Trump tariff threats are bad, but the uncertainty they instil is much worse
Donald Trump’s latest tariff threat, in pursuit of his goal of seizing Greenland, is a political nightmare for European leaders, but it could create a severe economic headache too,As the International Monetary Fund (IMF) has repeatedly pointed out since Trump’s trade war began in earnest last year, whatever the ultimate level of tariffs, uncertainty takes its own toll,And as the IMF managing director, Kristalina Georgieva, put it in October, in the Trump era “uncertainty is the new normal”,Businesses tend to hold back from new investment when they are unsure what the policy landscape will eventually look like – as the UK learned to its cost during several years of Brexit wrangling after the 2016 referendum,And this latest threat comes just as businesses in the UK and the EU believed they could plan with certainty, after much-vaunted trade deals with the US were struck and signed with ceremony last summer.
If Trump goes ahead with 10% tariffs in February – rising to a punitive 25% on 1 June – it will throw sand in the wheels of the economy at a fraught moment, with France deep in a budgetary crisis, and Germany hoping for an economic upturn after stagnating in 2025.For the UK chancellor, Rachel Reeves, the timing could not be worse, just as she had cause to hope for a modest upturn after a difficult 12 months.Yet ironically, one of the most significant risks of Trump’s latest tantrum lies at home, with the threat of resurgent prices.The tariffs already imposed over the last year are the highest since the second world war – though lower than Trump initially threatened.So far, inflation has barely budged, though the soaring cost of important food imports, from coffee to avocados, prompted Trump to reduce tariffs on them in November.
Some analysts have been warning for a while of a further leg-up in prices, as pre-tariff stocks of imported parts and products are run down, and US companies have less margin to absorb additional costs.Higher inflation would put the brakes on further cuts in interest rates from the Federal Reserve – defeating one of Trump’s central economic goals, for which he has harried and cajoled the Fed chair, Jerome Powell, for months.Finally, there is the risk that this latest outrageous move by Trump, severing economic policy decisively from any logic whatsoever, is the thing that rocks US financial markets.Bond and stock markets responded dramatically to last year’s threat of across-the-board “reciprocal” tariffs, prompting Trump to row back significantly on the policy – and causing the FT to coin the phrase “Taco”, which stands for “Trump always chickens out”.Since then, investors – particularly in stock markets – seem to have been largely unmoved by Trump’s on-off economic decisions – up to and including the launching of legal action against Powell, which prompted an extraordinary expression of solidarity from the world’s central bankers.
There have been some signs of a “flight to safety”, including an epic run-up in gold and silver prices, but the AI boom has continued to push stock indices to record highs.Investors may well assume “Taco”, and brush this latest drama off, too.But if they do decide that using tariffs as a weapon against major economic allies will have costs – including, perhaps, higher interest rates – there could be turbulent times ahead.Or, as Georgieva succinctly put it back in October, “buckle up”.
Civilised but casual, often hilarious, Adelaide writers’ week is everything a festival should be – except this year | Tory Shepherd
The sun almost always shines on Adelaide writers’ week, held on Kaurna land each year at the tail end of summer.For those who start looking forward to it as soon as soon as the Christmas tree is packed away (or earlier, frankly) there’s a sense of loss, of betrayal, at the omnishambles that has led to its cancellation this year.We’re bereft, and angry – not least because some of the most vocal critics seem to have no idea what writers’ week actually is.During Adelaide’s Mad March, the city’s parklands are home to the festival fringe’s sprawling performance spaces, bars and restaurants. On a Sunday you might leave behind the carnival chaos of the Garden of Unearthly Delights
‘Soon I will die. And I will go with a great orgasm’: the last rites of Alejandro Jodorowsky
The Chilean film-maker’s psychedelic work earned him the title ‘king of the midnight movie’, and a fan in John Lennon. Now the 96-year-old is ready for the end – but first there is more living to doThe Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more.There is an apocryphal story of an ageing Orson Welles introducing himself to the guests at a half-empty town hall
Call this social cohesion? The war of words that laid waste to the 2026 Adelaide writers’ festival
How a boardroom flare-up sparked an international boycott – and a looming defamation battleIt began as a quiet programming dispute in the genteel city of churches.But by Wednesday morning, a frantic, six-day war of words had culminated in the end of the 2026 Adelaide writers’ week and total institutional collapse.What started with the discreet exit of a business titan and arts board veteran spiralled into boardroom carnage last weekend, with mass resignations, lawyers’ letters of demands and allegations of racism and hypocrisy flung by all sides.By the time the writers’ week director, Louise Adler, walked, the boycott of writers, commentators and academics had gone global and the state’s premier cultural event had become a hollowed-out shell.The cancellation of AWW may only be the opening act
Seth Meyers on ICE: ‘An army of out-of-shape uncles’
Late-night hosts talked cratering public opinion on the Trump administration’s deployment of Immigration and Customs Enforcement (ICE) in US communities and the president’s apparent preference for whole milk.Seth Meyers opened Wednesday’s Late Night with a reminder to viewers about how Trump “sold his mass deportation program to voters during the campaign”.That would be by declaring some version of “We are going to start with violent criminals” again and again.“If you say you’re going to get violent criminals off the streets, of course people are going to be into that. But that was a lie,” Meyers noted
Ian McKellen to star as LS Lowry in documentary revealing trove of unheard tapes
Fifteen years ago, Sir Ian McKellen was among the leading arts figures who criticised the Tate for not showing its collection of paintings by LS Lowry in its London galleries and questioned whether the “matchstick men painter” had been sidelined as too northern and provincial.Now, 50 years after Lowry’s death, McKellen is to star in a BBC documentary that will reveal a trove of previously unheard audio tapes recorded with Lowry in the 1970s during his final four years of life.The interview is the longest the artist ever gave and was recorded in his living room, his “private sanctuary”. The tapes are said to reveal Lowry’s authentic voice, which McKellen will lip-sync on screen.The Lancashire-born actor described the role as a “unique privilege”
Has Joe Rogan fully soured on Trump’s presidency?
Joe Rogan’s comparison of US immigration raids to Gestapo operations, made during a podcast episode earlier this week, has sparked speculation about whether the wildly popular podcaster, who endorsed Donald Trump in 2024, has fully soured on Trump’s presidency – and what that might say of the millions of mainly young men who listen to Rogan’s show.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more.Rogan’s views, as expressed in the podcast discussion, were more complicated than the Gestapo remark taken alone might make them seem
‘It feels like gruel’: Lib Dem MPs growing frustrated by Ed Davey approach
Leaked Jenrick defection plan calls him ‘the new sheriff in town’
Tech companies’ access to UK ministers dwarfs that of child safety groups
‘I have lost a friend’: Tories in Jenrick’s constituency shocked by defection to Reform
Tories to step up attacks on Reform economic policy after Jenrick acrimony
Jenrick’s incredible journey – from self-centred halfwit to self-centred halfwit | John Crace