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A 3D-printed miniature model depicting US President Donald Trump, the Chinese flag, and the word "tariffs" in this illustration taken on April 17, 2025.
US and China limp toward trade war thaw
In the three months before US President Donald Trump dropped widespread tariffs on April 2, aka “Liberation Day,” the American economy contracted 0.3% at an annualized rate, a sharp drop from the 2.4% annualized rise in the final quarter of 2024. Economists were already worried that a recession was looming, and now the world’s largest economy is heading in that direction.
“The true disruptive effects are only beginning to be felt and will start playing out over the ensuing quarters,” says Robert Kahn, Eurasia Group’s managing director of Global Macro.
It’s not me, it’s you. Last year, Trump tried to take credit for the booming stock market, even though he was not in power. He inverted the argument on Wednesday, pinning the blame for the struggling economy on his predecessor, Joe Biden, while urging Americans to “BE PATIENT!!!” Though the midterm elections are still 18 months away, Trump’s pleas for patience show he’s wary of the political effects of a receding economy.
“Today’s data are a reminder that the political costs of a recession are going to be broad-based and significant,” Kahn added.
They’re not the only ones. China, the object of Trump’s tariff ire, also faces an economic slowdown. Chinese factories saw their sharpest monthly slowdown in over a year, per the National Bureau of Statistics, after the US president raised levies on their products to 145%. Beijing released a video on Tuesday reiterating that it “won’t kneel down to Trump,” an apparent signal that the trade war won’t end soon.
Actions speak louder than words. Despite the rhetoric, China is tempering some of its retaliatory measures. It created a list of US-made goods that will be exempt from its 125% counter-tariff. It’s not clear which products will be on this “whitelist,” but China has already spared the imports of microchips and aircraft engines – among other items – from its list. The White House has also made exceptions for Chinese imports three weeks ago, allowing smartphones and other tech devices to enter the United States with just a 20% tariff, and Trump predicted on Tuesday that he’d strike a trade deal with China.
A “painful truce,” as Kahn put it, may be inbound.
A photovoltaic power station with a capacity of 0.8 MW covers an area of more than 3,000 square metres at the industrial site of the Chernobyl Nuclear Power Plant, Kyiv region, Ukraine, on April 12, 2025.
The US-Ukraine minerals deal is finally done
Two months after their infamous White House fight, the US and Ukraine announced on Wednesday that they had finally struck a long-awaited minerals deal.
What’s in this deal? Leaked versions of the agreement signal that it creates a joint US-Ukraine investment fund to prospect for Ukraine’s critical minerals.It’s also believed to include US access not just to critical minerals but also to Ukraine’s oil, gas, and energy infrastructure. The minerals include lithium, titanium, and large reserves of graphite, an essential component in the batteries that power electric vehicles. Ukraine also claims significant quantities of rare earth metals that power a wide range of consumer products and high-tech weapons.
Will the deal help end the war? Ukraine’s President Volodymyr Zelensky has argued the deal would give Washington a stake in Ukraine’s peaceful future, making it less likely that US President Donald Trump would halt all US support for Ukraine’s defense against Russian invaders. Trump prides himself on his ability to cut big deals and will protect an agreement once signed. The president noted during a press event at the White House yesterday that the US presence in Ukraine “will keep a lot of bad actors out of the country.” That’s clearly what Kyiv is hoping for.
But this deal, however lucrative for the US and useful for a Ukraine desperate to keep Trump onside, doesn’t change the reality that Kyiv and Moscow’s visions for Ukraine’s future are fundamentally incompatible. That said, anything that keeps Washington invested in Ukraine’s defense will be greeted as good news in Kyiv.
One last step. Ukraine’s parliament must still ratify the framework for the deal before it becomes law.
Canada’s Prime Minister Mark Carney speaks with members of the media as he walks into his office after the Liberal Party staged a major political comeback to retain power in parliamentary elections, in Ottawa, Ontario, Canada, on April 29, 2025.
Carney wins power, but showdown with Trump looms over Canada’s future
Prime Minister Mark Carney may have won the battle for power in Canada, but his country’s war of words with US President Donald Trump is only just beginning. And before that all begins, the Liberal leader must form a government.
Carney has options. The Liberal Party is projected to fall just three seats shy of a majority. Even so, the former Bank of England and Bank of Canada governor is unlikely to seek a confidence-and-supply agreement, according to Eurasia Group senior analyst Graeme Thompson, even though Bloc Quebecois offered him a “truce.”
“If the Liberals fall short of a bare majority, they will be in a strong enough position to govern with a minority government, seeking ad hoc support from the NDP and Bloc Quebecois on specific issues,” Thompson said.
The elephant in the room. Once Carney forms a government, his principal test will be dealing with Trump. The aim for Carney, per Thompson, will be “to secure tariff-free (or at least low-tariff) access to the US market,” and the White House’s more dovish tone on trade over the last week suggests there might be an opening. The pair agreed to meet in person some time in the near future, according to a readout from the prime minister’s office, which comes after Carney insisted on Monday that he would only visit Washington to discuss trade agreements when there was a “serious discussion to be had.”
Ian Bremmer examines the future of the US-Canada relationship in his latest World in:60 here.
What’s next for Pierre Poilievre? The Conservative leader lost his own seat – a verdict that would consign you to reality television if you were in the United Kingdom. But he also led the Tories to their largest popular vote share since 1988, and expanded the right-wing coalition, so his political future may not be dead yet.
“He’s humbled,” Thompson said, “but likely to stay on to fight another day.”
