Flagship

Trump grants Canada, Mexico tariff reprieve

US President Donald Trump paused tariffs on a wide range of Mexican and Canadian imports, offering a major reprieve to two top trading partners. Trump said Thursday that goods covered by an existing three-way trade deal negotiated during his first term won’t face a 25% tariff until April 2 — that covers roughly 50% of imports from Mexico and some 36% of imports from Canada, according to the White House. The move reflected the president’s “will he, won’t he” approach to tariffs that has unnerved markets in recent weeks. Trump, who had already granted a reprieve to auto imports, downplayed on Thursday the reaction from both investors and some Republican lawmakers who are anxious over the duties: “I’m not even looking at the market.”

Bessent defends Trump’s approach

US Treasury Secretary Scott Bessent sought to persuade nervous investors that President Donald Trump’s economic policies are part of a larger, coherent vision. “Access to cheap goods is not the essence of the American dream,” Bessent said during a speech to the Economic Club of New York, arguing that everything from tariffs to laying off government workers to German defense spending is part of a coherent program to re-order the global economy in America’s favor. “International economic relations that do not work for the American people must be reexamined,” he said. The S&P 500, already 1% down on the day when Bessent started speaking, fell further by day’s end, even after Trump suspended tariffs on Canadian and Mexican imports.

US trade deficit reaches record high

The US trade deficit reached a record high in January, a sign businesses were scrambling to secure goods from overseas before President Donald Trump’s threatened tariffs went into effect. The total value of imports to the US increased 10%, while exports only rose 1.2%, leaving a $131 billion trade gap. Trump has criticized Washington’s trade deficit as inherently unfair, arguing that hiking import duties will push Americans to buy domestically and spur productivity. But markets are increasingly wary about that strategy’s impact, with stock indexes down this week. Analysts are already concerned about slowing growth, with some worried that the US could face a recession: “One thing is essential for an economy and that’s confidence, which has taken a hit,” one investor said.

EU summit on Ukraine exposes divides

European Union leaders agreed to boost defense spending at an emergency summit Thursday that, despite the accord, exposed sharp divisions within the bloc. All 27 member nations endorsed strengthening the continent’s security measures, but Hungary’s Prime Minister Viktor Orbán refused to back a statement promising “enduring” support for Kyiv. “It doesn’t matter in what form we state our support for Ukraine, just that we do,” one diplomat told the Financial Times. “At this particular juncture, it would be disastrous not to.” The ideological splits “are asking existential questions of the bloc’s unity” in the face of US President Donald Trump’s effort to sideline and fracture the continent, Politico wrote, even as leaders like France’s President Emmanuel Macron try to bolster Europe’s relevance.

China looks to avert isolation

Beijing is increasingly worried about becoming isolated on the world stage as US President Donald Trump upends global trade and geopolitics, The Wall Street Journal reported. Chinese leader Xi Jinping has asked aides to analyze the Cold War rivalry between the US and Soviet Union in a bid to ensure Beijing isn’t left out in the cold, as Moscow was then. “Xi is playing defense” given domestic economic challenges, the Journal wrote, noting that many of Trump’s early actions have been aimed at strengthening his hand over Beijing. China, in response, is shifting its strategy to push its population to spend more: In a speech to parliament this week, Premier Li Qiang mentioned consumption a record 32 times, The Economist noted.

Bangladesh turns to China

Bangladesh’s strained relationship with India has created a diplomatic opening for China, analysts said. India has been Bangladesh’s most important ally since the latter gained independence from Pakistan, with Indian military support, in 1971. But New Delhi has given shelter to ousted former Bangladeshi leader Sheikh Hasina, raising tensions with the interim Dhaka government: It wants her returned to face charges, including crimes against humanity. Meanwhile, a Bangladeshi delegation just ended a trip to China that one member of Bangladesh’s ruling party described as “basically a goodwill visit, initiated by Beijing.” China is already Dhaka’s biggest trading partner and military supplier, and Beijing is increasingly targeting South Asian nations as it jostles with New Delhi for regional influence.

Kumbh Mela drives economic growth

Religious piety is driving economic growth in India. This year’s six-week Maha Kumbh Mela festival, which saw hundreds of millions of Hindus make a pilgrimage to dip in holy waters, contributed to a surge in economic activity that could prove critical to India meeting its 2025 growth targets, Bloomberg wrote. India’s growth has slowed in recent quarters, and US President Donald Trump’s threat of reciprocal tariffs have added to the uncertainty. New Delhi is hoping to strike a trade deal with Washington to avoid any duty hikes before Trump’s April 2 deadline, while Prime Minister Narendra Modi looks to further bolster the economy through middle-class tax breaks.

