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Efforts to tackle student protests in America have backfired badly

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PART OF THE reason Elisha “Lishi” Baker wanted to go to Columbia University, an Ivy League university in New York, was its Middle Eastern History programme. He loved his first year and says he “felt great as a Jewish student at Columbia”. But since the Hamas attacks on Israel on October 7th, the atmosphere on campus has changed. Within days there were protests. He heard students calling for an intifada. He kept being told “you’re interpreting it wrong,” but this week there was no misinterpreting, he says, the undercurrent of antisemitism on campus.

University presidents are struggling with policing free speech on campus: specifically, how to deal with pro-Palestinian protests. After seeing timid responses by the heads of Harvard and the University of Pennsylvania lead to those presidents being forced to step down a few months ago, leaders are now trying a tougher approach. They are in danger of over-correcting.

The trigger for the latest troubles was the clearing by police of tents and protesters at Columbia on April 18th, and the arrest of more than a hundred students. This was an “alarming decision”, wrote Jameel Jaffer, from the university’s semi-independent free-speech centre, adding that “it was not evident to us how the encampment and protest posed such a danger” as to justify the escalation. According to the NYPD, the arrested protesters were peaceful and offered no resistance. “It was so scary,” says Layla Saliba, who saw the arrests. “All these cops just swarming everywhere and we had people in like full riot gear.” Within days another encampment sprang up on a nearby lawn.

In a letter posted on Columbia’s website Minouche Shafik, Columbia’s president, wrote that she asked the NYPD to intervene after other efforts failed, adding that she did so “out of an abundance of concern for the safety of Columbia’s campus”. The move only inflamed matters. “The irony is that in trying to quiet things down and assert control over the encampment, the administration unleashed this firestorm,” says David Pozen, a law professor at the university.

That firestorm has now spread, with tent encampments popping up far beyond Columbia. The demands by student protesters are largely the same: divest endowments of Israeli firms and any weapons manufacturers that sell there; end academic partnerships with Israeli institutions; and condemn Israel’s actions in the war.

As at Columbia, administrators elsewhere are overcoming their reluctance to call the cops. On April 22nd nearly 50 protesters were charged with trespassing for their participation in a week-long occupation of a plaza at Yale (protesters returned the next day). At New York University police broke up a copycat encampment. Yet not all sit-ins have proved so fraught. In February a camp that had stood for four months at Stanford disbanded peacefully after administrators met students and promised more transparency on investments.

Long before the debacle at Columbia, instances of disruptive behaviour had put administrators on edge. In February pro-Palestinian activists at UC Berkeley shattered a glass door leading to a lecture by an Israeli speaker. Weeks later others interrupted an event at the home of Erwin Chemerinsky, a free-speech scholar and dean of the law school.

Last year Columbia suspended two pressure groups, Students for Justice in Palestine and Jewish Voice for Peace, for organising unauthorised demonstrations. The New York Civil Liberties Union has sued over the move. Equally controversial was the University of Southern California’s decision to cancel the graduation speech of its pro-Palestinian valedictorian, who is Muslim; the school cited safety threats. USC has since cancelled all guest speakers at commencement.

Presiding over an American university was once a plum job; now it is a minefield. On April 17th Dr Shafik was the latest one to be grilled by the House Education Committee about antisemitism on campus. Unlike the presidents of Harvard and the University of Pennsylvania, who fumbled their appearances in December, Dr Shafik survived—for now. When she and colleagues were asked the question that both Claudine Gay, at Harvard, and Elizabeth Magill, at Pennsylvania, had struggled with—whether calling for the genocide of Jews violated their university’s code of conduct—they answered simply “yes, it does.”

Critics say she did not do enough to stand up for free speech. In his letter from Columbia’s First Amendment Institute, Mr Jaffer expressed dismay. The university’s rules, he wrote, guarantee broad protection “even for speech that is objectionable or offensive to some listeners”. In her own public letter, Dr Shafik says in her defence that “we cannot have one group dictate terms and attempt to disrupt important milestones like graduation to advance their point of view.”

Dr Shafik is not out of the woods. This week she faced threats from donors to withdraw their funding and calls to resign by several politicians. On April 22nd all of New York’s Republican House members signed a letter by Elise Stefanik, a high-ranking Republican, calling for her resignation. Politicians supposedly concerned about the climate on campuses have made administrators’ jobs even more complex.

At Columbia, campus life is now disrupted for the majority of students not taking part in protests. Classes have moved online. Many professors have “walked out” in solidarity. Helicopters circle above and police in riot gear stand ready nearby. The bull-horns from protesters outside the gates are loud enough to hear across campus: students studying for MCATS, an exam for medical school, cannot find a quiet spot to take practice tests.

