United States:
How Trump’s tariffs ripped up the global trade order:1
America’s president says the US could take Iran’s oil. We’ll tell you how all the uncertainty about what happens next in the war is weighing on global markets. Plus, it’s been a year since America’s so-called liberation day. In a special series this week, we’re asking: has US President Donald Trump actually reshaped global trade?
The FT believes he has tried to remake the world trading system with them. He has failed.
President Trump spoke to the FT late Sunday (March 29, 2026) about the war in Iran. When asked about his objectives, he said his “preference would be to take the oil”. Though he acknowledged he faces resistance at home, he compared the possible move to Venezuela, where the US plans to control the oil industry indefinitely.
A decision like that in Iran would involve seizing the country’s oil export hub Kharg Island. On that matter, the president said he has “a lot of options” and that taking it would mean being there “for a while”. The president stressed that talks between the US and Iran via what he called Pakistani emissaries were progressing well and said a ceasefire deal to reopen the vital Strait of Hormuz could be reached “fairly quickly”. He noted 13,000 targets have been hit in Iran and 3,000 remain, but he did not elaborate on what or where those targets are.
The interview with the president comes as oil prices started the week trading near the highs of the conflict, so far. A month of war in Iran has left investors with nowhere to hide. That is because global safe-haven bonds, and by comparison, riskier stocks have suffered their biggest combined sell-off since 2022.
The energy shock that the war in Iran has caused has really been brutal. So, what does it tell us, looking at the market, that basically everything is falling. We’ve got stocks, bonds, all on decline. This is a bit of a nightmare scenario for investors for a number of reasons.
The first reason is we don’t really know what we are dealing with here. What we know is that there’s an energy shock, but a lot depends on how much higher energy prices go. And so the longer this goes on for, the more damaging this gets for investors’ portfolios, which we all know are not the most important things in this conflict, but they are important nonetheless.
The second reason is that it’s really bad for bond markets. So, government bond markets are supposed to be the safe bit of a portfolio, but bonds hate inflation. And what we could be looking at here from the energy price shock and potential food price shock is another run-up in inflation. And so for investors, nothing is working. The FT wrote last week how it’s become slightly harder to trade in the $30tn US Treasury market. You’re talking about bonds. How worrying is that for the market now? The US government bond market really underpins global markets and asset markets of all kinds, that has started to become quite unstable. We’re having periods where it can be a little bit difficult for investors to get a hold of prices and to get deals done. These are the early signs that we are seeing quite disjointed markets, and the concern among investors is that when markets get like that, accidents can happen. You can have blow-ups, you know, we’ve already had a situation where a whole bunch of hedge funds have had a really horrible time in UK and European government bonds. None
1 FT News Briefing, Victoria Craig, Katie Martin and Alan Beattie, March 30, 2026, https://www.ft.com/search?q=how+trump+tariffs+ripped+up+the+global+trade+order of them were betting that anything like this would happen. In fact, they had the opposite bet on. So, when that hit a wall, they really took a lot of pain very, very quickly. So that’s why people are paying attention to trading conditions, particularly in US government bond markets, because it is very easy for stuff to go wrong when markets are as fragile as this.
There’s also a growing concern that global stagflation as a phrase has re-entered the lexicon. That’s sort of this mix of faltering growth and rising prices. It’s really hard to know how to deal with that because central banks can’t raise interest rates to control inflation that comes from energy prices very easily. So, it can become a very unpleasant experience for investors, the consumers, and it’s just difficult to see at this point what puts a stop to it. There is still a hope out there among investors that somehow we can pick a narrow path that kind of gets us to a point where we can model through this situation. Particularly, investors have their eyes on the fact that the US has midterm elections coming up in November. There’s an assumption that Trump won’t want energy prices to get too high in the run-up to that. So, there is a hope that at some point, someone will be forced into a solution. But until that happens, this concern that’s still hanging over people is that what we already have, which is an unpleasant market environment, could become a really unpleasant market environment on a completely unpredictable basis. It’s becoming much more apparent to investors that it’s not up to Trump. He can’t just flip a switch and make this go away. There has to be some sort of agreement with Iran, and it has an existential battle on its hands as far as it’s concerned. But Trump’s ability to talk this down and to turn this around is clearly troubled.
A lot has happened in the first year of US President Donald Trump’s second term: new global conflicts, fresh rifts with allies, new tariff regimes. Next week marks one year since the president’s so-called liberation day announcement. Donald Trump’s audio clip April 2nd, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again.
That Rose Garden speech last April was the official unveiling of a set of tariffs that would be enacted on countries around the world based on something called IEEPA, the International Emergency Economic Powers Act. It was a big deal. But it was an even bigger deal when the Supreme Court this year ruled all of those tariffs illegal. The FT has taken a deep dive into how global trade has changed with Trump’s whims.
