Economy

Medicines and chemicals are huge exports for European Union countries. That makes the sector a weak spot as trade tensions drag on.Insulin, heart treatments and antibiotics have flowed freely across many borders for decades, exempt from tariffs in a bid to make medicine affordable. But that could soon change.For months, President Trump has been promising to impose higher tariffs on pharmaceuticals as part of his plan to reorder the global trading system and bring key manufacturing industries back to the United States. This month, he said pharmaceutical tariffs could come in the “not too distant future.”If they do, the move would have serious — and wildly uncertain — consequences for drugs made in the European Union.Pharmaceutical products and chemicals are the bloc’s No. 1 export to America. Among them are the weight-loss blockbuster Ozempic, cancer treatments, cardiovascular drugs and flu vaccines. Most are name-brand drugs that yield a large profit in the American market, with its high prices and vast numbers of consumers.“These are critical things that keep people alive,” said Léa Auffret, who heads international affairs for BEUC, the European Consumer Organization. “Putting them in the middle of a trade war is highly concerning.”European companies could react to Mr. Trump’s tariffs in a range of ways. Some pharmaceutical companies trying to dodge the tariffs have already announced plans to increase production in the United States, which Mr. Trump wants. Others could decide to move production there later.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

The havoc unleashed by Donald Trump’s trade war has divided Europe’s far-right parties that have courted his Maga movement.Alice Weidel, one of the leaders of Alternative for Germany (AfD), described the US president’s moves as “far too aggressive and self-defeating”. The former Goldman Sachs analyst said that the so-called reciprocal tariffs — which Trump put on pause for 90 days after a stock market crash and fears of a global recession — were “fundamentally bad for free trade”.But Weidel’s co-chair Tino Chrupalla, a former painter and decorator from the east German state of Saxony, described Trump’s approach as “understandable”. “Sometimes you have to restrict free trade to protect your economy,” Chrupalla said. “President Trump wants to force other countries to negotiate. He wants to improve the US trade balance and stimulate industry.”Analysts said that the divergence spoke to a fundamental tension at the heart of the AfD that could also be observed in Europe’s other populist movements: how to explain to their voters a protectionist US policy that would hurt their country. Giorgia Meloni is one of the few European leaders in Donald Trump’s good books More

More than half a century after the summer of 1973 when he bought his first British retro sports car at the age of 20, Michael Hattem had been ready to buy a new model of the Morgan Plus Four.However the 73-year-old classic car enthusiast in Los Angeles is now facing a dilemma. The hand-built wood-framed luxury car, which has a price tag of $85,000, may soon become 10 per cent more costly if US President Donald Trump keeps his tariffs on imports of all foreign-made vehicles and automotive parts.“I just have to save a few pennies more,” Hattem, the president of the Morgan Plus Four Club in Southern California, said jokingly, but added that he was also afraid of buying now in case Trump changed his mind and removed the levies. “Let’s give it another 30 days. We will see what happens with the tariffs.”Morgan Motor Company, the 116-year-old British specialist carmaker, has unexpectedly been caught in Trump’s tariff crosshairs just as the key model in the marque’s offering returned to the US market for the first time in two decades. Long before the trade war started, the company’s engineers had been working for years to clear US regulatory hurdles to bring a four-wheeled Morgan to American fans following changes in a local rule that allows companies to replicate models that are more than 25-years-old.Large parts of the Plus Four cars are still wooden, including the frames that are made with ash timber carved by carpenters More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Foreign manufacturers in China are paying duties of 125 per cent to import components and then 145 per cent to export to the US as Donald Trump’s trade war hammers their operations.International companies and joint ventures account for nearly one-third of China’s total trade, according to official data that makes clear the extent of their exposure to tariffs.Large US companies such as Apple and Tesla and many smaller producers rely on China as a manufacturing base. These companies often import raw materials or components from the US for assembly into products that are then exported.This leaves them exposed to the possibility of paying both US and Chinese tariffs on the same goods, economists said, after Trump sharply escalated levies on all Chinese exports to 145 per cent, leading Beijing to retaliate.“Foreign firms are really being squeezed in the Chinese market,” said Heiwai Tang, director of the Asia Global Institute at the University of Hong Kong. “If they import, they pay the Chinese tariffs. When they export back to the US, they pay the US tariffs.”“They are hit twice.”Some content could not load. Check your internet connection or browser settings.Wholly or partly foreign-owned companies in the country accounted for $980bn of China’s exports last year, or more than one-quarter, and $820bn of imports, or more than a third, data from China’s General Administration of Customs and calculations by the Financial Times showed. China registered a record trade surplus of nearly $1tn last year.China’s export machine was built on the back of wholly and partly foreign-owned companies, including those from Hong Kong and Macau, which sought to take advantage of the country’s huge and low-cost labour market to manufacture goods. Foreign-invested companies, as they are called in China, accounted for 55 per cent of the country’s total trade in 2008.This share has fallen over the years as China has developed a more aggressive policy of industrial self-reliance. But foreign-invested enterprises still represented 29.6 per cent of trade by dollar value last year, according to the government figures.They accounted for just 16 per cent of China’s trade surplus last year, however, as foreign companies’ quantity of exports was offset by their larger share of total imports. “There’s a number of foreign companies operating in China who are not American but who rely on American inputs and so they are also being affected,” said American Chamber of Commerce president Michael Hart. China’s ministry of commerce is considering exemptions on tariffs for some sectors, Hart said. China does grant some exemptions from its customs duties for companies importing components and raw materials for goods that will be re-exported, which is known as the “processing trade”.Some larger US manufacturers, including smartphone makers and some electronics producers, have also won temporary exemptions from Trump.Some content could not load. Check your internet connection or browser settings.But with the trade war, many foreign companies may still find it prohibitive to export from China, particularly smaller producers. Jacob Rothman, chief executive of China-based Velong Enterprises, which makes kitchenware and home products in China sold by US retailers including Walmart, said it imports Tritan, a form of plastic, from US-based company Eastman.“We get hit with double tariffs on products with this material,” said Rothman. “Once when importing the material, and again when exporting the finished goods.”He said China had granted a tariff exemption if the final product was exported back to the US within a certain time period. But China did not grant the exemption if the product was exported to countries other than the US. Economists warned the trade war could cause further declines in China’s foreign direct investment inflows, which dropped 27.1 per cent in 2024 on a year earlier in renminbi terms, according to commerce ministry figures. “For those entering China to serve the Chinese market, they may still come. But if your aim is to serve other markets, especially the US, you will be hurt a lot,” said Qiu Dongxiao, economics department head at Lingnan University in Hong Kong “So you need to reconsider your global strategy.” More

