A Missouri town was solidly behind Trump. Then Carol was detained
The first sign of trouble came early this month when Carol didn't show up for her shift at John's Waffle and Pancake House.
She was as reliable as the sun rising over rice and melon fields in her adopted hometown, of Kennett, Missouri, a conservative farming hub of 10,000 people in the state's south-eastern boot heel, where 'Missouri' becomes 'Missour-uh'.
In the 20 years since she arrived from Hong Kong, she had built a life and family in Kennett, working two waitressing jobs and cleaning houses on the side. She began every morning at the bustling diner, serving pecan waffles, hugging customers and reading leftover newspapers to improve her English.
'Everyone knows Carol,' said Lisa Dry, a Kennett city councilperson.
That all ended on April 30, when federal immigration officials summoned Carol, 45, whose legal name is Ming Li Hui, to their office in St Louis, a three-hour drive from Kennett. Her partner, a Guatemalan immigrant, had voiced suspicion about the sudden call. But 'I didn't want to run', Hui said in a jailhouse phone interview. 'I just wanted to do the right thing.'
She was arrested and jailed to await deportation.
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Hui's detention has forced a rural Missouri county to face the fallout of US President Donald Trump's immigration crackdown, which was supported in theory by many residents in this Trump-loving corner of an increasingly red America.
Many are now asking how you can support Carol and also Trump.
'I voted for Donald Trump, and so did practically everyone here,' said Vanessa Cowart, a friend of Hui from church. 'But no one voted to deport moms. We were all under the impression we were just getting rid of the gangs, the people who came here in droves.'
She paused. 'This is Carol.'
Adam Squires, a one-time candidate for mayor of Kennett, saw it differently. He did not bear any ill will for Hui, he said, but he voted for Trump, as did 80 per cent of voters in Dunklin County, and he was glad to see the deportation campaign reach home.
'They vote for Trump, and then they get mad because the stuff starts happening,' he said of his neighbours. 'We've got to get rid of all the illegals. This is just a start.'
Hui said the call she received from immigration authorities ordered her to appear in St Louis without explanation. At the office, she said, an immigration officer called her into a secure area and initially told her the authorities would help her get a passport. Then she was told that she was being detained for overstaying a tourist visa that had expired long ago and that she would be deported.
Now, as Hui bounces from county jail to county jail, her name has popped up on prayer lists at churches in Kennett. Her absence was felt, residents said, when she was not in the baseball stands to watch her younger son pitch, nor at the eighth-grade graduation to see her older son receive an agricultural science award.
Cowart was her religious sponsor when Hui converted to Catholicism earlier this year, learning the Gospels from her Chinese Bible. She became a regular at Sunday morning Mass, as was her partner and their three American-born children: a daughter, 7, and sons aged 12 and 14.
Hui was keenly interested in early Christian martyrs, Cowart said: 'She'd smile and say, God will take care of us.'
According to the government, Hui does not have a blameless past. In court records, the government said she arrived in the United States from Hong Kong in February 2004, paying an American citizen $US2000 to enter into a sham marriage with her sometime around 2005. She had hoped the marriage would allow her to get permanent resident status and permit her to travel to Hong Kong to see her dying grandmother and return to the US afterwards, according to court records.
Her lawyer, Raymond Bolourtchi, said Hui was young and desperate in those days, and she acknowledged that her actions were wrong. 'Not a day goes by that she doesn't feel remorse,' he said.
Hui was never criminally charged for the fake marriage, which ended in divorce in 2009. Court papers indicate that she has no criminal record.
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Nonetheless, she was working, which people who enter as tourists are generally not allowed to do, and her tourist visa had lapsed. Her status in the country became a matter of dispute.
Many people in Kennett expressed outrage that a hardworking mother had spent the past month jailed by immigration authorities.
Supporters described her as an ideal addition to a rural town where the population is declining and the only hospital has closed.
'She's exactly the sort of person you'd want to come to the country,' said Chuck Earnest, a farmer. 'I don't know how this fits into the deportation problem with Trump.'
Celena Horton, a waitress at a steakhouse, said she and Hui would give each other huge tips when they ate at one another's restaurants. Horton said she loved almost everything that Trump was doing in his second term. Hui is the reason for the 'almost'.
'I can't believe they're doing this to her,' Horton said.
The sentiment reflects a stirring unease nationally over Trump's handling of immigration, his most potent political issue. Although most Americans in a recent New York Times /Siena College survey said they still supported deporting immigrants who are in the country illegally, most respondents disapproved of how Trump was carrying out his immigration policies.
In Kennett, some residents said they had implored state and national Republican lawmakers representing the area to intervene to stop Hui's deportation, but had gotten mostly cursory responses. Kennett's own leaders have not officially weighed in.
Hui's church organised a prayer vigil for her and meal deliveries for her family. Her bosses at the waffle house held a 'Carol Day' fundraiser that brought in nearly $US20,000 ($31,100). Petitions to bring Hui home, which have been signed by hundreds of residents, now sit on every table, next to the jelly packets and ketchup.
