Donald Trump said during a White House news conference that high tariffs on goods from China will “come down substantially, but it won’t be zero”.

Trump’s remarks were in response to earlier comments on Tuesday by treasury secretary Scott Bessent, who said that the high tariffs were unsustainable and that he expects a “de-escalation” in the trade war between the world’s two largest economies.

Trump placed import taxes of 145% on China, which has countered with 125% tariffs on US goods. Trump has placed tariffs on several dozen countries, causing the stock market to stumble and interest rates to increase on US debt as investors worry about slower economic growth and higher inflationary pressures.

Details of Bessent’s remarks were confirmed by two people familiar with the remarks who insisted on anonymity to discuss them.

“I do say China is going to be a slog in terms of the negotiations,” Bessent said, according to a transcript obtained by the Associated Press. “Neither side thinks the status quo is sustainable.”

The S&P 500 stock index rose 2.5% after Bloomberg News initially reported Bessent’s remarks.

Trump acknowledged the increase in the stock market in comments to reporters after the ceremonial swearing-in of Paul Atkins as the Securities and Exchange Commission chair on Tuesday.

However, Trump avoided confirming if he, too, thought the situation with China was unsustainable, as Bessent had said behind closed doors.

“We’re doing fine with China,” Trump said.

Despite his high tariffs, Trump said he would be “very nice” to China and not play hardball with Chinese President Xi Jinping.

“We’re going to live together very happily and ideally work together,” Trump said.

The US president said that the final tariff rate with China would come down “substantially” from the current 145%.

“It won’t be that high, not going to be that high,” Trump said.

The Trump administration has met for talks with counterparts from Japan, India, South Korea, the European Union, Canada and Mexico, among other nations.

But Trump has shown no public indications that he plans to pullback his baseline 10% tariff, even as he has insisted he’s looking for other nations to cut their own import taxes and remove any non-tariff barriers that the administration says have hindered exports from the US.

China on Monday warned other countries against making trade deals with the United States that could negatively impact China.

“China firmly opposes any party reaching a deal at the expense of China’s interests,” China’s commerce ministry said in a statement.

White House press secretary Karoline Leavitt said the Trump administration has received 18 proposals from other countries for trade deals with the US, adding: “Everyone involved wants to see a trade deal happen.”

The uncertainty over tariffs in the financial markets has also been amplified by Trump calling on the Federal Reserve to cut its benchmark interest rate, with the president saying he could fire Fed chair Jerome Powell if he wanted to do so.

Trump later said he wanted Powell to “be early” in lowering rates and that he has no intention of firing the Fed chair, despite previously suggesting that he would.

Donald Trump has said tariffs on goods from China will be reduced “substantially” but “won’t be zero”, after US treasury secretary Scott Bessent said he expects a “de-escalation” in the trade war between the world’s two largest economies.

Trump placed import taxes of 145% on China, which countered with 125% tariffs on US goods, causing volatility in the stock market and concern about slowing global economic growth.

But the US president on Tuesday said he would be “very nice” to China and not play hardball with Chinese President Xi Jinping. “We’re going to live together very happily and ideally work together,” Trump said.

Meanwhile, Tesla chief executive Elon Musk said he would start pulling back from his role at the “department of government efficiency” (Doge) from May, as the company reported a massive dip in profits amid backlash against his White House role.

Here are the key stories at a glance:

Catching up? Here’s what happened on 21 April 2025.

Donald Trump’s tariffs have unleashed a “major negative shock” into the world economy, the International Monetary Fund has said, as it cut its forecasts for US, UK and global growth.

In a stark assessment of the impact of the US president’s policies, as global finance ministers prepare to meet in Washington, the IMF said: “We expect that the sharp increase on 2 April in both tariffs and uncertainty will lead to a significant slowdown in global growth in the near term.”

