What you need to know

After heavy losses across Asian and European markets yesterday, U.S. stocks opened with a sharp drop, followed by a sudden spike, and then settled into more moderate declines by the close of trading.

The episode was a clear demonstration of how market movements right now are being driven less by fundamentals than by perceptions of confidence, credibility, and control—especially in a moment when the levers of state power are so tightly held by the White House.

U.S. east coast markets opened at 9:30am eastern time with a steep 6% fall. At 10:13am, a pseudonymous account on X known as *Walter Bloomberg—recognized both for posting financial updates and spreading pro-Russian messages—claimed that White House adviser Kevin Hassett had said President Donald Trump was considering a 90-day pause on tariffs. The post falsely attributed the statement to Reuters. In truth, Hassett had told Fox News only that “I think the President is gonna decide what he is gonna decide.”

Nonetheless, the post garnered 1.7m views and 3,300 reposts within minutes. CNBC, apparently without verifying the original interview, amplified the claim further. Markets surged approximately 8% by 10:15am. The spike quickly reversed after White House officials began denying knowledge of any such tariff pause. By 10:30am, the administration had issued a formal denial.

In just 23 minutes, U.S. stock markets swung more than $2 trillion in value. To put that into perspective, Australia’s GDP is $1.7 trillion, Russia’s $2.2 trillion, France’s $3 trillion, and Japan’s $4.3 trillion. In total, yesterday’s market moves amounted to roughly $7 trillion.

By the close, markets had receded into mildly negative territory. The S&P 500 ended the day down just 0.2%.

The incident illustrated a sobering truth: the current U.S. administration has the capacity to move markets on a scale exceeding the economic output of many nation-states, often through little more than rumor or offhand remarks. Because the crisis is largely of its own making, the administration also retains the ability to reverse losses—or generate gains—as investors anticipate policy pivots or statements.

Then, just after the announcement that the 90-day pause was fake news, Trump said that if China did not withdraw its retaliatory tariffs on U.S. goods, the U.S. would escalate its own tariffs to a cumulative total of 104%. In response, China announced it would not back down and permitted a slight devaluation in the international exchange rate of its currency—less than 2%—to partially absorb the tariff shock. The modest adjustment was carefully calibrated to avoid triggering domestic panic over the renminbi’s stability. China’s economy has been in a very fragile state for several years now.

On 17 April, the U.S. is expected to introduce new port fees: up to $1.5m per call for vessels manufactured in China, and between $500,000 and $1m for shipping lines that either own a Chinese-built vessel or have one on order.

Asian markets offered mixed signals today. Japan’s Nikkei 225 Index rose 6%. Indonesia’s stock exchange plunged 9% before trading was suspended. Vietnam’s markets continued to slide, dropping another 6.8%.

In Europe, officials in Brussels have proposed introducing blanket 25% tariffs on all U.S. goods starting on 16 May.

It’s now the U.S. vs China, everyone else needs to pick a side

New Zealand’s Prime Minister Christopher Luxon announced on Monday that his government would increase defense spending to NZ$9 billion over the next four years. Over an eight-year horizon, New Zealand aims to raise defense expenditure to 2% of GDP, up from just over 1% today.

The new spending targets will form part of the Defense Capability Plan. New Zealand is a member of the ANZUS security alliance with the United States and Australia, and a participant in the Five Eyes intelligence-sharing network alongside Canberra, Washington, London, and Ottawa.

China and Cambodia held joint military exercises on Sunday at the newly expanded Ream Naval Base on the Gulf of Thailand. The drills followed a formal ceremony attended by Cambodian Prime Minister Hun Manet.

China’s Defense Ministry said the base would strengthen military cooperation and support counterterrorism, humanitarian aid, and disaster relief.

Beijing has long feared that its supply lines could be severed in a conflict, particularly at the Malacca Strait. The Ream base would enable a land corridor linking Phnom Penh to the Gulf of Thailand as part of a Belt and Road initiative known as the Funan Techno Canal.

The United States has voiced concerns that China may have secured exclusive access to the base—allegations denied by Cambodian officials. Manet insisted that warships from all friendly nations are welcome to dock and participate in joint exercises. A Japanese vessel is expected to visit shortly.

Chinese President Xi Jinping is due to visit Cambodia in two weeks. China remains Phnom Penh’s leading source of investment and aid.