'This lady has the biggest heart in the whole world,' said Liridona Ramadani, whose family runs John's Waffle and Pancake House. 'Democrat, Republican, everybody was there for Carol' on 'Carol Day', she said.
Well, not everybody.
When an article about her detention was posted by The Delta Dunklin Democrat, a local newspaper, it was deluged with 400 reader comments. Most of them expressing sympathy, but not all.
'If you're here illegally, expect to be removed,' said one. 'This is the consequence of being in a nation with laws,' said another. One commenter simply wrote 'Bye'.
The online debate got so nasty that the owners of the waffle house implored people to keep their political comments to themselves.
From jail, Hui expressed surprise that her arrest had galvanised so many people in Kennett.
Only a few people in town speak Cantonese, she said, so when she settled there, she started to go by the English name she had chosen for herself as a girl in Hong Kong, when it was still under British rule.
She started a family with her partner, who also works at restaurants around town. (He declined to comment for this article, and his immigration status is not clear.) Hui bought a house in Kennett, and her front yard is decorated with 'Student of the Month' signs.
She made an application for asylum in 2009, saying that her mother in Hong Kong had beaten her and threatened her because Hui was a girl, and that she was afraid to return, according to court records.
Her claim was denied in 2012, and an immigration judge ordered her deported. Despite multiple legal setbacks, though, she managed to stay in the US by getting temporary government permissions known as orders of supervision, according to her lawyer, Bolourtchi.
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Hui's most recent order of supervision was valid through August 2025, records show. But on the day that Hui was arrested, she was told that the order was being terminated, Bolourtchi said.
ICE officials did not respond to a request for comment about Hui's case.
Hui said she had been blindsided by her arrest, which was one of many the Trump administration has been carrying out at mandatory immigration check-ins.
She said she spends her days shuffling between her bunk and meals, and waiting for chances to video chat with her children. She frets over how she would see them again if she is deported to Hong Kong. Her lawyer recently filed a legal motion to reopen Hui's immigration case.
Hui said that being separated from her family was the hardest part. Her 14-year-old son was upset that she missed his middle-school graduation. Her daughter told her that one of her school friends offered to adopt Hui so she could stay in the country.
During one call, her children tried to cheer up Hui by telling her about 'Carol Day'. She said she was stunned to learn about the outpouring of support.
'I didn't know they loved me,' she said.
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Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Would Trump's Golden Dome keep the US safe – and do space lasers work?
It's 1983 and relations between the superpowers are close to an all-time low. Their arsenals of nuclear weapons are multiplying. The USSR alone is estimated to have more than 1000 missiles capable of crossing continents and more in submarines that could lie submerged off the coast of New York or Los Angeles, ready to sow Armageddon. The US, meanwhile, has provocatively stationed low-flying cruise missiles, seen as 'first strike' weapons, at Greenham Common airbase outside London. Protests erupt. Both nations adhere to a strategy known as Mutually Assured Destruction (MAD), the knowledge that if one were to strike first, the other would have just enough time to launch a devastating counter-blow. Even US president Ronald Reagan finds it bewildering. 'It is inconceivable to me,' he says, 'that the great nations of the world will sit here, like people facing themselves across a table, each with a cocked gun, and no one knowing whether someone might tighten their finger on the trigger.' There must be a better way, he thinks. And some prominent scientists, such as physicist Edward Teller, 'father of the hydrogen bomb' and arch-rival to atom-bomb developer Robert Oppenheimer, tell him there might be. The US, they believe, has the capability to build a network of defences high in the sky that could stop Russian missiles dead in their tracks, using satellite-borne lasers to blow them up harmlessly in space. In March 1983, Reagan announces an ambitious program in a televised address: the 'Strategic Defence Initiative', which is immediately dubbed 'Star Wars' for its resemblance to the 1977 George Lucas film, which featured a laser-equipped space station called the Death Star (and Chewbacca, played by an actor in a furry suit). It turns out, of course, that the scientists had promised more than they could deliver. There were never any giant space lasers. But the idea didn't vanish completely. And now Donald Trump, a president who's already made waves for his elaborate madcap schemes (trying to buy Greenland, turning Gaza into a beach resort), wants his own space-based missile defence system called the 'Golden Dome'. Forty years on from Reagan's dream, could a defence shield now be possible? Would it make nuclear weapons obsolete? And what are 'Brilliant Pebbles'? What do we know about Trump's Golden Dome? In January, the president made an executive order calling for what he described as an 'Iron Dome for America', a reference to the Iron Dome air defence system that Israel has deployed, with some success, since 2011 to shoot down rockets fired from Gaza, Lebanon and Iran. Trump's order stated that since Reagan's time in office, the threat from strategic weapons had become more intense and complex; next-generation missiles were now 'a catastrophic threat' to the United States. It said that while some existing interceptor systems could counter 'rogue-nation threats' (presumably from North Korea, which has a fairly advanced ballistic missile program, and possibly Iran, which is believed to have nuclear weapons capability), they had not