First Thing: US-China trade row escalates as Beijing’s 84% tariffs come into effect

Retaliatory tariffs enforced hours after Trump announced a pause on dozens of levies against all countries except China. Plus, France could recognize Palestinian statehood within months

Good morning.

Beijing’s 84% retaliatory tariffs came into force on Thursday morning, hours after Donald Trump said he was freezing steep levies on dozens of countries, except China.

His announcement helped financial markets recover, after the most uncertain stretch since the Covid pandemic. Markets in east Asia soared, while the Nasdaq in the US climbed 12.2% to clinch its best day in 24 years on Wednesday evening.

However, Trump has implemented a broad 10% tariff for dozens of countries, and the picture for China-US trade was much worse. US tariffs against Chinese goods are at 125%, and the trade row does not appear likely to simmer down.

A China Daily editorial on Wednesday night stated that “caving in to the US pressure is out of the question for Beijing”. The intensifying dispute could reduce trade in goods between the two countries by 80%, warned the head of the World Trade Organization, Ngozi Okonjo-Iweala.

What impact could this have on the rest of the world? Given trade between the US and China makes up 3% of global trade, it could “severely damage the global economic outlook”, Okonjo-Iweala said.

Pentagon chief says US could ‘revive’ Panama bases

The US defence secretary has suggested that US troops could be invited to return to Panama to “secure” its strategically important canal – an idea immediately rejected by the Central American country’s government.

Speaking during a visit to Panama, Pete Hegseth said the US “by invitation” could “revive” former US military bases to once again host American troops in the country that it invaded 35 years ago.

Hegseth added that the US was seeking free passage through the canal for its warships – a demand that Trump has repeatedly and forcefully made since returning to power in January.

What did Panama say? “Panama made clear, through President Mulino, that we cannot accept military bases or defence sites,” its security minister, Frank Abrego, said.

France could recognize Palestinian statehood by June

Paris plans to recognize a Palestinian state within months, and could do so at a UN conference in New York in June on settling the Israel-Palestinian war, the French president has said.

Emmanuel Macron made the comment about the move, which would mark a significant policy switch, during an interview broadcast on Wednesday. “We must move towards recognition, and we will do so in the coming months,” he told the broadcaster France 5, Agence France-Presse (AFP) reported. He added that this could happen in June.

Macron said he hoped the move would also pressure those who support Palestinian statehood to also recognize the state of Israel. “I will do it because I believe that at some point it will be right and because I also want to participate in a collective dynamic, which must also allow all those who defend Palestine to recognise Israel in turn, which many of them do not do,” he said.

How has Israel responded? With criticism. Israel’s foreign minister, Gideon Saar, said France recognizing a Palestinian state would be a “prize” for terrorism, AFP reported.

In other news …

Anti-protest legislation has boomed under the Trump administration, with people resisting the US-backed war in Gaza and the climate emergency particularly targeted.

Emergency workers in the Dominican Republic on Wednesday ended the search for survivors of a nightclub roof collapse that killed 184 people.

Apple has poured cold water on the White House’s claims that it could manufacture iPhones in the US, amid the Trump administration’s trade dispute with China, citing workforce issues.

The Weezer bassist Scott Shriner’s wife, Jillian Lauren, was shot by police on Monday before being booked for attempted murder, according to Los Angeles police.

Stat of the day: Energy demands from AI datacentres to quadruple by 2030

The massive growth of artificial intelligence means the energy consumption of the datacenters that power it will quadruple by 2030, a report has found. Datacenters consume as much electricity as 100,000 households – but some of those being built will need 20 times more.

Don’t miss this: Farmers face one of the highest rates of suicide. This social worker believes the solution is buried in their land

For the social worker Kaila Anderson, tackling the mental health crisis faced by farmers was personal: her father had experienced a period of depression and considered harming himself during the peak of the 1980s farm crisis. She has since developed a novel way to train healthcare workers to support people in the agricultural sector that centers farmers’ relationship to their land to help them open up.

Climate check: Green activist group is pausing work after backlash by investors

A green shareholder activist group has decided to stop pressuring fossil fuel companies to cut their emissions for the first time since it began a decade ago, as investors turn their backs on climate action. The Netherlands-based group Follow This has been one of the most successful shareholder activists of recent years – in 2021, its resolution against the board of Chevron calling for emissions reductions was backed by 60% of shareholders.

Last Thing: Sex, patriotism and … Donald Trump cologne: the US ads that explain the 00s

Advertising can tell us a lot about the state of society at a certain time, and commercials from the 2000s are no different. The newest edition of All-American Ads reflects on the nostalgia-soaked era – here are six ads that sum up the era, including the Evian mermaid – so iconic that it must have inspired that scene in the Zoolander movie.

Sign up

First Thing is delivered to thousands of inboxes every weekday. If you’re not already signed up, subscribe now.

Get in touch

If you have any questions or comments about any of our newsletters please email newsletters@theguardian.com