U.S. President Donald Trump and Indian Prime Minister Narendra Modi shake hands as they attend a joint press conference at the White House in Washington, D.C., U.S., February 13, 2025.
A winner from Trump tariff wars? Maybe India
Modi has been around long enough to have navigated trade frictions during Trump’s first term, and he was one of the first world leaders to approach Trump earlier this year with a conciliatory approach to growing trade tensions. Now, according to US Treasury Secretary Scott Bessent, the first phase of a new US-India trade deal might be “one of the first trade deals we would sign." Following a visit to Washington last week, Rajesh Agrawal, India’s lead trade negotiator, highlighted hopes for a “mutually beneficial, multi-sector bilateral trade agreement by fall of 2025, including through opportunities for early mutual wins.” Creating more market openings for US exports will come at a cost in a country long known for trade protectionism, but Modi has also made moves in recent years to open trade talks with the EU, the UK, and others.
This also follows news that, to avoid the Trump administration’s surging tariff rates on China, Apple has unveiled plans to move production of most of the 60 million iPhones it sells in the US each year from China to India by the end of 2026 – though the transition may take longer.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.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.
Burkina Faso’s junta leader Captain Ibrahim Traore attends the first ordinary summit of heads of state and governments of the Alliance of Sahel States (AES) in Niamey, Niger, on July 6, 2024.
Hard Numbers: Burkina Faso foils coup effort, Trump dents democracy rating, Spain to hit defense-spending target, Musk to reduce his DOGE hours, Migrants arrested while fleeing US, Japan rids foreign debt, Tourists killed in Kashmir
40%: Burkina Faso’s ruling military recently foiled an attempted coup aimed at removing junta leader Cap. Ibrahim Traoré, the country’s security minister said on Monday. The Sahel nation has had to deal with widespread insurgency in recent years, with rebel jihadist groups reportedly controlling around 40% of the country’s land mass.
55: US President Donald Trump made a dent in American democracy almost as soon as he won the 2024 election, according to a survey of 520 political experts. The Bright Line Watch benchmark gave US democracy a rating of 55 in February, down 12 points from where it was on the day of Trump’s election victory and 14 points from where it was in October 2024. It’s the country’s fastest drop since the survey began in 2017.
2%: Our globally minded readers will immediately recognize this figure as the proportion of gross domestic product that NATO member nations are encouraged to spend on defense. Under pressure from the Trump administration and its European allies to expand its military, Spain said Tuesday that it will finally hit that figure again this year, after falling short for over 30 years.
130: Elon Musk is DOGE-ing himself. The Tesla CEO says he will cut back his role in the government after his electric vehicle company reported a massive profit drop. Musk says he will spend just one to two days each week on DOGE following accusations that he has let his focus on Tesla slip. Regardless, temporary government employees like Musk are normally limited to working 130 days a year, which would expire at the end of May.
8: So much for the Great Escape: From January through April, US authorities arrested eight undocumented Dominican migrants in Puerto Rico who were trying to return to their home country. The arrests raise questions over the Trump administration’s stated goal of encouraging undocumented migrants to leave of their own accord.
$20 billion: Trump’s tariffs have Tokyo in a selling mood. Japanese investors said sayonara to more than $20 billion of foreign debt early this month. The selloff shows how Wall Street jitters can ripple across the Pacific. It’s not clear which foreign debt Japanese investors unloaded, though they are the largest holders of US Treasuries of any country worldwide, so their investment choices are observed hawkishly.
26: Outrage is rising after gunmen killed 26 tourists in Indian-administered Kashmir’s Pahalgam on Tuesday. Several other victims remain critically injured. The Resistance Front – believed to be an offshoot of Pakistan-based terrorist group Lashkar-e-Taiba – has claimed responsibility.
U.S. President Donald Trump salutes as he attends the annual White House Easter Egg Roll, in Washington, D.C., U.S., on April 21, 2025.
HARD NUMBERS: Trump rolls real eggs, UAE seeks AI’s help, White House nixes safety jobs, South China Sea gets battle-tested, Gold rush, Senior US official robbed
30,000: Rising egg prices don’t seem to have hit the White House, as nearly 30,000 real eggs adorned the White House lawn Monday morning for the 147th annual Easter egg roll. Donald Trump paid tribute to Pope Francis, defended embattled US Defense Secretary Pete Hegseth, and shared photos with the Easter bunny.
1: Hey ChatGPT, can you propose some new legislation for the United Arab Emirates? Yes, the Emirati nation plans to become the first country to harness the power of artificial intelligence to propose new legislation.
875: Out of the roughly 1,000 National Institute for Occupational Safety and Healthjobs, the Trump administration has cut 875 of them as part of its broader effort to slash the number of federal employees. This move could especially harm former coal miners – who often suffer from lung disease – as NIOSH has helped them find work outside the mines.
14,000: More than 14,000 American and Filipino soldiers – 9,000 from the US, 5,000 from the Philippines – are participating in a “full battle test” this year, amid mounting tensions in the South China Sea. The coordinated drill will also feature soldiers from Australia, Canada, France, Japan, and the United Kingdom. The exercise, which started on Monday, will run for three weeks.
$3,400: An age-gold problem: The price of gold surpassed $3,400 on Monday amid fears over the future of the global economy and concerns for the Federal Reserve’s independence. A year ago today, the price of gold was at $2,384.
$3,000: A thief swiped US Homeland Security Secretary Kristi Noem’s bag while she was having dinner in Washington, DC, on Sunday night, taking her passport, makeup bag, checkbook, and $3,000 in cash. Police officers have not yet caught the thief, believed to be a white male.