kept up with 'peer and near-peer adversaries' – that is, Russia and China. The solution would be a 'next-generation missile defence shield' to safeguard the US homeland from all possible airborne threats. These include intercontinental ballistic missiles (ICBMs, which shoot out of concrete silos then fall to Earth on a parabolic arc, and their submarine-based cousins); ordinary cruise missiles (which look like planes and are slow but can evade detection by flying low); as yet theoretical 'fractional orbital bombardment systems' that live in space, flinging bombs down from on high; a new breed of hypersonic cruise missiles (much faster than cruise missiles); and so-called hypersonic glide vehicles (which are boosted to the edge of space on a rocket then continue under their own steam). No single defence weapon can neutralise all these. ICBMs have a predictable course but build up to a tremendous speed as they arc through space; hypersonic weapons fly lower but can manoeuvre in flight to evade detection. What we do know is that what Trump is calling the Golden Dome will incorporate many technologies. These include existing ground- and sea-based missile systems and – in a nod back to Star Wars – a new suite of anti-missile weapons based in orbit, where they might, if successful, destroy incoming ICBMs in the so-called 'boost phase', when they burn rocket fuel to reach space, and, ideally, before they break into multiple separate warheads that would have to be targeted individually. (Why 'Golden Dome'? Because it's Trump's favourite colour – the Oval Office is filled with golden knick-knacks he's collected.) While Reagan was not deluded about the scale of the task back in the '80s – 'It will take years, probably decades, of effort on many fronts,' he acknowledged – Trump, buoyed by scientific advances in the intervening years, is more bullish. 'We'll have it done in about three years,' he said. 'Once fully constructed, the Golden Dome will be capable of intercepting missiles even if they are launched from other sides of the world and even if they are launched from space.' Defence Secretary Pete Hegseth elaborated slightly: 'Some US technology in space, such as space-based sensors and air and missile defence, exists today, but all of the systems comprising the Golden Dome architecture will need to be seamlessly integrated. Golden Dome will be fielded in phases, prioritising defence where the threat is greatest.' Meanwhile, if Canada wants in, it needs to come up with a $US61 billion entrance fee, Trump has said on social media, or it's 'ZERO DOLLARS if they become our cherished 51st State'. Is any of this 'dome' technology even possible? 'I don't think it's fantasy land,' says Malcolm Davis at the Australian Strategic Policy Institute. 'There are aspects of it that are very aspirational and probably won't be achieved on schedule or on budget, but there's also aspects of it that are practical.' What is a fantasy is Trump's timeline, he says. 'This could take 10 years to develop, and it will cost a lot more than what Trump is anticipating.' Much of the technology required by Golden Dome has come a long way since the failure of Star Wars – at least, the bits that would be stationed on Earth. (The US has actually been exploring the idea since World War II, when its troops in Europe were threatened by Germany's V2 ballistic rockets.) Today, several countries have missile 'shields', including China, India, Israel, Italy, Russia and Turkey – South Korea is reportedly working on its own home-grown 'dome' – but nothing is at the scale or level of reliability that would be required to defend the entire US homeland. Israel, for example, is smaller than Hawaii and has faced less technologically sophisticated foes – nothing like the peer-level arsenal the US wants to shield against. 'US Navy ships are very capable in shooting down cruise missiles and drones, but they're essentially trying to defend one point, which is themselves,' says Marcus Hellyer, head of research at the think tank Strategic Analysis Australia. 'The more you scale it up from defending one point to a small area such as Israel to large areas such as Ukraine and then on to the continental US, the degree of difficulty and, of course, cost increases as well.' To successfully shield the US from nuclear attack, defensive interceptors would have to detect and destroy ICBMs that travel at speeds in excess of 24,000km/h. 'Defending against ballistic missile attacks is a challenging technical undertaking,' the Congressional Budget Office noted in a 2004 investigation into the practicalities of missile defence. 'In the case of ICBMs, a defensive system may need to hit a warhead smaller than an oil drum that is travelling above the atmosphere … countermeasures such as decoy warheads that may be carried by ICBMs further complicate the problem of intercepting targets.' It's possible to do it from the ground, as a successful military test showed in 2017, but that was under well-rehearsed conditions. 'Engaging ICBMs is not computationally hard because they fly on a simple parabolic arc,' says Sidharth Kaushal at the Royal United Services Institute in London, one of the world's oldest military think tanks. 'But given the speeds involved, it requires a very rapid hand-off of data between multiple systems. Engaging hypersonics is more complex, in computational terms, given the capacity of hypersonic glide vehicles to manoeuvre and their ability to fly beneath surface-based radar for longer than ballistic missiles.' In any case, the current arsenal of interceptors is far too small to provide adequate defence and would be immediately swamped by an attack from a major power, which would likely send many hundreds of missiles, each containing multiple warheads that would have to be targeted individually. The Federation of American Scientists calculates China already has some 600 warheads, with more on the way. The US has some 3700; Russia has more than 4000 (including those that are inactive). Meanwhile, the US has just two bases for what it calls its 'mid-course missile defence program' with the firepower to specifically target incoming