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The House of Representatives just gave Ukraine the best news it has had for a year

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JUST ONE WEEK ago, hope looked fanciful. President Joe Biden’s pitch to spend $100bn on aid for America’s allies under threat—Israel, Taiwan and especially Ukraine—had languished in Congress for six months since it was proposed in October 2023. The dithering had consequences. Ukrainian soldiers, forced to ration ammunition, are being pummelled by Russians with an artillery advantage of five to one.  America’s senior general in Europe warned that they would soon be outgunned by a margin of ten to one. Bill Burns, the CIA director, warned on April 18th that, without any more aid, “there is a very real risk that the Ukrainians could lose on the battlefield by the end of 2024.”

The man needed to see the necessary national-security budget bill through, Mike Johnson, the Republican speaker of the House, seemed unfit for the task. Thrust into the role from relative obscurity six months ago after his loud, isolationist colleagues defenestrated their previous leader, Kevin McCarthy, Mr Johnson lacked leadership experience. He had only a razor-thin parliamentary majority, had voted repeatedly against Ukraine funding himself and faced the threat of regicide from his own side if he changed his mind. For months he seemed paralysed and indecisive. And yet on April 20th, under Mr Johnson’s leadership, the House of Representatives met the moment, passing the budget bill through extraordinary parliamentary manoeuvring with large, bipartisan majorities in defiance of the isolationist faction of the Republican Party. Even though a majority of his own party voted against additional aid for Ukraine, Mr Johnson secured its passage with unanimous Democratic support. The isolationists managed to delay America’s support for its allies for six months, but ultimately could not defeat it.

Mr Johnson’s courage— what even his Democratic opponents have described as his Churchillian moment, may have come about for three reasons. First, Mr Johnson became haunted by the briefings he received as one of the congressional leaders in the Gang of Eight, who can receive highly classified intelligence. “I really do believe the intel and the briefings that we’ve gotten,” he said in recent remarks to the press. “I believe that Xi [Jinping] and Vladimir Putin and Iran really are an axis of evil.”

Second, Mr Johnson seemed to realise that his turn in power was destined to be brief, regardless of his actions. Marjorie Taylor Greene, an irrepressibly isolationist Republican congresswoman who seems to believe that Mr Putin is fighting on the side of Christianity against Ukraine, filed a “motion to vacate” (or sack) Mr Johnson after he passed a bill to keep the federal government open with Democratic votes. The speaker could have laboured in fear of such a threat or, as he daringly did, strike a bargain with Democrats to support him in exchange for bringing up the foreign-aid bill.

Third, Mr Johnson may have cleverly secured the tacit blessing of Donald Trump by paying a flattering visit to Mar-a-Lago last weekend. It did not hurt that one of Mr Trump’s ideas, of labelling economic aid to Ukraine’s government as a loan instead of a grant, was incorporated. Rather than urge his fellow Republicans to vote against the bill, Mr Trump only griped that Ukraine’s survival “should be much more important to Europe than to us but it is also important to us!”

The House was the last significant hurdle. Chuck Schumer, the Democratic Senate majority leader, expects to hold a vote on the combined package on Tuesday. Because the Senate overwhelmingly passed a very similar aid package in late February, it should do so again. Mr Biden is certain to sign it into law.

The consequences for Ukraine will be nearly immediate, preventing serious setbacks on the battlefield in the near term and undercutting Russia’s long-term belief that its war economy—it is devoting at least 6% of GDP to defence—is an unstoppable juggernaut. America is planning to send $61bn to Ukraine in total. The vast majority of that will be spent on lethal aid by replenishing American military stockpiles, allowing more to be given away, and procuring new weapons and ammunition from American arms firms. The first priority is desperately needed shells. An American three-star general has already been assigned the job of organising arms deliveries, subject to the vote. The Pentagon should be able to start getting shells to Ukraine within two weeks, reckons Michael Kofman of the Carnegie Endowment, a think-tank, and can supply enough to last for a year or so. Larger weapons systems will take much longer to ship; some still need to be ordered, let alone manufactured. The hope is that it will be enough to fend off a larger-scale Russian offensive that Kyrylo Budanov, the head of Ukraine’s military-intelligence service, has said he expects in June.

