while retaining his unfailing optimism that stock would turn around. The former “Apprentice” star added that he was open to extending the 90-day tariff pause on countries that aren’t China, but with Beijing further escalating the trade war, investors will remain unsettled.
President Donald Trump speaks as he signs executive orders and proclamations in the Oval Office at the White House on April 9, 2025.
The Truth will set tariffs free
With stock markets plunging and US Treasury yields reaching new heights, US President Donald Trump finally reneged on parts of his widescale tariff plan on Wednesday, declaring a 90-day pause to the far-reaching “reciprocal” levies that he introduced just one week ago while leaving a 10% across-the-board duty in place. He also escalated the already-burgeoning trade war with China by increasing the tariff on their imports to 125%.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!” Trump declared on Truth Social.
Trump’s announcement brought some much-needed relief to the countries facing these tariffs.
“This is a much smaller tariff wall. It is less disruptive. It has the potential for landing in a better place with most of the US trading partners,” said Eurasia Group’s geoeconomics expert Jens Larsen.
All in a day. The S&P 500 index surged more than 9% within a few hours of the announcement, bringing some rare good news to the American markets in an otherwise-tawdry week. The Nikkei jumped 9% on Thursday, recording its second-best ever day. As for China, Trump said the 125% tariff would be implemented immediately, before expressing optimism that the two superpowers could reach a deal. Beijing had announced earlier on Wednesday that it was imposing an additional 50% tariff on US imports, matching the extra duty that Trump had placed on Chinese imports on Tuesday and bringing the total levy to 84%.
Not out of the woods yet. Though stocks rose following Trump’s pause, Treasury yields haven’t fully recovered from the sharp moves of earlier this week, reflecting some potential damage to the US economic brand. The dollar has continued falling, too. The political ramifications of this are potentially more widespread than any market drops, as the higher yields make it more difficult for small businesses to access loans, with knock-on effects for the US economy.
“Fundamental uncertainty remains. Not only could tariffs be implemented in the future, but the predictability and credibility of US economic policy has taken a serious hit,” Larsen added. “And at the end, we still end up with a more rapidly fragmenting world.”