intercontinental nuclear-tipped ICBMs: Fort Greely in Alaska, which has 40 interceptor rockets, and Vandenberg Space Force Base in California, which has four. The rockets are built by Boeing and have a 'kill vehicle' – made by US aerospace manufacturer Raytheon – that detaches from a booster to engage the enemy in orbit, during the 'mid-course' phase of flight. Loading The US also has numerous smaller units that can engage with shorter-range missiles, planes and drones, such as the Aegis ship-board system, the Patriot system used by Ukraine against Russian attacks, and the missile batteries known as Terminal High Altitude Area Defence, or THAAD, which have been successfully used by Israel. Some of these systems could conceivably attempt to intercept ICBMs but would be likely to have a lower strike rate than the much larger rockets deployed in the mid-course missile defence program. In short, shielding the entire US is likely to cost far more than the White House claim of $US175 billion ($270 billion). Weapons company Lockheed Martin, which already makes anti-missile weapons, has likened the Golden Dome to the Manhattan Project (the World War II program that built the atom bombs dropped on Japan) in the scale of its ambition. It will probably top the $US260 billion (in today's money) that funded the Apollo space program through the '60s until 1972. In 2021, Princeton's Frank von Hippel calculated the US had already spent some $US280 billion (in today's dollars) over the previous four decades on anti-missile programs. Star Wars fizzled not only because technology didn't catch up in time, but because of the enormous drain on taxpayer dollars that subsequent administrations decided were better deployed elsewhere, particularly after the collapse of the Soviet Union in 1991. Democrat senator Ed Markey has branded Golden Dome ' economically ruinous '. 'Mega-projects' like this go wrong, says Marcus Hellyer, 'because you don't understand the requirements, and the requirements keep blowing out. And as the requirements blow out, so does the technical difficulty, and therefore the cost and schedule. And, at the moment, Golden Dome's requirements are essentially unbounded.' What about the space lasers? Miniaturisation, and vast improvements in computing power and data storage, not to mention AI, make the idea of a space defence that can co-ordinate attacks autonomously seem much more technologically feasible than in Reagan's era. Satellite networks such as Elon Musk's 7000-strong Starlink have already proved it is economically possible to launch thousands of small objects into orbit. Loading The not-insignificant hurdle that remains, once these things are in space, is successfully destroying enemy missiles. Do interceptors shoot something at them? Or would they zap them with Reagan's beloved lasers? These days, laser weapons do exist, but they require enormous energy and weigh a lot; typically, they are installed on warships. Says Hellyer: 'It's been really hard to get them to work even against fairly traditional threats like cruise missiles or drones.' Star Wars offers some lessons (the real one, not the film). Many of Edward Teller's claims to Reagan about the prospects of satellites firing lasers made from concentrated X-rays, particle beams and 'microwave devices' were highly exaggerated, says William J. Broad, author of the 1992 exposé Teller's War, and rarely performed as hoped in tests. The popular notion of a giant space station permanently parked above a rogue state that can shoot death rays on command is, thanks to the laws of orbital physics, probably an impossibility. To park it in a geostationary orbit, it would end up 35,000 kilometres away from Earth, which would put its ability to rain down lasers that have enough power to cause damage into the realm of science-fiction. Washington consulting firm Booz Allen Hamilton is instead advocating for a reboot of a curious idea that emerged out of Star Wars research called Brilliant Pebbles. A relatively low-tech scheme (at least, compared with lasers), it would deploy swarms of numerous small interceptors into a low-Earth orbit (2000 kilometres or lower altitude), to collide with enemy missiles as they speed past, their great numbers ensuring there are always enough passing over an enemy's territory to be able to intercept missiles in time. So, what's the catch? One would not imagine Russia or China sitting idly by while the US floods their skies with rocket-killing satellites, potentially depriving them of the capacity to respond to a nuclear strike. Both nations – and North Korea – have already condemned Trump's plan as destabilising. 'You could argue that all it does is kind of foster miscalculation,' Hellyer says. Then there are the inevitable countermeasures to overwhelm the anti-missile missiles (the anti-anti-missiles, perhaps) and space defences. 'All defensive systems can be defeated by countermeasures that cost far less,' wrote Charles Bennett of The New York Times in 1989 when Brilliant Pebbles was first proposed. 'The reason for that is simple. It's a lot easier to hit an orbiting satellite than a warhead moving at a vast rate of speed. Moreover, it's also easy to build enough new missiles to numerically overwhelm a defence, or to develop missiles that get into space before interceptors can target them.' Tellingly, the last remaining bilateral arms control treaty between the United States and Russia (the New Strategic Arms Reduction Treaty, or New START, which limits the number of long-range nuclear weapons) could expire early next year if not extended, opening the door to another arms race. China is believed to have been developing space-based weapons to disable satellites, Brigadier General Shawn Bratton, deputy director of operations at US Space Command in Colorado, said in 2020. Russia has also been considering sci-fi weapons of its own, says RUSI's Sidharth Kaushal, in the form of nuclear-powered jammers (or signal-blockers) and space-based plasma guns. Then there's the money. Star Wars was already on the nose with Congress by 1987, when doubts grew about its promised capability and Reagan continually asked for more funding. Republican senator Jim Coulter warned that the program would be 'bled to death' by budget cuts unless it could demonstrate at least some defences that could be deployed in a few years. 