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Trump U-turns on tariffs but keeps trade war heat on China

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U.S. President Donald Trump’s stunning decision to pause the hefty duties he had just imposed on dozens of countries sent battered global stock markets surging on Thursday even as he ratcheted up a trade war with the world’s No. 2 economy China.

Trump’s turnabout on Wednesday, which came less than 24 hours after steep new tariffs kicked in on most trading partners, followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic, Reuters reported.

The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in U.S. government bond yields that appeared to catch Trump’s attention.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know,” Trump told reporters after the announcement, referring to jitters sportpeople sometimes get.

U.S. stock indexes shot higher on the news, with the benchmark S&P 500 index closing 9.5% higher. Bond yields came off earlier highs and the dollar rebounded against safe-haven currencies.

The relief spread through Asian markets as they opened on Thursday with Japan’s Nikkei index surging 8% while European futures also pointed to a sharp rebound. Even Chinese stocks rose, propped up by hopes of state support, although its yuan currency fell to the lowest level since the global financial crisis.

Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.

U.S. Treasury Secretary Scott Bessent asserted that the pullback had been the plan all along to bring countries to the bargaining table. Trump, though, later indicated that the near-panic in markets that had unfolded since his April 2 announcements had factored in to his thinking.

Despite insisting for days that his policies would never change, he told reporters on Wednesday: “You have to be flexible.”

But he kept the pressure on China, the second biggest provider of U.S. imports. Trump said he would raise the tariff on Chinese imports to 125% immediately from the 104% level that took effect at midnight.

Beijing on Wednesday slapped 84% tariffs on U.S. imports to match Trump’s earlier tariff salvo and has vowed to “fight to the end” in an escalating tit-for-tat trade dispute between the world’s top two economies.

Chinese companies that sell products on Amazon are preparing to hike prices for the U.S. or quit that market due to the “unprecedented blow” from the tariff hikes, the head of China’s largest e-commerce association said.

‘GOADED CHINA’

Trump’s reversal on the tariffs imposed on other countries is also not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminum that are already in place.

The 90-day freeze also does not apply to duties paid by Canada and Mexico, because their goods are still subject to 25% fentanyl-related tariffs if they do not comply with the U.S.-Mexico-Canada trade agreement’s rules of origin. Those duties remain in place for the moment, with an indefinite exemption for USMCA-compliant goods.

Trump’s tariffs had sparked a days-long selloff that erased trillions of dollars from global stocks and pressured U.S. Treasury bonds and the dollar, which form the backbone of the global financial system. Canada and Japan said they would step in to provide stability if needed – a task usually performed by the United States during times of economic crisis.

Analysts said the sudden spike in share prices might not undo all of the damage. Surveys have found slowing business investment and household spending due to worries about the impact of the tariffs, and a Reuters/Ipsos survey found that three out of four Americans expect prices to increase in the months ahead.

Goldman Sachs cut its probability of a recession back to 45% after Trump’s move, down from 65%, saying the tariffs left in place were still likely to result in a 15% increase in the overall tariff rate.

Treasury Secretary Bessent shrugged off questions about market turmoil and said the abrupt reversal rewarded countries that had heeded Trump’s advice to refrain from retaliation. He suggested Trump had used the tariffs to create maximum negotiating leverage. “This was his strategy all along,” Bessent told reporters. “And you might even say that he goaded China into a bad position.”

Bessent is the point person in the country-by-country negotiations that could address foreign aid and military cooperation as well as economic matters. Trump has spoken with leaders of Japan and South Korea, and a delegation from Vietnam met with U.S. officials on Wednesday to discuss trade matters, the White House said.

Bessent declined to say how long negotiations with the more than 75 countries that have reached out might take.

Trump said a resolution with China was possible as well. But officials have said they will prioritize talks with other countries.

“China wants to make a deal,” Trump said. “They just don’t know how quite to go about it.”

Trump told reporters that he had been considering a pause for several days. On Monday, the White House denounced a report that the administration was considering such a move, calling it “fake news.”

Earlier on Wednesday, before the announcement, Trump tried to reassure investors, posting on his Truth Social account, “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”

Later, he added: “THIS IS A GREAT TIME TO BUY!!!”

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Venezuela-US tensions spike in wake of seized tanker as Nobel winner vows change

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Venezuelan opposition leader Maria Corina Machado on Friday promised political change after slipping out of the country in secret to collect the Nobel Peace Prize, as the shock waves intensified from the Trump administration’s seizure of an oil tanker earlier this week.

That escalation came on the heels of a large-scale U.S. military buildup in the southern Caribbean as President Donald Trump campaigns to oust Venezuelan leader Nicolas Maduro, pushing relations to their most volatile point in years, Reuters reported.

The effects could ripple through the region, with Venezuelan oil exports falling sharply and crisis-stricken Cuba, already straining to power its grid, at risk of losing supply.