It came as Rachel Reeves was due to arrive in the US capital on Tuesday evening, ahead of what could be a key week for a US-UK trade deal. The chancellor, who will meet her US counterpart, Scott Bessent, for the first time, is expected to press the UK’s case for reduced tariffs. She said she would be “defending British interests and making the case for free and fair trade”.

Publishing the latest edition of its World Economic Outlook, the Washington-based IMF cut its forecast for global GDP growth to 2.8% for this year – 0.5% weaker than it was expecting as recently as January.

The IMF said that while its forecasts had been prepared on the basis of current trade policy, “intensifying downside risks dominate the outlook”.

Its forecasts show every major economy being hit, with the UK expected to grow by 1.1% this year, down from 1.6% predicted in January. The IMF expects a sharper deterioration for the US, from 2.7% to 1.8%.

It said that although tariffs and the uncertainty created would weigh on the economy in the UK, “domestic factors” were mainly to blame for the downgraded growth forecast. These included increased government borrowing costs and weaker consumer spending in response to higher UK inflation, partly driven by rising energy bills.

Responding to the UK downgrade, Reeves highlighted the fact that the IMF still expected it to be the “fastest-growing European G7 economy” in 2025.

As its spring meetings kick off, the IMF said that even after Trump’s “pause”, which suspended punitive “reciprocal tariffs” on a string of countries, trade barriers were at the highest level in a century.

Given the lack of clarity about the future direction of the policy, it predicted that companies throughout the global economy were likely to respond by cutting spending.

“Faced with increased uncertainty about access to markets – their own but also those of their suppliers and customers – many firms’ initial reaction will be to pause, reduce investment, and cut purchases. Likewise, financial institutions will re-evaluate their credit supply to businesses,” it said.

“The combined increased uncertainty and resulting tightening of financial conditions are a global negative demand shock and will weigh on activity.”

The IMF added that emerging economies may be hit especially hard, as “unfavourable global financial conditions” make it harder for them to service their debts – a situation that could be exacerbated by overseas aid cuts.

The UK recently announced a historic cut to its aid budget, to fund defence spending, and Trump is battling court action as he attempts to dismantle USAID.

“More limited international development assistance may increase the pressure on low-income countries, pushing them deeper into debt or necessitating significant fiscal adjustments, with immediate consequences for growth and living standards,” the IMF said.

As finance ministers prepare to meet, the IMF called for coordinated action to reduce trade tensions, restructure low-income countries’ debts, and “address shared challenges”. It is unclear what role the US could take in any such discussion, however, given its commitment to an “America first” approach.

The IMF expressed concern in the report about the shock waves unleashed in financial markets by Trump’s trade policies – and said worse may be to come.

In particular, it points to the risk of “strong volatility” in currency markets, which “may be difficult to navigate, especially for emerging market economies”.

The dollar was up 0.5% on Tuesday after earlier hitting a a three-year low, as Trump issued further criticism of Jay Powell, the chair of the Federal Reserve, calling him “Mr Too Late” for failing to cut interest rates.

Wall Street shares rose on Tuesday after the US treasury secretary suggested a trade war with China was unsustainable and that the world’s two largest economies would have to find a way to de-escalate.

Bessent made the comments at a closed-door investor summit, according to Bloomberg. US shares had already opened higher and picked up after the comments were reported, with the Dow Jones and S&P 500 both up by more than 2%.

The IMF said the probability of a recession in the US had increased to nearly 40%, higher than its forecast of 25% made in October, the month before Trump’s election victory.

The global financial system is coming under increasing strain as Donald Trump’s trade war rocks markets, the International Monetary Fund has warned.

“Global financial stability risks have increased significantly,” the IMF said in its regular snapshot of the system, urging regulators to be on the alert for potential crises.

It pointed to the “sharp repricing of risk assets” that has followed the US president’s tariff announcements since February – in particular his 2 April “liberation day” statement – and warned that there may be more to come.

Published as finance ministers and central bankers gather in Washington for the IMF’s spring meetings – and as the IMF downgraded its forecasts for global growth amid tariff concerns – the Global Financial Stability Report identified what it called “forward-looking vulnerabilities” in markets.