America First

Ukraine delegation to Washington this week for discussions on minerals deal

Ukraine’s Deputy Prime Minister Yulia Svyrydenko said on Monday that a delegation would travel to Washington this week to advance negotiations on a minerals deal with the United States. Svyrydenko indicated that the talks would focus on establishing legal frameworks and long-term investment mechanisms.

The administration of President Donald Trump has made a resource-sharing agreement with Kyiv a key pillar of its support for Ukraine in peace negotiations with Russia. While Ukraine accepts the need for such a deal, officials remain wary of surrendering too much. Earlier speculation in Kyiv suggested that a draft agreement might grant the U.S. extensive access to future resource income.

The delegation will include representatives from the Ministries of Economy, Foreign Affairs, Justice, and Finance.

Ukraine holds deposits of more than 20 minerals deemed critical to U.S. national security, including titanium, lithium, and uranium.

Birth pangs in the birthplace of civilization

Syrian President Ahmed al-Sharaa will visit the United Arab Emirates this week, following a trip to Türkiye. Al-Sharaa previously visited both Türkiye and Saudi Arabia in February, underscoring his efforts to restore ties with key regional actors. Türkiye, the UAE, and Saudi Arabia are now, alongside Israel, the most influential powers in the Middle East.

Türkiye provided significant backing to Al-Sharaa’s group, Hayat Tahrir al-Sham, in its seizure of Damascus in December. Turkish officials have since engaged with his government and offered technical assistance, while reportedly seeking a long-term military presence in Syria.

The UAE, with its vast oil wealth and regional clout, is well positioned to help rebuild Syria’s shattered economy. It is keen to see Syria stabilize. It was among the first Arab states to restore diplomatic relations with the previous regime of Bashar al-Assad in 2018 after nearly a decade of regional isolation.

Israel continues to strike military sites in Syria and as recently as last week hit a base Türkiye had intended to use. Israel now views Türkiye as a strategic rival and fears it may establish a lasting presence near its borders.

At a NATO foreign ministers’ meeting in Brussels last week, Turkish Foreign Minister Hakan Fidan said Ankara does not seek conflict with Israel in Syria but warned that Israeli actions were exacerbating regional instability.

Özgür Özel, leader of Türkiye’s main opposition party, the Republican People’s Party (CHP), said on Sunday that protests would continue against the imprisonment of Istanbul Mayor Ekrem Imamoğlu. Özel was re-elected party chairman during an internal vote in Ankara and, in a defiant speech, declared that the opposition was “ready to save Türkiye from you,” in reference to President Recep Tayyip Erdoğan.

Imamoğlu was arrested on 19 March on corruption charges—allegations that opposition parties and human rights groups claim are politically motivated, aimed at neutralizing a major challenger to Erdoğan. Imamoğlu had been expected to run for the presidency in the 2028 election.

Although Erdoğan is technically barred from serving another term, he is reportedly maneuvering to hold an early election which would allow him to escape the constitutional limit of two terms as President. Nearly 15 million people supported Imamoğlu as the CHP’s presidential candidate in a recent internal vote. He is among the few opposition figures to pose a serious electoral threat to Erdoğan and enjoys broad popular support.

Instability from Sahel to Horn of Africa amid state fragility, Russian interference, & Islamist insurgencies

Algeria closes airspace to Mali after shooting down drone

Algeria’s relations with the military-led governments of Mali, Burkina Faso, and Niger descended into crisis on Monday following the downing of a Malian drone by Algerian forces on 31 March.

Algeria claimed the drone had violated its airspace near the southern border town of Tin Zaouatine. Mali, a member of the Alliance of Sahel States (AES) alongside Niger and Burkina Faso, denied that the drone had crossed the border.

The AES condemned the incident as an “irresponsible act” that violated international law. All three countries recalled their ambassadors from Algiers in protest. Algeria responded by withdrawing its own envoys and suspending all flights to and from Mali.

According to the AES, the drone had been targeting a “terrorist group that was planning terrorist acts against the AES.” Mali’s Prime Minister declared that the episode proved “the Algerian regime sponsors international terrorism.” The Algerian Foreign Ministry dismissed the accusation, saying the criticism was a diversion to deflect from Mali’s own failures in combating terrorism.

Mali has long struggled to control its northern regions, where Tuareg separatists and jihadist groups remain active. Algeria, once a key mediator between Bamako and the rebels, has grown increasingly distant from the Malian authorities following the military coups of 2020 and 2021.