So whipsawed, is the word that the FT emphasized when it comes to US tariff policy over the last year or so, how do America’s trading partners feel? Probably also whipsawed, possibly traumatised. I think one of the problems is that they thought there’s a lot more logic to him than there actually is. So, he will announce all of these things and they say, what do you want? And then because it turns out he wants about 10 different things, which all contradict each other. They find it hard to grasp that. And the European Union in particular, which is a ruthlessly logical mechanism, finds it difficult to negotiate with somebody whose objectives keep changing and who can’t really be relied on to keep a promise anyway. Trump’s various tariff programs have really upended, rerouted or changed global trade in a meaningful way on a permanent basis? Or is this all sort of just temporary until things settle out or even until another administration comes in? During his first term, what we saw was China continuing to export to the US just via third countries, and then Trump was extremely keen that that wouldn’t happen again. As far as we can tell, he hasn’t really succeeded. Because Chinese exports are still roaring away. It’s still running a huge surplus with the rest of the world, but the bilateral deficit with the US or US’s bilateral deficit with China, rather, has fallen. So as far as we can tell, the same pattern is there. China is such an incredibly competitive exporter in so many ways, and increasingly in high-tech goods and things that other countries actually
can’t do. That the sort of the logic of market forces means it will continue to export and those things will find their way to the US somehow.
Now, in terms of the trading system, one thing that’s really striking is that we have not had a sort of worldwide surge to protectionism. There just hasn’t been a lot of other countries cutting off trade between themselves. In fact, if anything, somewhat the opposite, countries have continued to sign trade deals. I think it’s a bit like Brexit in the UK, that the UK left the European Union and everyone wondered would other countries follow it out. That’s the same with Trump. He’s pulled the US to some extent out of the trading system. Everyone else has looked at and said, oh my goodness, whatever we do, we’re not gonna do that.
When it comes to how the US behaves, the Supreme Court struck down the IEEPA-based tariffs, and that was seen as a huge blow to the president’s tariff strategy. But has it done anything to actually derail the administration’s ultimate goals? The FT believes that it will change the way they’ve responded. I mean, they signalled very clearly in advance of the decision what they were going to do, which is recreate the tariff wall using a bunch of other legal authorisations, specifically one which is supposed to deal with balance of payments crises. One which is supposed to deal with national security and one which is supposed to do with unfair trade.
There are areas in which the Supreme Court has traditionally deferred more to the president. So, it seems fairly likely that they will be able to rebuild that tariff war to more or less what it was before the Supreme Court ruling.
Finally, for America’s Trading Partners over the next two and a half years that we have President Trump in office, is there any certainty about what trade will look like given he can really change on a whim.
The FT thinks he can, but I think one of the things that the governments have discovered, Trump puts tariffs on and trade finds its way around. You know, the US is quite a closed economy. It’s probably only 15 or 17 per cent of global imports. If the US wants to remove itself from trade to some extent it can do so. I mean, everyone else will be looking for a source of final demand, but it’s not immediately catastrophic. The FT believes we have reached peak tariff and that he has tried to remake the world trading system with them. He has failed. He has tried to close the US trade deficit with them. He has failed. Unless he goes completely insane and tries to cut off the US from the rest of the world altogether, the FT believes there’s a limited amount that he could do that he hasn’t already done and which is actually feasible for him to do.
Impact of US and Iran Memorandum of Understanding:
The US and Iran have electronically signed an interim deal on Wednesday, June 17, 2026, that extends their ceasefire and offers concessions to the Islamic republic, according to a report by the FT.2
US President Donald Trump signed the memorandum of understanding in Versailles, France, on Wednesday after he had said Washington would release frozen Iranian funds and lift sanctions “as soon as they behave”.
Washington’s interim deal with Iran to reopen the Strait of Hormuz would “terminate all types of sanctions” on Iran, including UN Security Council resolutions. The memorandum of 2 Alex Rogers, FT.com, June 18, 2026, https://www.ft.com/content/40c13aa0-4228-4068-8659-408f96e36172?syn-25a6b1a6=1 (last visited June 26, 2026).
understanding stated that the US would work with regional partners to establish a $300bn fund for Iran’s “reconstruction and economic development”, which would be contingent on a final deal.
Earlier on Wednesday, the president played down talk of the US investing in the fund. A person briefed on the talks said it was designed for companies that wanted to invest in Iran. The interim deal extends the ceasefire and lays the framework for nuclear negotiations. The parties said they would find a “mutually agreed” mechanism to handle Iran’s enriched uranium. The MoU sets out a “minimum” for the dilution of the stockpile on site, under the supervision of the International Atomic Energy Agency.
