Politics: unpredictable and dangerous
By Richard North - April 8, 2025
The story on Trump’s tariffs is getting even more frenetic, almost to the point where coherent reporting – and certainly analysis – is all but impossible. All the major newspapers (and broadcast media) are running reports, but different organs are often looking at different bits, often at different stages, so there is little in the way of a unifying theme.
As far as front pages go, the tabloids have largely given up, with the likes of the Mail the Express and others going for the easy, human interest shot of the baby born after the first womb transplant, relegating the tough stuff to the inside pages where the coverage is slight and often derivative.
In a way, a complex, fast moving story like this sorts the men from the boys, although it is probably not possible to do justice to the full scale of the events. There really are too many moving parts, too many actors and too much happening for even a series of reports to capture the full flavour of the ongoing drama.
Where there is some sense of a dominant issue, it is on the response of China to Trump’s moves, and then the response of Trump to China’s move. No doubt, by morning here, with the US papers not having gone to bed, there will be more developments which will render much of the current reporting obsolete.
Given the transatlantic nature of this crisis, the instinct is to look to the US press for guidance, and in particular the Wall Street Journal which, even in these frenetic days, is sometimes capable of sober reporting. But even here, this paper has yet to decide on its main line and is keeping its options open with a live news blog which is simply recording developments as they happen, without attempting to order them, much less making an attempt at clinical analysis.
One story which does get some mileage, in the WSJ and elsewhere, is the extraordinary “fake news” report arising mid-morning US time when Kevin Hassett, the chairman of the Council of Economic Advisers – not a figure of a position widely known in the UK – was erroneously reported as saying that Trump was considering a 90-day tariff pause.
Although the White House moved swiftly to rebut the report, it was not quick enough to prevent a brief but dramatic upwards surge of the US stock market, before crisis mode took over again, touching off what the WSJ called “wild swings”, highlighting “the increasing desperation on Wall Street as the trade-war rout of 2025 extends into a new week”.
The initial reaction, says the paper, “showed how much desire there is among investors to return to the well-trod territory of administrations that want to assist markets and stock declines that are quickly followed by sharp bounce-backs”.
Not all is well, in Trumpland though, as the paper then warns that some major investors are starting to sound off publicly about what they see as the dangers in the shift to large tariffs, even as it becomes clear that Trump and his advisers “aren’t humming the same tune”.
Nevertheless, the president himself seems unaffected by the chaos around him – largely of his making – announcing that he was planning an additional 50 percent tariff on China starting as soon as tomorrow, if Beijing does not withdraw its own retaliatory tariff increase on the US. In something of a scorched earth policy, he also declares that: “all talks with China concerning their requested meetings with us will be terminated!”.
As a result, in market trading, stocks are being described as “volatile” – meaning mainly down and, in some cases, substantially so. The S&P index, we are told, stood close to bear-market territory, which is defined as a 20 percent-plus decline from a recent peak.
In Asia, where many economies are highly trade-reliant, the news is that stocks have plunged. Hong Kong’s main equity benchmark lost 13 percent, marking its worst day since the Asian financial crisis. Indexes in Shanghai, Taipei and Tokyo fell between 7 and 10 percent.
Europe seems to have weathered the crisis better, with the Stoxx Europe 600 index sinking by over 4 percent. But, as an indication of the devastation caused so far, the WSJ is telling us that last week, US stocks lost $6.6 trillion in value in the two days after Trump announced his tariff hike.
There is a suggestion, though, that what can go down can go up as well, but it is also the case that what goes down can go down even further. But we’re not yet in Wall Street crash territory when in October 1929 the Dow lost over 23 percent in two days.
Back on this side of the Atlantic, where this country’s main financial journal – the Financial Times has gone to bed, we are actually getting much the same story, with the headline proclaiming: “Donald Trump threatens extra 50% tariff on China in day of wild market swings”, with the sub-head reporting that: “US president sticks with plan to ‘reset’ global trade but sends mixed signals about negotiations”.