Convening over three days in Washington, DC, the World Economy Summit 2025 is dedicated to advancing dialogues that catalyze global growth and fortify resilience in an uncertain, shifting global economy. This week, we’re announcing our world-class program and the opening of delegate registration. Twelve sessions over three days will focus on the dynamic forces shaping the global economic and geopolitical system, each session is designed to inspire transformative, news-making dialogue to shape a more prosperous economy. Apply to be an in-person delegate or sign up for a virtual pass to watch every session live.

April 23-25 | Washington, DC | Learn More

SpaceX eyes next test for Starship

SpaceX is gearing up for the eighth test flight of its Starship megarocket amid heightened scrutiny over the Elon Musk-led company’s growing role in the US government. The launch comes just weeks after the last test flight involved an explosion that saw rocket parts rain down over the Atlantic Ocean, escalating tensions between the airline industry, Federal Aviation Administration regulators, and Musk, The Wall Street Journal reported. Since then, SpaceX employees have been enlisted into the FAA as part of Musk’s push to overhaul the government and increase efficiency. The tech billionaire has long touted Starship as vital to get humans to Mars, and has pushed to increase launch frequency, even as falling space debris poses a growing risk to commercial planes.

Danish postal service shutters

Denmark’s postal service will shutter after 400 years of service, the result of a precipitous decline in the volume of mail. The number of posted letters fell from 1.4 billion in 2000 to 110 million last year. Denmark is one of the world’s most digitized countries: Few people use cash, drivers’ licenses and health cards are on smartphones, and bank statements, bills, and local authority communications are electronic. But the postal decline is Europe-wide: Germany’s mail service recently announced it would axe 8,000 jobs, about 4% of its workforce, while Britain’s Royal Mail posted 6.7 billion letters last year, down from 20 billion in 2005. Danes who prefer paper and pen will still be able to send letters using private companies.

All-AI art auction exceeds estimates

Christie’s first auction consisting solely of art augmented by artificial intelligence netted far more cash than experts had anticipated. The works on sale included a painting that reimagined data from the International Space Station and satellites. It fetched $277,200, exceeding its top estimate of $200,000. Another artwork was created by a robot during the auction itself — every new bid triggered the bot to paint more, eventually producing a piece worth $8,190. The auction, in which 37% of bidders were first-timers, had sparked controversy: Critics argued that the art relied on AI models trained on copyrighted material, Artnet reported. But Christie’s said AI only “enhanced” the artists’ work, showing technology is “not a substitute for human agency.”

March 7:

• The US Labor Department releases non-farm payroll numbers for February.
• Christine Lagarde delivers an address at the European Central Bank’s International Women’s Day 2025 conference.
• South Korean director Bong Joon-ho’s latest film, Mickey 17, opens in US theaters.

A new museum show in Palm Springs shines a light on a Nicaraguan artisan who helped bring Frank Lloyd Wright’s 20th-century modernist designs to life. Manuel Sandoval was part of the founding class of a fellowship Wright ran in Wisconsin in 1932, becoming an apprentice. Yet Sandoval “had been largely lost to history, but [his] work nonetheless quietly materializes in architectural monographs and museum collections,” Hyperallergic wrote. Artist and carpenter Ryan Preciado studied Sandoval’s contributions and crafted the show around pieces both connected to and inspired by Sandoval. “It’s about shining a light on lost labor,” Preciado said.

Some Flagship readers (including our editor-in-chief, regrettably) disagreed with the BBC’s interpretation of Giuseppe Tomasi di Lampedusa’s The Leopard, cited in yesterday’s Curio. Rather than “skewering the ultra-rich,” as we wrote, Ben Smith’s favorite novel might better be described as: “A tale of disenchantment and fear of obsolescence amid a crumbling dynasty” that “skewers the flaws and hypocrisies present throughout all Italian society.”

Even cryptocurrency backers haven’t fully bought into US President Donald Trump’s “strategic reserve” plan, Semafor’s Eleanor Mueller reported.

“I don’t mind the concept. I just don’t know what utility it serves,” Sen. Thom Tillis, R-N.C., told Semafor. Though Trump’s announcement exposes it to criticism, the crypto industry maintains strong bipartisan backing in congress, and is well within reach of fulfilling its legislative wishlist.