Trade War

Seoul, South Korea – After six hours of emergency martial law, hundreds of days of protests, violence at a Seoul court and the eventual impeachment of President Yoon Suk-yeol, South Korea is now hours away from choosing a new leader in the hope of restoring stability to an unsettled nation.

From 6am to 8pm on Tuesday (21:00 to 11:00 GMT), South Koreans will vote for one of five presidential candidates in a race led largely by the opposition Democratic Party’s Lee Jae-myung. He is followed in the polls by the governing People Power Party candidate Kim Moon-soo.

The election – involving 44.39 million eligible voters – is expected to see either of these two top contenders replace Yoon. The expelled former president last week attended his fifth court hearing where he faces charges of leading an insurrection and abusing power due to his failed imposition of martial law on December 3.

If convicted, Yoon could face a maximum penalty of life in prison or even the death sentence.

Participation in the election is predicted to be at an all-time high amid the political turmoil resulting from the brief imposition of military rule, which still resonates in every corner of society and has sharply divided the country along political lines. There are those who still support Yoon and those who vehemently oppose his martial law decision.

The Democratic Party’s Lee is currently the clear frontrunner, with Gallup Korea’s latest poll on May 28 placing his support at 49 percent, compared with People Power Party Kim’s 36 percent, as the favourite to win.

Early voting, which ended on Friday, had the second-highest voter turnout in the country’s history, at 34.74 percent, while overseas voting from 118 countries reached a record high of 79.5 percent.

Lee Jae-myung’s second chance

In the last presidential election in 2022, Yoon narrowly edged out Lee in the closest presidential contest in South Korea’s history.

After his crushing defeat in 2022 to a voting margin of just 0.73 percentage points, Lee now has another chance at the top office, and to redeem his political reputation.

About a month ago, South Korea’s Supreme Court determined that Lee had spread falsehoods during his 2022 presidential bid in violation of election law.

In addition to surviving a series of bribery charges during his tenure as mayor of Seongnam and governor of Gyeonggi Province, which he claimed were politically motivated, Lee also survived a stabbing attack to his neck during a news conference in Busan last year.

Fortunately for Lee, the courts have agreed to postpone further hearings of his ongoing trials until after the election.

On the campaign trail this time around, Lee addressed his supporters from behind bulletproof glass, with snipers positioned on rooftops, scanning the crowds for potential threats, as counterterrorism units patrolled on foot.

Lee has also been joined on his campaign by conservative lawmakers, his former opponents, who have publicly supported his run for office numerous times during the past month, seeing him as a path back to political stability.

People Power Party candidate Kim was served an especially hard blow when his parliamentary colleague, Kim Sang-wook, defected from the party in early May to join Lee’s Democratic Party.

According to polling data from South Korea’s leading media outlet Hankyoreh, only 55 percent of conservative voters who supported Yoon in the 2022 election said they would back the People Power Party’s Kim this time around.

While such shifts represent the crisis that the mainstream conservative party is facing after the political fallout from Yoon’s botched martial law plan and removal from office, it also testifies to Lee’s appeal to both moderate and conservative voters.

Future president faces ‘heavy burden’

“The events of the martial law, insurrection attempt and impeachment process have dealt a heavy blow to our democracy,” said Lim Woon-taek, a sociology professor at Keimyung University and a former member of the Presidential Commission on Policy Planning.

“So, the new president will receive a heavy burden when assuming the president’s seat,” Lim told Al Jazeera.

Youth unemployment, social inequality and climate change have also become pressing issues that Yoon’s administration failed to tackle.

According to recent research, South Korea’s non-regular workers, including contract employees and part-timers, accounted for 38 percent of all wage and salary workers last year.

Lee has promised to champion business-friendly policies, and concentrate on investment in research and development and artificial intelligence, while refraining from focusing on divisive social issues such as the gender wars.

His stance has shifted considerably from his time moving up the political ranks when he promoted left-wing ideas, such as a universal basic income.

Events on the night of the declaration of martial law on December 3, also helped cement Lee’s image as a political freedom fighter. A former human rights lawyer, Lee was livestreamed scaling the walls of the National Assembly as the military surrounded the compound, where he rallied fellow legislators to vote and strike down Yoon’s decision to mobilise the military.

Among Lee’s most central campaign pledges has been his promise to bring to justice those involved in Yoon’s martial law scheme and tighten controls on a future president’s ability to do the same. Lee also wants to see a constitutional amendment that would allow presidents to serve two four-year terms, a change from the current single-term five years.

While Lee’s closest challenger, Kim, has agreed on such policies and made sure to distance himself from Yoon, the former labour-activist-turned-hardline-conservative has also said the former president’s impeachment went too far.

Trump, tariffs and South Korea’s new direction

The election also unfolds as United States President Donald Trump has proposed a series of tariffs on key South Korean exports such as steel, semiconductors and automobiles.

In the face of those threats, Lee has promised to stimulate demand and growth, while Kim has promised to ease business regulations. Kim also emphasised his plan to hold an immediate summit meeting with Trump to discuss the tariffs.

Lee, on the other hand, has promised a more pragmatic foreign policy agenda which would maintain relations with the US administration but also prioritise “national interests”, such as bridging closer relations with neighbouring China and Russia.

On North Korea, Lee is determined to ease tensions that have risen to unprecedented heights in recent years, while Kim has pledged to build up the country’s military capability to counter Pyongyang, and wants stronger security support from the US.

Lee has also promised to relocate the National Assembly and the presidential office from Seoul to Sejong City, which would be designated as the country’s new administrative capital, continuing a process of city-planning rebalancing that has met a series of setbacks in recent years.

Another major issue that Keimyung University’s Lim hopes the future leader will focus more on is the climate situation.

“Our country is considered a climate villain, and we will face future restrictions in our exports if we don’t address the immediate effects of not keeping limits on the amount of our hazardous outputs,” Lim said.

“The future of our country will really rest on this one question: whether the next president will draw out such issues like the previous administration or face the public sphere and head straight into the main issues that are deteriorating our society.”

The results of Tuesday’s vote are expected to emerge either late on Tuesday or in the early hours of Wednesday morning.

In the 2022 election, Yoon was proclaimed the winner at 4:40am the morning after election day.

With Lee the clear frontrunner in this election, the outcome could be evident as early as Tuesday night.

But enhanced surveillance at polling stations this year due to concerns raised about counting errors may be a factor in slowing down any early announcement of the country’s next president.

United States President Donald Trump has announced his administration is raising tariffs on steel imports from 25 percent to 50 percent.

Speaking to steelworkers and supporters at a rally outside Pittsburgh, Pennsylvania, Trump framed his latest tariff increase as a boon to the domestic manufacturing industry.

“We’re going to bring it from 25 percent to 50 percent, the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” Trump told the crowd. “Nobody’s going to get around that.”

How that tariff increase would affect the free-trade deal with Canada and Mexico – or a separate trade deal struck earlier this month with the United Kingdom – remains unclear.

Also left ambiguous was the nature of a deal struck between Nippon Steel, the largest steel producer in Japan, and the domestic company US Steel. Still, Trump played up the partnership between the two companies as a “blockbuster agreement”.

“ There’s never been a $14bn investment in the history of the steel industry in the United States of America,” Trump said of the deal.

A tariff hike on steel

Friday’s rally was a return to the site of many election-season campaign events for Trump and his team.

In 2024, Trump hinged his pitch for re-election on an appeal to working-class voters, including those in the Rust Belt region, a manufacturing hub that has declined in the face of the shifting industry trends and greater overseas competition.

Key swing states like Pennsylvania and Michigan are located in the region, and they leaned Republican on election day, helping to propel Trump to a second term as president.

Trump, in turn, has framed his “America First” agenda as a policy platform designed to bolster the domestic manufacturing industry. Tariffs and other protectionist policies have played a prominent part in that agenda.

In March, for instance, Trump announced an initial slate of 25-percent tariffs on steel and aluminium, causing major trading partners like Canada to respond with retaliatory measures.

The following month, he also imposed a blanket 10-percent tariff on nearly all trade partners as well as higher country-specific import taxes. Those were quickly paused amid economic shockwaves and widespread criticism, while the 10-percent tariff remained in place.

Trump has argued that the tariffs are a vital negotiating tool to encourage greater investment in the US economy.

But economists have warned that attempting a “hard reset” of the global economy – through dramatic tax hikes like tariffs – will likely blow back on US consumers, raising prices.

Rachel Ziemba, a senior fellow at the Center for a New American Security, said the latest tariff hike on steel also signals that negotiating trade deals with Trump may result in “limited benefits”, given the sudden shifts in his policies.

Further, Friday’s announcement signals that Trump is likely to continue doubling down on tariffs, she said.

“The challenge is that hiking the steel tariffs may be good for steel workers, but it is bad for manufacturing and the energy sector, among others. So overall, it is not great for the US economy and adds uncertainty to the macro outlook,” Ziemba explained.

Trump’s tariff policies have also faced legal challenges in the US, where businesses, interest groups and states have all filed lawsuits to stop the tax hikes on imports.

On Thursday, for instance, a federal court briefly ruled that Trump had illegally exercised emergency powers to impose his sweeping slate of international tariffs, only for an appeals court to temporarily pause that ruling a few hours later.

A deal with Nippon Steel

Before the tariff hike was announced, Friday’s rally in Pittsburgh was expected to focus on Nippon Steel’s proposed acquisition of US Steel, the second largest steel producer in the country.

“We’re here today to celebrate a blockbuster agreement that will ensure this storied American company stays an American company,” Trump said at the outset of his speech.

But the merger between Nippon Steel and US Steel had been controversial, and it was largely opposed by labour unions.

Upon returning to the White House in January, Trump initially said he would block the acquisition, mirroring a similar position taken by his predecessor, former US President Joe Biden.