The Swiss franc has soared to a decade high against the dollar as investors rush for shelter from the global trade turmoil, sparking bets that the country’s central bank will have to lower interest rates to zero or below to curb the currency’s rise.The currency, historically a financial market haven because of the Alpine country’s political and economic stability, reached near-record strength against the dollar this week, with the greenback sinking close to SFr0.80 for the first time since the franc’s shock appreciation in 2015. That has put policymakers in a bind, as they seek to restrain the currency to support the export-heavy economy without provoking a backlash from the US, which has already threatened Switzerland with high tariffs.Those “cross-currents” put the central bank in a “staggeringly difficult” position, said Kit Juckes, chief FX strategist at Société Générale. “The Swiss government doesn’t want major disinflationary pressures coming at it again, and so they’re frustrated,” he added. Yields on short-term government debt have dipped into negative territory in recent days as traders bet that the Swiss National Bank will respond with interest rate cuts. Two-year Swiss yields, which reflect expectations for interest rates, traded marginally below zero on Friday.The rapid appreciation in the franc risks a deflationary shock for Switzerland, say analysts, exacerbated by the growth impact of US President Donald Trump’s trade war. At 31 per cent, the “reciprocal” tariffs placed on Swiss goods earlier this month — before being suspended for 90 days — exceed the levies on the EU. Switzerland relies on US consumers for more than 10 per cent of exports. The situation has propelled the government into a diplomatic offensive. Swiss President Karin Keller-Sutter, who is also the finance minister, held a phone call with Trump hours before he announced the tariff pause. This week she travelled to Washington with the economy minister for a meeting with US Treasury Secretary Scott Bessent, at which she said they discussed “opportunities for enhanced collaboration between our two countries”. Switzerland, which has historically sought to restrain the strength of its currency, is no stranger to sharp moves. In January 2015, the SNB suddenly scrapped its policy of capping the franc’s value against the euro, sending the currency soaring.Analysts say Bern fears being branded a currency manipulator by the US again if it were to intervene heavily in markets to rein in the franc. Switzerland was added to a US list of “currency manipulators” in the final weeks of the first Trump presidency, in part due to its intervention to cushion the financial turmoil from the coronavirus pandemic. It was removed from the list under the Biden administration.The franc has also risen against the euro, leaving the export-reliant country in a difficult position with its biggest trading partner. The SNB has already moved faster than its peers in cutting its key interest rate to 0.25 per cent, and further cuts are viewed as a diplomatically safer option to arrest the franc’s rise. The SNB held rates well below zero for eight years — in part to stop the franc rising too far — before raising them into positive territory in 2022 to combat the burst in inflation that followed the pandemic.“If the SNB is unhappy with the strong franc and constrained on FX interventions, lower rates are the only option,” said Francesco Pesole, FX strategist at ING. Stefan Gerlach, chief economist at EFG Bank said negative interest rates “may well happen”, adding that currency intervention could also be necessary.Gerlach played down the chances of Switzerland being labelled a currency manipulator again. There is a sense among “adults in the room” at the US Treasury department that this is not a problem, he said.“It may be an issue if you push down the exchange rate to gain competitive advantage. But it is not an issue if your currency surges and you try to moderate its rise.” Markets are pricing in an around 80 per cent chance of the rate falling to zero at the next meeting in June, with a small chance it could move into negative territory later in the year, according to levels implied by swaps markets.Annual inflation is sitting at around 0.3 per cent, already at the low end of the central bank’s target range of zero to 2 per cent. The Swiss central bank is “definitely worried,” said Gregor Kapferer, head of Swiss bonds at Vontobel, arguing greater intervention would be a “last resort”. “During the last Trump administration they were called a currency manipulator but there were not really any consequences. Now Trump is following through so I think SNB will be a lot more cautious here.”But Athanasios Vamvakidis, Bank of America’s global head of G10 FX strategy, suggested that the SNB “lean against the wind” with some interventions. “It’s hard to imagine that the US administration will be complaining about some intervention” given the rapid appreciation in the currency, he said, adding that this approach seemed more likely than negative interest rates.Leaving aside the 2015 shock, the dollar is closing on its 2011 all-time low against the franc.“Maybe [the franc] just needs a calmer world than this,” said Société Générale’s Juckes. “The danger is, history says, over time, it gets stronger.” More