These include what it said were overstretched valuations for stocks and bonds in some areas, even after recent sell-offs; the highly leveraged state of some financial institutions, including hedge funds; and the vulnerability of some governments to volatility in sovereign bond markets.

The IMF also warned economic policy and trade uncertainty were at an all-time high, “foreboding further shocks, corrections of asset prices, and tightening of financial conditions”.

Governments in emerging economies could be hit especially hard by sudden increases in borrowing costs, the IMF warned, suggesting “investor concerns about public debt sustainability and other fragilities in the financial sector can worsen in a mutually reinforcing fashion”.

Meanwhile, companies may find it more expensive to borrow, if volatile corporate bond markets drive up the cost of debt, it suggested – while households will be hit via “wealth effects”, if the value of their pensions and other investments continues to slide.

The Washington-based lender expressed particular concern about the growing role of “nonbank” lenders, which are much less heavily regulated than banks, but can still pose risks to the wider financial system.

The role of these lenders, which include pension and investment funds, has grown rapidly in recent years, after rules on banks were toughened up after the 2008 global financial crisis.

The IMF warned of a “deepening nexus” between these nonbank lenders and traditional banks. It suggested they could be forced to divulge more information to regulators, which could then identify and rein in “poorly governed and excessive risk-taking institutions”.

High levels of borrowing by these nonbank lenders also “imperils market functioning”, the IMF said, noting these investors had amplified a recent sell-off in US government bonds due to pressure to meet margin calls. This is when an investor must provide collateral to cover losses quickly.

Borrowing by hedge funds could also “exacerbate losses” during periods of market turmoil, the IMF said. At the hedge funds that make big macroeconomic bets, leverage can be as high as 40 times the value of their assets, the report found.

The institution also suggested big global banks could be underestimating the “true level of risk” attached to their business.

Banks use the “average risk-weight”, or “RWA density”, as a metric to reflect the level of risk connected to its business. However, the IMF found that data from international banks, even those with similar models and overall risk profiles, showed “wide variation” by this measure.

The IMF also urged governments to ensure there is sufficient capital and liquidity in the banking system to cope with a crisis – including by the “full, timely and consistent implementation” of the so-called Basel 3 rules, devised after the 2008 crisis.

The Bank of England recently delayed the implementation of the final stage of these rules, known as Basel 3.1, by a year in the UK, as the chancellor, Rachel Reeves, pressed regulators to take a more pro-growth approach.

The report also flagged potential contagion risk in the private credit fund system, which it said could “spread credit shocks across institutions and countries”.

More companies are borrowing from private credit funds, it said, and big investors such as pension funds are increasingly backing foreign direct-lending funds.

As the market becomes more complex and global, “the risk that credit shocks will propagate from one jurisdiction to others intensifies”, the report said.

Separately on Tuesday, a member of the Bank’s rate-setting panel, Megan Greene, said US trade tariffs were more likely to push down UK inflation than to drive it up, but that there were risks on both sides.

Greene told Bloomberg: “The tariffs represent more of a disinflationary risk than an inflationary risk.” However, she added: “There’s a ton of uncertainty around this, but there are both inflationary and disinflationary forces.”

On Monday, Trump renewed his attack against the Federal Reserve chair, Jerome Powell, and the independence of the US central bank.

Greene said that “credibility is the currency of central banks and I think independence is quite an important piece of that”. She said the Bank could credibly try to hit its targets because it was free to make its own decisions.

At least 26 tourists have been killed and ten injured after suspected militants opened fire at a popular local tourist destination in Kashmir during a scheduled four-day visit to the country by the US president JD Vance.

Most of the victims were Indian, although two foreign nationals were also reportedly among the dead.

The attack occurred in the Baisaran Valley, a picturesque meadow in Pahalgam, a well-known tourist town located 30 miles south-east of Srinagar, the region’s main city, in what officials are describing as the deadliest attack on civilians in the region in recent years.

