Plus: App of the day
IN TODAY’S EDITION
1️⃣ The trade war is on |
2️⃣ Diplomats on the move |
3️⃣ App of the day |
Hi Intriguer. I recently came across a 2023 study in Science that rather alarmingly claimed that “98.7% of the early human lineage was wiped out”, leaving only “1,280 breeding individuals” on earth. This “ancestral bottleneck” lasted for 117,000 years, give or take a few millennia.
The twist? It wasn’t caused by war, or a meteor, or even a pandemic. The study concludes the catastrophe was probably caused by extreme climate shifts and prolonged droughts leading to dwindling food sources.
Why mention this? Well, there’s been a lot of talk of WW3 lately and I’m a doomscroller for sure, but mostly I just wanted to share an interesting historical tidbit. I guess if I had to draw a larger meaning out of it all, it’s a good reminder that in our world of daily or hourly fluctuations (like our main story today about President Trump’s on-again off-again Trade War™️), it’s important not to miss the subtle long term shifts.
PS – For any Intriguers in DC caught up in recent layoffs, our friends at Right Proper Brewing are hosting a networking happy hour tomorrow (Thursday) from 5pm to help with next career steps. It’s free to register. We’ll be there too!
Trump addresses Congress in record-breaking speech.
The US president has told Congress he’s “just getting started” in a record-long 1 hour and 40 minute speech. He told lawmakers he’s received indications both Ukraine and Russia are ready to negotiate, and he’s defended his trade policy (more on that below), while repeating his calls to take Greenland and the Panama Canal.
China repeats 5% growth goal for 2025.
Premier Li Qiang has announced China will maintain its ambitious economic growth target of around 5% this year, a possible indication of more stimulus to come. But others remain sceptical China’s economy, stuck in a deflationary rut and now facing another US trade war, can still hit this level of growth for the third year straight.
Hong Kong owner sells Panama ports to BlackRock.
A consortium including US finance titan BlackRock has agreed to buy two major ports on the Panama Canal from Hong Kong-based CK Hutchison as part of a $14B deal. It follows months of pressure from Trump alleging that China has been running the canal.
Merz unveils historic German debt brake reform.
Chancellor-elect Friedrich Merz has managed to convince his coalition partner to draft a bill exempting defence spending from Germany’s strict debt rules, potentially unlocking hundreds of billions for defence (and infrastructure). They’re hoping to pass the bill this month before a new parliament is sworn in, but that’ll require some horse-trading.
Arab leaders back Egypt’s $53B Gaza plan.
The plan includes efforts to remove unexploded ordinance, clear over 50 million tons of rubble, and deploy a UN peacekeeping force. Hamas (which would theoretically cede power) has welcomed the plan, while Israel and the US have dismissed it, reiterating their preference for Trump’s idea to relocate millions of Gazans before rebuilding the strip.
TOP STORY
Shots fired! The ‘Great Trade War’ is back
And so The Great Trade War™ is on. You’ve probably already heard endless hot takes from folks dressed in shirts with collars more rigid than your uncle Rob on the dance floor, so let’s keep this one short (and our collars in an effortless kind of linen ruffle).
Here’s what you need to know.
Trump’s tariffs on Canada, Mexico, and China kicked in yesterday (Tuesday), including:
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A 25% levy on Canadian goods (10% for energy)
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A 25% levy on Mexican goods, and
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Another 20% (two cumulative 10% announcements) on China.
Why? As we explored when the US president first announced these tariffs last month, the very real scourge of fentanyl also presents Trump with a legal basis to hit US trading partners with tariffs. Beyond the legalities, he’s also spoken repeatedly about the role he sees for tariffs in repairing the US budget and reversing US industrial decline.
And while he never spelt out what exactly Canada and Mexico had to do, he tapped a 30-day pause button when the two neighbours signalled tougher border commitments. But that 30-day clock has now run out, and Trump’s tariffs are now in force.