However, he has since pivoted his stance and backed the deal. Last week, he announced an agreement that he said would grant Nippon only “partial ownership” over US Steel.

Speaking on Friday, Trump said the new deal would include Nippon making a “$14bn commitment to the future” of US Steel, although he did not provide details about how the ownership agreement would play out.

“Oh, you’re gonna be happy,” Trump told the crowd of steelworkers. “There’s a lot of money coming your way.”

The Republican leader also waxed poetic about the history of steel in the US, describing it as the backbone of the country’s economy.

“The city of Pittsburgh used to produce more steel than most entire countries could produce, and it wasn’t even close,” he said, adding: “If you don’t have steel, you don’t have a country.”

For its part, US Steel has not publicly communicated any details of a revamped deal to investors. Nippon, meanwhile, issued a statement approving the proposed “partnership”, but it also has not disclosed terms of the arrangement.

The acquisition has split union workers, although the national United Steelworkers Union has been one of its leading opponents.

In a statement prior to the rally, the union questioned whether the new arrangement makes “any meaningful change” from the initial proposal.

“Nippon has maintained consistently that it would only invest in US Steel’s facilities if it owned the company outright,” the union said in a statement, which noted firmer details had not yet been released.

“We’ve seen nothing in the reporting over the past few days suggesting that Nippon has walked back from this position.”

The rally on Friday comes as Trump has sought to reassure his base of voters following a tumultuous start to his second term.

Critics point out that steel prices have risen in the US by roughly 16 percent since Trump took office, and his Republican Party faces potentially punishing congressional elections in 2026.

US Secretary of State Marco Rubio’s salvo against Chinese students, promising to “aggressively revoke” their visas, is the latest move in heightening tensions between the world’s two largest economies.

Despite a temporary tariff truce reached between them earlier this month, divisions between Washington and Beijing remain wide, with recent ruptures over higher education, artificial intelligence (AI) chips and rare earth minerals.

Here’s all we know about how relations between China and the United States are worsening despite diplomatic efforts.

What did the US and China agree on tariffs?

A US-China trade spat escalated after Trump’s administration raised tariffs on Chinese goods to 145 percent earlier this year, with cumulative US duties on some Chinese goods reaching a staggering 245 percent. China retaliated with 125 percent tariffs of its own on US goods.

Under an agreement reached on May 12 following two days of trade talks in Geneva, tariffs on both sides were dropped by 115 percentage points for 90 days, during which time negotiators hope to secure a longer-term agreement. For now, the US has maintained a 30 percent tariff on all Chinese goods while Beijing has a 10 percent levy on US products.

In the weeks since the temporary reprieve, however, Washington and Beijing appear to have had only limited discussions.

On Thursday, US Treasury secretary Scott Bessent told Fox News that trade talks between the US and China are “a bit stalled”, and may need to be reinvigorated by a call between US President Donald Trump and Chinese leader Xi Jinping.

In the meantime, the Trump administration has announced new, strict visa controls on Chinese university students and told US companies to stop selling their advanced chip software used to design semiconductors to Chinese groups.

Why is the US targeting Chinese students?

On Wednesday, Rubio announced that the US will “aggressively revoke” the visas of Chinese students studying in the country. He also pledged to ramp up scrutiny of new visa applicants from China and Hong Kong.

The Trump administration’s decision to carry out deportations and to revoke student visas is part of wide-ranging efforts to fulfil its hardline immigration agenda.

China is the second-largest country of origin for international students in the US, behind India. Chinese students made up roughly a quarter of all foreign students in the US during the 2023-2024 academic year – more than 270,000 in total.

China’s Ministry of Foreign Affairs criticised the decision to revoke visas, saying it “damaged” the rights of Chinese students. “The US has unreasonably cancelled Chinese students’ visas under the pretext of ideology and national rights,” Foreign Ministry spokesperson Mao Ning said.

The Trump administration also banned Harvard University from enrolling any foreign students on May 22, accusing the institution of “coordinating with the Chinese Communist Party”. That move has since been blocked by a US federal judge.

Still, the largest portion of foreign students at Harvard – almost 1,300 – are Chinese, and many top officials, including the current leader Xi Jinping, have sent their children to the Ivy League school.

How is the US taking aim at Chinese semiconductors?

On May 13, just after the end of trade talks in Geneva, the US Commerce Department issued guidance warning American firms against using Huawei’s Ascend AI semiconductor chips, stating that they “were likely developed or produced in violation of US export controls”. 

The move marked the latest in a series of efforts by the Trump administration to stymie China’s ability to develop cutting-edge AI chips. The tiny semiconductors, which power AI systems, have long been a source of tension between the US and China.

China’s Commerce Ministry spokesperson fired back against the guidance last week, accusing Washington of “undermining” the consensus reached in Geneva and describing the measures as “typical unilateral bullying and protectionism”.

Then, on May 28, the US government ramped up the row by ordering US companies which make software used to design semiconductors to stop selling their goods and services to Chinese groups, The Financial Times reported.

Design automation software makers, including Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their technology to China.

Why is the US targeting Chinese semiconductors?

The US has been tightening its export controls on semiconductors for more than a decade, contending that China has used US computer chips to improve military hardware and software.

Chinese officials and industry executives deny this and contend that the US is trying to limit China’s economic and technological development.

In his first term as president, Trump banned China’s Huawei from using advanced US circuit boards.

Huawei is seen as a competitor to Nvidia, the US semiconductor giant which produces its own-brand of “Ascend” AI chips. In April, Washington restricted the export of Nvidia’s AI chips to China.

But Nvidia’s chief executive, Jensen Huang, recently warned that attempts to hamstring China’s AI technology through export controls had largely failed.

How could China be affected by US measures?

The suspension of semiconductor sales will limit supplies for aerospace equipment needed for China’s commercial aircraft, the C919, a signature project in China’s push towards economic and transport self-reliance.

Christopher Johnson, a former CIA China analyst, told The Financial Times that this week’s new export controls underscored the “innate fragility of the tariff truce reached in Geneva”.

“With both sides wanting to retain and continue demonstrating the potency of their respective chokehold capabilities, the risk the ceasefire could unravel even within the 90-day pause is omnipresent,” he added.

Will China ease restrictions on rare earth minerals exports?

US officials had expected the Geneva talks to result in China easing its export restrictions on rare earth elements. So far, there have been few signs of that, however.

Rare earth minerals are a group of precious minerals required to manufacture a wide range of goods in the defence, healthcare and technology sectors.

Rare earth metals, which include scandium and yttrium, are also key for producing components in capacitors – electrical parts which help power AI servers and smartphones.

China processes some 90 percent of the world’s rare earth minerals and instituted export controls in April to counter Trump’s “Liberation Day” tariffs in April, triggering alarm among US companies.

Last week, for instance, Ford temporarily closed a factory in Chicago which makes utility vehicles after one of its suppliers ran out of a specialised rare earth magnet.

In most new cars, especially elevate vehicles (cars with robotic technology allowing them to “climb” over obstacles), these high-tech magnets are used in parts which operate brake and steering systems, and power seats and fuel injectors.

The restrictions on the supply of rare earth minerals provide Beijing with a strategic advantage in future negotiations, as it can limit supplies of crucial technologies for US industry.

A federal appeals court has temporarily reinstated (PDF) US President Donald Trump’s tariffs a day after a trade court ruled that it exceeded the authorities granted to the president.

The United States Court of Appeals for the Federal Circuit in Washington temporarily blocked the lower court’s decision on Thursday, but provided no reasoning for the decision, only giving the plaintiffs until June 5th to respond.

The Court of Appeals for the Federal Circuit granted an emergency motion from the Trump administration arguing that a halt is “critical for the country’s national security”.

The White House has applauded the move.

“You can assume, even if we lose tariff cases, we will find another way,” trade adviser Peter Navarro said.

Wednesday’s surprise ruling by the US Court of International Trade had threatened to halt or delay Trump’s “Liberation Day” tariffs on most US trading partners, as well as import levies on goods from Canada, Mexico and China related to his accusation that the three countries were facilitating the flow of fentanyl into the US.

The International Court of Trade said tariffs issued under the International Emergency Economic Powers Act (IEEPA), which is typically used to address issues of national emergencies rather than addressing the national debt, were considered overreach.

Experts said the IEEPA, which was passed in 1977, is narrow in scope and targets specific countries, US-designated “terrorist organisations”, or gang activity pegged to specific instances. The US, for example, used the law to seize property belonging to the government of Iran during the hostage crisis in 1979 and the property of drug traffickers in Colombia in 1995.

“The 1977 International Emergency Economic Powers Act doesn’t say anything at all about tariffs,” Bruce Fain, a former US associate deputy attorney general under Ronald Reagan, told Al Jazeera.

Fein added that there is a statute, the Trade Expansion Act of 1962, which allows tariffs in the event of a national emergency. However, he said, it requires a study by the commerce secretary and can only be imposed on a product-by-product basis.

‘Product-by-product’

Despite the appeal court’s reprieve, Wednesday’s decision has been viewed as a blow to the administration’s economic agenda that has thus far led to declining consumer confidence and the US losing its top credit rating.

Experts believe that, ultimately, the tariffs will not last.

Posting on X, formerly known as Twitter, on Thursday, lawyer Peter Harrell, a fellow at the Carnegie Endowment for International Peace, wrote that, if the trade court’s decision “is upheld, importers should eventually be able to get a refund of [IEEPA] tariffs paid to date. But the government will probably seek to avoid paying refunds until appeals are exhausted.″

“The power to decide the level of tariffs resides with Congress. The IEEPA doesn’t even mention raising tariffs. And it was actually passed in order to narrow the president’s authority. Now the president is using it to rewrite the tariff schedule for the whole world,” Greg Schaffer, professor of international law at Georgetown Law School, told Al Jazeera.