At about 3pm local time, a group of gunmen, who apparently approached tourists from the direction of the nearby mountains, emerged from a dense pine forest.

Graphic videos shared by locals on social media showed injured tourists lying in pools of blood, while their relatives screamed and pleaded for help. Due to the area’s lack of road access, helicopter services were deployed to evacuate the wounded.

Describing the scene, a local tour guide told the AFP news agency he reached the scene after hearing gunfire and transported some of the wounded away on horseback.

“I saw a few men lying on the ground looking like they were dead,” said Waheed, who gave only one name.

A female survivor told the PTI news agency: “My husband was shot in the head while seven others were also injured in the attack.”

Omar Abdullah, the region’s top elected official, wrote on social media: “This attack is much larger than anything we’ve seen directed at civilians in recent years.”

Government officials said the dead included tourists from the Indian states of Karnataka, Odisha and Gujarat and two foreign nationals. At least six others were wounded.

India’s prime minister, Narendra Modi, decried the “heinous act” cut short a visit to Saudi Arabia.

“Those behind this heinous act will be brought to justice … they will not be spared. Their evil agenda will never succeed. Our resolve to fight terrorism is unshakable and will only grow stronger,” said Modi, who met with Vance the day before.

Donald Trump expressed his “full support” to India in a call with Modi late on Tuesday, Delhi’s foreign ministry said.

The scene of the attack was cordoned off as police launched an operation to track down the attackers.

According to local police officials, two to three gunmen opened indiscriminate fire on tourists in the area, which is accessible only by foot or on horseback, before fleeing the scene.

A witness speaking to India Today said: “The shooting occurred right in front of us. At first we thought it was just firecrackers, but when we heard others screaming we rushed out of there to save ourselves.”

Another witness, who also did not reveal his name, said: “We didn’t stop running for 4km … I’m still trembling.”

Protests erupted in several areas of the Indian-administered Kashmir condemning the attack, with a rally led by rightwing vigilantes in the city of Jammu blaming Pakistan.

A militant group identifying itself as “Kashmir Resistance” has claimed responsibility for the attack in a social media message. The group cited anger over Indian settlement of over 85,000 “outsiders”, which it said was driving a “demographic change” in the region.

The mountain region is claimed in full but ruled in part by both India and Pakistan, and has been riven by militant violence since the start of an anti-Indian insurgency in 1989.

Tens of thousands of people have been killed, although violence has tapered off in recent years.

India revoked Kashmir’s special status as an autonomous state in 2019, splitting the state into two federally administered territories – Jammu and Kashmir, and Ladakh.

This also allowed local authorities to issue domicile rights to outsiders, allowing them to get jobs and buy land in the territory.

Authorities have described the attack as targeted and intended to spread terror among the tourists visiting Kashmir.

Tuesday’s attack seems to be a major shift in the regional conflict where tourists for many years have largely been spared from violence despite a spate of targeted killings of Hindus, including immigrant workers from Indian states, after New Delhi ended the region’s semi-autonomy in 2019 and drastically curbed dissent, civil liberties and media freedoms.

The Baisaran area attracts tens of thousands of Indian tourists daily, especially during the summer months, when temperatures in mainland India soar.

Indian army and paramilitary forces have been deployed to the area to search for the attackers. In recent years, militants have increasingly targeted security forces in the region’s mountainous and forested areas.

Kashmir remains one of the most heavily militarised zones in the world and is claimed in full by both India and Pakistan, although each controls only a part. The two countries have fought multiple wars over the region.

David Lammy, the foreign secretary, will host US and European negotiators for fresh talks about Ukraine on Wednesday amid speculation that Russia has told Washington it might be willing to drop its claim to parts of Ukraine it does not occupy.

The price would include the US making concessions to Moscow such as recognising the 2014 annexation of Crimea, though Ukraine’s president Volodymyr Zelenskyy said no such proposal had been shared with him by the White House and that his country could not endorse it.

