Stock shock, tariff math and Friday night firings
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Today, the world reels from Trump's once-in-a-century tariff shock. The conversations inside the White House as the economic impact becomes more clear. Plus, federal workers fear what the end of the week can bring. ♪

It's Friday, April 4th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes, every weekday. I'm Christopher Waljasper in Chicago. And I'm Carmel Crimmins in Dublin. U.S. President Donald Trump's sweeping tariffs have ignited a firestorm on global markets.

wiping $2.4 trillion off U.S. stocks overnight, their biggest one-day loss since the depths of the COVID pandemic in 2020.

Asked about the market turmoil as he left the White House for a trip to a golf event in Miami, Trump had this to say. I think it's going very well. It was an operation like when a patient gets operated on and it's a big thing. I said this would exactly be the way it is. The market's selloff is spiraling into a second day, with the dollar and the price of oil both sinking and bank stocks cratering as investors fret about the risk of recession.

In Japan, the US's biggest foreign investor, Prime Minister Shigeru Ishiba warned Parliament

that Japan was facing a national crisis. Now, Trump's levies amount to the highest trade barriers in more than a century and could increase prices for U.S. shoppers on almost everything, from running shoes to food, cars, and even smartphones. Businesses are racing to adjust, looking at where they can shift production to ease tariff pressure. The president's actions will reverberate here in Canada forever.

and across the world. Canadian Prime Minister Mark Carney says the U.S. has abandoned its role as champion of global economic cooperation. It's already resulted in layoffs for Canadian auto workers. Workers who now worry how they're going to put food on the table and pay their bills. Carney says Canada is placing a 25% tariff on all vehicles imported from the U.S.,

China and the EU both vowed to retaliate. China's been hit with a 54% tariff on imports, while the EU faces a 20% duty. French President Emmanuel Macron is pushing for European nations to suspend investment in the United States. South Korea, Mexico and India say they're holding off on retaliatory measures, hoping to seek concessions.

Our European economics editor, Mark John, is looking into just how these tariffs were determined and how they'll be felt around the globe. So the White House gave a quite complex algebraic formula. All of the economists that we've spoken to say that that simply reduces to a much simpler quotient.

You take the US goods trade deficit of a certain country, you divide it by that country's goods exports to the US, and you cut that figure in half to produce what becomes the US reciprocal tariff. If it's less than 10%, it becomes 10% because the floor imposed is 10%. What are the issues with applying this formula across the board like this? Well, one, it doesn't actually correspond

to the actual tariffs in place. So for example, the WTO says that the average tariffs applied by the EU are only 5%. So that doesn't correspond to the 20%. It doesn't include tariffs on services. This is all about goods trade. And then you get these somewhat strange outcomes, such as how

The volcanic Australian territory of Heard Island and McDonald Islands in the Antarctic, which is largely inhabited by penguins, ends up with a tariff of 10%. I think the more serious implication, though, is that poorer countries, which will never really be in a position to buy expensive US imports, almost inevitably are going to end up with higher tariffs.

And that is the case, for example, with Madagascar, which has ended up with a 47% tariff. It's the same for Lesotho, 50%, 49% for Cambodia. So there is a real sense here that some of the poorest countries in the world have been worst hit for this. So how do countries try and negotiate lower tariffs? The problem is...

Because it doesn't necessarily correspond to anything they recognise as the reality of their trade barriers, the question then is, where do they actually start? And I think the other point simply is that Trump didn't identify any specific measures that countries might actually start changing in order to persuade him to change his mind. As you heard earlier in the show, President Trump is confident despite the market panic.

But is that sense of calm shared by everyone in D.C.? We caught up with White House reporter Trevor Honeycutt to find out and spoke to him from Andrews Air Force Base, where Trump was leaving for that golf tournament in Florida.

There are some senior Republicans and Trump advisors who do have concerns with how the markets are responding to these tariff announcements. They are not the majority voice, though, at this point. Most of President's aides are pushing fully behind getting this policy enacted. And their focus is much more on the legislation

long-term political and economic gains that they see from these policies. Right. Trump has said tariffs are a great negotiating tool. In fact, he said China could get tariff relief if it approves the sale of TikTok. So what are the conversations at the White House?

A lot of the discussion right now is about whether we're closer to the end or the beginning of this trade war. How much retaliation there's going to be from other countries. Should we expect more in terms of tariffs on chips and on pharmaceuticals? How much negotiation there's going to be to bring these tariffs down? And kind of how close they are to having done enough to say they could reach the president's goals.

Iowa Republican Senator Chuck Grassley has introduced a bill that would require congressional approval for new tariffs. Grassley teamed up with Washington state Democratic Senator Maria Cantwell on the bill, which would give Congress 60 days to sign off on any new tariffs or automatically block them. "Prompt's made clear.

He supports NATO. We're going to remain in NATO. U.S. Secretary of State Marco Rubio in Brussels telling NATO allies that Washington is committed to the alliance. Rubio says that the U.S. expects them to fork out far more on defense and will give countries time to step up their spending. And elation on the streets of Seoul as the president is ousted by the Constitutional Court.

The ruling upholds Parliament's impeachment of Yoon Suk-yool over his decision to impose martial law. An election in South Korea is now on the cards within the next two months. The head of the National Security Agency and US Cyber Command was fired on Thursday. That's according to The Washington Post. We don't know the reason for Timothy Hawke's dismissal, but the day of the week is unusual.

Because since the Trump administration took office, Fridays seem to be the day of choice for dismissing federal workers. A ping on the phone, an email notification telling them that they've been fired. Mass firings by President Trump and Elon Musk's Department of Government Efficiency have occurred on seven out of the ten Fridays that President Trump's been in office. That's according to a Reuters analysis.

Our reporter Tim Reed has been digging into what's behind the pattern. This is unprecedented. The White House says the reasons for the Friday night firings is logistical and for security reasons. But we spoke to some legal and government experts who speculated that firing people on a Friday night, first of all, makes it much more difficult for them to get quick legal help.

or an emergency hearing in the courts because you know, law offices are shut and the courts are shut.

It also gives the IT people in these government agencies time over the weekend to shut those people out of the computer systems and to switch their access badges off. So even if they turned up to the office on Monday morning, one, they can't get into the office, and two, they can't even get into their emails or get into any computer systems. So who are these employees? Is there a pattern here? A lot of the people who've been fired late on the Friday nights are quite senior. Prosecutors that were involved in prosecuting

The people who rioted on January 6th, 2021 at the US Capitol, Trump supporters, FBI agents involved in those prosecutions, top brass at the Pentagon, including the most senior military official in the US. So again, the feeling is that if you're firing people who are really quite senior and well-connected, cutting them off from any sort of immediate legal help on a Friday night is probably one of the reasons they're doing this.

The Department of Government Efficiency did not respond to Reuters' requests for comment. And for today's recommended read, a weekend listen. Tune in tomorrow as our healthcare editors join us to explore how cuts to federal healthcare agencies might impact the U.S.'s ability to address national health crises, as well as impacts to the pharmaceutical industry and the federal government's ability to keep Americans healthy.

It'll be in this feed on Saturday. And before we let you go for your weekend, a little favor from me. My podcast, Reuters Econ World, has been nominated in two categories for a Webby Award. It's for our show on Swiftonomics. I'm looking for your votes to win the prize. We'll put the voting links in the description of today's pod. And of course, a link to the Swiftonomics show, although I'm sure you've already heard it. For more on any of the stories from today, check out reuters.com or the Reuters app.

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