Trump said he would allow Iran to keep some of its ballistic missiles. Critics of the president have asked whether the concessions Tehran made were worth four months of war, billions of dollars in cost, the depletion of US weapons stocks and friction with allies, as reported by the FT.
The shadow of Barack Obama hung over Donald Trump at the G7 summit on Tuesday (June 16, 2026) as he bristled at comparisons between his deal to end the US war with Iran and his predecessor’s nuclear pact with Tehran.3
“That was a road to a nuclear weapon,” the US president said of Obama’s 2015 agreement, which he fiercely criticised for years and scrapped during his first term in office. “Mine is a wall against a nuclear weapon.”
Trump’s agreement to end the conflict with Iran may have paved the way for a restoration of shipping traffic through the Strait of Hormuz, easing oil prices and rallying equity markets, but it has left him on the defensive.
Critics are also pointing out that his deal is similar to the Joint Comprehensive Plan of Action, which was agreed under Obama and limited Iran’s nuclear programme in exchange for sanctions relief and has been a major concern of conservatives for years.
Referring to Trump’s claim on social media that his deal is the “complete opposite” of Obama’s, Morton Klein, president of the pro-Trump Zionist Organization of America, said: “While we hope that is the case, how will this be achieved? There appears to be no agreement at this time on how or whether to remove Iran’s nuclear stockpiles and decommission its nuclear facilities.”
Obama has weighed in to say his pact with Tehran was essentially on the same terms as Trump’s. “It is doubtful that any agreement that arises is going to be significantly different, or a significant improvement from the deal that we had in the first place and had worked for a long stretch of time before we, the United States, pulled out of it,” Obama said in an ABC interview due to be aired on Wednesday.
Trump’s relationship with his first-term predecessor has always been bitter. He has called Obama “the most ignorant president in history” and a “disaster”. Ditching the JCPOA was one of the signature foreign-policy achievements of his first term.
JD Vance, the vice-president and a top Republican contender to succeed Trump in 2028, has been at pains to point out the differences in the two deals as he has defended Trump’s agreement in television interviews in recent days. “If you go back to the Obama JCPOA, what it did was it took an Iranian nuclear programme that it accelerated. It basically bribed
3 James Politi and Abigail Hauslohner, FT.com., June 17, 2026 (‘Humiliation’: Donald Trump battles claims his Iran deal is worse than Obama’s) (last visited June 26, 2026).
the Iranians to stop that programme,” he told CBS. Now, “the Iranian nuclear programme has been completely destroyed, and what we’re saying is: ‘make the long-term commitment to not rebuild it, and you will get the benefits that come with that’,” Vance said.
But Trump has not released the text of the agreement, which is due to be signed at a ceremony in Switzerland on Friday (June 19, 2026), unsettling many Republicans in Congress.
Joni Ernst, Republican senator from Iowa, said: “A deal of this magnitude deserves thorough review. It is critical that the Senate has the opportunity to examine the details, ask tough questions and ensure America’s interests and those of our allies are protected.”
Asked whether he was confident Iran would give up its nuclear ambitions, John Kennedy, a Louisiana Republican senator, answered: “Unless you were homeschooled by a day drinker, no one’s confident that Iran is going to do anything.”
As well as scepticism that his deal is tough enough to curtail Iran’s nuclear ambitions, Trump is facing criticism from conservatives over potential sanctions relief for Tehran, the possible inclusion of a $300bn investment fund to be established for the Islamic republic and constraints on Israel’s actions in Lebanon.
The conservative National Review on Monday called on him to “release the text” of the pact in an editorial and said: “All told, there is the possibility that Trump would return the US to Obama’s failed Iran deal that Trump rightfully tore up in his first term, which would have all the makings of a humiliation after all of the president’s tough talk.”
Democrats are already attacking the deal. “While we want it to end, this agreement will be proof positive to the American people of what an absolute dumpster fire this war has been from start to finish,” Chris Murphy, Democratic senator from Connecticut, said on Tuesday.
Brian Katulis, a senior fellow at the Middle East Institute, a Washington think-tank, said even when the text was released it would be like “Swiss cheese”, given the number of gaps that need to be filled, with many of the toughest issues left to be thrashed out by US and Iranian negotiators over the next 60 days. “This deal essentially resets to the status quo ante with some costs paid to Iran just to reopen the Strait of Hormuz, and then it resets the clock on discussions that they have not been able to get to consensus on the nuclear issues and other things,” he said. However, Katulis agreed that Obama’s deal was different from Trump’s. The 2015 pact was “a very detailed and very technical agreement” with “implementation mechanisms and oversight”, he said, adding: “this thing sounds like something that was pieced together over WhatsApp messages”.