The emerging US-Russia plan would then envisage a ceasefire along roughly the existing front lines once Moscow’s territorial demand has been dropped, leaks suggest – something that Ukraine has indicated it could accept, as long it did not have to recognise Russian occupation as permanent or legal.

Ukraine would be prevented by a US veto from joining Nato, a point largely accepted by a reluctant Kyiv. The only future security guarantees for Ukraine will be provided by a UK-French 30-country coalition of the willing to provide a “reassurance force”, but this will not include the US.

It had been hoped that Marco Rubio, the US secretary of state, would attend the talks, but the state department said on Tuesday that would no longer be possible and that Keith Kellogg, the White House’s Ukraine envoy, would be present instead.

The meetings in London take place amid European scepticism that the Russian leader is seriously willing to end the war, reinforced by events over Easter weekend, when Ukraine reported of thousands of violations of a short truce announced by Russian president Vladimir Putin.

John Healey, the defence secretary, told the Commons that the UK agreed with Ukraine that the Russian leader’s public pledges were not borne out by military reality.

“Despite President Putin’s promise of a 30-hour pause in fighting, I can confirm that Defence Intelligence [an MoD unit] has found, and I quote ‘no indication that a ceasefire on the frontline was observed over the Easter period’,” he told MPs.

“So, while Putin has said he declared an Easter truce – he broke it. While Putin says he wants peace – he rejected a full ceasefire. And while Putin says he wants to put an end to the fighting – he continues to play for time in negotiations.”

On Tuesday, Zelenskyy said that Russia had continued to bomb the frontline with first-person view drones over Easter, though he said that the attackers had scaled back the number of operations and did not use long-range weapons.

Healey also said he would meet Ukrainian defence minister, Rustem Umerov, “as the government is bringing together US, UK and European ministers and national security advisers to discuss next steps”.

Ukrainian sources indicated that foreign secretary Andrii Sybiha was expected in London to meet Lammy, Kellogg and delegations from France and Germany at meetings expected to last throughout the day.

Healey said the meetings in London would include discussion of “what a ceasefire might look like and how to secure peace in the long term”. Despite nearly three months of talks led by the White House there has until now been no breakthrough in ending the war.

European officials had believed Moscow is not ready to agree to a ceasefire because Putin has not abandoned his efforts to dominate Ukraine while talks between the Kremlin and the White House continue.

Russia has been demanding that Ukraine hand over the entirety of four eastern and southern regions its forces only partly occupy. That would include Kyiv ceding Kherson, which its forces recaptured in November 2022, and Zaporizhzhia city, proposals Ukraine would not be able to accept.

But the FT reported on Tuesday that the Kremlin would soften its demands in direct discussions with the US, and would accept a freezing of the conflict on the frontline if the US agreed that Crimea, seized by Moscow in 2014, belonged to Russia.

However, Zelenskyy ruled out recognising Crimea as Russian territory. “There is nothing new to mention or discuss. Ukraine will not recognise the occupation of Crimea,” he said, pointing out that it would be incompatible with Ukraine’s constitution.

No details of any revised peace plan had been formally shared with Kyiv, Zelenskyy added. He said discussions should take place in the London format, rather than through the media, with the UK, France and the US as participants.

According to one report in the Telegraph, Russia would hand over control of the Zaporizhzhia nuclear plant, the largest in Europe, not to Ukraine but to the US – though it is unclear how Kyiv would respond to this.

Putin floated on Tuesday that he was open to direct negotiations with Ukraine, which would be the first time the two countries had held peace discussions since spring 2022. This could involve discussing the issue of not striking civilian targets, his spokesperson, Dmitry Peskov, later added.

The US is expected to relay Ukraine’s response to Putin after the London meetings. Steve Witkoff, who is a close friend of Donald Trump and his informal envoy, is set to visit Moscow later this week. Witkoff has held three in-depth meetings with Putin, and his apparently warm relationship with the Kremlin has raised concerns in Ukraine that he may be amplifying Russian narratives.