'I think it's just impossible to sustain a vague defence research goal,' he said presciently. The Congressional Budget Office this year estimated that even a skeleton deployment of what it calls 'space-based interceptors' would probably blow the entire Golden Dome budget, costing between $US161 billion ($250 billion) and $US542 billion ($840 billion). The US is also facing a bill in the billions to upgrade its existing nuclear deterrent, Hellyer says. While upgrading the existing Virginia class submarines to nuclear capability will shoulder some of the load, 'The US is facing a situation where it could be spending itself into irrelevance. It'll have an offensive system that's massively undercapitalised and obsolete and isn't the deterrent that it wants it to be. Meanwhile, it'll have this kind of half-baked defensive system that isn't really a deterrent either because any adversary will look at it and go, 'Well, it can't really stop us getting through'. It's the worst of both worlds.' Loading Malcolm Davis says: 'I think what you will end up with is a leaky shield that makes it more difficult for an adversary to get an attack through, and can certainly defend against limited attacks, but it will never be something that will make it impossible for the Russians or the Chinese to attack the United States.' Pavel Podvig, a senior researcher at the United Nations Institute for Disarmament Research, told The Wall Street Journal: 'This missile-defence mirage gives you the illusion you can protect yourself, but you're driving all these countries to build all these hundreds and thousands of missiles.' Says Hellyer: 'What's a satisfactory success rate? Let's say the bad guys launch 100 missiles at you with 1000 warheads. Let's say you have a 90 per cent success rate. Well, that's still 100 getting through.'
The Advertiser
4 hours ago
- The Advertiser
Asia share markets, dollar wary on tariff news
Asian share markets have made a wary start to the week as investors navigate the shifting sands of White House tariff policy, while awaiting key US jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late on Friday to double tariffs on imported steel and aluminium to 50 per cent, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. White House officials continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners. "The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results," said Bruce Kasman, chief economist at JPMorgan. "There is a commitment to maintaining a minimum US tariff rate of at least 10 per cent and imposing further sector tariff increases," he added. "An increase in ASEAN to discourage transhipment looks likely, and the bias for higher tariffs on US-EU trade persists." Markets will be particularly interested to see if Trump goes ahead with the 50 per cent tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.1 per cent on Monday, while South Korean stocks dipped 0.1 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. The S&P climbed 6.2 per cent in May, while the Nasdaq rallied 9.6 per cent on hopes final import levies will be far lower than the initial sky-high levels. Front-running the tariffs has already caused wild swings in the economy, with a contraction in the first quarter likely turning into a jump this quarter as imports fall back. The Atlanta Fed GDPNow estimate is running at an annualised 3.8 per cent, though analysts assume this will slow sharply in the second half of the year. Data this week on US manufacturing and jobs will offer a timely reading on the pulse of activity, with payrolls seen rising 130,000 in May while unemployment stays at 4.2 per cent. A rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next. A move in September is seen at around a 75 per cent chance, though Fed officials have stopped well short of endorsing such pricing. There are at least 11 Fed speakers on the diary for this week, led by Fed Chair Jerome Powell later on Monday. Fed Governor Christopher Waller said on Sunday that cuts remain possible later this year as he saw downside risks to economic activity and employment and upside risks to inflation from the tariffs. A softer jobs report would be a relief for the Treasury market, where 30-year yields continue to flirt with the five per cent barrier as investors demand a higher premium to offset the ever-expanding supply of debt. The Senate this week will start considering a tax-and-spending bill that will add an estimated $US3.8 trillion ($A5.9 trillion) to the federal government's $US36.2 trillion ($A56.3 trillion) in debt. Across the Atlantic, the European Central Bank is considered almost certain to cut its rates by a quarter point to 2.0 per cent on Thursday, while markets will be sensitive to guidance on the chance of another move as early as July. The Bank of Canada meets Wednesday and markets imply a 76 per cent chance it will hold rates at 2.75 per cent, while sounding dovish on the future given the tariff-fuelled risk of recession there. Widening rate spreads have so far offered only limited support to the US dollar. "The greenback remains near the lower end of its post-2022 range and considerably weaker than interest rate differentials would imply," noted Jonas Goltermann, deputy chief markets economist at Capital Economics. "Sentiment around the greenback remains negative and it continues to look vulnerable to further bad news on the fiscal and trade policy fronts." On Monday, the dollar had dipped 0.2 per cent on the yen to $143.79 , while the euro edged up a fraction to $1.1353 . The greenback also slipped 0.1 per cent on the Canadian dollar to $1.3727, getting no tailwind from Trump's threat of 50 per cent tariffs on Canadian steel exports. In commodity markets, gold edged up 0.6 per cent to $US3310 ($A5,147) an ounce , having lost 1.9 per cent last week. Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase. Brent rose $US1.07 ($A1.66) to $US63.85 ($A99.28) a barrel, while US crude gained $US1.18 ($A1.83) to $US61.95 ($A96.33) per barrel. Asian share markets have made a wary start to the week as investors navigate the shifting sands of White House tariff policy, while awaiting key US jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late on Friday to double tariffs on imported steel and aluminium to 50 per cent, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. White House officials continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners. "The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results," said Bruce Kasman, chief economist at JPMorgan. "There is a commitment to maintaining a minimum US tariff rate of at least 10 per cent and imposing further sector tariff increases," he added. "An increase in ASEAN to discourage transhipment looks likely, and the bias for higher tariffs on US-EU trade persists." Markets will be particularly interested to see if Trump goes ahead with the 50 per cent tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.1 per cent on Monday, while South Korean stocks dipped 0.1 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. The S&P climbed 6.2 per cent in May, while the Nasdaq rallied 9.6 per cent on hopes final import levies will be far lower than the initial sky-high levels. Front-running the tariffs has already caused wild swings in the economy, with a contraction in the first quarter likely turning into a jump this quarter as imports fall back. The Atlanta Fed GDPNow estimate is running at an annualised 3.8 per cent, though analysts assume this will slow sharply in the second half of the year. Data this week on US manufacturing and jobs will offer a timely reading on the pulse of activity, with payrolls seen rising 130,000 in May while unemployment stays at 4.2 per cent. A rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next. A move in September is seen at around a 75 per cent chance, though Fed officials have stopped well short of endorsing such pricing. There are at least 11 Fed speakers on the diary for this week, led by Fed Chair Jerome Powell later on Monday. Fed Governor Christopher Waller said on Sunday that cuts remain possible later this year as he saw downside risks to economic activity and employment and upside risks to inflation from the tariffs. A softer jobs report would be a relief for the Treasury market, where 30-year yields continue to flirt with the five per cent barrier as investors demand a higher premium to offset the ever-expanding supply of debt. The Senate this week will start considering a tax-and-spending bill that will add an estimated $US3.8 trillion ($A5.9 trillion) to the federal government's $US36.2 trillion ($A56.3 trillion) in debt. Across the Atlantic, the European Central Bank is considered almost certain to cut its rates by a quarter point to 2.0 per cent on Thursday, while markets will be sensitive to guidance on the chance of another move as early as July. The Bank of Canada meets Wednesday and markets imply a 76 per cent chance it will hold rates at 2.75 per cent, while sounding dovish on the future given the tariff-fuelled risk of recession there. Widening rate spreads have so far offered only limited support to the US dollar. "The greenback remains near the lower end of its post-2022 range and considerably weaker than interest rate differentials would imply," noted Jonas Goltermann, deputy chief markets economist at Capital Economics. "Sentiment around the greenback remains negative and it continues to look vulnerable to further bad news on the fiscal and trade policy fronts." On Monday, the dollar had dipped 0.2 per cent on the yen to $143.79 , while the euro edged up a fraction to $1.1353 . The greenback also slipped 0.1 per cent on the Canadian dollar to $1.3727, getting no tailwind from Trump's threat of 50 per cent tariffs on Canadian steel exports. In commodity markets, gold edged up 0.6 per cent to $US3310 ($A5,147) an ounce , having lost 1.9 per cent last week. Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase. Brent rose $US1.07 ($A1.66) to $US63.85 ($A99.28) a barrel, while US crude gained $US1.18 ($A1.83) to $US61.95 ($A96.33) per barrel. Asian share markets have made a wary start to the week as investors navigate the shifting sands of White House tariff policy, while awaiting key US jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late on Friday to double tariffs on imported steel and aluminium to 50 per cent, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. White House officials continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners. "The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results," said Bruce Kasman, chief economist at JPMorgan. "There is a commitment to maintaining a minimum US tariff rate of at least 10 per cent and imposing further sector tariff increases," he added. "An increase in ASEAN to discourage transhipment looks likely, and the bias for higher tariffs on US-EU trade persists." Markets will be particularly interested to see if Trump goes ahead with the 50 per cent tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.1 per cent on Monday, while South Korean stocks dipped 0.1 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. The S&P climbed 6.2 per cent in May, while the Nasdaq rallied 9.6 per cent on hopes final import levies will be far lower than the initial sky-high levels. Front-running the tariffs has already caused wild swings in the economy, with a contraction in the first quarter likely turning into a jump this quarter as imports fall back. The Atlanta Fed GDPNow estimate is running at an annualised 3.8 per cent, though analysts assume this will slow sharply in the second half of the year. Data this week on US manufacturing and jobs will offer a timely reading on the pulse of activity, with payrolls seen rising 130,000 in May while unemployment stays at 4.2 per cent. A rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next. A move in September is seen at around a 75 per cent chance, though Fed officials have stopped well short of endorsing such pricing. There are at least 11 Fed speakers on the diary for this week, led by Fed Chair Jerome Powell later on