What you need to know

President Donald Trump’s decision to implement tariffs has erased approximately $2.5 trillion in market value from Wall Street equities. However, Trump said on Thursday that he had expected his tariffs to have such an effect, adding that “the economy had a lot of problems…it was a sick patient.” He claimed that the decision would lead to a “booming economy.”

President Emmanuel Macron of France has responded by saying that European companies should suspend planned investments in the United States until “things are clarified with the United States.” He called the tariffs “brutal and unfounded,” and a shock to international trade. Canada responded by imposing a 25% tariff on U.S. vehicles. China has forbidden any investment in the U.S. and imposed an extra across the board 34% tariff on all American goods.

Prime Minister Keir Starmer of the United Kingdom said that Britain would still seek a trade agreement with the U.S. The UK has been hit with a 10 percent tariff on its exports to the U.S., which is the minimum under Trump’s Liberation Day policy.

The S&P 500 fell by 4.8 percent on Thursday, while the Nasdaq dropped 6 percent—its worst day since the Covid crisis of 2020. Apple and Nvidia saw a combined loss of $470 billion. Kristalina Georgieva, Managing Director of the International Monetary Fund, said that the tariffs represented a “significant risk” to the global economic outlook. About $300 billion was wiped off Apple’s market capitalization, while Brent crude fell 6.7 percent to $69.94 a barrel.

On Thursday, the U.S. dollar fell overall about 1.7 percent, and another 0.2 percent on Friday morning. The Euro appreciated 2.7% against the USD, the British Pound gained roughly 0.4% against the USD, the Japanese Yen appreciated around 2.3% against the USD, the Swiss Franc rose 3% against the USD, and the Canadian dollar rose about 1%.

However, there is strong evidence to suggest that Trump’s tariffs are not a negotiating tool, or a knee jerk reaction, but rather part of deliberate policy that relates to America’s almost unimaginable level of public debt.

The plan to address this, unofficially know as the Mar-a-Lago accord, was partially outlined in a policy document (see here) circulated late last year by Stephen Miran, who is now chair of the council of economic advisors to the President.

Baseline tariffs will be imposed on 5 April (tomorrow), with the ‘reciprocal’ tariffs (which as we said yesterday are actually calculated on the balance of trade rather than tariffs or taxes imposed on American imports) will come into effect on 9 April.

It’s important to note that these tariffs could also be reversed by Congress, but Congress has so far declined to take any action.

Europe's center of gravity shifts east, politics moves right, & hostility to migrants from the south rises

A spokesperson for Russia’s Foreign Ministry said on Thursday that France had “killed democracy” with the conviction of far-right leader Marine Le Pen. Le Pen was found guilty of embezzlement on Monday and is now barred from contesting the 2027 presidential election. Far-right leaders across Europe—including Prime Minister Viktor Orbán of Hungary, Matteo Salvini of Italy’s League party, and Geert Wilders of the Netherlands—defended her.

Dmitry Peskov, spokesperson for President Vladimir Putin of Russia, said the verdict represented a “violation of democratic norms.” The court found that Le Pen had embezzled more than €4 million. She has longstanding links to Russia, notably through a controversial bank loan her party, the National Rally, secured in 2014 and repaid only in 2023. At times, her positions have closely aligned with those of the Kremlin.

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

Secretary of State Marco Rubio said on Thursday that the administration of Donald Trump remains committed to NATO, but that member states must significantly increase defense spending. Rubio described speculation that Trump was abandoning NATO—and the defense of Europe—as hyperbole, insisting that the U.S. is “as active in NATO as it has ever been.” “He [Trump] is against a NATO that does not have the capabilities it needs to fulfill the obligations that the treaty imposes upon each and every member state,” Rubio said.

Trump has repeatedly called for members to spend 5 percent of GDP on defense—an amount no country, including the U.S., currently meets.

Rubio’s comments were notably more conciliatory than many prior statements from the Trump administration, which have often been critical of NATO allies. Nevertheless, European governments continue to seek clarity on how far the U.S. intends to withdraw from European security in favor of Asia, and how quickly this shift might occur. “No one expects that you’re going to be able to do this in one year or two,” Rubio said. “But the pathway has to be real.”

Putin envoy visits White House

A Kremlin envoy has been holding talks in Washington over the past two days, praising the administration of Donald Trump for hearing out “Russia’s position on many issues.”

Kirill Dmitriev, head of Russia’s sovereign wealth fund and special representative for investment and economic cooperation, met with senior Trump administration officials, though he did not disclose specific names. Dmitriev said there was “a great desire by American companies to return to Russia” and suggested opportunities for cooperation on rare earth minerals.