The US trade court did not weigh in on tariffs put in place by other laws, such as the Trade Expansion Act – the law used to justify tariffs on steel, aluminium, and automobiles.

There are additional targets for similar narrow tariffs, such as pharmaceuticals from China. In April, the White House announced that the US Department of Commerce launched an investigation to see if the US reliance on China for active ingredients in key medications posed a national security threat, thus warranting tariffs.

“This is not an issue of whether the president can impose tariffs,” said Fein, the former associate deputy attorney general. “He can under the 1962 act after there’s a study and after showing that it’s not arbitrary and capricious and that it’s a product-by-product, not a country-by-country approach.”

“If he doesn’t like that, he can ask Congress to amend the statute.”

A United States trade court has ruled that President Donald Trump’s global reciprocal tariffs are illegal, finding that the president overstepped his authority by imposing the import levies last month. Wednesday’s ruling could throw Trump’s sweeping trade policies into disarray, experts say.

The Court of International Trade in New York ruled that an emergency law invoked by Trump during his “Liberation Day” announcement in April does not give him unilateral authority to impose certain tariffs. Instead, the court ruled, that power resides with Congress.

It also extended this ruling to previous tariffs levied earlier this year on Canada, Mexico and China over the fentanyl opioid crisis as well as security at the US border.

Trump has consistently promised Americans that his tariffs will draw manufacturing jobs back to the US, and shrink the country’s $1.2 trillion goods trade deficit with the rest of the world.

He has argued that the US’s large trade deficits with other countries amount to a national emergency, particularly regarding China, giving him the right to invoke emergency measures. But the court disputed that, arguing the US has run a trade deficit with the rest of the world for 49 years.

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January.

“That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”

On April 9, Trump imposed a 10 percent across-the-board tariff on all imports, plus higher reciprocal rates for countries with which the US has large trade deficits. He later paused or lowered those, but kept the 10 percent baseline tariff in place.

Wednesday’s ruling, if it stands, would blow a hole through Trump’s strategy to use tariffs to wring concessions from trading partners, experts say. It also creates uncertainty around trade negotiations and agreements with the European Union and China, as well as other countries.

But the Trump administration, some experts say, might explore new ways to impose tariffs even if it loses the current case.

What has the court ruled?

The three-judge panel was ruling on a lawsuit filed by the nonpartisan Liberty Justice Center on behalf of five small businesses which import goods from countries targeted by the duties. To date, at least seven lawsuits have been filed challenging Trump’s trade policies.

On Wednesday, the court invalidated all of Trump’s tariffs since January which were rooted in the International Emergency Economic Powers Act (IEEPA), a 1977 law meant to address “unusual and extraordinary” threats during a national emergency.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court ruling stated.

The judgement affects levies imposed on April 2, including the baseline 10 percent tariff and higher, so-called “reciprocal” duties on many countries, but not the sectoral tariffs that Trump had imposed earlier.

The ruling left in place any tariffs that Trump issued using his Section 232 powers from the Trade Expansion Act of 1962, including his 25 percent tax on most imported vehicles and parts, as well as on all foreign-made steel and aluminium.

The judges gave the government 10 days to carry out the necessary administrative moves to remove the affected tariffs.

How has the Trump administration responded to the ruling?

Minutes after the announcement of the ruling, the Trump administration filed a notice of appeal and questioned the authority of the court.

In a statement issued on Wednesday, White House spokesperson Kush Desai said US trade deficits with other countries constituted “a national emergency that has decimated American communities … and weakened our defence industrial base”.

“It is not for unelected judges to decide how to properly address a national emergency,” Desai added.

Stephen Miller, the White House deputy chief of staff for policy, also hit out at the ruling with a post on X claiming “the judicial coup is out of control”.

The Justice Department, which is headed by US Attorney General Pam Bondi, a Trump appointee, said the lawsuits should be dismissed because only Congress, not private businesses, can challenge a national emergency declared by the president under the IEEPA.

How have world markets responded?

Financial markets responded positively to the ruling, with the US dollar rising in value against the euro, yen and Swiss franc.

In Europe, the German Dax rallied by 0.9 percent at the start of trading on Thursday, while the UK’s FTSE 100 index of shares ticked up by 0.1 percent.

Stocks in Asia also climbed on Thursday, while the price of Brent crude – the global price benchmark for Atlantic basin crude oils – climbed 81 cents, or 1.25 percent, to $65.71 a barrel.

Most economists agree that eliminating Trump’s tariffs would improve prospects for the world’s major economies.

What steps could the Trump administration take now?

The Trump administration has 10 days to complete the process of halting tariffs, although the introduction of most reciprocal tariffs has been shelved until later in the summer anyway.

It’s not yet clear if the White House will respond by suspending its emergency powers after July 9, when the reciprocal tariffs pause is set to end.

For now, the trade court ruling will most likely be appealed at the US Court of Appeals in Washington, DC, and — if needed — after that, the US Supreme Court. It is unclear how long this process could take.

Meanwhile, Trump can still unilaterally launch import taxes of 15 percent for 150 days on nations with which the US runs large trade deficits, in line with Section 122 of the Trade Act of 1974.

The White House may also begin to explore other laws to enable it to force through Trump’s trade policies.

According to Mona Paulsen, assistant professor in international economic law at the London School of Economics, “Section 338 of the Tariff Act of 1930 could be option”.

This would allow Trump to raise duties up to 50 percent above existing charges on imports from countries that “discriminate against US commerce”.

“Rather than wipe out Trump’s trade plans, I think yesterday’s ruling will see the White House use more and more ambiguous trade laws,” Paulsen told Al Jazeera.

How does the ruling affect new trade deals?

The trade deal that Trump reached with the United Kingdom on May 8 has been thrown into doubt following the trade court ruling.

That agreement, which has not yet been finalised, imposed a 10 percent tariff only on all imports from the UK.

“A lot of governments will wait and see what happens now,” said Paulsen, suggesting that trade partners may now have a stronger hand in negotiations with the US.

Panel of judges finds the president overstepped his authority by imposing across-the-board duties on imports from trading partners.

A United States trade court has ruled that President Donald Trump exceeded his authority when he imposed blanket tariffs on imports from US trading partners, issuing a permanent injunction that immediately halts the tariffs and demands a government response within 10 days.

The Court of International Trade, based in New York, said the US Constitution grants Congress exclusive authority to regulate commerce with other countries that is not overridden by the president’s emergency powers to safeguard the US economy.

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel wrote on Wednesday. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”

The ruling, if it stands, could derail Trump’s global trade strategy to use steep tariffs to wring concessions from trading partners. It creates deep uncertainty around multiple simultaneous negotiations with the European Union, China and many other countries.

The court struck down Trump’s tariff orders issued since January under the International Emergency Economic Powers Act (IEEPA), a statute meant for addressing rare and extraordinary national emergencies. Tariffs introduced under other laws, such as those targeting specific industries like steel, autos and aluminium, were not addressed in this ruling.

The Trump administration swiftly filed an appeal, disputing the court’s jurisdiction. A White House spokesperson insisted trade imbalances posed a national crisis. “It is not for unelected judges to decide how to properly address a national emergency,” said Kush Desai, the White House deputy press secretary, defending Trump’s executive actions as necessary to protect US industry and security.

Al Jazeera’s Mike Hanna, reporting from Washington, noted the court’s impartiality. “This particular court cannot be accused of being an activist one, as Trump and his followers have accused other courts that have ruled against him,” Hanna said. “One of the judges was appointed by Trump himself, another by former President Barack Obama and the third by the former Republican President Ronald Reagan.”

The Court of International Trade handles matters relating to customs and trade law. Its rulings can be challenged in the US Court of Appeals for the Federal Circuit and eventually taken to the Supreme Court.

Financial analyst Robert Scott told Al Jazeera the tariffs failed to deliver tangible results even in Trump’s first term. “Most of those tariffs did not see the US trade position improve,” he said. “US trade deficits continued to grow and China’s exports to the world kept rising. They simply rerouted goods through other countries.”

The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small US businesses that import goods from countries targeted by the duties, and the other by 12 US states.

The companies, which range from a New York wine and spirits importer to a Virginia-based maker of educational kits and musical instruments, have said the tariffs will hurt their ability to do business.

“There is no question here of narrowly tailored relief; if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all,” the judges wrote in their decision.

At least five other legal challenges to the tariffs are pending.

US electronic design automation software makers were told via letters to stop supplies to China, the FT reported.

United States President Donald Trump’s administration has ordered US firms that offer software used to design semiconductors to stop selling their services to Chinese groups, the Financial Times has reported, citing people familiar with the move.

Electronic design automation software makers, which include Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their tech, the report, which was published on Wednesday, said.

A spokesperson for the Commerce Department declined to comment on the letters but said it is reviewing exports of strategic significance to China, while noting that, “in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending”.

Shares of Cadence, which declined to comment, closed down by 10.7 percent, while shares of Synopsys fell by 9.6 percent.

Synopsys CEO Sassine Ghazi said in a call with analysts that the company had not received a letter, nor had it heard from the Commerce Department’s Bureau of Industry (BIS) and Security, which enforces export controls.

“We are aware of the reporting and speculations, but Synopsys has not received a notice from BIS. So, our guidance that we are reiterating for the full year, reflects our current understanding of BIS export restrictions as well as our expectations for year-over-year decline in China. We have not received a letter,” Ghazi said.

After the market closed, Synopsys reaffirmed its revenue forecast for 2025. Its shares and those of Cadence bounced back 3.5 percent in trading after the close.

Siemens EDA did not immediately respond to a request for comment.

The software of these firms is used to design both high-end processors as well as simpler products.

While the scope of the policy change described in the report was not immediately clear, any move to strip the software makers of their Chinese customers could deal a blow to their bottom line and to their Chinese chip design customers, which heavily rely on top-of-the-line US software.

