The Guardian view on Trump's tariffs: both a political and an economic threat
In the event, there were some last-minute agreements struck this week, few of them fair or rational in trade terms, most of them motivated by the desire to generate some commercial order. Some conflicts are still in the balance. There were 11th-hour court challenges too, disputing the president's very right to play the trade war game in this way.
Even now, no one, probably including Mr Trump himself, knows whether this is his administration's last word on US tariffs. Almost certainly not. That's because Mr Trump's love of tariffs is always more about the assertion of political clout rather than economic power. Mr Trump's antipathy towards the European Union drives one example. The pact agreed by Ursula von der Leyen in Scotland last weekend underlines that the EU's aspirations as a global economic superpower exceed its actual clout. The EU could not prevent Mr Trump making European goods 15% more expensive if they sell on US markets. Nor could it stop Mr Trump getting EU tariffs on US goods withdrawn.
Equally eloquent about the global balance of economic power is that Mr Trump has not been able to force China to bend the knee in the manner of the EU. China has responded aggressively to Trump's tariff threats, retaliating with tariffs of its own and blocking the sale of commodities, including rare-earth minerals, that the US most covets. Unsurprisingly, this standoff has not produced one of Mr Trump's so-called deals. Friday's deadline has been reset for later in the month. It would be no surprise if it was eventually pushed back further.
Mr Trump is not imposing tariffs on the rest of the world in order to promote global trade or even to boost the US economy. He is doing it, in part, because Congress has delegated this power to him, allowing the president to impose or waive tariffs at will. He uses this power for many purposes. These include raising government income without congressional oversight and also, because tariffs are regressive, shifting the tax burden away from the very rich, like Mr Trump himself, on to the middle and working class.
But economics also comes way down the field in the list of reasons why Mr Trump is wielding the tariff weapon internationally. US talks with Brazil – with which the US runs a trade surplus, not a deficit – have been hijacked by Mr Trump's grievance over the prosecution of its former president Jair Bolsonaro for trying to overturn his 2022 election defeat. Talks with India are deadlocked because Mr Trump wants to penalise Delhi for buying energy and weapons from Russia. Those with Canada have been hit by Mr Trump's objections to Ottawa's plan to recognise Palestine.
The ultimate test of the policy, however, will indeed be economic. For now, financial markets appear to have decided that Mr Trump's tariffs are manageable. If tariffs now raise the cost of goods on US high streets, slowing growth and feeding inflation, as they may, the wider market response could change quickly. In that event, the mood among American voters might even shift too.
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The Sun
14 minutes ago
- The Sun
Major UK high street bank quits UN-backed net zero alliance as it says body ‘not fit for purpose'
A MAJOR high street bank has become the latest British lender to quit the Net Zero Banking Alliance, the bank said on Friday. Barclays argued that the departure of several global lenders has left it no longer fit to support the bank's green transition. Barclays' decision to quit the foremost banking alliance focused on tackling climate change follows on from HSBC and several major US banks. It also raises questions about the ability of the group to influence change in the sector going forward. The bank said in a statement on its website: "After consideration, we have decided to withdraw from the Net Zero Banking Alliance." It added that its commitment to be net zero by 2050 remained unchanged and that it still saw a commercial opportunity for itself and its clients in the energy transition. Earlier this week Barclays published the first update on its sustainability strategy in several years. It said the bank made £500 million in revenue from sustainable and low-carbon transition finance in 2024. Jeanne Martin, co-director of corporate engagement at responsible investment NGO ShareAction called the decision to leave the Net Zero Banking Alliance "incredibly disappointing and a step in the wrong direction at a time when the dangers of climate change are rapidly mounting." Barclays said the alliance was no longer fit for its purpose: "With the departure of most of the global banks, the organisation no longer has the membership to support our transition." The Net Zero Banking Alliance, a global initiative launched by the United Nations Environment Programme Finance Initiative, lists more than 100 members on its website - including leading international financial institutions. A spokesperson for the alliance said it remains focused on "supporting its members to lead on climate by addressing the barriers preventing their clients from investing in the net-zero transition." It comes after it was announced that Barclays is slashing interest rates on its popular Rainy Day for the third time in less than seven months. From August 4, the interest rate for balances up to £5,000 will fall from 4.61% to 4.36%. The Rainy Day Saver account, which offers easy access to funds, has been a favourite among Barclays ' 20 million customers. It is designed for balances up to £5,000, with savers earning the higher rate on the first £5,000 – currently 4.61%. Savings above this threshold earn just 1% interest, but customers benefit from instant access to their money at any time. At the current rate, holding £5,000 in the account would earn you £230.50 in interest over 12 months. However, when the rate drops to 4.36%, this will fall to £218 - a loss of £12.50 per year. Once boasting