And so now, the top three US trade partners are responding just as they pledged:
🇨🇦 Ottawa
Outgoing leader Justin Trudeau, whose approval ratings have rebounded as he leads Canada’s response, has described the situation in words we’re stunned to be typing out: "Perhaps what [Trump] wants is to see a total collapse of the Canadian economy because that will make it easier to annex us" (a reference to Trump’s various ‘51st state’ comments).
That’s startling because this is Canada, which is…
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a) A long-time US ally who (eg) lost the third most troops per-capita (after Denmark and Estonia) fighting alongside Americans in Afghanistan after 9/11, and
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b) Whatever the border issues, the numbers are tiny compared to down south.
So Trudeau announced immediate 25% retaliatory tariffs on CA$30B (US$21B) worth of US goods, while another CA$125B (US$86B) will hit in 21 days if the US tariffs are still in place. This kind of scalable response is common in disputes — presenting an offramp while preserving space to ratchet up the pain as needed.
Meanwhile Doug Ford, freshly re-elected as the leader of Canada’s key Ontario province, is ripping up his $100M deal with Elon Musk’s Starlink, banning US firms from procurement contracts, and warning that 1.5 million Americans relying on Ontario electricity will face a 25% tariff if this trade war persists. Trump’s commerce secretary (Lutnick) apparently put in a spicy phone call to push back, but Ford ain’t budging.
🇨🇳 Beijing
We previously described China’s sense of relief that it’s only copping another 20% in tariffs rather than the 60% Trump threatened on the campaign trail.
And you can kinda see that relief in Beijing’s actions, imposing just 10-15% tariffs on US farm products including chicken, beef, pork and soybeans. The idea is to (again) nudge Trump’s base hard enough for it to nudge Trump, but not enough to wipe them out.
China’s words, on the other hand, really caught our eye: “Intimidation does not scare us. Bullying does not work on us. […] If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.” Bluster or not, that’s new.
🇲🇽 Mexico City
Meanwhile President Claudia Sheinbaum, whose country has the biggest dependence on exports to the US, is still keeping her cards close for now — rather than announce her response yesterday as expected, she’s now unveiling it at a rally on Sunday instead.
A bit of political choreography to solidify support at home? A delay to give her team more time to adjust Mexico’s countermeasures and/or explore offramps with the White House? Probably both.
Soooo, what’s next?
Commerce Secretary Lutnick has flagged Trump could roll back tariffs on Mexico and Canada as early as tomorrow. So maybe we’ll end up with another ceasefire via an update to Trump 1.0’s own US-Mexico-Canada trade pact (USMCA). But Lutnick is also the guy who hinted Trump’s tariffs this week might’ve been less than 25%, so it’s hard to know if these are fake-outs or if he’s out of the loop (or if there is a loop).
Meanwhile, Trump himself has tweeted he’ll instead simply ratchet up his tariffs in response to Canada’s own retaliation.
And while everyone guesses whether this is all bluster, another negotiation tactic, or a casual re-ordering of our modern economy, markets are doing some talking of their own: stocks have plunged almost everywhere, with Ford’s CEO (for example) already warning these tariffs will “blow a hole” in the US auto industry given its integration with suppliers across both Canada and Mexico — and speaking of the neighbours, they now stand to face major destabilising downturns given their own dependence on the US market.
Oh, and even before Trump’s tariffs kicked in, the Atlanta Fed suggested the US economy could now already be contracting (though there’s a fierce and nerdy debate).
INTRIGUE’S TAKE
An executive at America’s biggest bank (JP Morgan) had a good line on tariffs earlier this week: “The trouble with tariffs, to be succinct, is that they raise prices, slow economic growth, cut profits, increase unemployment, worsen inequality, diminish productivity and increase global tensions. Other than that, they’re fine.”
So… why do all this? Intriguers should be aware of the ‘Mar-a-Lago Accord’ theory now doing the rounds, particularly on Wall Street. It’s a term some are using to describe a speculated Trump strategy to reorder the international financial system in America’s favour. If you really want to nerd out, it’s based on a paper by top Trump advisor Stephen Miran, which in turn reflects some of the thinking laid out by an influential (if often impenetrable) markets guru known as Zoltan Pozsar.