“They are the true choke point,” said a former Commerce Department official, who added that rules restricting the export of EDA tools to China have been under consideration since the first Trump administration, but were ruled out as too aggressive.

Synopsys relies on China for about 16 percent of its annual revenue, while China accounts for about 12 percent of annual revenue for Cadence.

Synopsys, which partners with chip companies such as Nvidia, Qualcomm and Intel, provides software and hardware used for designing advanced processors.

US President Donald Trump has backed away — for now — from imposing steep levies on the European Union, two days after he threatened the bloc with 50 percent tariffs.

On Sunday, Trump agreed to extend his deadline for trade talks until July 9, from the June 1 deadline he set on Friday, after European Commission President Ursula von der Leyen said the bloc needed more time to “reach a good deal”.

Von der Leyen reportedly told Trump during a phone call that the EU needed more time to come to an agreement and asked him to delay the trade duties until July, the deadline he had originally set when he announced his “reciprocal” tariffs on almost all countries around the world in April.

Trump said that he had granted the request, and that von der Leyen told him, “We will rapidly get together to see if we can work something out.” Von der Leyen said in a social media post that the EU was ready to move quickly in trade talks.

During a trip to Vietnam on Monday, French President Emmanuel Macron said that he hoped Washington and Brussels could achieve a deal with the lowest tariffs possible. “The discussions are advancing,” he told reporters.

The US president’s latest salvo comes amid Washington’s stop-and-start global trade war that kicked off in April. Trump’s moves have unnerved markets, businesses and consumers and raised fears of a global economic downturn.

But while his approach has yielded a trade deal with the United Kingdom, and negotiations are believed to be progressing with a range of other nations — from India to Vietnam to Japan — key sticking points complicate the prospects of an agreement with the EU.

Here’s what the tiff is about, and why the US and EU are struggling to reach a trade deal:

What’s the backdrop?

Trump’s recent broadside against the EU was prompted by the White House’s belief that negotiations with the bloc are not progressing fast enough. “Our discussions with them are going nowhere!” Trump posted on Truth Social.

“Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States,” he wrote last Friday.

By Sunday, however, Trump had changed course. He welcomed von der Leyen’s assertion that the bloc was willing to negotiate but that it needed more time. He added that it was his “privilege” to delay the increased tariffs.

Trump said, “[von der Leyen] said she wants to get down to serious negotiation. We had a very nice call … she said we will rapidly get together and see if we can work something out,” he told reporters.

Trump is thought to be opposed to the idea of mutually cutting tariffs to zero – an EU proposal. The US president has insisted on preserving a baseline 10 percent tax on most imports from America’s trading partners.

On May 8, the UK agreed to a trade deal that kept Trump’s 10 percent reciprocal tariff rate in place.

EU trade chief Maros Sefcovic said the European Commission – the EU’s executive arm – remains committed to securing a deal that works for both sides. But he warned that EU-US trade “must be guided by mutual respect, not threats.”

In 2024, EU exports to the US totalled about 532 billion euros ($603bn). Pharmaceuticals, cars and auto parts, chemicals and aircraft were among the largest exports, according to EU data.

What is the EU offering?

Last week, the US rejected a proposal sent by the European Commission. The EU had offered to remove tariffs on industrial goods, boost access for some US agricultural products and co-develop AI data centres, Bloomberg reported.

It also proposed enhancing economic cooperation in areas like shipbuilding and port infrastructure, as well as by establishing an EU-US energy partnership covering gas, nuclear power and oil.

In exchange, Brussels wants the Trump administration to have more flexibility on lowering the 10 percent baseline tariff — including by potentially lowering it in phases over time.

While the EU has said it wants to find a negotiated solution, it has also been preparing to retaliate if necessary.

Member states have approved a 50 percent tariff on a batch of US products worth 21 billion euros ($23.8bn), including maize, wheat and clothing, which will kick in on July 14 without a deal.

The bloc is also preparing tariffs on other imported products totalling 95 billion euros ($107.8bn), targeting industrial goods like Boeing aircraft and cars, as well as bourbon.

What does the US want?

Trump has long accused the European Union of “ripping off” the US, and is determined that Brussels will adopt measures to lower its 198.2-billion-euro ($225bn) goods trade surplus with the US.

Washington has repeatedly raised concerns over Europe’s value-added tax, as well as its regulations on IT and food exports. Trump contends that these controls act as de facto trade barriers to the EU.

For his part, Sefcovic recently told the Financial Times that he wants to slash the US-EU trade deficit by buying more US gas, weapons and agricultural products.

In addition, the bloc is reportedly open to reducing its dependence on Chinese exports and on erecting tariffs against subsidised Chinese exports, which Trump is keen on.

Sefcovic and his US counterpart, Jamieson Greer, are scheduled to meet in Paris next month to discuss ways of de-escalating the ongoing US-EU trade dispute.

How badly would Trump’s tariffs affect both economies?

In 2024, the EU exported 531.6 billion euros ($603bn) in goods to the US and imported products worth 333 billion euros ($377.8bn), resulting in a trade surplus of almost 200 billion euros ($227bn).

On the flip side, the US runs a surplus of more than 109 billion euros ($124bn) in services as of 2023, with notable IT exports, led by large American tech companies, charges for intellectual property and financial services.

Trump’s tariffs would, in turn, hit both economies hard. According to a 2019 study by the International Monetary Fund, a full-scale US-EU trade war could cost 0.3-to-0.6 percent of gross domestic product (GDP) on both sides.

The British monarch is expected to voice support for Canada’s sovereignty against Trump’s 51st state comments.

King Charles III, the British monarch, has arrived in Canada for a two-day visit that officials say aims to assert support for the country’s sovereignty amid Donald Trump’s calls for annexing the United States’ northern neighbour.

The monarch’s trip, which started on Monday, comes at the invite of Canadian Prime Minister Mark Carney, who won general elections last month amid Trump’s threats.

Charles is the ceremonial head of state in Canada, which remained a commonwealth realm after gaining independence from Great Britain in 1867.

The king is set to open parliament in Ottawa on Tuesday with a “Speech from the Throne” speech – the first such address to be delivered by a British monarch in Canada since 1977.

While the British monarch has refrained from interfering in politics in recent decades, remaining a symbolic figure, Charles is expected to deliver a message of support for Canada against Trump’s statements.

“The prime minister has made it clear that Canada is not for sale now, is not for sale ever,” Canada’s envoy to the UK, Ralph Goodale, told reporters last week.

“The king, as head of state, will reinforce the power and the strength of that message.”

Canadian officials have forcefully rejected Trump’s comments about making their country the 51st US state, as a trade row between the two countries continues. During a visit to the White House earlier this month, Carney told Trump that Canada is “not for sale”.

Charles’ trip, which he will make with his wife Queen Camilla, will be his first visit to the former British colony since becoming king in September 2022.

Governor General Mary Simon, the monarch’s ceremonial representative in Canada, said the royal couple’s visit holds “profound significance”.

“It reaffirms the enduring constitutional bond that has shaped Canada’s journey into a proud and independent nation,” Simon, who is the first indigenous person to hold the position, said in a statement.

On Monday, the royal couple will visit a large park in Ottawa and meet vendors and artists, according to Buckingham Palace. The king will then participate in a ceremonial puck drop to launch a street hockey demonstration before planting a tree in another part of the city.

US president continues to fuel global economic uncertainty with erratic trade policy.

United States President Donald Trump has backed away from launching a trade war with the European Union, two days after threatening to impose punishing tariffs.

Trump said on Sunday that he has agreed to extend trade negotiations with the EU to July 9 following a call with European Commission President Ursula von der Leyen. As part of that agreement, the US will also hold back from imposing a 50 percent tariff on imports from the bloc, which Trump announced on Friday would be imposed on June 1.

The announcement is the latest U-turn on US trade policy in a long series in recent months, and will only add to the uncertainty that Trump’s erratic and unpredictable policy is casting over the global economy.

Trump said, “[von der Leyen] said she wants to get down to serious negotiation. We had a very nice call.”

“She said we will rapidly get together and see if we can work something out,” he told reporters.

The European Commission chief noted that she had shared a “good call” with Trump and that the EU was ready to move swiftly.

Backtracked

Trump set a 90-day window for trade negotiations with the EU in April, making them due to end on July 9.

He had backtracked on Friday, saying he was not interested in reaching an agreement at all and escalated the transatlantic trade dispute.

“I’m not looking for a deal,” the president said. “We’ve set the deal – it’s at 50 percent.”

However, by Sunday, he welcomed von der Leyen’s assertion that the bloc is willing to negotiate but needs more time.

“Europe is ready to advance talks swiftly and decisively,” she recapped on X. “To reach a good deal, we would need the time until July 9.”

The bloc’s top trade negotiator, Maros Sefcovic, had on Friday urged the US to show “mutual respect, not threats”.

Trump roiled financial markets with his Liberation Day announcement in April, which threatened sweeping tariffs on multiple countries.

However, amid nosediving markets, threats of retaliation, and turmoil across the globe, the US president has in many cases softened his stance in favour of negotiations.

Washington has made deals with the United Kingdom and opened talks with China. Those moves have buoyed markets somewhat, but uncertainty persists as the US stance continues to shift.

EU official says a trade deal ‘must be guided by mutual respect, not threats’ after the US president says talks with the bloc are ‘going nowhere’.

The European Union has said it will defend its interests after United States President Donald Trump threatened to impose a 50-percent tariff on all goods from the 27-member bloc.

The EU’s top trade official, Maros Sefcovic, said in a post on X that he spoke on Friday with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick on the issue.

“The EU is fully engaged, committed to securing a deal that works for both,” he said, adding that the EU Commission remains ready to work in good faith towards an agreement.

“EU-US trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests.”

Trump posted on his Truth Social platform that he is “recommending” a huge 50 percent duty on the EU starting on June 1 since talks with them “are going nowhere”.

