☕ Mr Worldwide (tariffs)

Good morning.

US trade policy has undergone a seismic shift this week - more so than over the entire first term of President Trump’s time in the White House. Yesterday’s Liberation Day announcements are being digested worldwide as nations evaluate whether to respond to new tariffs with anger, try to negotiate a more favorable outcome, or wait for others to move first.

The bottom line? If this new situation continues, what we buy and how much we pay for it will change substantially.

I’ll walk you through everything that was announced in today’s newsletter.

I’ve got 30 seconds

Some headlines from this morning:

• Myanmar’s military government has reached a ceasefire with opposition groups, a week after a 7.7 magnitude earthquake struck the Asian nation and the military launched attacks in various parts of the country. Both the guerillas and the military said they reserve the right to retaliate against attacks before the ceasefire ends on 22 April. Meanwhile, rescue efforts are continuing, with hundreds still missing and the death toll rising to nearly 3,000. Myanmar’s ruling junta seized power in 2021 amid a violent civil war between the military and resistance forces.

• A federal judge has dismissed a corruption case against New York City Mayor Eric Adams, accepting a push from the White House to drop the charges. The judge issued the order “without prejudice”, meaning the charges can’t be renewed in the future. In the ruling, the judge criticized the Trump Justice Department’s decision to terminate the case, alleging there were political motivations behind the move, but said “a court cannot force the Department of Justice to prosecute a defendant”. Adams was pleading not-guilty to all charges.

• Israel has announced it will launch a major expansion of its military operation by taking control of “large areas” of Gaza. In his announcement, Israeli Defence Minister Israel Katz said the aim was to “clear the area of terrorists and terrorist infrastructure” and pressure Hamas to return the remaining Israeli hostages. It comes as ongoing ceasefire negotiations between Israel and Hamas have stalled. Israel has announced evacuation orders for large parts of southern Gaza, with airstrikes continuing. The UN reported this week that more than 1,000 Palestinians have been killed since the collapse of the ceasefire earlier this year.

• Lawyers acting for President Trump have taken steps towards the sale of Trump’s shares in Truth Social, worth roughly $2.2b. A financial trust that holds President Trump's shares in the social media platform Truth Social has refiled its registration with the SEC, including a provision that would allow for the sale of all the shares. However, the registration does not mean a sale is imminent. President Trump lashed out against “legacy media,” saying it had misconstrued a routine filing and he has no intention to sell. Truth Social has lost about 40% of its value since President Trump took office in January.

I’ve got 1 minute

A deadline for the sale of Chinese-owned social media app TikTok to a US company will expire this weekend. With only days to go, a domestic buyer has yet to be announced.

However, high-profile bidders, including Amazon and OnlyFans, have entered the race this week.

Here’s the latest.

Background

Representatives across the political spectrum have alleged TikTok improperly shares US data with the Chinese Government, and the app was unsafe for use by Americans.

A US ban on TikTok took effect on January 9, months after the law passed with bipartisan support. To avoid the ban and satisfy national security concerns, ByteDance, the parent company of TikTok, was ordered to sell its US operations to a non-Chinese entity.

ByteDance refused to sell, and the ban was enforced. However, the day after, on the first day of his second term, President Trump suspended enforcement of the ban for 75 days.

President Trump promised a deal to sell TikTok within 75 days.

VP JD Vance and National Security Advisor Mike Waltz were appointed to manage the sale.

Buyers

Late last month, President Trump said a deal with one of four potential buyers was coming “soon.”

At the same time, reports emerged that US software company Oracle had “accelerated” purchase talks with the White House.

However, this week, reports of new bids have emerged.

Amazon made a last-minute bid, seen as part of the tech giants' efforts to incorporate a social media app into its suite of products.

The founder of adult entertainment app OnlyFans is leading a group that has also made an offer.

What’s next?

President Trump reiterated on the weekend that he was confident a deal could be made by the deadline.

However, significant questions remain, including how American data will be protected if ByteDance still controls the global platform and if ByteDance will include the highly confidential TikTok algorithm in the sale.

I’ve got 2 minutes

President Trump has announced tariffs on all imports into the US, with “reciprocal tariffs” as high as 50% to apply to countries with existing fees on US goods entering their markets.

As part of his “Liberation Day” ceremony, President Trump said the American economy had been “looted, pillaged, raped, [and] plundered” promising his tariffs would bring significant financial gains for all Americans.

The President exercised executive power to enact the tariffs rather than an act of Congress, signing the order on the White House lawn.

Here’s what you need to know.

What is ‘Liberation Day’

A month ago, President Trump dubbed April 2 “Liberation Day”, heralding the commencement of a new round of import tariffs, including reciprocal tariffs.

A tariff is a tax on imports. It’s applied to foreign-made goods brought into another country and paid by the importer. A reciprocal tariff is a levy applied to countries that have tariffs of their own on US goods.

Ultimately, President Trump says tariffs are needed to bring back American manufacturing jobs and reassert America’s economic dominance. Until yesterday, the details of these tariffs remained unclear.

Details

Speaking yesterday, President Trump announced a baseline 10% tariff on all imports into the US, to come into effect on 5 April. This includes tariffs on imports from nations that don’t currently have tariffs on US goods.

Several nations, described as the "worst offenders", were singled out for further reciprocal tariffs, which would be added to the 10% baseline. Chinese goods will be tariffed 34% to be added to the existing 20% tariffs, bringing the total new levy to 54%.

Some of the closest allies of the US were heavily impacted - the 27 members of the EU will be subject to a 20% tariff, and the UK received a 10% tariff. India and Japan will pay 26% and 24%, respectively, with six other Asian nations tariffed over 30%. These will come into effect from 9 April.

President Trump also announced a 25% tariff on all auto vehicle imports. It is unknown whether this tariff would apply on top of nation-based tariffs. The administration has previously imposed 25% tariffs on steel and aluminium.

Reactions

President Trump praised the new tariffs, saying yesterday was "our declaration of economic independence.” He said "For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike”.

The administration also warned countries against retaliation, with Commerce Secretary Howard Lutnik saying, "My advice to every country right now is, do not retaliate”.

Meanwhile, the Democrats have vowed to use whatever powers are available to the House and Senate to undo parts of President Trump’s plans, with four Republicans announcing that they will vote against the measures with their opposing party.

Republican Senator Susan Collins said she was against the tariffs as “we should be distinguishing between allies and our adversaries and not treating them the same way”.

European leaders, who had been preparing for the tariffs, have been preparing retaliatory tariffs that are yet to be announced. Georgia Meloni, Italy’s far-right president and personal ally of President Trump, called the tariffs “wrong and not in the interest of either party.”

Meanwhile, the S&P 500 futures, a key stock index in the US, fell almost three points in reaction to the announcement. Stock markets around the world have reacted similarly.