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The election in Georgia could be as pivotal as it was four years ago

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In 2020 no other state produced as much election drama as Georgia. In the end it gave Democrats slender victories that helped them win both the White House and a majority in the Senate, though not before Donald Trump, unsuccessfully, implored Georgia’s Republican secretary of state, Brad Raffensperger, to “find 11,780 votes”, the number needed to overturn the swing state’s results in his favour. In 2024 Georgia will again find itself taking centre stage—for three reasons.

The first is Mr Trump. After a big win in Iowa, the former president looks as politically robust as ever. Though his legal woes have not alienated Republican voters (rather the reverse), they could yet cause him trouble, not least in Georgia. Last August a grand jury indicted him for running a criminal ring that conspired to overturn the state’s 2020 election. Unlike in the federal cases pending in Washington and Florida, if re-elected Mr Trump could not pardon himself from the Georgia charges (though, according to long-standing policy, he would have immunity while in the White House). Nor could Brian Kemp, the state’s Republican governor, nix them.

But the case has taken an unexpected turn. On January 8th Fani Willis, the district attorney prosecuting Mr Trump, was accused by one of his co-defendants of having a fling with a special prosecutor she hired. Though the salacious claim is unlikely to disqualify her from litigation, it opens her to allegations of corruption (Ms Willis denies acting improperly in hiring him). Her foes are calling for her to go. That plot twist is unlikely to be the last.

Second, there is the matter of election security. Though Georgia is not home to the country’s loudest election-deniers—its Republican statewide politicians have staunchly asserted that its contests have been fair—fierce debates over election safety are playing out in the courts. A case that has been dragging on for over six years is reaching its end. An Obama-appointed judge will decide in the coming weeks if Georgia must scrap its electronic voting machines. Left-wing plaintiffs argue that the touchscreen ballot-markers are eminently hackable and make paper audits impossible. They point to a breach in Coffee County, where Trump allies copied election software from a rural polling station in January 2021, as proof that bad actors have all they need to do damage in 2024.

Good on paper

To the dismay of the cyber-security professors making the case for a switch to hand-marked paper ballots, Georgia’s most infamous conspiracy-theorists have taken their side. During opening statements the courtroom was packed with Trump apostles keen to tell your correspondent about the counterfeit ballots that flipped elections past. The office of Mr Raffensperger, the defendant, says it refuses to negotiate with election-deniers of left or right, noting that the trial is sowing unsubstantiated distrust of the state’s elections.

On 11 criteria for “fair, accessible, secure and transparent” elections—including, for example, whether a state has early voting and conducts audits—the Bipartisan Policy Centre, a think-tank based in Washington, DC, ranks Georgia best in the country (tied with Colorado). Even some who do not see it that way reckon it is too late to change the voting system before November. “It would cause mayhem,” says Cianti Stewart-Reid, the head of Fair Fight Action, a voting group started by Stacey Abrams, a Democrat who ran for governor in 2018. The case plants the seeds for fights over the validity of the results in November.

Third, voting rights: Georgia’s increasingly diverse electorate makes the state a laboratory for the demographic changes expected across America—and the fights over voter access that come with them. That has catalysed a movement to get unlikely voters registered and to persuade national campaigns to invest in Georgia. The Abrams machine spent $400m doing so in the decade to 2022. But since 2013, when the Supreme Court struck down the pre-clearance regime that gave the federal government authority to monitor election rules in places with historical injustices, Georgia’s Republicans have also been tightening voting laws.

After Joe Biden won Georgia in 2020 the legislature passed SB202, a bill that, among other things, made it illegal to pass out water and snacks to those queuing to vote and allowed individual citizens to challenge the voter registrations of neighbours they suspect are unlawfully registered. Though the law has had a more muted effect than some expected, it has forced Democrats into new battles. According to ProPublica, an investigative outlet, in two years nearly 100,000 registrations were challenged (oddly, 89,000 challenges were filed by just six people). Those who fail to respond to the notices can get kicked off the rolls. In early January Democrats lost in court to True the Vote, a conservative group leading the challenge crusade. Following the decision, its leaders announced the launch of new automated mass-challenge software.

All this amounts to the most dynamic political tug-of-war outside the capital. “Without a doubt there was some sore-loser politics involved, but SB202 addressed real issues as well,” says a Republican who took part in its deliberations. The handful of Georgia judges making decisions on the Trump trial, election security and voting-rights cases have the hard task of distinguishing between political high-jinks and good-faith arguments. Their rulings will matter for all Americans. 

Stay on top of American politics with Checks and Balance, our weekly subscriber-only newsletter examining the state of American democracy, and read other articles about the elections of 2024.

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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