a competitive 5.12% interest rate earlier this year, Barclays has steadily chipped away at its appeal. In February, the rate dropped to 4.87%, followed by another cut in April to 4.61%. In February, the bank reduced the rate to 4.87%, followed by another cut in April to 4.61%. Now, just months later, rates are set to drop again, leaving savers questioning whether to stick with the account or explore better options elsewhere. How Barclay Card Changes Could Affect You ANALYSIS by Consumer Reporter, James Flanders: Barclaycard's change to its credit card repayment structure sounds great if you don't dig into the details. After all, Barclaycard says it's "making the changes to give you greater flexibility each month". In practice, it means that if you can't afford to pay off your balance in full at the end of each statement period, you can repay much less under the minimum repayment option than you have done previously. If you only pay the minimum amounts on occasion, this is super useful. But if you rely on this type of repayment plan in the long term, it could will cost you hundreds of pounds extra in interest. It could also negatively affect your credit file as it'll take you much longer to clear your debt. More interest will be applied to your outstanding balance, too, as less is paid down each month. For example, if you have a balance of £5,000 on a Barclaycard at 24% interest, where you only make the minimum payments and don't spend on the card. Under the old "2.5% of the balance plus the interest charged" rule, it would take around 14 years to clear the balance. In total, you'd expect to pay about £3,500 in interest. But with the new "1% of the balance plus the interest charged" calculation, it will take over 30 years to clear the same balance. You'd then end up paying a whopping £8,500 in interest. Before taking out a new credit card or increasing the amount you borrow, it's vital to consider the consequences. You should only borrow money if you can afford to pay it back. It's always vital to ask yourself if you actually need to borrow before committing to a new credit card, personal loan or overdraft. If you use a credit card, I'd recommend that you always pay off your balance in full at the end of each statement period. Lenders have a responsibility to help customers who are in debt. If you're in a debt crisis, your first point of call should be your lender. They might help you out by offering you a reduced interest rate or a temporary payment holiday - so check in with your lender if you're struggling.
Daily Mail
14 minutes ago
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RICHARD TICE: Why ditching Miliband's Net Zero madness could save every family £1,000 a year
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And one of the biggest contributory factors to this crisis is an issue that almost no one in Westminster wants to talk about: Net Zero and the spiralling cost of Britain's green energy agenda. Expensive energy is the grenade exploding Britain's economic model. It is not just about switching on the lights and heating homes. It powers industry, transports goods, and underpins every job and price tag. When energy becomes expensive and unreliable, everything else does too. When you hear ministers blaming this crisis on Russian president Vladimir Putin and international fossil fuel markets, remember this: UK energy prices were already among the highest in the developed world before Russia invaded Ukraine. This emergency didn't start in Moscow. It was manufactured in Westminster. We blew up coal plants, messed up nuclear, banned fracking, deterred North Sea investment (which drove up gas imports) and prioritised unreliable green energy. From the other side of the Atlantic, even Donald Trump can see that, writing on his social media site Truth Social: 'North Sea Oil is a treasure chest for the United Kingdom. The taxes are so high, however, that it makes no sense... Incentivise the drillers, fast.' He rightly added that wind is 'the worst form of energy' and a con. When it comes to energy, Westminster has been Putin's most useful idiot. If the US is waking up to that fact, when will Labour? For nearly two decades, clueless politicians from Labour, the Conservatives and the Liberal Democrats have clung to a fantasy: that we could eliminate all hydrocarbon use, build a national grid dominated by wind and solar power, and suffer no consequences. The result? At a time of rising demand we are reliant on an unreliable energy supply and lumbered with higher bills. Three-quarters of the rise in electricity bills over the past decade can be attributed to green energy policies and the multi-billion-pound subsidies paid to renewable investors, according to Net Zero Watch. Yet hundreds of thousands of jobs are being destroyed by high energy prices, while millions more are at risk. Now suppliers are warning that prices will rise again in 2026. Professor Gordon Hughes, a former energy adviser at the World Bank, has warned they could approach 40p per kilowatt hour by 2030 – up from 25p today, which is a catastrophic increase. That's why I took action. Last month, I wrote to major windfarm developers, warning them and their investors to stay away from the AR7 auction. I made it clear that if they press ahead, a Reform government will make them regret it. As Nigel Farage said a few weeks ago about the renegotiation of green subsidy contracts, investors will see 'some haircuts'. 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Daily Mail
44 minutes ago
- Daily Mail
US nuclear submarines 'closing in' on Russia: Trump warns 'I want to be ready' as he ramps up tension in chilling war of words with former Russian president
