US Weighs Farmer Bailout As China Retaliation Threatens Exports

Business executives are warning of a potential recession caused by his policies, some of the top U.S. trading partners are retaliating with their own import taxes and the stock market is quivering after days of decline.

Trump's tariffs kicked in shortly after midnight, including 104% on products from China, 20% on the European Union, 24% on Japan and 25% on South Korea. Administration officials have tried to reassure voters, Republican lawmakers and CEOs that the rates are negotiable, but by their own admission that process could take months.

When a downturn appears on the horizon, investors typically crowd into U.S. Treasury notes as a safe haven, viewing the federal government as a source of stability. Not this time. Government bond prices are down, pushing up the interest rate on the 10-year U.S. Treasury note to 4.39% in a sign that the world is increasingly leery of Trump's moves.

The Republican president was publicly defiant as the stock market recovered slightly and then sold off in morning trading.

“THIS IS A GREAT TIME TO BUY!!!” he posted on Truth Social, his social media site. “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”

Presidents often receive undue credit or blame for the state of the U.S. economy as their time in the White House is subject to financial and geopolitical forces beyond their direct control. But by unilaterally imposing tariffs, Trump is exerting extraordinary influence over the flow of commerce, creating political risks that could prove difficult to avoid if his plans do not pan out. After early success in exerting control over American institutions, from law firms and universities to federal agencies and cultural organizations, he is now facing off with global markets that will not simply bend to his will.

JPMorgan Chase CEO and Chairman Jamie Dimon said there would “probably” be a recession, although he also deferred to his economists.

“I do think fixing these tariff issues and trade issues would be a good thing to do,” he said in an interview with Fox Business Network's “Mornings with Maria.”

On CNBC, Delta Air Lines CEO Ed Bastian said the administration was being less strategic than it was during Trump's first term.

“Trying to do it all at the same time has created chaos in terms of being able to make plans,” he said, noting that demand for air travel has weakened.

Economic forecasters say Trump's return to the White House has had a series of negative and cascading impacts that could put the country into a downturn.

Source: Yahoo Finance

Amid U.S. President Donald Trump’s global tariff offensive, China and the United States are locked in a cycle of trade retaliation, with both sides unwilling to be viewed as ceding ground.

On April 2, which he dubbed “Liberation Day,” Trump announced sweeping tariff hikes on most countries around the world, supposedly designed to bring U.S. trade barriers to “reciprocal” levels (although, as critics have pointed out, the simplistic formula being used seems to actually reflect the U.S. trade deficit with various countries instead). For China specifically, the April 2 announcement called for adding a 34 percent tariff – on top of two separate 10 percent tariff hikes in February, which Trump had linked to China’s role in the U.S. fentanyl crisis.

China responded to each of these escalations with a mirroring response: increasing its own tariffs on U.S. imports, adding U.S. firms to its Unreliable Entity List, and restricting exports of critical minerals. In response to the April 2 hike, China ramped up its response by slapping a 34 percent tariff on all U.S. exports to China – no longer limiting the damage to targeted sectors.

Trump was irate about China’s response and immediately threatened to levy an additional 50 percent tariff on Chinese goods. It wasn’t clear at first if this was a serious policy decision or Trump-esque bluster, but on April 8 – the day before the “reciprocal tariffs” took effect – the White House confirmed the new hike was happening.

“It was a mistake for China to retaliate,” White House Press Secretary Karoline Leavitt told reporters. “The president, when America is punched, he punches back harder. That’s why there will be 104 percent tariffs going into effect on China tonight at midnight.” (The 104 percent number comes from the total of all Trump’s separate tariff hikes: 10 percent, 10 percent, 34 percent, and 50 percent.)

Treasury Secretary Scott Bessent also told CNBC that it was a “big mistake” for China to retaliate against Trump’s tariffs.

The Trump administration was unlikely to be pleased, then, when China responded with yet another tariff hike of its own on April 9. China’s State Council announced that it was raising tariffs on all U.S. imports to 84 percent, matching Trump’s 50 percent escalation. Unintentionally echoing the Trump administration’s language, a statement from the Commerce Ministry said, “The U.S. threat to escalate tariffs on China is a mistake on top of a mistake.”