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Economics

Trump tariffs’ effect on consumer prices debated by economists

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The U.S. government is set to increase tariff rates on several categories of imported products. Some economists tracking these trade proposals say the higher tariff rates could lead to higher consumer prices.

One model constructed by the Federal Reserve Bank of Boston suggests that in an “extreme” scenario, heightened taxes on U.S. imports could result in a 1.4 percentage point to 2.2 percentage point increase to core inflation. This scenario assumes 60% tariff rates on Chinese imports and 10% tariff rates on imports from all other countries.

The researchers note that many other tariff proposals have surfaced since they published their findings in February 2025. 

Price increases could come across many categories, including new housing and automobiles, alongside consumer services such as nursing, public transportation and finance. 

“People might think, ‘Oh, tariffs can only affect the goods that I buy. It can’t affect the services,'” said Hillary Stein, an economist at the Boston Fed. “Those hospitals are buying inputs that might be, for example, … medical equipment that comes from abroad.” 

White House economists say tariffs will not meaningfully contribute to inflation. In a statement to CNBC, Stephen Miran, chair of the Council of Economic Advisers, said that “as the world’s largest source of consumer demand, the U.S. holds all the leverage, which means foreign suppliers will have to eat the economic burden or ‘incidence’ of the tariffs.” 

Assessing the impact of the administration’s full economic agenda has been a challenge for central bank leaders. The Federal Open Market Committee decided to leave its target for the federal funds rate unchanged at the meeting in March. 

The Fed targets its overnight borrowing rate at between 4.25% and 4.5%, with the effective federal funds rate at 4.33% on March 31, according to the New York Fed. The core personal consumption expenditures price index inflation rate rose to 2.8% in February, according to the Commerce Department. Forecasts of U.S. gross domestic product suggest that the economy will continue to grow at a 1.7% rate in 2025, albeit at a slower pace than what was forecast in January.  

Consumers in the U.S. and businesses around the world are bracing for impact. 
 
“There is a reason why companies went outside of the U.S.,” said Gregor Hirt, chief investment officer at Allianz Global Investors. “Most of the time it was because it was cheaper and more productive.” 

Watch the video above to learn how much inflation tariffs may cause.

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Economics

Trump’s tariff gambit will raise the stakes for an economy already looking fragile

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U.S. President Donald Trump speaks alongside entertainer Kid Rock before signing an executive order in the Oval Office of the White House on March 31, 2025 in Washington, DC. 

Andrew Harnik | Getty Images

President Donald Trump is set Wednesday to begin the biggest gamble of his nascent second term, wagering that broad-based tariffs on imports will jumpstart a new era for the U.S. economy.

The stakes couldn’t be higher.

As the president prepares his “liberation day” announcement, household sentiment is at multi-year lows. Consumers worry that the duties will spark another round of painful inflation, and investors are fretting that higher prices will mean lower profits and a tougher slog for the battered stock market.

What Trump is promising is a new economy not dependent on deficit spending, where Canada, Mexico, China and Europe no longer take advantage of the U.S. consumer’s desire for ever-cheaper products.

The big problem right now is no one outside the administration knows quite how those goals will be achieved, and what will be the price to pay.

“People always want everything to be done immediately and have to know exactly what’s going on,” said Joseph LaVorgna, who served as a senior economic advisor during Trump’s first term in office. “Negotiations themselves don’t work that way. Good things take time.”

For his part, LaVorgna, who is now chief economist at SMBC Nikko Securities, is optimistic Trump can pull it off, but understands why markets are rattled by the uncertainty of it all.

“This is a negotiation, and it needs to be judged in the fullness of time,” he said. “Eventually we’re going to get some details and some clarity, and to me, everything will fit together. But right now, we’re at that point where it’s just too soon to know exactly what the implementation is likely to look like.”

Here’s what we do know: The White House intends to implement “reciprocal” tariffs against its trading partners. In other words, the U.S. is going to match what other countries charge to import American goods into their countries. Most recently, a figure of 20% blanket tariffs has been bandied around, though LaVorgna said he expects the number to be around 10%, but something like 60% for China.

What is likely to emerge, though, will be far more nuanced as Trump seeks to reduce a record $131.4 billion U.S. trade deficit. Trump professes his ability to make deals, and the saber-rattling of draconian levies on other countries is all part of the strategy to get the best arrangement possible where more goods are manufactured domestically, boosting American jobs and providing a fairer landscape for trade.