Homemade barbecue pork chops. Katy Perry performs onstage during the Katy Perry The Lifetimes Tour 2025. A woman checks her receipt while exiting a store.
iStock| Theo Wargo | Hispanolistic | Getty Images

A few weeks ago, as Kiki Rough felt increasingly concerned about the state of the economy, she began thinking about previous periods of financial hardship.
Rough thought about the skills she learned about making groceries stretch during the tough times that accompanied past economic downturns. Facing similar feelings of uncertainty about the country’s financial future, she began making video guides to recipes from cookbooks published during previous recessions, depressions and wartimes.

The 28-year-old told followers that she is not a professional chef, but instead earned her stripes by learning to cook while on food stamps. From Rough’s yellow-and-black kitchen in the Chicago suburbs, she teaches viewers how to make cheap meals and at-home replacements for items like breakfast strudel or donuts. She often reminds people to replace ingredients with alternatives they already have in the pantry.
“I keep seeing this joke over and over in the comments: The old poors teaching the new poors,” Rough told CNBC. “We just need to share knowledge right now because everyone is scared, and learning is going to give people the security to navigate these situations.”
The self-employed consultant’s videos quickly found an audience on TikTok and Instagram. Between both platforms, she’s gained 350,000 followers and garnered about 21 million views on videos over the last month, by her count.
President Donald Trump’s announcement of broad and steep tariffs earlier in April has ratcheted up fears of the U.S. economy tipping into a recession in recent weeks. As Americans like Rough grow increasingly worried about the road ahead, they are harking back to the tips and tricks they employed to scrape by during dark financial chapters like the global financial crisis that exploded in 2008.
Google is predicting a spike in search volumes this month for terms related to the recession that came to define the late 2000s. Searches for the “Global Financial Crisis” are expected to hit levels not seen since 2010, while inquiries for the “Great Recession” are slated to be at their highest rate since the onset of the Covid pandemic.

Porkchops, house parties and jungle juice

On TikTok, a gaggle of Millennials and Gen Xers has stepped into the roles of older siblings, offering flashbacks and advice to younger people on how to pinch pennies. Some Gen Zers have put out calls to elders for insights on what a recession may feel like at this stage of life, having been too young to feel the full effects of the financial crisis.
“This is, potentially, at least on a large scale, the first time that millennials have been able to be the ‘experts’ on something,” said Scott Sills, a 33-year-old marketer in Louisiana. “We’re the experts on getting the rug pulled out from under us.”
Those doling out the advice are taking a trip down memory lane the to tail-end of the aughts. Cheap getaways to Florida were the norm instead of lush trips abroad. They had folders for receipts in case big-ticket purchases went on sale later. Business casual outfits were commonplace at social events because they couldn’t afford multiple styles of clothing.
Porkchops were a staple dinner given their relative affordability, leading one creator to declare that they “taste like” the Great Recession. They drank “jungle juice” at house parties, a concoction of various cheap liquors and mixers, instead of cocktails at bars.
“There’s things that I didn’t realize were ‘recession indicators’ the first time around that I thought were just the trends,” said M.A. Lakewood, a writer and professional fundraiser in upstate New York. “Now, you can see it coming from 10 miles away.”