That gets at the root of the issue: both Washington and Beijing believe the other side is making a “mistake” by retaliating (instead of, presumably, folding and coming to the table for negotiations to end the trade war). That assumption is underpinned by each side’s confidence that their country is better positioned to weather the inevitable pain that will follow the tariff hikes.

“What do we lose by the Chinese raising tariffs on us?” Bessent said dismissively to CNBC. “We export one-fifth to them of what they export to us, so that is a losing hand for them.”

China’s policymakers, however, disagree. They are betting that the American public will refuse to tolerate sharp price hikes from tariffs – a logical assumption, considering Trump was elected largely based on dissatisfaction with inflation – as well as the U.S. stock market’s ongoing crash. Some CEOs have already dubbed the economic damage “the Trump recession.” Beijing seems willing to gamble that rising internal pressure will force Trump to back down without China having to make concessions.

There’s also the fact that Trump has essentially declared a trade war against the entire world, severely limiting U.S. alternatives to Chinese imports. China, which is fighting on a single front, has more options for diversifying its markets for both imports and exports – a possess that Beijing had already begun in earnest during the first Trump administration. But, experts warn, the rest of the world is unlikely to be willing to absorb the massive excess capacity that would be caused by a sharp dropoff on Chinese exports to the United States. Attempts to export more to the rest of the world could cause a domino effect of discontent in China’s other trade relationships.

Beyond the economics, there’s also a psychological dimension to the trade war that is fueling the escalation cycle. Unlike other countries that have shown a willingness to negotiate with Trump – like Vietnam, Japan, and India – China is locked in a global rivalry with the United States. Each side views the other with extreme suspicion, and that makes any compromise unlikely. Instead, both the United States and China have accused each other of bullying behavior, adding a emotive component to the trade war that will make it exceedingly difficult for either Trump or Xi Jinping to back down.

“China firmly rejects and will never accept such hegemonic and bullying move,” said Lin Jian, China’s Foreign Ministry spokesperson, in a regular press conference on April 9. “…If the U.S. decides not to care about the interests of the U.S. itself, China and the rest of the world, and is determined to fight a tariff and trade war, China’s response will continue to the end.”

Bessent called China “the worst offenders in the international trading system.”

Already, both Beijing and Washington have indicated that they will wait for the other side to come begging to start negotiations.

“If the U.S. really seeks to resolve the issue through dialogue and negotiation, it should demonstrate an attitude of equality, respect and reciprocity,” Lin said.

Meanwhile, Leavitt had told reporters on April 8 that China would have to be the one to start talks to end the tariffs. “The president also wanted me to tell all of you that if China reaches out to make a deal, he’ll be incredibly gracious, but he’s going to do what’s best for the American people,” she said, adding, “China has to call first.”

For now, instead of trying to negotiate, China is taking steps to bolster its economy internally. According to Reuters, top Chinese policymakers – including senior officials from the State Council, the People’s Bank of China, and the banking and securities regulators – were expected to hold an urgent meeting this week “to hammer out measures to boost the economy and stabilize capital markets.”

Source: The Diplomat

(April 9): Before he stepped down as Canadian prime minister, Justin Trudeau called Donald Trump’s tariff policies “very dumb”. This might be an accurate description of many Trump administration policies — but the more objectively correct word is “stupid”.

In fact, Québec’s largest newspaper, Le Journal de Montréal, published a front-page photo of Trump in early February with the word “stupid” in 350-point type. Some may call this an opinion, but the science of stupidity tells us that it’s more of a definition.

Recent research has produced a succinct label for the poorly calculated actions of decision-makers: stupidity.

This is not simple name-calling, but a phenomenon that comprises loss and features a set of actions that are either outright recognizably dysfunctional, or appear so at odds with any sensible course of action that it seems a hidden agenda could be involved.

According to the seminal and transactional view of human stupidity by Carlo Cipolla, the late Italian economic historian, interactions fall into four categories:

• Intelligent interactions that are beneficial to all — a positive-sum game like Scottish philosopher Adam Smith’s notion of wealth through specialization and trade;
• Helpless interactions that result in a loss in a zero-sum game;
• Bandit interactions that result in a gain in zero-sum game;
• Stupid interactions that cause all parties to suffer a loss.