US President Donald Trump last night confirmed that two US Navy nuclear submarines are 'getting closer to Russia ', dramatically escalating tensions between the two countries. Mr Trump ordered the submarines, packed with nuclear warheads, towards Russian waters after an online spat with former Russian president Dmitry Medvedev – now deputy chairman of Russia's National Security Council – who said: 'Each new ultimatum is a threat and a step towards war.' The sabre-rattling came after Mr Medvedev wrote on social media platform Telegram that Russia could invoke 'Dead Hand' – a doomsday program with the ability to automatically launch a nuclear counterstrike against major US cities, even if Moscow and President Vladimir Putin are wiped out. Mr Medvedev wrote: 'As for the talk about the 'dead economies' of India and Russia, and 'entering dangerous territory' – maybe he should recall his favourite movies about 'the walking dead,' and also remember how dangerous the so-called 'Dead Hand', that does not exist in nature, could be. 'He should remember two things: 1: Russia isn't Israel or even Iran. 2: Each new ultimatum is a threat and a step towards war. Not between Russia and Ukraine, but with his own country. Don't go down the Sleepy Joe [a reference to former President Joe Biden ] road!' Writing on Truth Social, Mr Trump said: 'Based on the highly provocative statements of the Former President of Russia, Dmitry Medvedev, who is now the Deputy Chairman of the Security Council of the Russian Federation, I have ordered two nuclear submarines to be positioned in the appropriate regions. Words are very important and can often lead to unintended consequences. I hope this will not be one of those instances. 'A threat was made… so we have to be very careful. We're going to protect our people. He's entering very dangerous territory!' On Friday, in an interview with cable channel Newsmax, Mr Trump added: 'The subs are getting closer to Russia. We always want to be ready. I want to make sure his words are only words and nothing more than that.' Last night the White House, Pentagon and Downing Street refused to comment on the escalating tensions, which come just days before Mr Trump's August 8 deadline for Putin to declare a ceasefire in the war against Ukraine. The US President has vowed to impose 'devastating' sanctions on Russia and her closest trading partners if his demands are not met. A source close to the President told the MoS: 'Trump is running out of patience with Russia. He promised to end the Ukraine war within 24 hours of taking office and clearly that has not happened. 'Now he's threatening to impose sanctions if Putin doesn't declare a ceasefire and come to the negotiating table to discuss peace.' While the location of the subs is unknown, the US Navy has 71 nuclear-powered submarines in its fleet, all of which can travel thousands of miles without resurfacing. By comparison, the Russian Navy fields fewer than 30 nuclear‑powered submarines. Military experts said Mr Trump will most likely have deployed two Ohio -class vessels. Each is armed with up to 20 Trident II D5 missiles that can deliver multiple thermonuclear warheads with a range of up to 7,000 miles. Sources last night told the Washington Post that Russia is 'seeking clarity' from America about Mr Trump's 'actions and intentions', with Russian officials scrambling to assess the significance of the subs' deployment. RIA Novosti, a state-controlled news agency which has been called 'Putin's mouthpiece', confirmed it had sent enquiries to the White House, Pentagon, US Central Command and the National Security Council, but had not received a response. Mr Trump's dramatic doubling down came after the deadliest Russian air strike on Kyiv this year, when 31 people were killed in a single missile strike on an apartment block in the early hours of Thursday morning. Five children, the youngest aged just two, were among the dead. Mr Trump called the air strike 'disgusting' and announced he was sending his special envoy Steve Witkoff to the region to try and negotiate a ceasefire. Russian lawmaker Viktor Vodolatsky said there are enough Russian nuclear submarines in the high seas to tackle the two American subs. 'The number of Russian nuclear submarines in the world's oceans is significantly higher than the American ones, and the subs that US President Donald Trump ordered to be redirected to the appropriate regions have long been under their control,' he said yesterday. 'So no response from the Russian Federation to the American leader's statement about the submarines is required.' Retired US Marine Colonel Mark Cancian called Mr Trump's announcement that he had sent subs steaming towards Russian waters 'highly unusual'. He said: 'This is signalling in its purest form.' Others urged restraint, saying Mr Medvedev does not speak for Putin. Oligarch Mikhail Khodorkovsky, now a Putin critic living in London, said: 'When you see his [Mr Medvedev's] latest apocalyptic tweet about turning European capitals to dust, remember: this isn't strategic communication from the Kremlin. It's the rambling of a man drowning his terror in vodka.' The exchange of nuclear threats and references to Cold War-era systems evoked echoes of the Cuban Missile Crisis of 1962, the closest the world has come to full-scale nuclear war. The 13-day crisis occurred after Fidel Castro overthrew the US-backed government and aligned his new regime with the Soviet Union. President John F. Kennedy said US spy planes had spotted Soviet nuclear missile installations and threw a blockade around Cuba, even as Russian ships carrying additional warheads steamed towards the island, 230 miles off the tip of Florida. Nuclear bombers on both sides were put on round-the-clock alert, provoking terror in the US with schoolchildren being taught what to do in a nuclear attack. Soviet President Nikita Khrushchev eventually backed down and turned his ships around. He agreed to remove the nuclear missile installations in Cuba, in return for the US not invading the island. Mr Trump has spoken of his admiration for JFK, saying: 'He made the Soviets blink first.' A source said: 'Whether this latest move leads to a breakthrough with Putin remains to be seen.'