 Customers shop for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas.
Brandon Bell | Getty Images

To be sure, some of the discourse has centered around how inflationary pressures have made a handful of these hacks defunct. Some content creators pointed out that the federal minimum wage has sat at $7.25 per hour since 2009 despite the cost of living skyrocketing.
Kimberly Casamento recently began a TikTok series walking viewers through recipes from a cookbook that was focused on affordable meals published in 2009. The New Jersey-based digital media manager said she’s found costs for what were then considered low-budget meals ballooning between about 100% and 150%. In addition to sharing the price changes, the 33-year-old gives viewers some tips on how to keep costs down.
“Every aspect of life is so expensive that it’s hard for anybody to survive,” Casamento said. “If you can cut the cost of your meal by $5, then that’s a win.”

‘A very human thing’

This type of communal knowledge-sharing is common during times of economic belt tightening, according to Megan Way, an associate professor at Babson College who studies family and intergenerational economics. While conversations about how to slash costs or to make meals stretch typically took place among neighbors in the late 2000s, Way said it makes sense that they would now play out in the digital square with the rise of social media.
“It’s a very human thing to reach out to others when things are feeling uncertain and try to gain on their experience,” Way said. “It can really make a difference for feeling like you’re moving forward a little prepared. One of the worst things for an economy is absolute fear.”

Read more CNBC analysis on culture and the economy

Way said that Americans are quick to look back to the Great Recession for a guide because that downturn was so shocking and widely felt. However, she said there’s key differences between that economic situation and what the U.S. is facing today, such as the absence of bad debt that sparked the housing market’s crash.
Still, she said there’s broad uncertainty felt today on several fronts — be it tied to the economy, geopolitics or domestic policy priorities like slashing the federal workforce or limiting immigration. That can reignite the feeling of unpredictability about what the future will bring that was paramount during the Great Recession, Way said.
In 2025, it’s clear that economic confidence among the average American is rapidly souring. The University of Michigan’s index of consumer sentiment recorded one of its worst readings in more than seven decades this month.

With that negative economic outlook comes rising stress. When Lukas Battle made a satirical TikTok about feeling like divorces were increasingly common around the time of the Great Recession, the 27-year-old’s comments were abuzz with people talking about their parents splitting recently. (Though divorce has been seen as a cultural hallmark of the financial crisis, data shows the rate actually declined during this period.)
“There’s a second round of divorces happening as we speak,” Battle said.

Cultural parallels

That’s one of several parallels social media users have drawn between the late aughts and today. When videos surfaced of a group dancing to Doechii’s hit song “Anxiety,” several commenters on X reported feeling déjà vu to when flashmob performances were common.
Disney’s reboot of the animated show “Phineas and Ferb,” which originally premiered in the late 2000s, similarly put the era top of mind.

Lady Gaga performing at Coachella 2017
Getty Images | Christopher Polk

“Recession pop,” a phrase mainly referring to the subgenre of trendy music that dropped during the Global Financial Crisis, has caught a second wave over the past year as Americans contended with inflation and high interest rates.
Now, in 2025, as the chorus of voices projecting a recession ahead grows, pop music has some familiar sounds.
In 2008, artists such as Miley Cyrus, Lady Gaga and Katy Perry regularly appeared on the music charts. Both Cyrus and Gaga have released new songs this year. Perry kicked off a world tour this week.
“It’s almost a permission to feel good, whether that’s through song or something,” said Sills, the marketer in Louisiana. “It’s not necessarily ignoring the problems that are here, but just maybe finding some sort of joy or fun in the midst of all of it.” More

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The return of Donald Trump to the White House has brought with it market chaos, trade wars and economic anxiety. International diplomacy has been turned upside down as the US rethinks decades of alliances, while the global trading system has been jolted by unprecedented tariffs. To mark the first 100 days of Trump’s second term on Wednesday we asked readers to share their questions, to be answered by our experts. The questions below may have been lightly edited for sense and some of the names withheld at the request of the correspondent. We start with three trade questions.Tariffs on US imports are ten times what they were last year, according to rating agency Fitch More