Speaking later in the Oval Office, the Republican president emphasised that he was not seeking a deal with the EU but might delay the tariffs if more European companies made major investments in the US.

“I’m not looking for a deal,” Trump told the reporters. “We’ve set the deal. It’s at 50 percent.”

European leaders warned the tariffs will hurt both sides.

German economy minister Katherina Reiche said everything must be done “to ensure that the European Commission reaches a negotiated solution with the United States” while French foreign minister Laurent Saint-Martin said the bloc prefers de-escalation but is “ready to respond”.

If implemented, the tariffs would mean that the EU will have higher import taxes on its hundreds of billions worth of exported goods compared with China, which had its tariffs cut earlier this month to allow more negotiations between Washington, DC, and Beijing.

In early April, Trump announced a 20 percent tariff on most EU goods but brought it down to 10 percent until July 8 to allow time for more negotiations.

Trump has complained that existing frameworks are “unfair” to US companies as the European bloc sells more goods to its ally than it buys from it.

Trump on Friday also warned that the US tech giant Apple could also be hit with a 25 percent import tax on all iPhones not manufactured but sold in the US.

His announcements online dealt another blow to stock markets both in the US and in the EU, with the S&P 500 down about 0.8 percent and the pan-European STOXX 600 index falling about 1.2 percent.

US President Donald Trump has threatened a 50-percent tariff on all imports from the European Union and 25-percent on Apple products unless iPhones are made in the United States.

The president announced his intentions over social media on Friday.

“Our discussions with them are going nowhere!” Trump posted on Truth Social. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.”

The Republican president’s proposal would see higher import taxes on goods from the EU, a longstanding US ally, than from China, a geopolitical rival that had its tariffs cut to 30 percent this month so Washington and Beijing could hold negotiations.

Trump has been upset by the lack of progress in trade talks with the EU, which has proposed mutually cutting tariffs to zero even as the president has publicly insisted on preserving a baseline 10-percent tax on most imports.

Trump aides have said the goal of his tariffs was to isolate China and strike new agreements with allies, but the president’s tariff threats undermine the logic of those claims. Not only could the EU face higher tariffs than China, but the bloc of member states might have been better off by establishing a broad front with China and other countries against Trump’s trade policy, said German economist Marcel Fratscher.

“The strategy of the EU Commission and Germany in the trade conflict with Trump is a total failure,” Fratscher, the head of the German Institute for Economic Research, said on X. “This was a failure you could see coming — Trump sees Europe’s wavering, hesitation and concessions as the weaknesses that they are.”

Apple’s ultimatum

Trump’s post had been preceded by a threat of import taxes against Apple for its plans to continue making its iPhone in Asia. Apple now joins Amazon, Walmart and other major US  companies in the White House’s crosshairs as they try to respond to the uncertainty and inflationary pressures unleashed by his tariffs.

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote on Truth Social. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the US.”

The statement by Trump is critical in that he suggests the company itself would bear the price of tariffs, contradicting his earlier claims as he rolled out a series of aggressive tariffs over the past several months that foreign countries would shoulder the cost of the import taxes. In general, importers pay the tariffs and the costs are often passed along to consumers in the form of higher prices.

In response to Trump’s tariffs on China, Apple CEO Tim Cook said earlier this month that most iPhones sold in the US during the current fiscal quarter would come from India, with iPads and other devices being imported from Vietnam. After Trump rolled out tariffs in April, analysts estimated that the cost for a $1,200 iPhone, if made in America, could jump anywhere from $1,500 to $3,500.

“The pressure from Trump administration on Apple to build iPhone production in the US … would result in an iPhone price point that is a non-starter for Cupertino and translate into iPhone prices of ~$3,500 which is not realistic as this would take 5-10 years to shift production to the US. We believe the concept of Apple producing iPhones in the US is a fairy tale that is not feasible,” Wedbush Securities analyst Dan Ives said in a note.

Trump had previously created an exemption on electronics imported from China to help companies such as Apple, something he could now remove. He also threatened separate 25-percent import taxes on computer chips and could have the tariffs schedule rewritten in ways that could expose Apple products to the taxes.

Until recently, the US president repeatedly bragged about the $500bn that Apple in February pledged to invest domestically as part of its development of artificial intelligence technologies. But he publicly turned against the company last week while speaking in Qatar.

“I had a little problem with Tim Cook yesterday,” Trump told the audience. “I said to him, ‘My friend, I treated you very good. You’re coming here with $500bn, but now I hear you’re building all over India. I don’t want you building in India.’”

A global response

German Foreign Minister Johann Wadephul said the EU’s executive commission has his country’s full support in working to “preserve our access to the American market”.

“I think such tariffs help no one, but would just lead to economic development in both markets suffering,” Wadephul said in Berlin. “So we are still counting on negotiations, and support the European Commission in defending Europe and the European market while at the same time working on persuasion in America.”

Dutch Prime Minister Dick Schoof said he expected a calm and robust response from the EU to the announcement of possible new US trade tariffs.

In response to the news, Volvo Cars CEO Hakan Samuelsson said the tariffs would result in higher prices for consumers. In an interview with the Reuters news agency, he said the tariff would limit the ability of Volvo Cars to sell its Belgium-made EX30 electric vehicle in the US.

Investors are shaken on the move. As of 10:30am in New York (14:30 GMT), the Dow was down 0.6 percent, the tech-heavy Nasdaq was down 1 percent and the S&P 500 was down 0.8 percent. Apple is down 2.3 percent from the market close yesterday.

SAP, Europe’s most valuable company’s stock, is down 1.8 percent from yesterday’s close. Novo Nordisk, the Danish pharmaceutical giant and the maker of the blockbuster drug Ozempic, which is Europe’s second-highest valued company, has seen its stock down 1 percent on the news.

Shares in LVMH and Hermes, France’s largest listed companies by market capitalisation, fell by about 3 and 4 percent, respectively.

The group said it would call for analysis on international supply chain resilience.

Finance ministers and central bank governors from the Group of Seven (G7) democracies have pledged to address “excessive imbalances” in the global economy and said they could increase sanctions on Russia.

The G7 announced the plan on Thursday as the officials, who met in the Canadian Rocky Mountains, said there was a need for a common understanding of how “non-market policies and practices” undermine international economic security.

The document did not name China, but references by the United States and other G7 economies to non-market policies and practices often are targeted at China’s state subsidies and export-driven economic model.

The final communique called for an analysis of market concentration and international supply chain resilience.

“We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency,” it said.

Lowering Russian oil price cap

European Commission Executive Vice President Valdis Dombrovskis said the G7 ministers discussed proposals for further sanctions on Russia to try to end its war in Ukraine. They included lowering the G7-led $60-per-barrel price cap on Russian oil, given that Russian crude is now selling under that level, he said.

The G7 participants condemned what they called Russia’s “continued brutal war” against Ukraine and said that if efforts to achieve a ceasefire failed, they would explore all possible options, including “further ramping up sanctions”.

Russia’s sovereign assets in G7 jurisdictions would remain immobilised until Moscow ended the war and paid for the damage it has caused to Ukraine, the communique said. It did not mention a price cap.

Brent crude currently trades at around $64 per barrel.

A European official said the US is “not convinced” about lowering the Russian oil price cap.

Earlier this week, the US Treasury said Secretary Scott Bessent intended to press G7 allies to focus on rebalancing the global economy to protect workers and companies from China’s “unfair practices”.

The communique also recognised an increase in low-value international “de minimis” package shipments that can overwhelm customs and tax collection systems and be used for smuggling drugs and other illicit goods.

The duty-free de minimis exemption for packages valued below $800 has been exploited by Chinese e-commerce companies including Shein and Temu.

Target has slashed its annual forecasts amid a pullback in discretionary spending due to tariff-driven uncertainty and a backlash against shifts in its diversity, equity and inclusion (DEI) policy.

The United States big box retailer, which reported its first-quarter earnings on Wednesday, relies on China for 30 percent of its store label goods. While it is on track to reduce its dependency by another 5 percent by the end of the year, tariff-driven uncertainty has caused a slump.

In its forecast, the Minneapolis, Minnesota-based retailer expects a low single-digit decline in annual sales. Wall Street analysts expected a marginal increase of 0.27 percent in annual sales, according to the LSEG. Target previously forecasted net sales growth of about 1 percent.

This comes as Bank of America recently forecasted that consumers have eased up on spending as the most recent report from The Conference Board showed a slowdown in consumer confidence, which hit a 13-year low in April. The US economy also showed the first contraction in three years in the first quarter.

Target’s first-quarter comparable sales fell 3.8 percent compared with analysts’ estimates of a 1.08 percent decline. It expects annual adjusted earnings of $7 to $9 per share, compared with its prior forecast of $8.80 to $9.80. Analysts were expecting $8.40.

“Expectations were very low for Target’s first quarter. Even against that, Target’s results came in light,” Michael Baker, a DA Davidson analyst, told the news agency Reuters. Target’s stock has performed poorly, down nearly 28 percent this year, in contrast to Walmart’s 9 percent gain and Home Depot’s 2.3 percent decline.

Target’s stock is tumbling on the news of its disappointing earnings report. As of 11am in New York (15:00 GMT), it was down 2.91 percent from the market open although it is up more than 1 percent over the past five days.

DEI boycotts weigh on sales 

Target also said its first-quarter performance was impacted by changes made to its DEI policies in January.

Target ended many of its DEI policies, drawing condemnation as some of its critics noted that its commitment to inclusiveness had helped attract younger, more diverse consumers. The decision generated more attention as it coincided with US President Donald Trump’s executive order to eliminate DEI policies in federal agencies and schools.

The backlash led to economic boycotts, notably from Reverend Jamal-Harrison Bryant, a Georgia pastor who organised a 40-day “fast” of Target stores. He has since called for those efforts to continue in recognition of the fifth anniversary of George Floyd’s murder by police in Minneapolis, Target’s headquarters.

