Crypto News: Japan’s take on Trump

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When Pete Hegseth visits Iwo Jima this weekend, it'll highlight how far US-Japan ties have come since they were on opposing sides in the battle for the Pacific island 80 years ago.

The US defense secretary's trip will also show that it's far from a stress-free relationship.

Even before he set off, Japan was reeling from President Donald Trump's announcement yesterday of 25% tariffs on all auto imports. Further trade levies due April 2 will likely deal Tokyo another blow.

WATCH: Trump signed a proclamation to implement a 25% tariff on auto imports. Jon Herskovitz reports on Bloomberg TV.

Japan is meanwhile bracing for US calls to raise defense outlays, perhaps during Hegseth's meeting with his counterpart, Gen Nakatani.

True, Hegseth has his own challenges, with the ongoing furor over a private Signal chat.

Tokyo's concerns go deeper, however.

Trump has questioned long-standing US security pledges to Japan, while media reports suggest Washington might dial back plans for a new military headquarters in the country. And yet, European-style soul-searching over concerns at US abandonment are far less pronounced in Japan.

That's because Tokyo doesn't see any realistic alternative to bandwagoning with the US, even if the ride gets bumpy.

Whereas European nations may be able to collectively deter the threat from Russia, the military challenge from China is just too great for Japan. Complex ties between Asian nations and Beijing's economic pull mean there's little prospect of a grand coalition to counter China.

Even when Japan and China try to get along, mistrust is never far away.

Recently, Tokyo has fretted about Chinese patrols around a group of Japanese-controlled islands that Beijing also claims. In an early call with Nakatani, Hegseth repeated a commitment to help Japan defend those islands.

Trump and Prime Minister Shigeru Ishiba struck up a rapport at a summit last month. Tokyo's goal now is to navigate the inevitable speed bumps in US ties, tough talk from Hegseth included. — Alastair Gale

Ishiba during a news conference in Washington on Feb. 7. Photographer: Stefani Reynolds/Bloomberg

Global Must Reads

Trump suggested in a late-night social-media post that additional trade tariffs "far larger than currently planned" would be imposed on the European Union and Canada if they worked together "to do economic harm" to the US. He also said he would consider lowering tariff rates imposed on China to secure Beijing's support for a sale of the US operations of social video platform TikTok to an American company.

European leaders are trying to carve out a role for themselves in US-led ceasefire talks over Russia's war in Ukraine as French President Emmanuel Macron hosts more than 30 of them for an impromptu defense summit in Paris today. US Treasury Secretary Scott Bessent said the Ukrainian government is reviewing a new economic partnership proposal from the US that could be signed as soon as next week.

Emergency services at the scene of a Russian attack in Kharkiv, Ukraine, in a photo released today. Source: State Emergency Service of Ukraine

Thousands of Palestinians demonstrated across parts of the Gaza Strip yesterday in rare rallies against militant group Hamas, the ruler of the war-ravaged territory. Meanwhile, the Israeli parliament passed a law today increasing the role played by politicians in selecting judges despite widespread protests. Israel's homegrown defense industry is producing more than ever and some potential buyers are the same countries that had imposed restrictions on the industry.

President Xi Jinping is bolstering China's presence across the Indo-Pacific and testing US allies, as Trump's sudden embrace of Russia, skepticism of NATO allies and tariffs that punish friendly nations fuel concerns about the US as a reliable security partner in the region. From sending warships off Australia's coast for unprecedented shooting drills to issuing a strongly worded warning on Taiwan to Tokyo, Beijing is ramping up efforts to project power in the region.

Sudan's army recaptured the national capital of Khartoum from the Rapid Support Forces militia, a turning point in a two-year civil war that's drawn in outside powers, and may have killed as many as 150,000 people. In neighboring South Sudan, the United Nations called for restraint and urged all parties to recommit to a peace accord that ended a civil war after security forces stormed the residence of the East African nation's deputy leader.

Sudanese armed forces. Photographer: AFP/Getty Images

Trump and top allies struggled to fend off criticism over the inadvertent inclusion of a journalist in a Signal chat discussing military attacks in Yemen after texts showed how Hegseth revealed specific operational details.

UK Chancellor of the Exchequer Rachel Reeves did the minimum to preserve her credibility with markets by restoring her fiscal buffer in yesterday's mid-year budget statement, but risks tax hikes should financial conditions deteriorate.

Four US soldiers and a vehicle went missing in eastern Lithuania, where authorities have been carrying out a search-and-rescue operation.

Former Brazilian President Jair Bolsonaro will stand trial on allegations that he attempted a coup following his 2022 election defeat, after a Supreme Court panel unanimously voted to accept the charges.

On the new episode of Trumponomics: What happens when US economic data can't be trusted? With Trump firing independent regulators and killing off advisory committees, David Wilcox, director of US economic research for Bloomberg Economics, and Molly Smith, editor on the US economy, discuss why reliable data is at risk. Listen on Apple, Spotify, or wherever you get your podcasts.

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Chart of the Day

France's budget deficit came in at a narrower-than-expected 5.8% of gross domestic product last year, giving the government some breathing room as it struggles to shrink its debt load. At the same time, a goal to bring the gap down to 5.4% this year, and within the EU limit of 3% by 2029, faces mounting challenges due to weak economic growth and Macron's pledge to ramp up defense spending.

And Finally

As Europe figures out how to boost military spending in the face of Russia's threat, Greece offers some valuable lessons in what it takes to live with an adversary next door. It has a long rivalry with Turkey, despite being NATO allies, over the island-dotted waters of the Aegean Sea that separate them. Greece consistently exceeded NATO's expenditure target of 2% of GDP, even at the peak of a sovereign-debt crisis that brought the economy to its knees.