Since Trump took office in January, the U.S. and Russia have made some progress toward normalizing ties—including efforts to settle the war in Ukraine—but momentum has slowed. Washington has grown increasingly frustrated with Moscow’s position on Ukraine. Trump, who initially accepted Russia’s rationale for its invasion, said over the weekend that he was “pissed off” with Putin for dragging out negotiations.

Philippines attempts to convince China purchase of F-16s not a threat

The government of the Philippines has said that any potential purchase of F-16 fighter jets from the United States is not intended to threaten any other country, including China. The statement came from a National Security Council spokesperson, following the State Department’s approval of a possible $5.5 billion sale of 20 F-16s on Tuesday. The Defense Security Cooperation Agency said the deal would improve the security of a “strategic partner that continues to be an important force for political stability, peace, and economic progress in Southeast Asia.”

The spokesperson said the acquisition was part of the country’s broader effort to modernize its military. The deal would also enable greater interoperability between the Philippine Air Force and its U.S. counterpart.

Last week, Defense Secretary Pete Hegseth visited the Philippines, where he said the U.S. aimed to reestablish deterrence against “Communist Chinese” threats and pivot Washington’s strategic focus toward East Asia.

Birth pangs in the birthplace of civilization

Russia on Thursday warned the U.S. against launching military strikes on Iran, saying such actions could have catastrophic consequences—especially if critical infrastructure were to be targeted. President Donald Trump has threatened military action if Iran fails to reach an agreement over its nuclear program.

The U.S. has positioned military assets within striking distance, including two aircraft carrier strike groups, two additional Patriot air-defense batteries, a THAAD missile-defense system, several fighter squadrons, and at least six and possibly as many as nine B-2 stealth bombers.

Russia’s foreign ministry said that Moscow remains committed to resolving Iran’s nuclear dispute diplomatically and respects Tehran’s right to peaceful nuclear energy.

Although Tehran maintains that its nuclear program is civilian in nature, Western governments accuse it of seeking nuclear weapons capability. In January, Russia and Iran signed a comprehensive strategic partnership agreement, though it contains no mutual defense clause.

Israeli airstrikes killed at least nine people in southwestern Syria on Thursday, according to the Syrian Observatory for Human Rights, which said the victims were armed residents from Daraa province. The strikes were accompanied by deeper-than-usual ground incursions. Syria’s state news agency, SANA, claimed the dead were civilians but gave no further details. On Wednesday, Israel also struck near a key airbase in Hama, where Türkiye is reportedly trying to establish a military presence. Syria’s Foreign Ministry said the strikes nearly destroyed the airbase and injured dozens of civilians and military personnel.

Israel’s foreign minister, Gideon Saar, accused Türkiye of playing a “negative role” in Syria and of attempting to create a “Turkish protectorate.”

Since Islamist-aligned Syrian rebels took power in Damascus in December—and have now formalized their hold and integrated into state structures—Israel has carried out dozens of strikes on military bases and strategic sites. It argues that it cannot allow the new government to emerge as a threat. Türkiye, which supported the rebels and maintains close ties with the new government, has accused Israel of “undermining efforts to establish stability in Syria.”

In southwestern Syria, Israel has created what it calls a buffer zone to defend against attacks and to protect the Druze minority, which also has a significant population in Israel. The occupation has stirred resentment among local residents and increased tensions.

In a dramatic and unanimous decision, South Korea’s Constitutional Court has officially removed President Yoon Suk Yeol from office, upholding his impeachment over the controversial declaration of martial law last December.

The court found that Yoon’s actions—particularly deploying military forces to block parliamentary proceedings and curtail civil liberties—amounted to a grave violation of the country’s democratic order. The ruling delivered a sharp rebuke to Yoon’s claims that the move was necessary to quell unrest, with the justices instead framing it as a dangerous power grab.

With Yoon now out, Prime Minister Han Duck-soo has stepped in as acting president. A snap election must be held within the next 60 days to choose a new head of state. Political parties are already scrambling to select candidates, setting the stage for what promises to be a high-stakes campaign.

Yoon, who was arrested earlier this year, now faces criminal charges including insurrection and abuse of power. His fall from grace has deeply divided the country—while many celebrated the court’s decision as a victory for the rule of law, his supporters have taken to the streets, decrying what they see as a politicized takedown.

Yoon pursued a policy of outreach to Japan, a contentious policy given the bitter history of Japanese colonialism in Korea. It is unlikely that the next South Korean President will be so open towards Japan.