At risk of casually summarising complex and controversial ideas in a single line, the idea involves strong-arming US trade partners into helping a) devalue the US dollar and b) reduce debt, deficits, and borrowing costs, all in hopes of c) putting the US economy on a more sustainable long-term footing.
Leaving aside how this would even work, there’s every chance this kind of medicine — dunking on allies while flirting with recession — could end up worse than the disease.
Also worth noting:
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President Trump has threatened to impose similar tariffs on EU imports.
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There are reports he’s also exploring an easing of sanctions on Russia.
MEANWHILE, ELSEWHERE…
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🇰🇿 Kazakhstan: UN research suggests cases of measles, rumps, and rubella among kids have surged across Central Asia in the post-Covid era, with Kazakhstan alone registering 28,147 preventable cases. The report cites increased vaccine hesitancy among parents as a key driver.
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🇮🇪 Ireland: Dublin has greenlit a plan to develop an emergency gas facility to beef up Ireland’s energy security. The facility, a floating liquefied natural gas terminal, will only be used in emergencies though Ireland has yet to determine the exact costs or location.
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🇸🇬 Singapore: A local probe into alleged smuggling of advanced US-designed Nvidia chips to China has put pressure on neighbouring Malaysia, with claims smugglers are fraudulently listing it as their end destination. So far, Singapore’s probe has led to the arrest of two citizens of Singapore, and one from China.
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🇨🇱 Chile: Chile’s interior minister (Carolina Toha) has tendered her resignation without a reason, fuelling speculation she plans to run for president. Elections are scheduled for November-December this year, and polls suggest the conservative opposition’s Evelyn Mattheiis (a former labour minister) is the frontrunner.
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🇬🇦 Gabon: Military junta leader Gen. Brice Oligui Nguema, who seized power in a 2023 coup, has officially declared his candidacy for next month’s elections. His coup ended 55 years of Bongo family rule, though critics are calling on him to honour his original pledge to hand power to civilians.
EXTRA INTRIGUE
Diplomats on the move ✈️
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🇹🇷 Turkey and 🇮🇷 Iran have summoned each other’s envoys after Turkey’s foreign minister warned Iran against working with armed Kurdish groups in Syria.
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New Zealand 🇳🇿 deputy prime minister and foreign minister Winston Peters has wrapped up his tour through the Middle East and Asia, stopping in the UAE, Saudi Arabia, China, Mongolia, and South Korea.
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The Baltics 🇱🇹 🇱🇻 🇪🇪 didn’t score an invite to last weekend’s London Summit on Russia’s invasion of Ukraine, prompting a speedy apology from PM Keir Starmer.
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And Russia 🇷🇺 has banned entry by Japan’s foreign minister, former/current ambassadors to Ukraine, and several top business executives in response to Tokyo’s sanctions.
APP OF THE DAY
Bom, Bom, de-Bom! Close your eyes, and you can almost hear that Skype ring-tone from across the room, as you rush back to your desktop to answer that call from your parents before it rings out because you were too busy signing up for some new thing called Netflix. Anyway, that bit of modern history is now coming to an end because Microsoft has announced it’ll be sunsetting Skype in May!
The tech giant is encouraging users to migrate over to Microsoft Teams instead. Millennials, make sure to add Skype to the list of things you tell your kids about.
DAILY POLL
Where do you think the US, Canada, and Mexico will be a year from now? |
Yesterday’s poll: Do you think Turkey's peace at home will bolster its standing abroad?
🟩🟩🟩🟩🟩🟩 💪 Yes, the Kurdish conflict has long eroded its credibility (61%)
🟨🟨🟨⬜️⬜️⬜️ 😩 No, Turkey's challenges run deeper (37%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write us!) (2%)
Your two cents:
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💪 M.D: “With the world stage being so tumultuous, any sliver of peace will be embraced — even while sweeping otherwise unsavory domestic issues under the rug.”
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✍️ A.A: “Erdogan now risks his credibility as a longstanding conflict against the PKK could potentially become numerous conflicts against the lingering and more aggressive factions.”
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