CEO Brian Cornell said the reversal of some DEI policies played a role in first-quarter performance but he couldn’t quantify the impact.

Worse than competitors 

“Target’s [results] do nothing to restore confidence in the company. On the contrary, they are emblematic of a business that has made too many mistakes and has lost its way on several fronts,” GlobalData Managing Director Neil Saunders told Reuters, pointing to issues including poor inventory management and a lack of exciting merchandise.

Target’s forecast contrasts with its bigger rival Walmart, which maintained its annual forecasts last week but said it would need to pass on higher prices due to tariffs. That has drawn the ire of Trump, who said Walmart should “eat the tariffs” on imported goods instead of passing on the costs.

Unlike Walmart, which generates the bulk of its revenues by selling groceries like bananas, milk, toilet paper and shampoo, a majority of what Target sells falls in the nonessential category – largely apparel, home furnishings and beauty products, which it sources from China.

TJX, the parent company of retailer TJ Maxx, also reported its earnings on Wednesday, and while tariffs loom, the company is set to maintain its forecasts. The Massachusetts-based big box retailer expects comparable sales to grow 2 percent to 3 percent during the current quarter.

Unlike Target and Walmart, TJ Maxx, relies on expansive sourcing from middlemen in the US, which limits the impact of any new tariffs on China.

Looming price hike 

On a media call, Target executives declined to provide details on potential price increases due to tariffs. Most tariff-related increases could be offset, they said, but acknowledged that raising prices could be a “last resort”.

Cornell said pricing decisions will largely depend on ongoing efforts to source more products from the US and reduce reliance on China.

“That is going to play a very important role,” he said.

Rick Gomez, the company’s chief commercial officer, said Target is working on negotiating with suppliers, expanding sourcing to other Asian countries beyond China, re-evaluating its product assortment, and adjusting the timing and quantity of orders.

“These efforts are expected to offset the vast majority of the incremental tariff exposure,” Gomez said.

Johannesburg, South Africa – When the millionaire mining magnate-turned-president of South Africa landed in Washington to meet the billionaire real estate tycoon-turned-president of the United States, it was with a deal in mind.

Tensions have been escalating between the US and its African trade ally since Donald Trump took office this year, cut off aid to South Africa, repeated false accusations that a “white genocide” is taking place there and began welcoming Afrikaners as refugees.

At the meeting between Trump and Cyril Ramaphosa in the White House on Wednesday, the South African president began by focusing heavily on trade and investments, highlighting the two countries’ years of cooperation, in keeping with statements made by South Africa’s presidency that Ramaphosa would present a trade deal to the US.

But Trump responded with a well-prepared redirect that South African media and analysts described as an “ambush” and a move that “blindsided” Ramaphosa.

Ready with printouts of news articles about alleged white victims of killings in South Africa and a video of firebrand opposition politician Julius Malema singing Kill the Boer, Trump insisted that white farmers were being targeted and murdered – an assertion Ramaphosa politely yet firmly denied, saying criminality was a problem for all South Africans regardless of race.

The team Ramaphosa assembled to join him on his working visit – which included four white South Africans: two golf legends, the wealthiest man in the country and the agriculture minister – all reaffirmed Ramaphosa’s facts that while violence was widespread, white people were not specifically being targeted.

“We have a real safety problem in South Africa, and I don’t think anyone wants to candy-coat that,” said John Steenhuisen, the agriculture minister and a member of the Democratic Alliance party, which is part of South Africa’s governing coalition.

“Certainly, the majority of South Africa’s commercial and smallholder farmers really do want to stay in South Africa and make it work,” the minister, who is himself an Afrikaner, said. Trump claimed that “thousands” of white farmers were fleeing South Africa.

Steenhuisen added that the people in the video Trump showed were leaders of opposition minority parties and his party had joined forces with Ramaphosa “precisely to keep those people out of power”.

‘The lion’s den’

The meeting began cordially where Trump complimented South African golfers, including well-known Ernie Els and Retief Goosen, who were part of the delegation. They both implored Trump for enhanced trade to uplift South Africa’s economy.

Also in the delegation was South Africa’s richest man, Johann Rupert, a luxury-goods mogul and an Afrikaner. He countered claims of racial persecution against the white minority, saying that while criminality was rife, Black people were more often the victims.

“We have too many deaths, but it’s across the board. It is not only white farmers,” Rupert said to Trump.

Ramaphosa kept his cool, local media and observers said, noting that the South African president chose to remain calm, patient and light-hearted even in light of Trump’s attack.

He steered talks back to trade, saying South Africa needed economic investment from its allies, and mostly sat expressionless while the video was played, occasionally stretching his neck to look at it.

Ramaphosa went into “the lion’s den” and was met with an ambush but he remained calm, South African political analyst Sanusha Naidu said.

“Ramaphosa and the delegation did not allow themselves to be baited into an emotional response. That’s critical. They made Trump feel like he had the upper hand in the meeting,” she told Al Jazeera, adding that given the narrative from Trump before Ramaphosa’s arrival, it “could have gone worse”.

When asked by a reporter whether he wanted the impasse between the US and South Africa resolved, Trump said he was open to it.

“I hope it has to be resolved. It should be resolved,” he said, adding that if it were not resolved, it would be “the end of the country”.

‘Reset’ relations

Before the two leaders met on Wednesday, Ramaphosa’s office said the aim was to “reset” relations, especially as the US is South Africa’s second largest trading partner after China.

“Whether we like it or not, we are joined at the hip, and we need to be talking to them,” the South African president said before his trip.

Christopher Isike, a political scientist at the University of Pretoria, told Al Jazeera that direct engagement between the leaders was important, given the tense relations between their countries.

“This is an opportunity for South Africa to correct misinformation peddled by President Trump and try to reset trade relations between the two countries,” he said.

Isike noted that both presidents’ backgrounds as businesspeople could provide common ground for discussing mutually advantageous deals.

“Rich friends of Ramaphosa are also rich friends of Trump, and that may have helped facilitate the meeting,” Isike added.

Common ground and level heads would be useful as the leaders continued private talks away from the media on Wednesday, observers said.

Before the visit, Ramaphosa maintained that while Trump was a dealmaker, he too was adept at making deals and even joked about the possibility of playing a round of golf with his US counterpart.

Washington, however, has criticised Pretoria for a host of matters since Trump took office. This continued in the meeting on Wednesday.

Trump focused on the white farmers, particularly Afrikaners – the descendants of mainly Dutch settlers who instituted apartheid. He alleged they are being killed because of their race despite evidence showing that attacks and killings are common across all groups in the country.

Trump also mentioned South Africa’s land reform law that allows land in the public interest to be taken without compensation in exceptional circumstances in an effort to redress apartheid injustices. Pretoria said no white land has been taken, but the US said the law unfairly targets minority white South Africans who are the majority landholders.

Despite Pretoria consistently seeking to rectify false assertions, the Trump administration has pushed ahead with a plan to take in Afrikaners as refugees. The first group arrived last week. He has also cut aid, including vital support for life-saving HIV programmes, to South Africa.

Additionally, there are worries that Trump may not attend the Group of 20 summit being held in South Africa in November and his government may not renew the African Growth and Opportunity Act (AGOA), key US trade legislation that assists economies in sub-Saharan Africa. It expires in September.

Trade and investments

Before Wednesday’s meetings, Ramaphosa said strengthening trade relations between the two countries was his primary motivation for travelling to Washington, DC.

“We want to come out of the United States with a really good trade deal, investment promotion. We invest in the United States, and they invest in us. We want to strengthen those relations. We want to consolidate relations between the two countries,” he said.

This week, South Africa’s ministers of trade and agriculture, Parks Tau and Steenhuisen, met with US Trade Representative Jamieson Greer to present the first draft of a trade deal.

In 2024, total goods trade between the US and South Africa amounted to $20.5bn. This included $5.8bn in US exports to South Africa and $14.7bn in South African exports to the US.

However, some observers said that at the heart of the potential trade deal is what South Africa could offer billionaire and close Trump ally, Elon Musk, given his ongoing claims about obstacles he allegedly faces in operating Starlink, his satellite internet company, in the country where he was born due to its transformation laws.

These laws seek to redress past injustices that kept Black people destitute and require businesses over a certain size to have a 30 percent equity stake held by members of previously disadvantaged groups.

Speaking at the Doha Economic Forum on Tuesday, Musk reiterated his assertions about laws he claimed were biased against white people despite experts explaining that most of those only seek to promote racial justice.

“All races must be on equal footing in South Africa. That is the right thing to do. Do not replace one set of racist laws with another set of racist laws, which is utterly wrong and improper,” Musk said.

“I am in an absurd situation where I was born in South Africa but cannot get a licence to operate Starlink because I am not Black,” he claimed.

Before Wednesday’s meeting, a White House official told the Reuters news agency Trump is likely to tell Ramaphosa that all US companies in South Africa should be exempt from “racial requirements”.

Opposition figure Malema’s party, the Economic Freedom Fighters (EFF), threatened legal action after news that the government was considering offering regulatory assurances to Musk’s Starlink. The EFF said the move would be unconstitutional and shows Ramaphosa is willing to compromise the country’s sovereignty to “massage the inflated ego of Musk and Trump”.

Isike said that while trade concessions would be discussed, he doubted the South African government would give up its laws to appease Musk.

“I will be surprised if Starlink gets its way by refusing to follow South African transformation laws, which require 30 percent Black ownership of a foreign company,” he said.

‘Genocide’ claims

Meanwhile, in private talks, Ramaphosa and Trump were also expected to discuss foreign policy issues, including peace prospects between Russia and Ukraine and South Africa’s support for Palestine and its genocide case against Israel at the International Court of Justice (ICJ).