Ukraine has other looming problems, though. Its stock of air-defence interceptor missiles, fired from a mix of American, European and Soviet-era launchers, has dwindled. Russian attack jets have recently been providing close air support to troops with seemingly little risk of being shot down. America’s Patriot missile-defence systems are in high demand elsewhere, including Israel, and production is low. At the same time, Russia is deploying effective new weapons. On April 11th it successfully launched an attack on a thermal power station in Kyiv using a Kh-69 stealth cruise missile that eluded a Patriot interceptor. Even with enough kit, Ukraine confronts a serious manpower disadvantage compared with Russia. This month Volodymyr Zelensky, Ukraine’s president, reduced the age for conscription to the armed forces to 25 despite the considerable unpopularity of that measure.

Although the provisions for Ukraine are the most important, the other bits passed by the House are consequential, too. Progressive Democrats strenuously objected to the $16bn in military aid for Israel, because of the dire humanitarian conditions in Gaza. Much of this spending would replenish defensive weapons like those used by Israel’s Iron Dome, but it also provides billions for new offensive weapons. American authorities would be given the ability to seize $5bn in Russian sovereign assets that have been frozen since the start of the war and transfer them to Ukraine to help defray the cost of defending itself. Riding along with the bill is a hotly debated law that would force the sale of TikTok, a time-sucking app, to a non-Chinese owner within the next year.

Seeing all of this through will be the legacy-defining achievement of Mr Johnson. Ukraine will get the ammunition and weapons systems (including, perhaps, more long-range ATACMS) that it needs to weather a Russian offensive—at least until the next president is sworn in next year. Many feared that a Trump victory would force Ukraine to accept either defeat or a huge territorial loss in 2025. Without congressional action, though, that might have happened even while Mr Biden remained president. Mr Johnson’s reward for defying members of his own party is unlikely to be more power—some are already speculating that his speakership might be over within a matter of weeks. “I could make a selfish decision and do something that’s different but I’m doing here what I believe to be the right thing,” he said this week. “History judges us for what we do.”

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Economics

Analysts react to latest U.S. levies

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Charts that show the “reciprocal tariffs” the U.S. is charging other countries are on display at the James Brady Press Briefing Room of the White House on April 2, 2025 in Washington, DC. 

Alex Wong | Getty Images

U.S. President Donald Trump on Wednesday laid out the “reciprocal tariff” rates that more than 180 countries and territories will face under his sweeping new trade policy.

The announcement sent stocks tumbling and prompted investors to seek refuge in assets perceived to be safe.

Analysts generally had a pessimistic take on the announcement, with some even predicting an increased risk of a recession for the U.S.

Here is a compilation of reactions from experts and analysts:

Tai Hui, APAC Chief Market Strategist, J.P. Morgan Asset Management

“Today’s announcement could potentially raise U.S. average tariff rates to levels not seen since the early 20th century. If these tariffs persist, they could materially impact inflation, as U.S. manufacturing struggles to ramp up capacity and supply chains pass on costs to consumers. For instance, advanced semiconductor manufacturers in Taiwan may not absorb tariff costs without viable substitutes.

“The scale of these tariffs raises concerns about growth risks. U.S. consumers may cut back on spending due to pricier imports, and businesses might delay capital expenditures amid uncertainty about the tariffs’ full impact and potential retaliation from trade partners.”

David Rosenberg, President and founder of Rosenberg Research

“There are no winners in a global trade war. And when people have to realize, when you hear this clap trap about how consumers in United States are not going to bear any brunt. It’s all going to be the foreign producer. I roll my eyes whenever I hear that, because it shows a zero understanding of how trade works, because it is the importing business that pays the tariff, not the exporting country.

And a lot of that will get transmitted into the consumer, so we’re in for several months of a very significant price shock for the American household sector.”

Anthony Raza, Head of Multi-Asset Strategy, UOB Asset Management

“They’ve come up with the most extreme numbers that we can’t even comprehend. How they’re coming up with these? And then in terms of timing, I think we were hopeful that maybe this would be something that was rolled out over the course of a year, that would allow like time for negotiations or whatever. But it does seem like the timing is much more immediate and is, again, worse than our worst-case type scenario in terms of flexibility.”