The U.S. seizure of the Skipper tanker off Venezuela’s coast on Wednesday marked the first U.S. capture of Venezuelan oil cargo since sanctions were imposed in 2019.

The vessel is now heading to Houston, where it will offload its cargo onto smaller ships, Reuters reported.

The Trump administration does not recognize Maduro, in power since 2013, as Venezuela’s legitimate leader.

Washington has signalled more seizures are planned as part of efforts to choke off sanctioned oil flows, and subsequently imposed new sanctions on three nephews of Maduro’s wife and six tankers linked to them.

The U.S. military presence in the Caribbean has grown as Trump in recent weeks has discussed potential military intervention in Venezuela, based on accusations that the country ships narcotics to the United States. The Venezuelan government has denied the accusations.

So far there have been over 20 U.S. military strikes in the Caribbean and Pacific against suspected drug vessels this year, in which nearly 90 people have been killed, alarming human rights advocates and stirring debate among U.S. lawmakers.

While many Republicans have backed the campaign, Democrats have questioned whether the campaign is illegal and urged more transparency, including the release of a full, unedited video, opens new tab of strikes on a suspected drug-trafficking boat.

MACHADO DEFIES BAN, URGES TRANSITION

Machado defied a decade-long travel ban and a period in hiding to travel to Oslo on Thursday, noting that she would soon bring the Nobel Peace Prize back home to Venezuela.

She said Maduro would leave power “whether there is a negotiated changeover or not,” vowed she is focused on a peaceful transition, and thanked Trump for his “decisive support.”

Machado is aligned with U.S. hardliners who accuse Maduro of ties to criminal networks – claims that U.S. intelligence has reportedly questioned.

When asked at a press conference in Oslo if she believed U.S. intervention was needed in Venezuela, Machado replied, “We are asking the world to help us.”

Venezuela condemned the tanker seizure as “blatant theft” and “international piracy,” saying it would file complaints with international bodies.

At the same time, Venezuelan lawmakers took a step to withdraw the country from the International Criminal Court, which is currently investigating alleged human rights abuses in the South American country.

Adding to the friction, the Venezuelan government announced the suspension of a U.S. migrant repatriation flight on Friday. A U.S. official countered that deportation flights would continue.

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Putin arrives in Ashgabat to hold series of meetings

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Russian President Vladimir Putin has arrived in Turkmenistan’s capital for a two-day visit.

According to TASS, the presidential aircraft of the Rossiya Special Flight Detachment landed near the presidential terminal of Ashgabat International Airport, commonly referred to as the “small bird” for its distinctive design.

During his visit, Putin will attend an international forum titled “Peace and Trust: Unity of Goals for a Sustainable Future” and hold several bilateral meetings.

The Kremlin has confirmed talks with Turkish President Recep Tayyip Erdogan, while the Iranian Embassy has announced that a meeting with President Masoud Pezeshkian is also planned.

The Ashgabat forum will also be attended by Turkmen President Serdar Berdymukhamedov, along with the presidents of Armenia, Iraq, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan, as well as the prime ministers of Azerbaijan, Hungary, Georgia and Pakistan.

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Trump launches gold card program for expedited visas with a $1 million price tag

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President Donald Trump’s administration officially launched his “Trump Gold Card” visa program on Wednesday to provide a pathway, with a steep price, for non-U.S. citizens to get expedited permission to live in the United States.

The website Trumpcard.gov, complete with an “apply now” button, allows interested applicants to pay a $15,000 fee to the Department of Homeland Security for speedy processing, Reuters reported.

After going through a background check or vetting process, applicants must then make a “contribution” — the website also calls it a “gift” — of $1 million to get the visa, similar to a “Green Card,” which allows them to live and work in the United States.

“Basically it’s a Green Card, but much better. Much more powerful, a much stronger path,” Trump told reporters at the White House. “A path is a big deal. Have to be great people.”

Commerce Secretary Howard Lutnick said some 10,000 people have already signed up for the gold card during a pre-registration period and he expected many more to do so. “I would expect over time that we’d sell, you know, thousands of these cards and raise, you know, billions, billions of dollars,” Lutnick told Reuters in a brief interview.

Lutnick said the gold card program would bring people into the United States who would benefit the economy. He compared that to “average” Green Card holders, whom he said earned less money than average Americans and were more likely to be on or have family members on public assistance. He did not provide evidence for that assertion.

Trump’s administration has pursued a broad crackdown on immigration, deporting hundreds of thousands of people who were in the country illegally and also taking measures to discourage legal immigration.

The gold card program is the Trump version of a counter balance to that, designed to make money for the U.S. Treasury in the same way the president, a former New York businessman and reality television host, has said his tariff program has successfully done.

Lutnick noted that there was also a corporate version of the gold card that allowed companies to get expedited visas for employees they wanted to work in the United States, for a $2 million contribution per employee.

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