Some political observers said Pretoria is in the US crosshairs partly because of its actions against the key Washington ally.

Patrick Bond, a sociology professor at the University of Johannesburg, predicted before the talks that the US might offer to retract claims of “white genocide” in exchange for South Africa dropping its case at the ICJ.

South Africa is seeking to hold Israel accountable for its assault on Gaza, which has killed more than 53,000 Palestinians since October 2023. The US is Israel’s strongest ally and arms supplier.

“We are very rational when it comes to discussing global and geopolitical matters. We will put South African positions first, and our foreign policy positions will be clarified,” Ramaphosa said before the meeting.

As the Gaza genocide case against Israel continues in The Hague, US allegations of a widely discredited “white genocide” in South Africa continue to follow the country’s leadership.

Before Trump and Ramaphosa retreated to private meetings on Wednesday, a reporter asked the US president if he had decided whether genocide was being committed in South Africa. “I haven’t made up my mind,” he replied.

The unfounded claim of white genocide has “taken on a life of its own”, analyst Paolo von Schirach, president of the Global Policy Institute in Washington, DC, told Al Jazeera.

It will be difficult for Ramaphosa and Trump to rebound after the Oval Office “ambush”, he said.

“We know that Elon Musk certainly fanned this story [about a white genocide], and he’s probably not the only one,” von Schirach said. “It’s going to be hard for Trump to say, ‘Oh, so sorry. I was misinformed.’”

Walmart, the world’s largest retailer, will have to start raising prices later this month due to the high cost of tariffs, executives have warned in a clear signal that United States President Donald Trump’s trade war is filtering through to the US economy.

As a bellwether of US consumer health, Walmart’s explicit statement on Thursday is also a signpost for how the trade war is affecting companies as Walmart is noted for its ability to manage costs more aggressively than other companies to keep prices low.

Walmart’s shares fell 2.3 percent in morning trading after it also declined to provide a profit forecast for the second quarter, even as the company’s US comparable sales surpassed expectations in the first quarter.

Net sales rose 2.5 percent to $165.6bn, a hair shy of estimates, while same-store sales were up 4.5 percent. Walmart’s quarterly adjusted profit was 61 cents per share, ahead of the analyst consensus for 58 cents per share.

Many US companies have either slashed or pulled their full-year expectations in the wake of the trade war, as consumers stretch their budgets to buy everything from groceries to essentials at cheaper prices. But Walmart’s statement will resonate nationwide, as roughly 255 million people shop in its stores and online weekly around the world, and 90 percent of the US population lives within 10 miles of a Walmart.

US shoppers will start to see prices rise at the end of May and certainly in June, Walmart’s Chief Financial Officer John David Rainey said in a CNBC interview. On a post-earnings call with analysts, he said the retailer would also have to cut back on orders as it considers price elasticity.

As the largest importer of container goods in the US, Walmart is heavily exposed to tariffs, and even though the US and China reached a truce that lowered levies for imports on Chinese goods to 30 percent, that’s still a high cost to bear, executives said.

“We’re very pleased and appreciative of the progress that has been made by the administration to bring tariffs down … but let me emphasise we still think that’s too high,” Rainey said on the call, referring to the tariff cuts negotiated over the weekend.

“There are certain items, certain categories of merchandise that we’re dependent upon to import from other countries and the prices of those things are likely going to go up, and that’s not good for consumers,” he added.

Other retailers also said they would be boosting prices. German sandal maker Birkenstock on Thursday said it plans to raise prices globally to fully offset the impact of the US tariff of 10 percent on European Union-made goods.

US consumer sentiment ebbed for a fourth straight month in April, signaling watchful purchasing, while the country’s gross domestic product (GDP) contracted for the first time in three years during the first quarter, fanning worries of a recession.

Narrow margins

Walmart’s CEO Doug McMillon said the retailer would not be able to absorb all the tariffs’ costs because of narrow retail margins, but was committed to ensuring that tariff-related costs on general merchandise – which primarily come from China – do not drive food prices higher.

To mitigate the impact, Walmart is working with suppliers to substitute tariff-affected components, such as replacing aluminium with fibreglass, which is not subject to tariffs.

Despite these efforts, McMillon noted that adjusting costs is more challenging in cases where Walmart imports food items like bananas, avocados, coffee, and roses from countries such as Costa Rica, Peru, and Colombia.

Analysts said Walmart was better positioned than rivals, as its scale enables it to lean on its suppliers and squeeze out efficiencies to shield customers from tariffs, but only so much.

“There will likely be some demand destruction from tariffs; a complete wreck is unlikely,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Walmart on Thursday kept its annual sales and profit forecast intact for fiscal 2026, but withheld second-quarter operating income growth and earnings per share forecasts, citing a “fluid operating environment … [which] makes the very near term exceedingly difficult to forecast at the level and speed at which tariffs could go up”.

The United States and China have surprisingly agreed to a dramatic de-escalation in their trade war.

Under the agreement, the world’s two largest economies have paused their respective tariffs for 90 days.

That breaks an impasse which has brought much of the commerce between the two nations to a halt.

Critics say the talks in Geneva did not appear to yield any meaningful concessions. The two sides aim to reach a broader deal, but this takes too long to negotiate.

Also in this episode, we examine whether the US-UK trade pact will deliver real benefits, or is it symbolism over substance?

Also, Senegal is capitalising on its energy wealth to change its fortunes.

On Monday, the United States and China reached an agreement to slash sky-high tariffs for 90 days. Though both sides claimed they could withstand a long trade war, they reached a truce quicker than many analysts expected.

The breakthrough marked a dramatic ratcheting down of trade tensions following the tariff war launched by US President Donald Trump during his “liberation day” announcement on April 2.

Trump initially unveiled so-called reciprocal tariffs on dozens of countries before pausing them just one week later. China, however, did not get off the hook and Beijing soon retaliated with tariffs of its own.

Tit-for-tat exchanges quickly snowballed into eye-watering sums. By April 11, tariffs on Chinese goods entering the US had reached 145 percent and levies on US products going to China had swelled to 125 percent.

Tensions were already at boiling point last weekend when US Treasury Secretary Scott Bessent and He Lifeng, China’s vice-premier, agreed a ceasefire that would slash respective tariffs by 115 percentage points for three months.

US duties on Chinese products will now fall to 30 percent, while China’s tariffs on US goods will drop to 10 percent. Stock Markets rallied on the news, with the Nasdaq Composite climbing 4.3 percent on Monday and gaining 20 percent over its April low.

But one key question has significant implications for trade talks to come: Did Washington or Beijing flinch first?

What did the two countries say?

The tariff suspension, which was sharper than analysts expected, came after two days of trade talks in Geneva, Switzerland. On Monday, the US and China released a joint statement announcing the deal.

The two countries acknowledged the importance of their “bilateral economic and trade relationship” as well as the importance of a “sustainable, long-term, and mutually beneficial economic and trade relationship”.

The US and China agreed to establish a mechanism to continue discussing trade relations. China also agreed to “suspend or cancel” non-tariff measures against the US, but did not provide any details.

Speaking to reporters in Geneva last weekend, China’s Vice Premier He described the talks as “candid, in-depth and constructive”.

For his part, US Treasury Secretary Bessent told Bloomberg Television on Monday that “both sides agree we do not want a generalised decoupling.”

“The US is going to do a strategic decoupling in terms of the items that we discovered during COVID were of national security interests – whether it’s semiconductors, medicine, steel,” Bessent said.

After the talks concluded, Trump praised negotiations as a “great trade deal”, adding “we’re not looking to hurt China.” He then claimed a personal win, saying he had engineered a “total reset” with Beijing.

Elsewhere, Hu Xijin, former editor of the Chinese state-run Global Times publication, said on social media that the deal was “a great victory for China”.

What are the terms of the pause?

After the tariff pause had been announced, Bessent said it’s “implausible” that reciprocal tariffs on China will fall below 10 percent. However, he said the April 2 level – set by President Trump at 34 percent – “would be a ceiling”.

He also said “we could see some amount of the fentanyl tariffs… come off.” Earlier this year, Trump put a 20 percent tariff on China, accusing it of not doing enough to stop the flow of fentanyl, a highly addictive and deadly opioid, into the US.

For now, Chinese goods will continue face a 30 percent tariff. In addition, specific products from China, such as electric vehicles, steel and aluminium, are subject to even higher, separate tariffs imposed in recent years.

On Monday, the White House also issued an executive order lowering duties on low-value packages – items costing up to $800 – from China from 120 to 54 percent.

And while a minimum $100 fee on packages from e-commerce sites Temu and Shein will remain in place, the increase to $200 planned for June 1 was dropped.

On the flip side, Beijing pledged to suspend non-tariff forms of retaliation imposed since April 2, such as export restrictions on critical minerals that US manufacturers use in high-tech equipment and clean energy technology.

Notably, the deal does not include concessions from Beijing on several US sticking points, like its huge trade surplus with the US or its exchange rate policy, China is accused of keeping its renminbi artificially low in order to boost export sales.

Tariff suspensions will be in place for 90 days. They will be subject to reviews based on broad negotiations in the coming weeks and months.

Who conceded more ground?

The speed with which the US and China unwound their tariffs, taking many analysts by surprise, suggests the trade war was inflicting pain on both sides.

The tariffs were threatening job losses for Chinese factory workers and higher inflation and empty shelves for American consumers.

But for Piergiuseppe Fortunato, an adjunct professor of economics at the University of Neuchatel in Switzerland, it is clear who wanted the deal more badly.

“First of all, America made more concessions than China. Second, America’s economy, which is unsteady at the moment, is more reliant on China’s than the other way around.”

In April, the International Monetary Fund (IMF) warned that the US economy was facing an increased risk of recession as Trump’s trade war – and the accompanying increase in consumer prices – could unleash a “significant slowdown”.