Free trade is based on an intelligent positive-sum interaction. Trump’s transactional zero-sum view is that for every winner there is a loser.

He apparently doesn’t understand that tariffs are only successful if other countries don’t retaliate. But other countries do retaliate, and as the world is now witnessing, the resulting trade war can decimate the global economy.

Trump’s protectionist measures aimed at boosting the US economy can therefore be considered “stupid” interactions that deepen and lengthen economic depression.

Modern-day researchers have also identified three recognizable sets of actions embodying stupidity:

Confident ignorance that involves people taking risks without having the necessary skills to deal with them. It’s not just being ignorant of one’s ignorance — explained by the Dunning-Kruger effect — but being self-assured despite contrary evidence.

Trump may know what he does not know, so he delegated many tasks to Tesla founder Elon Musk and trade tariff architect Pete Navarro, both of whom seem to possess no such awareness.

Absent-minded failure means people knew the right thing to do but were not paying sufficient attention to avoid doing something stupid. Organizations create agendas, but if issues don’t reach a point where they seriously impact the organization’s objectives, they are ignored.

An example is the recent US strikes against Yemeni Houthis. US officials ignored critical security components by sharing information about their plans over unsecure connections and with a member of the media.

Lack of control means that autocratic decision-makers compromise their organizations by failing to accept objections from those charged with implementing the leader’s preconceived plans.

Such autocratic decision-makers may select biased information to support their proposals. Those working under these leaders either buy into efforts to selectively use information, limit alternatives and execute these preconceived plans or they leave the organization (either voluntarily or not).

In the US, witness the firing of Justice Department pardon attorney Elizabeth Oyer. She failed to support restoring gun rights to actor Mel Gibson, who had been convicted of domestic violence in 2011. Gibson’s pardon was reportedly based on his personal relationship with the president.

Organizational researchers have used the term functional stupidity to describe those who refuse to use their intellectual capacities when making decisions and then avoid justification for their actions. This allows group members to quickly execute routine functions without much thought.

Dysfunctional stupidity is a lack of organizationally supported reflection, reasoning and justification. Organizations fail to use intellectual resources to process knowledge or question norms or claims of knowledge when confronted with new or non-routine decisions. By blocking communications, muffling criticism and squelching doubts, organizations ensure adherence to superiors’ edicts.

One Trump administration example is the unquestioning permission given to allow the Department of Government Efficiency (DOGE), headed by Musk, to access to a wide array of government data.

It can take the combined efforts of organizational officials on multiple levels to maintain stupidity.

Individually, stupidity is reinforced by ignoring crucial information because of a need for a rapid response.

Consequently, quick decisions and shortcuts made by individuals result in negative outcomes. An example would be the Trump administration’s apparent need to appear to find cost savings quickly to allow for tax cuts, overriding a more logical approach to find ways to achieve those savings without gutting legally mandated services.

Organizationally, stupidity is reinforced because organizations limit acceptable alternative behaviours when they cannot process all available information. Data is restricted, controls are tightened and organization officials fall back to using previously well-learned responses in their comfort zones. Inexperienced decision-makers fall back on uninformed assumptions, or no assumptions at all.

Witness Trump’s “reciprocal” trade tariffs currently decimating financial markets worldwide. No tariffs were calculated using current tariff rates, while others were based on American trade deficits with other countries. Other tariffs seem to be based on no rationale at all.

Some actions that appear stupid may simply hide a hidden agenda. When the Trump administration erroneously detains and deports anyone under the Alien Enemies Act, is it an accident or a way to instil fear in everyone that authorities can detain, mistreat and deport them without due process at any point?

Many of the actions being taken by the Trump administration appear stupid.

Tariffs, for example, represent a loss — a transactionally negative sum game.

Trump’s decisions exhibit confident ignorance, absent-minded failure and lack of control. They also show dysfunctional stupidity as Trump officials seemingly refuse to use their full intellectual resources. Stupidity is also being reinforced through unfounded assumptions. Is this all hiding a secret agenda?

“You can’t fix stupid,” so the saying goes. But having capable administrators in place while other branches of government exercise their constitutionally mandated oversight role might dampen some of the Trump administration’s stupidity.

