Reuters World News - Trump’s trade war, bond selloff, Ukraine and China

Episode Date: April 9, 2025

Donald Trump's sweeping tariffs kick in, including a 104% duty on Chinese goods. It deepens a global trade war, triggering carnage on global markets and sending U.S. bonds plunging. Consumers are waiting for the impact. Plus, President Volodymyr Zelenskiy says two Chinese men fighting for Russia have been captured in eastern Ukraine. Find our recommended read on Hezbollah here. Sign up for the Reuters Econ World newsletter here. Find the latest Reuters Econ World podcast here. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Trump's sweeping tariffs have officially begun, with consumers across the globe bracing as China and the European Union vow reciprocal tariffs. It's deepened a global trade war, triggering carnage on global markets and sending U.S. bonds plunging. Plus, President Zelensky says Ukrainian forces have captured Chinese men fighting for Russia. It's Wednesday, April 9th. This is Reuters' World News. bringing you everything you need to know from the front lines in 10 minutes every weekday.

I'm Christopher Waljasper in Chicago. And I'm Tara Oaks in London. US President Donald Trump's tariffs on dozens of countries have taken effect, raising fears of recession and wiping trillions of dollars off the market value of major firms. China has been hit by a massive 104% duties and has vowed to fight what it describes as US bullying. It's prompted a rare meeting of China's top leaders to discuss how to boost the economy and stabilize the markets. Kevin Krolicki is in Beijing. China is looking to do a number of things at once here.

It wants to play both offense and defense. The meeting that we reported is a form of defense. It's the highest level meeting of this kind to be convened since the Trump tariffs were announced. The topic is to look at the ways to support domestic demand, including perhaps in, export tax credits. And we think there is more to come here. The choreography of this will be interesting. We understand that the deliberations will be made public. That's part of signaling both here to citizens and consumers. The government understands pain is coming and also presumably to the Trump administration that the government is serious when they say they're willing to fight this

to the end if the U.S. administration pushes it. Is China in a different position to push back now than it was during the last Trump administration? I think from the perspective of officials here, they were looking and expecting to have an opening be invited to an opening for negotiations. They thought this would be about making a deal with Trump. And now the rhetoric on both sides is at a point, the acrimony is so high, where something really has to change in order to create an opening for high-level talks, I mean, let alone talks that would put she and Trump in the same room.

So who's going to blink first? Someone will have to blink or both sides will have to blink, but the stakes are huge for China with a trillion-dollar trade surplus, $480 billion in exports to the U.S. China's share of global manufacturing is over 30 percent, but its share of consumption is only less than half of that. Given the stakes for China's economy, they will sit down if the rhetoric can cool down and if they think they can now sort of accede to talks without having been seen to give in to what they've called blackmail. As Trump's tariffs kick in, the turmoil on markets is back with a vengeance.

Stocks and oil are tumbling and a savage sell-off in treasuries shows that investors are dumping even their safest assets in a panicked dash for cash. Carmel Grimmons explains. U.S. government bonds are traditionally seen as a safe haven in times of turmoil, but this sell-off is shaking that view. Investors are dumping longer-dated treasuries, and even the benchmark 10-year bond is getting hit. Market participants say that hedge funds are at the heart of the purge. They need to cover losses on some of their highly leveraged bets, but there could be other more fundamental triggers at play, concerns that tariffs will drive inflation and prevent the Fed from cutting interest rates, and that foreign investors will dump US treasuries in retaliation for tariffs.

So, away from Wall Street, how are the consumers on Main Street reacting? Well, most Americans are bracing for higher prices on a wide range of goods following Trump's tariffs. A New Reuters-Ipsos poll has found that 73% of respondents say they expect prices of everyday items to surge. Our U.S. retail correspondent, Siddharth Cavalais, is in Dallas and has been looking into how consumers are reacting. Consumers are mindful and are knowledgeable about the tariffs, but in the majority of people, it was more of a wait and sea approach. On the flip side, there were some actually cautious consumers also. So I spoke with a businessman, a small-time businessman who works in Jersey. He had come to a Walmart store just the day after President Trump declared as Liberation Day and unreal sweeping tariffs on a host of nations.