Monday. Fed Governor Christopher Waller said on Sunday that cuts remain possible later this year as he saw downside risks to economic activity and employment and upside risks to inflation from the tariffs. A softer jobs report would be a relief for the Treasury market, where 30-year yields continue to flirt with the five per cent barrier as investors demand a higher premium to offset the ever-expanding supply of debt. The Senate this week will start considering a tax-and-spending bill that will add an estimated $US3.8 trillion ($A5.9 trillion) to the federal government's $US36.2 trillion ($A56.3 trillion) in debt. Across the Atlantic, the European Central Bank is considered almost certain to cut its rates by a quarter point to 2.0 per cent on Thursday, while markets will be sensitive to guidance on the chance of another move as early as July. The Bank of Canada meets Wednesday and markets imply a 76 per cent chance it will hold rates at 2.75 per cent, while sounding dovish on the future given the tariff-fuelled risk of recession there. Widening rate spreads have so far offered only limited support to the US dollar. "The greenback remains near the lower end of its post-2022 range and considerably weaker than interest rate differentials would imply," noted Jonas Goltermann, deputy chief markets economist at Capital Economics. "Sentiment around the greenback remains negative and it continues to look vulnerable to further bad news on the fiscal and trade policy fronts." On Monday, the dollar had dipped 0.2 per cent on the yen to $143.79 , while the euro edged up a fraction to $1.1353 . The greenback also slipped 0.1 per cent on the Canadian dollar to $1.3727, getting no tailwind from Trump's threat of 50 per cent tariffs on Canadian steel exports. In commodity markets, gold edged up 0.6 per cent to $US3310 ($A5,147) an ounce , having lost 1.9 per cent last week. Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase. Brent rose $US1.07 ($A1.66) to $US63.85 ($A99.28) a barrel, while US crude gained $US1.18 ($A1.83) to $US61.95 ($A96.33) per barrel. Asian share markets have made a wary start to the week as investors navigate the shifting sands of White House tariff policy, while awaiting key US jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late on Friday to double tariffs on imported steel and aluminium to 50 per cent, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. White House officials continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners. "The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results," said Bruce Kasman, chief economist at JPMorgan. "There is a commitment to maintaining a minimum US tariff rate of at least 10 per cent and imposing further sector tariff increases," he added. "An increase in ASEAN to discourage transhipment looks likely, and the bias for higher tariffs on US-EU trade persists." Markets will be particularly interested to see if Trump goes ahead with the 50 per cent tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.1 per cent on Monday, while South Korean stocks dipped 0.1 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. The S&P climbed 6.2 per cent in May, while the Nasdaq rallied 9.6 per cent on hopes final import levies will be far lower than the initial sky-high levels. Front-running the tariffs has already caused wild swings in the economy, with a contraction in the first quarter likely turning into a jump this quarter as imports fall back. The Atlanta Fed GDPNow estimate is running at an annualised 3.8 per cent, though analysts assume this will slow sharply in the second half of the year. Data this week on US manufacturing and jobs will offer a timely reading on the pulse of activity, with payrolls seen rising 130,000 in May while unemployment stays at 4.2 per cent. A rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next. A move in September is seen at around a 75 per cent chance, though Fed officials have stopped well short of endorsing such pricing. There are at least 11 Fed speakers on the diary for this week, led by Fed Chair Jerome Powell later on Monday. Fed Governor Christopher Waller said on Sunday that cuts remain possible later this year as he saw downside risks to economic activity and employment and upside risks to inflation from the tariffs. A softer jobs report would be a relief for the Treasury market, where 30-year yields continue to flirt with the five per cent barrier as investors demand a higher premium to offset the ever-expanding supply of debt. The Senate this week will start considering a tax-and-spending bill that will add an estimated $US3.8 trillion ($A5.9 trillion) to the federal government's $US36.2 trillion ($A56.3 trillion) in debt. Across the Atlantic, the European Central Bank is considered almost certain to cut its rates by a quarter point to 2.0 per cent on Thursday, while markets will be sensitive to guidance on the chance of another move as early as July. The Bank of Canada meets Wednesday and markets imply a 76 per cent chance it will hold rates at 2.75 per cent, while sounding dovish on the future given the tariff-fuelled risk of recession there. Widening rate spreads have so far offered only limited support to the US dollar. "The greenback remains near the lower end of its post-2022 range and considerably weaker than interest rate differentials would imply," noted Jonas Goltermann, deputy chief markets economist at Capital Economics. "Sentiment around the greenback remains negative and it continues to look vulnerable to further bad news on the fiscal and trade policy fronts." On Monday, the dollar had dipped 0.2 per cent on the yen to $143.79 , while the euro edged up a fraction to $1.1353 . The greenback also slipped 0.1 per cent on the Canadian dollar to $1.3727, getting no tailwind from Trump's threat of 50 per cent tariffs on Canadian steel exports. In commodity markets, gold edged up 0.6 per cent to $US3310 ($A5,147) an ounce , having lost 1.9 per cent last week. Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase. Brent rose $US1.07 ($A1.66) to $US63.85 ($A99.28) a barrel, while US crude gained $US1.18 ($A1.83) to $US61.95 ($A96.33) per barrel.