The consequences, though, could be rough in the near term.

Potential inflation impact

On their surface, tariffs are a tax on imports and, theoretically, are inflationary. In practice, though, it doesn’t always work that way.

During his first term, Trump imposed heavy tariffs with nary a sign of longer-term inflation outside of isolated price increases. That’s how Federal Reserve economists generally view tariffs — a one-time “transitory” blip but rarely a generator of fundamental inflation.

This time, though, could be different as Trump attempts something on a scale not seen since the disastrous Smoot-Hawley tariffs in 1930 that kicked off a global trade war and would be the worst-case scenario of the president’s ambitions.

“This could be a major rewiring of the domestic economy and of the global economy, a la Thatcher, a la Reagan, where you get a more enabled private sector, streamlined government, a fair trading system,” Mohamed El-Erian, the Allianz chief economic advisor, said Tuesday on CNBC. “Alternatively, if we get tit-for-tat tariffs, we slip into stagflation, and that stagflation becomes well anchored, and that becomes problematic.”

Tariffs could be a major rewiring of the domestic and global economy, says Mohamed El-Erian

The U.S. economy already is showing signs of a stagflationary impulse, perhaps not along the lines of the 1970s and early ’80s but nevertheless one where growth is slowing and inflation is proving stickier than expected.

Goldman Sachs has lowered its projection for economic growth this year to barely positive. The firm is citing the “the sharp recent deterioration in household and business confidence” and second-order impacts of tariffs as administration officials are willing to trade lower growth in the near term for their longer-term trade goals.

Federal Reserve officials last month indicated an expectation of 1.7% gross domestic product growth this year; using the same metric, Goldman projects GDP to rise at just a 1% rate.

In addition, Goldman raised its recession risk to 35% this year, though it sees growth holding positive in the most-likely scenario.

Broader economic questions

However, Luke Tilley, chief economist at Wilmington Trust, thinks the recession risk is even higher at 40%, and not just because of tariff impacts.

“We were already on the pessimistic side of the spectrum,” he said. “A lot of that is coming from the fact that we didn’t think the consumer was strong enough heading into the year, and we see growth slowing because of the tariffs.”

Tilley also sees the labor market weakening as companies hold off on hiring as well as other decisions such as capital expenditure-type investments in their businesses.

That view on business hesitation was backed up Tuesday in an Institute for Supply Management survey in which respondents cited the uncertain climate as an obstacle to growth.

“Customers are pausing on new orders as a result of uncertainty regarding tariffs,” said a manager in the transportation equipment industry. “There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business.”

While Tilley thinks the concern over tariffs causing long-term inflation is misplaced — Smoot-Hawley, for instance, actually ended up being deflationary — he does see them as a danger to an already-fragile consumer and economy as they could tend to weaken activity further.

“We think of the tariffs as just being such a weight on growth. It would drive up prices in the initial couple [inflation] readings, but it would create so much economic weakness that they would end up being net deflationary,” he said. “They’re a tax hike, they’re contractionary, they’re going to weigh on the economy.”

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Economics

Euro zone inflation, March 2025

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A man pushes his shopping cart filled with food shopping and walks in front of an aisle of canned vegetables with “Down price” labels in an Auchan supermarket in Guilherand Granges, France, March 8, 2025.

Nicolas Guyonnet | Afp | Getty Images

Annual Euro zone inflation dipped as expected to 2.2% in March, according to flash data from statistics agency Eurostat published Tuesday.

The Tuesday print sits just below the 2.3% final reading of February.

So called core-inflation, which excludes more volatile food, energy, alcohol and tobacco prices, edged lower to 2.4% in March from 2.6% in February. The closely watched services inflation print, which had long been sticky around the 4% mark, also fell to 3.4% in March from 3.7% in the preceding month.

Recent preliminary data had showed that March inflation came in lower than forecast in several major euro zone economies. Last month’s inflation hit 2.3% in Germany and fell to 2.2% in Spain, while staying unchanged at 0.9% in France.

The figures, which are harmonized across the euro area for comparability, boosted expectations for a further 25-basis-point interest rate cut from the European Central Bank during its upcoming meeting on April 17. Markets were pricing in an around 76% chance of such a reduction ahead of the release of the euro zone inflation data on Tuesday, according to LSEG data.

The European Union is set to be slapped with tariffs due in effect later this week from the U.S. administration of Donald Trump — including a 25% levy on imported cars.

While the exact impact of the tariffs and retaliatory measures remains uncertain, many economists have warned for months that their effect could be inflationary.

This is a breaking news story, please check back for updates.

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