And he said he was there because he feared a recession was coming. And he said, I have been stockpiling for some time now, but since yesterday, the urgency has become more. So are analysts able to estimate how much these tariffs might end up costing consumers? It's very difficult. You know, there are millions of items that come from hundreds of countries. And if there are blanket tariffs on that, how do you calculate that range and say that's going to affect every product similarly? So it's hard to give you an estimate. However, there is a think tank called the Tax Foundation. According to their estimates, they think that the April 2 tariffs will cost the US in total

$3.1 trillion over 10 years. And now if you peter that down to each household, that's increasing it by $2,100 per household in 2025 alone. So the lower income households will have to make some really hard choices. So for instance, if someone was planning to buy a car over the next few weeks of the month, may have to delay that purchase longer. Or if it comes down to like a pamper's diaper, they might choose the store brand instead.

So taking all of that into consideration, Goldman Sachs, for instance, has raised the odds of a U.S. recession to 45% from 35%. The second time it has increased the forecast in a week. Juan Manuel Mendez head of the Dominican Republic's emergency operations center confirming dozens have been killed in a catastrophic roof collapse at a nightclub.

Authorities are still working to ascertain the number of dead and injured as emergency services searched through the rubble. The deceased include a popular singer, a provincial governor, and former Major League Baseball pitcher, Octavio D'Otel. The U.S. Supreme Court has blocked a judge's order for the Trump administration to rehire thousands of fired employees. The High Court says six federal agencies do not have to reinstate recently hired probationary employees, while lawsuits challenging the legality of those dismissals are ongoing. The Trump administration has moved to reinstate at least six recently canceled U.S. foreign aid programs for emergency food assistance. That's according to sources. The reinstatements include awards to the World Food Program in Lebanon, Syria, Somalia, Jordan,

Iraq and Ecuador. President Volodemir Zelensky says Ukrainian forces have captured two Chinese men fighting for Russia in eastern Ukraine. Beijing is a close diplomatic ally of Moscow but is not publicly known to have directly aided in the Kremlin's full-scale invasion, which Trump is seeking to swiftly end.

Our Ukraine Bureau Chief, Christian Lowe, is in Kiev. So we don't know if these people are in the pay of the Chinese military at all. It is possible that they are just there as private citizens. There are a bunch of people fighting there from various countries who are mercenaries. However, President Zelensky is kind of putting this at the door of Beijing. So he instructed his foreign minister to summon the Chinese Charger de Fair in Kiev. We assume that it was to express a protest. Zelensky is saying this demonstrates that Russia is pulling another country now in the shape of

China into this conflict, which he says demonstrates that Moscow's not interested in the peace that Donald Trump wants to achieve. They just want to fight on and keep escalating and expanding this war. So does China have a role in this conflict? So China says there's not a party to this war. China says it's provided no military assistance to Russia. However, China is an ally of Russia. The European Union and Ukraine, and at times the United States have accused China of turning a blind eye or facilitating dual-use goods that are banned by the European Union and the United States for delivery to Russia, because they could be used for the Russian war machine, are actually circumventing sanctions, getting to Russia via China,

and in that way helping Russia's war machine, according to the European Union and Ukraine. So in that sense, Ukraine sees China as a party to this conflict. China's foreign ministry says it's verifying reports of Chinese nationals, being captured in Ukraine. Russia has not yet publicly commented on Zelensky's claim, nor has it explicitly confirmed using North Korean troops in its Korsk region. Our recommended read today is a Reuters exclusive on how Hezbollah is open to arms talks if Israel withdraws from South Lebanon. That's according to a senior Hezbollah official. Discussion of disarmament has intensified since the power balance was upended by last year's

war with Israel and the ousting of Hezbollah's Syrian ally, ex-president Bashar al-Assad. You can read more by following the link in the pod description. For more on any of the stories from today, check out Reuters.com or the Reuters app. Don't forget to follow us on your favorite podcast player. We'll be back tomorrow with our daily headline show.