David Roche, Strategist, Quantum Strategy

“These tariffs are not transitional. They are core to President Trump’s beliefs. They mark the shift from globalisation to isolationist, nationalist policies – and not just for economics. The process will last several years and be felt for decades. There will be spillovers into multiple policy domains such as geopolitics.

Right now, expect retaliation, not negotiation by the EU (targeting U.S. services) and China (focusing on U.S. strategic and business interests). The Rose Garden tariffs will cement the bear market. They will cause global stagflation as well as U.S. and EU recession.”

Shane Oliver, Head of Investment Strategy and Chief Economist, AMP

“Our rough calculation is that the 2nd April announcement will take the US average tariff rate to above levels seen in the 1930s after the Smoot/Hawley tariffs which will in turn add to the risk of a US recession – via a further blow to confidence and supply chain disruptions – and a bigger hit to global growth.

“The risk of a US recession is probably now around 40% and global growth could be pushed towards 2% (from around 3% currently) depending on how significant retaliation is and how countries like China respond with policy stimulus.”

Tom Kenny, Senior International Economist, ANZ

“Today’s announced US reciprocal tariffs are worse than expected. The effective tariff rate on U.S. merchandise imports is likely to climb to the 20-25% range, the highest since the early 1900s.

Yields on inflation-indexed bonds were higher and equities sold off after the announcement, suggesting the market thinks these tariffs will hurt growth and add to inflation. Market pricing of the federal funds rate points to cuts from the Federal Reserve coming sooner.”

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Economics

EC President von der Leyen

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The European Union is preparing further countermeasures against U.S. tariffs if negotiations fail, according to European Commission president Ursula von der Leyen.

U.S. President Donald Trump had imposed 20% tariffs on the bloc on Wednesday.

Von der Leyen’s comments come after retaliatory duties were announced by the bloc after the U.S. imposed tariffs on  last month in a bid to protect European workers and consumers. The EU at the time said it would introduce counter-tariffs on 26 billion euros ($28 billion) worth of U.S. goods.

Previously suspended duties — which were at least partially in place during Trump’s first term as president — are set to be re-introduced alongside a slew of additional duties on further goods.

Industrial-grade steel and aluminum, other steel and aluminum semi-finished and finished products, along with their derivative commercial products, such as machinery parts and knitting needles were set to be included. A range of other products such as bourbon, agricultural products, leather goods, home appliances and more were also on the EU’s list.

Following a postponement, these tariffs are expected to come into effect around the middle of April.

This is a developing story, please check back for updates.

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Economics

ADP jobs report March 2025:

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Attendees check in during a job fair at the YMCA Gerard Carter Center on March 27, 2025 in the Stapleton Heights neighborhood of the Staten Island borough in New York City. 

Michael M. Santiago | Getty Images

Private payroll gains were stronger than expected in March, countering fears that the labor market and economy are slowing, according to a report Wednesday from ADP.

Companies added 155,000 jobs for the month, a sharp increase from the upwardly revised 84,000 in February and better than the Dow Jones consensus forecast for 120,000, the payrolls processing firm said.

The upside surprise comes amid worries that President Donald Trump’s aggressive tariffs could deter firms from adding to headcount and in turn slow business and consumer activity. Trump is set to announce the next step in his trade policy Wednesday at 4 p.m.

Hiring was fairly broad based, with professional and business services adding 57,000 workers while financial activities grew by 38,000 as tax season heats up. Manufacturing contributed 21,000 and leisure and hospitality added 17,000.

Service providers were responsible for 132,000 of the positions. On the downside, trade, transportation and utilities saw a loss of 6,000 jobs and natural resources and mining declined by 3,000.

On the wage side, earnings rose by 4.6% year over year for those staying in their positions and 6.5% for job changers. The gap between the two matched a series low last hit in September, suggesting a lower level of mobility for workers wanting to switch jobs.

Still, the overall numbers indicate a solid labor market. Recent data from the Bureau of Labor Statistics indicates that the level of open positions is now almost even with available workers, reversing a trend in which openings outnumbered the unemployed by 2 to 1 a couple years ago.

The ADP report comes ahead of the more closely watched BLS measure of nonfarm payrolls. The BLS report, which unlike ADP includes government jobs, is expected to show payroll growth of 140,000 in March, down slightly from 151,000 in February. The two counts sometimes show substantial disparities due to different methodologies.

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