Key events
Spain’s economy minister, Carlos Cuerpo, is expected to meet the US treasury secretary, on Tuesday as he aims to bolster bilateral ties between the two countries.
The Trump administration has slapped a 10% tariff on imports of most European goods, including olive oil, although it announced a 90-day pause last week on higher, 25% “reciprocal” duties.
Spain is the world’s top exporter of olive oil and also sells important quantities of auto parts, steel and chemicals to the US. The country’s prime minister, Pedro Sánchez, has announced a €14.1bn (£12.2bn; $16bn) government aid package to industry to lessen the domestic impact of Trump’s levies.
Hedge fund billionaire says US may face ‘worse than a recession’ from Trump tariffs
Maya Yang, a breaking news reporter and live blogger for Guardian US, has filed this story about a warning over the potential consequences of Trump’s erratic economic policies:
Billionaire investor Ray Dalio said that he is worried the US will experience “something worse than a recession” as a result of Donald Trump’s trade policies.
Speaking to NBC’s Meet the Press on Sunday, the 75-year-old hedge fund manager said: “I think that right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well.”
He went on to add: “A recession is two negative quarters of GDP and whether it goes slightly there. We always have those things. We have something that’s much more profound. We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money.”
Dalio’s comments come in response to a tumultuous week across the global stock markets following the US president’s tariffs policies that include a 145% tariff raise on China. The billionaire also said there are “profound changes in our domestic order … and world order”, comparing current times with the 1930s.
“I’ve studied history and this repeats over and over again. So if you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders, the systems, are very, very disruptive. How that’s handled could produce something that is much worse than a recession. Or it could be handled well,” he said.
Dalio, who correctly predicted the 2008 recession, also said the current economic state of the US is “at a juncture”.
“Let’s take the budget. If the budget deficit can be reduced to 3% of GDP, it will be about 7% if things are not changed. If it could be reduced to about 3% of GDP, and these trade deficits and so on are managed in the right way, this could all be managed very well,” he said.
He went on to urge congressional members to take what he calls the “3% pledge”, adding that if they don’t, there will be a supply and demand problem for debt with results that will be “worse than a normal recession.”
You can read the full story here:
Chinese president in Vietnam to bolster regional economic ties
Chinese President Xi Jinping will be welcomed by Vietnam’s President Luong Cuong today as he seeks to strengthen economic ties in south-east Asia amid a trade war with Washington that has caused turmoil in global markets.
In an article for the Nhan Dan newspaper, Xi called for more regional cooperation, saying China and Vietnam were “friendly socialist neighbours sharing the same ideals and extensive strategic interests”.
He added that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere”, without explicitly mentioning the US.
The visit, planned for weeks, comes as Beijing faces 145% US duties, while Vietnam is negotiating a reduction of threatened US tariffs of 46%. China is Vietnam’s biggest trading partner; Hanoi has a good relationship with both Washington and Beijing.
As my colleague Rebecca Ratcliffe notes in this story, officials in Hanoi were shocked when Vietnam was hit with the 46% tariff, even after various efforts to appease the Trump administration. The tariff, which has been paused, threatens to devastate the country’s ambitious economic growth plan.
Xi will visit Vietnam, a manufacturing powerhouse, from 14 to 15 April, and Malaysia and Cambodia from 15 to 18 April. He last visited Cambodia and Malaysia nine and 12 years ago, respectively.
Xi’s trip to Hanoi, his second in less than 18 months, aims to consolidate relations with a strategic neighbour that has received billions of dollars of Chinese investments in recent years as China-based manufacturers moved south to avoid tariffs imposed by the first Trump administration.
Trump signals new tariffs on smartphones and computers
Good morning and welcome to our US politics blog.
In an announcement made late on Friday evening, Donald Trump’s presidential administration exempted smartphones and computers from the 125% levies imposed on imports from China as well as other “reciprocal” tariffs.
The devices would be excluded from the 10% global tariff that Trump recently imposed on most countries, along with the much heftier import tax on China, in what seemed like a softening of the president’s trade positioning towards Beijing.
US stock markets were expected to stage a recovery after the announcement. Shares in Apple and chip maker Nvidia were on course to surge after tariffs on their products imported into the US were lifted for three months.
China’s commerce ministry said the exemption demonstrated the US taking “a small step toward correcting its erroneous unilateral practice of ‘reciprocal tariffs’,” and suggested the American administration cancel the whole punitive tariff regime.
However, Trump’s commerce secretary, Howard Lutnick, said on Sunday that critical technology products from China would face separate new duties along with semiconductors within the next two months.
“He’s saying they’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick said in an interview on ABC. “These are things that are national security, that we need to be made in America.”
Amid the confusion over the White House’s tariff policy, Trump said he would provide more details on his administration’s approach on semiconductor tariffs later today.
But he suggested any tariff exemption for China-made smartphones would be short-lived, writing on his social media: “Nobody is getting off the hook for unfair trade balances”. Stay with us throughout the day as we bring you the latest tariff developments and other US political stories.
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