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China threatens countermeasures to combat Trump tariffs

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China threatens countermeasures to combat Trump tariffs

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Beijing has hit out at new 10 per cent tariffs imposed by the US on Chinese exports, saying it will “take necessary countermeasures to defend its rights and interests” as trade tensions between the two powers enter a new phase.

The Ministry of Foreign Affairs said on Sunday that China opposed the tariffs, which it said were introduced “under the pretext of the fentanyl issue”.

“The US needs to view and solve its own fentanyl issue in an objective and rational way instead of threatening other countries with arbitrary tariff hikes,” the MFA said.

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China’s Ministry of Commerce said it would file a lawsuit with the World Trade Organization.

The additional 10 per cent levies come alongside new 25 per cent tariffs on exports from Canada and Mexico, as President Trump embarks on an expanded trade war, following a range of measures imposed on China by the US during his first term.

Trump said the influx of “illegal aliens” and drugs, including the opiate Fentanyl, had created a “national emergency” that justified the tariffs.

During last year’s election campaign, he had warned of tariffs as high as 60 per cent against China, but subsequently signalled a rate of 10 per cent. He has linked the levies to the country’s role in the flow of ingredients or “precursors” for fentanyl.

China agreed to take actions to stem the flow of precursors at a summit between President Xi Jinping and then-president Joe Biden in San Francisco in November 2023. Since then, Beijing has taken some actions that were welcomed by the Biden administration, but critics, including some in the outgoing administration, wanted China to do much more.

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Although widely anticipated, the measures pose a significant challenge to Xi Jinping’s government at a time when weaknesses in domestic demand have made it particularly dependent on exports for economic growth. Last year, China’s trade surplus hit a record high of close to $1tn.

Tao Wang, chief China economist at UBS Investment Bank, said the tariffs had been imposed more quickly than expected and that the blanket 10 per cent rate was more expansive than phased measures under Trump’s first administration.

“This is broader and likely much bigger than the first round,” she said, adding that many expected Trump to add more tariffs once his officials completed a review of trade policy in April.

Wang said she expected a hit to China’s GDP of 0.3 to 0.4 per cent.

In a report published last week, Morningstar said the 10 per cent tariffs would most affect home appliances, home furnishings, lithium batteries and electric vehicles in China. But it added many companies would “likely see an impact of less than 5 per cent of their respective total revenue” and that they “may not be as bad as feared for some industries”.

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Beijing also faces trade tensions with the EU over tariffs imposed on its electric vehicles last summer, which have led to a wave of countermeasures on products from cognac to dairy. 

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Toyota considers exporting from UK to US to ease impact of Trump tariffs

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Toyota considers exporting from UK to US to ease impact of Trump tariffs

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Toyota will not rule out using the “export potential” of its UK plant to send small volumes of vehicles to the US in a bid to navigate the supply chain challenges posed by Donald Trump’s tariff war, a senior European executive has said. 

“If the business equation makes sense and the product that we’re producing is wanted by another region . . . we would of course study [our assets],” Matt Harrison, the chief corporate officer in Europe for the world’s largest carmaker, told the Financial Times. 

Harrison warned of more “political whirlwinds” ahead as the car industry prepares for a series of tariffs the US president has threatened against its major trading partners. 

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Trump has handed carmakers a one-month reprieve on tariffs on imports from Mexico and Canada but the Japanese carmaker would be exposed if he goes ahead with the duties after 30 days.

US officials have also said “reciprocal” tariffs, allowing Trump to match import tariffs to those imposed on US goods by other countries, would still go into effect on April 2 as planned.

The EU, which levies 10 per cent on car imports compared to the 2.5 per cent by the US, could be one of the main targets of the “reciprocal” tariffs. 

If the UK manages to avoid US tariffs and Trump delivers on his tariff threats against other trading partners, Toyota’s Burnaston plant could hold more “export potential”, Harrison said.

But he cautioned that potential volumes would be limited considering that smaller models produced in the UK do not match consumer demand for bigger-sized vehicles in the US. 

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“It doesn’t mean that there wouldn’t be some opportunity, but probably small volume. Not huge,” he added.

Toyota has been a longtime proponent of selling a broad variety of vehicles including hybrids and hydrogen-powered models. Sales growth of electric vehicles, meanwhile, has slowed in both Europe and the US.

But it will boost its EV line-up in Europe this year with three new all-electric sport utility vehicles for the main Toyota brand and another three EV models for Lexus. By the end of next year, it expects to have at least 14 battery-only models, and to sell only zero-emission vehicles across Europe by 2035.

Toyota said it would not be ready to start producing EVs at its European plants in the near term. Currently, its EVs are produced in Japan, India and at European plants owned by Stellantis. 

“Maybe in 2025, battery EVs will be 10 per cent of our business, but still at 10 per cent of our business, the critical mass is not there to be fully competitive producing locally,” Harrison said. 