Fortunato told Al Jazeera that “Beijing is not in such a precarious position. Take, for example, its latest export figures.”

China’s exports grew sharply in April. The strong performance, an 8.2 percent increase from the year before, came as Chinese firms diverted trade flows to Southeast Asia, Europe and other destinations.

“I think that Washington overplayed its hand with Beijing,” says Fortunato.

“The White House overestimated the importance of the US market, and underestimated China’s success in diversifying its exports away from the US since the first Trump trade war” in 2018.

What will happen next?

“It could take a long time to reach a detailed agreement, if one is even possible,” notes Fortunato.

In 2018, the US backed away from a potential trade deal following talks with Beijing. The next 18 months saw tariff exchanges before a Phase One deal was signed in January 2020.

However, China did not meet all the terms of that purchase agreement. It fell some 43 percent short of the $200bn worth of goods it agreed to buy from the US by 2021.

Then, the US trade deficit with China jumped up during the COVID-19 pandemic, setting the stage for the current trade war.

Earlier this week, Bessent once again hinted that Washington might be looking for the type of “purchase agreements” that characterised the Phase One deal.

“The US has made noises that it may be going for more purchase agreements. But the American economy took a hit last time from similar arrangements,” says Fortunato.

During Trump’s first trade war with China, the US-China Business Council estimated that 245,000 US jobs were lost.

As the scope of tariffs is greater today, even after last weekend’s announcement, it’s fair to assume that even more jobs will be shed.

In the future, Fortunato suspects the US will “land at an average tariff rate of 15-20 percent, and even higher for China. That’s five times greater than what it was in January… a massive change.”

Lilongwe, Malawi – Since he was young, Enock Dayton has made a living from bananas. The 30-year-old was born and raised in Molele, in the southern Malawian district of Thyolo, which was at the heart of local banana production until a plant virus devastated crops more than a decade ago.

At his stall at Mchesi market, in Malawi’s capital Lilongwe, Dayton serves customers from the bunches of green bananas that he has. “I started this business when I was young, and we had farms where we were growing bananas and we would take trucks and bring them here and sell them to individuals,” he told Al Jazeera.

But in 2013, the deadly banana bunchy top disease wiped out almost all the crops in the country. Farmers were asked to uproot their banana plants to avoid the spread of the virus; hundreds of thousands of people were affected.

Bananas are Malawi’s fourth biggest staple crop, after maize, rice and cassava, according to the Food and Agriculture Organization (FAO).

The United Nations body – which is working with other organisations to help revive banana farming in the country – said in 2023 that with “the right investments and strategic support, the banana sector has the potential to provide greater benefits in food and nutrition security and commercial value for growers, transporters, consumers and food processors”.

But in the meantime, to maintain their businesses in the absence of sufficient local produce, farmers and fruit-sellers like Dayton turned to neighbouring Tanzania to import the crop and complement their own meagre local supplies. In 2023 alone, for instance, Malawi imported more than $491,000 worth of bananas, with the majority of that – 5,564,180kg (12,266,920lb) – coming primarily from Tanzania. The remainder came from South Africa and Mozambique.

But this year, that arrangement came to a sudden halt. In March, Malawi said it was temporarily banning the import of some farm produce, including bananas, from Tanzania and other countries. The government said this was to help support local industries and stabilise the country’s foreign exchange shortage, which has led to challenges that include the inability to import some necessities, like pharmaceuticals.

But Malawi might have underestimated the effect of its bold move, observers say.

In retaliation, in April, Tanzania banned the entry of all agricultural imports from Malawi, responding to what it described as restrictions on some of its exports. That ban also extended to South Africa, which for years prohibited the entry of bananas from Tanzania.

This was bad news for Malawi, observers say, as it is more on the receiving end of trade between the neighbours. According to data from the Observatory of Economic Complexity (OEC), Malawi exports less than $50m worth of products to Tanzania, including soybean meal, soybeans and dried legumes, while it imports hundreds of millions of dollars in the form of mineral fuels, oil, distilled products, soaps, lubricants, cement and glassware, among other products.

In its response, Dar es Salaam went a step further, extending its trade ban to the export of fertiliser from Tanzania to landlocked Malawi. It also threatened to stop goods en route to Malawi from passing through Tanzania.

By land, Malawi depends on Tanzania, Zambia and Mozambique for the import of goods. As it lacks direct access to the sea, Malawi utilises seaports in Tanzania and Mozambique. But the instability of the Mozambique route – due to insecurity caused by conflict, recent post-election violence and truck drivers facing harassment – made the deadlock with Tanzania a bigger challenge for industry. Businesses that rely on the import of farm produce started crying foul as their trucks of groundnuts and other produce stood in line at the Songwe border.

Malawi also found itself in a tricky situation as it depends on Tanzania for its harbours to import fuel.

Soon, even Kenya found itself entangled in the conflict as cargo from Malawi, which has to travel through Tanzania, was also stopped en route.

The ensuing row shone a light on Malawi’s precarious geographical location, as well as regional agreements aimed at facilitating trade, the efforts by individual nations to follow the rules, and the macroeconomic imbalances in a nation designated as one of the poorest in the world.

After weeks of tensions, this month, a high-level meeting between Malawi and Tanzania appeared to have brokered the differences, paving the way for the lifting of the bans between the two countries, according to a spokesperson for Malawi’s Ministry of Foreign Affairs.

‘Symptom of a huge challenge’

For Ernest Thindwa, a political commentator based at the University of Malawi, the recent trade dispute does not exist in isolation – and should also be viewed from a political lens.

Both countries are heading for polls this year, first Malawi in September and then Tanzania in November. Within an election environment, the dispute says something about the attempts by both countries’ leaders to display patriotism and a sense of empowerment to their citizens, the analyst said.

“The current administration [in Malawi] wants to be seen to be delivering and they want to be seen to be responding to people’s concerns,” Thindwa told Al Jazeera. “And certainly they need to make sure that local producers are protected, which has become more urgent as we go towards elections.”

Thindwa said that both Malawi and Tanzania are signatories to regional and international trade agreements, the frameworks of which entitle them to take measures to protect their trade interests when they deem necessary.

However, he questioned the timing of these moves, asking why the initiatives by Malawi were not implemented earlier if they were indeed to protect local industries.

Answering his own question, he said, “Because then it might have not been an agent in terms of attracting votes.”

“What you would call subsistence or smallholder producers … would be significant for the government in terms of trying to win votes from such social groups,” he observed.

Meanwhile, in Tanzania, something similar was at play in its decision to retaliate, Thindwa said.

“The incumbent administration in Tanzania wants to be seen to be responding to the needs and interests of its citizens. So the administration in that country, in Tanzania, also wanted to project an image that it cares for its people. That’s why it responded rather quickly.”

Broadly speaking, Thindwa noted that the trade dispute points to overall challenges African countries face – in terms of promoting internal trade, and trading more within Africa than with other continents.

Citing the example of Angola, he said that despite it having oil, countries within the Southern African Development Community (SADC) bloc continue to import oil from the Middle East.

“There is Angola there,” he said. “Why can’t they put together a regional project, for instance, and invest in the capabilities to make sure that the end product is being produced in Angola and Angola serves the region, to be much cheaper for the region? And it will make sure that the resources of the region remain within the region.”

Such examples show that “in spite of these trade protocols, Africa still struggles to encourage trade between member states”, he said.

“So the case of Tanzania and Malawi is just a symptom of a huge challenge Africa faces in terms of promoting internal trade.”

Tensions eased

In a statement on May 9, Malawi’s Ministry of Trade said Malawi and Tanzania had held bilateral discussions in Tanzania regarding the implementation and resolution of its prohibition order.

After that, a letter from the ministry, addressed to Malawi’s Revenue Authority, read: “In this regard, I wish to advise that you facilitate the clearance of exports and imports of goods between the Republic of Malawi and the Republic of Tanzania. This, however, does not exempt importers from complying with legal and regulatory requirements, including obtaining the relevant licences and certifications from regulatory bodies.”

After the talks, Charles Nkhalamba, Malawi’s Ministry of Foreign Affairs spokesperson, told Al Jazeera the neighbours had signed “a joint communique” to resolve the dispute between them.

The “high-level discussions” were a result of “robust diplomatic efforts” by the foreign ministries of both countries, he said in a message on WhatsApp, adding that Tanzania also “acknowledg[ed] the economic circumstances that necessitated the import restrictions”.

During the meeting, both parties agreed in principle on the importance of continuous engagement and communication on all matters impacting their bilateral trade relations, Nkhalamba added.

Weeks earlier, Tanzania’s Ministry of Agriculture also released a statement acknowledging that Lilongwe had reached out to Dar es Salaam to resolve the problem and stating that “Tanzania is lifting a ban on export and import of agricultural produce to and from Malawi”.

In principle, the trade war between the neighbours appears to have stalled for now.

But experts told Al Jazeera that practically speaking, it will take time for the logistics to be sorted out and for things to return to normal for sellers left in limbo when their supplies dried up.

At the market in Lilongwe, Dayton is eagerly awaiting the trucks of sweet bananas from across the border, so he has enough to sell to his customers.

He is grateful for the cross-border trade, and the arrangement that has over the years helped business people like him make money selling the crop from their neighbours.

But he also had mixed feelings as he reminisced about their lost opportunity to grow their own crops.

“The amount of money we used to have when we grew our own bananas is different from what we’re earning now,” Dayton said. “While we were growing and buying them at a cheap price … we were making a lot of money, apart from the transport [costs]. The ones from Tanzania are quite expensive.

“We need our bananas back.”

A decade ago, Dayton was a casualty of a natural disaster that made his garden back in the village dormant. Now, he feels that he is a casualty of the decisions made by authorities in offices far away.

“What we want is a stable supply of bananas in this market,” he said. “It’s good because it provides for our families and the customers as well.”