Source: Theedgemarkets

Oil prices slumped to four-year lows Wednesday after China announced additional tariff measures on U.S. goods, ramping up the trade war between the two largest economies in the world.

At 08:25 ET (12:25 GMT), Brent oil futures expiring in June fell 5.9% to $59.11 a barrel, while West Texas Intermediate crude futures fell 6.1% to $55.97 a barrel.

China retaliates to Trump’s tariffs

China announced earlier Wednesday that it will impose 84% tariffs on U.S. goods from Thursday, up from the previous 34%, in response to U.S. President Donald Trump signing an executive order hiking his planned tariffs on China by 50%, marking a dire escalation in tensions with the world’s biggest oil importer.

Brent and WTI have fallen for five sessions since Trump announced sweeping tariffs on most imports, prompting concerns over economic growth and demand for fuel.

Trump’s latest order had brought U.S. tariffs on China to a cumulative 104%, much higher than the 60% worst case rate threatened by Trump when he was campaigning for President.

The tariffs are expected to dent China’s economy, potentially hurting the country’s appetite for oil imports.

Beijing has maintained a largely harsh rhetoric against Trump’s tariffs, vowing to “fight till the end.” China is also expected to ramp up its stimulus efforts to offset the impact of Trump’s tariffs.

But beyond China, oil markets were also on edge over the broader economic impact of Trump’s tariffs, which stand to disrupt global trade and potentially dent growth. Trump’s tariffs will be borne largely by U.S. importers, a trend that could drive up local inflation and also undermine growth.

Several investment banks, brokerages, and betting markets were seen increasing their odds for a U.S. recession in 2025. Such a scenario bodes poorly for oil demand.

US inventories see small draw - API

Data from the American Petroleum Institute showed a nearly 1.1 million barrel draw in U.S. inventories over the past week. The draw comes after several weeks of outsized builds in inventories - a trend that had sparked some concerns over sluggish fuel demand.

The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday.

Oil inventories grew by a substantially bigger-than-expected 6.1 million barrels in the prior week.

Source: Investing

Source: Cointelegraph

President Donald Trump’s so-called reciprocal tariffs are now in place, dealing a thunderous blow to the world economy as he pushes forward efforts to drastically reorder global trade.

Trump’s latest tariffs push levies imposed on China this year to as high as 104%, along with import taxes on roughly 60 trading partners that run trade surpluses with the US. That comes after a 10% baseline tariff for most US trading partners took effect Saturday.

The moves raise tariffs to their highest level in more than a century.

China announced retaliatory measures at 7 p.m. Beijing time, raising tariffs on US goods from 34% to 84% from April 10, according to a statement.

Treasuries extended their selloff, with 30-year yields soaring briefly above 5%, and Asian shares and European shares fell in Wednesday trading. US futures fell sharply after China announced retaliation. Markets had remained volatile throughout the US day Tuesday, rallying as Trump previewed negotiations with South Korea, then reversing as the administration affirmed plans to move ahead with its massive China tariffs.

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Asian countries are bearing the brunt of the measures, with Cambodia facing 49% and Vietnam 46%. Imports from the European Union will be taxed at a 20% rate.

“The tariffs are on and the money is pouring in at a level that we’ve never seen before, and it’s going to be great for us. It’s going to be great for other countries. We’ve been ripped off and abused by countries for many years,” Trump said Tuesday at a White House event.

In the hours before implementation — at 12:01 a.m. Wednesday in Washington — the White House insisted the duties were indeed coming, squelching market speculation for any last-minute reprieve.

US levies on China now include previous 20% levies tied to fentanyl trafficking, a 34% “reciprocal” tariff derived from a calculation based on the bilateral trade balance, and an additional 50% duty Trump announced after Beijing said it would respond by taxing US exports to China.

The president welcomed appeals from US allies who want him to lower their rates, saying Tuesday that teams from Japan and South Korea were en route to hammer out agreements. Trump hosted Israeli Prime Minister Benjamin Netanyahu earlier this week for talks, while Italian Prime Minister Giorgia Meloni will travel to Washington next week.

“We’re doing very well in making, I call them tailored deals, not off-the-rack,” Trump said. “It’s been amazing what’s happened. Sometimes you have to mix it up a little bit.”

Urgent Diplomacy

Wall Street

Source: Yahoo Finance