Sydney Morning Herald
5 hours ago
- Sydney Morning Herald
Why did Trump double his steel tariffs? Because he could
Apart from trying to show that he still has some, albeit more limited, authority to act on tariffs, Trump's announcement, to a rally of US steelworks, had a secondary purpose. Loading During last year's election campaign, Trump was vehemently opposed to a proposed $US15 billion ($23.3 billion) acquisition of US Steel by Japan's Nippon Steel - as was Joe Biden, who blocked the deal only days before he left office. Both were chasing the votes of steelworkers and their powerful union in the critical swing state of Pennsylvania, where US Steel is headquartered and has its major plants. Having won the election, however, Trump has had a change of mind. While the US will impose some significant conditions on the deal -- including, perhaps, a 'golden share' that would give the government a veto over major decisions along with a commitment from Nippon Steel to appoint a US chief executive and a majority of Americans to the board – it now appears that he will approve the deal, even though he says he hasn't seen its final details. Nippon Steel, one of the world's most sophisticated steel producers, has promised to invest about $US14 billion in US Steel's operations, which have been struggling, shrinking and suffering from under-investment for decades. Trump's doubling of the tariff rate for steel and aluminium is a way of justifying the decision to approve the deal, as well as enhancing the economics of US Steel and other US steelmakers and helping to underwrite Nippon Steel's massive investments, most of which will occur over the next four years. Trump's original tariffs on steel and aluminium infuriated America's trade partners, including Australia, even though Australia's exports of those metals to the US are quite modest. Canada, whose steel exports represent about a quarter of US steel imports and half its aluminium imports, has far more at stake. Mexico, Brazil, South Korea, Vietnam, Japan and European nations will also be impacted, with Canada and the European Union already threatening retaliation, as they did in response to Trump's initial 25 per cent tariffs. Australia is still, probably fruitlessly, seeking an exemption. Loading The decision to allow the Nippon Streel deal to proceed, if that is the final outcome, is good policy. The US steel industry is small – about half the size it was half a century ago -- and has been shrinking. It has poor profitability and ageing technology. Nippon Steel's investment and its technologies can arrest that decline. The decision to double the tariffs on steel – indeed the original decision to impose the 25 per cent tariff – is, however, poor policy. It will increase investment in the sector, and will probably improve its profitability, plant utilisation rates and employment numbers. But that will come at a significant cost. In 2018, when Trump first imposed tariffs on imported steel, steel prices rose almost 10 per cent, the sector's profits rose by about $US2.5 billion, capacity utilisation jumped from 74 per cent to about 80 per cent and nearly 10,000 jobs were added within the sector. The impact was quite short-lived, with those numbers subsequently reversing as the industry resumed its long-term decline. The initial impact was predictable. Tariffs are protectionist. They protect domestic industries and companies from more efficient producers elsewhere by boosting their sales, margins and profits. That's what happened after the 2018 tariffs. Loading They come, however, at a cost to the customers of the protected industries, which is also what happened after Trump's 2018 tariffs were imposed. A Peterson Institute for International Economics study concluded that the 2018 tariffs cost US downstream steel-using industries about $US5.6 billion, or about $US650,000 for each new job they added in the steel sector. The US Federal Reserve Board concluded that they cost about 75,000 jobs in those downstream industries, or more than eight times the number of jobs added by the steelmakers. Steel is a key input to the manufacturing industries, whose protection Trump has trumpeted as the rationale for his trade wars. It's also extensively used in the construction sector. With the 25 per cent version of the tariffs on steel and aluminium not only set at twice the 2018 rate, but also applying more broadly – they now also extend to downstream products containing the metals – their impact on steel and aluminium users and US companies and consumers will be far more significant and damaging. Trump might regain a little of the authority and ego he lost when the court knocked out, perhaps temporarily, his broader weaponisation of tariffs against the rest of the world. He might also have ingratiated himself with the steelworkers whose jobs he will protect, but the economic benefits of his metals tariffs will be far outweighed by their costs to the rest of the US economy. The probable impact on the steel and aluminium industries and their customers provide, in fact, a glimpse of the broader damage that Trump's trade wars on everyone – if the courts allow him to continue them, or he can find other means to implement them – will inflict on the world's largest economy.