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Andrea Carlucci, vice-president of Toyota Europe, told the FT that Toyota’s diverse EV offering will help keep it from being dragged into a price war. Carmakers have struggled to make money from EVs, which are more expensive to produce than petrol vehicles and often require discounts to convince consumers to make the switch.

“It would be naive to tell you that we can rescue ourselves from a price war,” Carlucci said. “But I think we have a bit more freedom.” 

Another battleground for the group in Europe is plug-in hybrids, such as the carmaker’s Prius model.

As EV sales growth slows in Europe, BYD and other Chinese rivals are increasing their hybrid offerings, which are also not subject to the EU’s anti-subsidy tariffs.

“Competition is very welcome,” Carlucci said. “I’m ready to take any challenge from anyone.”

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USAID staff told to shred and burn classified documents

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USAID staff told to shred and burn classified documents

Staff at the US Agency for International Development (USAID) have been told to shred and burn classified documents and personnel files.

The request raised alarm among employees and labour groups amid the ongoing dismantling of the agency.

Acting Executive Secretary Erica Y Carr sent an email that thanked staff for clearing out classified safes and personnel documents from a Washington DC office and told them to meet in the building’s lobby for an all-day disposal event on Tuesday.

“Shred as many documents first, and reserve the burn bags for when the shredder becomes available or needs a break,” her email to staff read.

Typically, documents placed in burn bags for disposal are sealed and then taken to a secure site for incineration.

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The email asked staff not to overfill the burn bags and label them with the words “SECRET” and “USAID (B/IO)” – which stands for bureau, or independent office – using permanent markers.

The BBC has viewed a copy of the email, which was also reported by its US partner, CBS News. It was first reported by ProPublica.

The US State Department did not immediately return a request for comment.

It was not immediately clear if the agency had preserved copies of the documents marked for destruction.

The American Foreign Service Association (AFSA), a union representing USAID staff, was aware employees had been asked to shred documents, spokesperson Nikki Gamer told the BBC.

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The union said it was “alarmed” by the reports and warned that such documents “may be relevant to ongoing litigation regarding the termination of USAID employees and the cessation of USAID grants”.

The Trump administration faces multiple lawsuits over its dismantling of USAID, which began shortly after Trump took office in January. Unions and other groups have challenged the administration’s power to shut down an agency and freeze funds that had been established and approved by the US Congress.

AFSA noted that federal law dictates that government records must be preserved as they are “essential to transparency, accountability, and the integrity of the legal process”.

The union warned that ” the unlawful destruction of federal records could carry serious legal consequences for anyone directed to act in violation of the law.”

Government agencies do occasionally destroy paper records of classified materials and other documents, but strict procedures govern the process.

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The Federal Records Act of 1950 sets out guidelines for the proper disposal of documents and creating backup or archival records, including electronic records.

The email sent by Carr did not contain some of the details traditionally found in a records disposal request, raising concerns about procedure, experts told the BBC.

“There is no indication in this email order that any thought is being given to proper retention or even identifying which records can be destroyed and which records cannot,” said Kel McClanahan, executive director of the National Security Counselors, a non-profit law firm in Washington.

Mr McClanahan filed a complaint with the National Archives and Records Administration, asking them to “take immediate measures” to stop the destruction of records.

The loss of personnel records could also cause serious complications for federal employees who need to verify or process their employment benefits.

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USAID was one of the first targets of the Department of Government Efficiency (Doge), which was established by the Trump administration to root out what they view as waste and fraud in the federal bureaucracy. Billionaire Elon Musk is helping lead the agency.

Musk referred to the agency as “evil” and the White House has argued that the agency’s international programmes were a wasteful use of taxpayer dollars.

Over a few dramatic weeks, the agency was essentially shut down, with thousands of employees being laid off or placed on administrative leave. Many foreign service officers stationed abroad received little to no instructions for how to return home.

Many USAID staff remain on administrative leave, which allows them to receive pay but keeps their lives and careers in limbo.

The Trump administration named Secretary of State Marco Rubio the acting head of USAID in February and announced that Pete Marocco, who works at the State Department, would oversee its daily operations.

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The Trump administration also ordered a temporary freeze on foreign aid that included funds distributed by USAID, which sent shockwaves through the international development community and forced some private companies and nonprofits to lay off staff.

On Monday, Rubio announced on X that the administration was cancelling “83% of the programmes at USAID.”

“The 5200 contracts that are now cancelled spent tens of billions of dollars in ways that did not serve, (and in some cases even harmed), the core national interests of the United States,” he wrote. The State Department would administer the roughly 1,000 remaining grants.

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Are You a Federal Worker? We Want To Hear From You.

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Are You a Federal Worker? We Want To Hear From You.

The Times would like to hear about your experience as a federal worker under the second Trump administration. We may reach out about your submission, but we will not publish any part of your response without contacting you first.

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