Crypto News: Trump-Xi collision course

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Whether or not Donald Trump's step back from the brink on tariffs was all part of the plan, it's left China out on a limb.

Beijing is now subject to record US tariffs of 125%, almost certainly meaning surging costs to US consumers of everything from smartphones to sneakers, laptops and children's toys.

WATCH: Trump says China wants to make a trade deal, but Beijing doesn't know how to go about it.

Investors cheered the president's 90-day pause on levies on other nations, sending markets into a frenzy. But the reality is that the two largest economies are now at loggerheads.

Where does that leave the world order?

It puts Trump on a collision course with Chinese President Xi Jinping, whose government has vowed to fight "to the end." While both sides have said they're open to talks, it's politically unviable for Xi to submit to Trump's pressure tactics. And the US leader has shown no sign of offering a face-saving off ramp.

Beijing hit back at the levies forcefully and hasn't shown any clear signs of trying to contact Trump. China warned citizens about traveling or studying in the US.

There are other strains, of course: US Defense Secretary Pete Hegseth criticized China's military this week for having "too large of a presence in the Western Hemisphere," calling on governments to work together to deter Beijing.

To be sure, the Biden administration put up numerous hurdles to China's advance, denying it access to leading-edge technology including semiconductors through ever-tighter export controls.

But it broadly agreed with European Commission President Ursula von der Leyen's policy in relation to China of de-risking, not decoupling — namely diversifying supply chains to reduce the risk of pinch-points for strategic items like medical goods or critical minerals.

That gauge has now tipped far closer to severing economic ties.

The concern must be that without pulling back from the edge, the US and China will increasingly diverge and go their own ways, forcing other nations to choose a side.

In that scenario, it may only be a matter of time until trade tensions spill over into other, more dangerous arenas. — Alan Crawford

A garment workshop in Guangzhou, China, on Monday. Photographer: Qilai Shen/Bloomberg

Global Must Reads

Germany's likely next finance minister was in Manhattan on the day of the Sept. 11, 2001, attack on the World Trade Center and the experience ignited an interest in defense and security policy that became a recurring focus of his career. Now aged 47, Social Democrat co-leader Lars Klingbeil can make up in defense expertise what he may lack in fiscal experience, as Europe's biggest economy opens the budget taps to intensify the costly modernization of its military.

Albanian Prime Minister Edi Rama hailed Trump as "good for everyone," telling us in an interview that the president's abrasive treatment of US allies is an opportunity for the European Union to expand its global influence. Rama's comments are striking because he's a Socialist who has staked his legacy on taking Albania into the EU by 2030 if he wins next month's parliamentary elections.

Edi Rama. Photographer: Atdhe Mulla/Bloomberg

President Prabowo Subianto met the leader of Indonesia's de facto opposition party for the first time in more than a year, looking to reassure investors with US tariffs threatening Southeast Asia's largest economy. The meeting six months into Prabowo's presidency comes as Indonesia's financial markets are also reeling from pressures ranging from uncertain government policy to populist spending plans.

Prime Minister Mark Carney pledged to make Canada the world's "leading energy superpower" with a plan that includes establishing a single office to decide on major projects within two years. Carney's rival in the April 28 election, Conservative Leader Pierre Poilievre, has also pledged a single project office, with a maximum timeline for decisions of one year.

African countries have watched with mounting angst as Trump slashed foreign aid and slapped tariffs on some of the world's poorest nations. Now they're concerned that US military cooperation that's aided the fight against terrorists and rebellions may be next.

US special forces operators train Cameroonian soldiers in counter-terrorism training in Ghana. Photographer: Nipah Dennis/AFP/Getty Images

Taiwanese President Lai Ching-te said his government could eliminate duties on US products if Washington did the same, the latest overture from the self-run democracy as it seeks to placate its main military backer in the face of mounting Chinese pressure.

Ukrainian President Volodymyr Zelenskiy said Kyiv's intelligence services identified at least 155 Chinese nationals fighting alongside Russian troops following a Kremlin recruitment drive on social media.

New Zealand's parliament rejected legislation that had fueled racial tensions by seeking to define the principles of the Treaty of Waitangi, the 1840 agreement between indigenous Māori and the British Crown that is considered the nation's founding document.

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