The Times does attempt what it calls analysis, but which is actually speculation, signalled by the headline: “Trump dares China to blink first. What if it doesn’t?”,
Writer, David Chater, notes that, as president of the United States, Trump can wield the largest economy and the strongest currency, which in almost every case would prove overwhelming. But, he adds, “America’s main geopolitical rival has some powerful economic weapons of its own”.
Not least, he says, it has the ability to decimate some of the biggest names in US computing and electronics like Apple, Intel, Tesla and Qualcomm, all of which rely on China for a huge part of their business. So far, he observes, it is Trump who has done the damage. A month ago, Apple was worth $3.6 trillion. As of Monday afternoon, it was worth about $2.7 trillion.
Someone, somewhere, must think all this disruption is worth it – if not Trump himself. But as to the president’s “high-stakes ultimatum to China”, Chater remarks that it is on another level after he wrote that “all talks with China concerning their requested meetings with us will be terminated”.
Trump, Chater says, is forcing a trial of strength with a rival not known for submission and the world can only wait to see if the No 2 economic power bows to No 1, with unpredictable and dangerous consequences if this stand-off continues.
“Unpredictable and dangerous” are not happy words in this context, and we still have to take in the response from the slow-moving European Union. Bruno Waterfield, also in The Times deals with some of that, his piece headlined: “Fightback begins as EU bets markets will force Trump tariff retreat”.
The thrust of that is self-evident, as we learn that the “Europeans” are hoping that global financial markets will force Trump into a retreat, thus preventing a full-blown trade war. But not until next Monday are EU trade ministers due to meet in Luxembourg, when they will at last discuss how to respond to Trump’s moves.
By then, if their thinking is straight, they will have less to worry about as the markets will have forced Trump to tone down his actions. But many will take the view that Trump is unlikely to be deterred by the mere prospect of a global financial crisis – if not collapse.
The Telegraph has him urging Americans not to panic despite the trillions of dollars being wiped from global markets. And, in an apparent reference to his own Republican Party, he is telling his critics not to be “a Panican” – coining a new phrase which he described as “a new party based on weak and stupid people”.
In a sign that he remains unfazed by the stock market ructions, the New York Times has reported that he spent the end of last week hosting a dinner at his Mar-a-Lago resort, where guests paid $1m a head to dine with the president at his private club.
This does not augur well for the EU’s “wait and see” strategy so, even as the stock markets hammer the US and the dollar, the EU is stressing that it has “cards up its sleeve”.
This we know from my piece yesterday, and there’s nothing much to add, other than to say that the EU strategy is to keep its powder dry for now. This, Waterfield assures us, will ensure that it is Trump, and not any European response to him, that gets the blame for economic fallout.
“If there is a global crash, then it [will] be Trump, not us, who will be responsible in the eyes of the public on both sides of the Atlantic”, an anonymous European diplomat is cited as saying.
The thing to watch for is whether the EU manages to hold together the member states in a show of unity, bearing in mind that they are all affected in different ways by the Trump tariffs, with the French particularly at risk if alcohol sales come into the crosshairs.
While the Europeans ponder their approach, the New York Times – as always, is lining Trump up for a fall. The paper complains that Wall Street professionals, like so many other ostensibly smart people, refused to see Trump clearly, mistaking his skill as a demagogue for wisdom as a policymaker.
For its instrument of destruction, it chooses Peter Berezin, chief global strategist at BCA Research, who thinks that Wall Street still hasn’t come to terms with the cost of the nascent Trump presidency.
“I do think that at this point we might have passed the event horizon, meaning that even if Trump backs off from the tariffs, there’s been enough damage done to the US economy, to the global economy, to investor confidence, consumer confidence, that we’re probably going to see a recession regardless of what happens”, he says.
Yet, on Sunday, I called it a “Humpty Dumpty” moment, remarking that “all the king’s horses and all the king’s men couldn’t put Humpty together again”.
Who knew?
