The European Union’s second-biggest trade partner, China, today joined the tariff war initiated by its largest. Beijing announced 34% duties on all US goods, striking back at the 54% levy announced by Donald Trump earlier this week. 

While EU leaders weigh the 20% levy the US punished them with, some may also be considering the old African proverb -- when elephants fight, it is the grass that gets trampled — before formulating a response. The EU has to weigh up joining the fight or risk being trampled. Markets have, after all, been sending mixed signals since Trump began his attack on global trade. 

Even as stocks tumbled, with European equities headed into correction territory, safe-haven investors poured into utilities, pushing infrastructure providers to a 17-year high. Currency traders, too, are proving more sanguine about the continent’s prospects. The euro has become an unlikely winner from US efforts to redraw the global order, surging to its highest level in six months versus the dollar. --Jonathan Tirone

What You Need to Know Today

The worst is yet to come for markets, according to one Wall Street insider who was sounding the alarm long before this week’s tariffs. Peter Berezin and his team at BCA predicted Trump would go well beyond the trade restrictions imposed during his first term. “We’re at the cusp of a very, very ugly feedback loop,” Berezin told us, forecasting a recession has become more likely for the world’s biggest economy.  Read our live ticker about the economic fallout of the trade war by clicking here. 

Help is wanted to grow the UK’s sprawling defense industry as the government gears up for a spending boost. Thousands of small businesses compose the supply chain feeding into industrial giants like Babcock International Group and BAE Systems. Plans to repair what Chancellor of the Exchequer Rachel Reeves has called a broken defense procurement system include a new hub for SMEs to access tenders. 

Ukraine's armed forces are trained to use a Challenger 2 tank by the British Army at Lulworth Camp in 2023. Photographer: Hollie Adams/Bloomberg

Ukraine’s European allies joined Canada in calling for Russian President Vladimir Putin to respond immediately to a US cease fire proposal. French Foreign Minister Jean-Noel Barrot told reporters today that the Kremlin appears to be “flip-flopping” by continuing to strike Ukrainian energy assets, even after agreeing to a partial deal last month.

Unprecedented damage has been inflicted on Tesla’s brand, according to a JPMorgan analyst, who cited buyer backlash against the antics of billionaire founder Elon Musk. A recent Tesla sales report “causes us to think that — if anything — we may have underestimated the degree of consumer reaction,” wrote Ryan Brinkman in a report. Musk is wielding significant influence over US federal cost-cutting efforts and is a Trump confidant. Sales of his electric vehicles have slumped in Europe following his public advocacy for far-right parties in Germany and the UK. 

Anti-American sentiment prompted a Danish supermarket to give consumers new ways to avoid buying US products. The Fisketorvet shopping mall has become a battleground in the global trade wars. Last month, the store started putting stars on goods to help guide customers to products made in Europe. In a turbulent period for EU-US relations, Denmark has had a particularly rocky ride, with Trump insisting he’ll take over the semi-autonomous Danish territory of Greenland. 

European airlines are taking stock of optimistic transatlantic-travel expectations issued before the US unveiled sweeping tariffs. Even before Trump made his declaration on April 2, the risks were becoming more apparent in an industry whose business is connecting economies and people around the globe. Carriers on both sides of the Atlantic have every reason to fear a decline in one of the most important global air corridors.

An American Airlines aircraft prepares to land at Heathrow Airport in London. Photographer: ADRIAN DENNIS/AFP

Israel’s army moved into parts of northern Gaza in order to expand a buffer zone and increase pressure on Hamas. Troops destroyed infrastructure and control centers belonging to the Iran-backed Palestinian militant group, according to a statement from the Israel Defense Forces. Saudi Arabia condemned the escalation and said a strike in the southern city of Rafah — near the border with Egypt — hit a Saudi-run facility used to store and distribute medical supplies to the war-torn Palestinian territory.

What You’ll Need to Know Tomorrow

For Your Commute

Finding a place to eat in London is no small feat. The popular restaurants are invariably packed; the nonjammed places aren’t always worth it. Here, then, is a monthly guide offering five superb dining options that speak to the array of questions we get asked all the time: What’s a great new restaurant? Where should I go to celebrate (a deal, or an anniversary)? Where can I get in tonight? And what’s a good-value place right now?