• Ukraine’s foreign ministry has summoned Beijing’s ambassador as Volodymyr Zelenskyy said citizens of China were working at a drone production site in Russia, possibly using “stolen” Chinese technology. The Ukrainian president said on Tuesday: “I asked the Security Service of Ukraine to transfer information of a broader nature to the Chinese side regarding Chinese citizens who work at the drone factory. We believe that it may be that Russia stole – made an agreement with these citizens outside the agreements with the Chinese leadership – stole these technologies.”

• Beijing’s ambassador, Ma Shengkun, was summoned over the allegations, as well as evidence of Chinese citizens fighting in the Russian army. “[Ukrainian] deputy foreign minister Yevhen Perebyinis stressed that the participation of Chinese citizens in hostilities against Ukraine on the side of the aggressor state, as well as the involvement of Chinese companies in the production of military products in Russia, are of serious concern and contradict the spirit of partnership between Ukraine and China,” said a Ukrainian statement on Tuesday. Perebyinis “called on the Chinese side to take measures to stop supporting Russia in its aggression against Ukraine, the absence of which has been repeatedly stated by Beijing”.

• Beijing had not responded to the latest claims at time of writing. Zelenskyy said on Thursday of last week that Ukrainian intelligence showed China was supplying weapons to Russia, including gunpowder and artillery, and that Chinese representatives were involved in weapons production on Russian territory. China dismissed this as groundless, but Tuesday’s statements by Zelenskyy made good on a promise to provide details this week. Two alleged Chinese soldiers have been caught by Ukraine and shown to the press, and Zelenskyy has said there at least 155 Chinese nationals operating on Russia’s side. The Chinese government has consistently denied providing military support to Russia or taking its side in the war.

• Representatives from Ukraine, the UK, France and the US will meet in London on Wednesday to continue talks on a potential ceasefire. Media reports have suggested the US is promoting a “peace deal” that heavily favours Russia. Donald Trump’s Ukraine envoy, Gen Keith Kellogg, will attend the discussions, according to a US state department spokesperson, Tammy Bruce. Contrary to a previous announcement, the US secretary of state, Marco Rubio, will not be attending. Even though he is the administration’s Ukraine envoy, Kellogg has been largely sidelined from the publicised peace talks that the US has been holding separately with Russia and Ukraine.

• David Lammy, the UK foreign secretary, will host the US and European negotiators in London. On Wednesday there was speculation that Russia has told Washington it might be willing to drop its claim to parts of Ukraine it does not occupy, write Dan Harding and Luke Sabbagh, giving rise to a ceasefire along roughly the existing frontlines. Russia has been demanding that Ukraine hand over the entirety of four eastern and southern regions its forces only partly occupy.

• Russian overnight drone attacks on east, south and central Ukraine damaged civilian infrastructure and businesses in the Poltava region and injured two civilians in the Odesa region, Ukrainian officials said early on Wednesday. Air defence units were also at work in the Kyiv region and in Ukraine’s second-largest city, Kharkiv, regional governors posted.

• Russia hit a residential area in the eastern Ukrainian city of Myrnograd with drones on Tuesday, killing three people and wounding two, authorities said. One person was reported dead and 23 wounded after two bombs hit the southern city of Zaporizhzhia, the region’s governor said. Russian strikes wounded another six people in the southern city of Kherson and seven in Kharkiv in the north-east, officials said.

The Tesla chief executive, Elon Musk, said he will start pulling back from his role at the so-called “department of government efficiency” starting in May. Musk’s remarks came as the company reported a massive dip in both profits and revenues in the first quarter of 2025 amid backlash against his role in the White House.

On an investor call, Musk said the work necessary to get the government’s “financial house in order is mostly done”.

“Starting probably next month, May, my time allocation to Doge will drop significantly,” he said.

That said, he expects to spend one to two days a week continuing to do what he referred to as “critical work” at Doge “for as long as the president would like me to do so and as long as it is useful”.

Musk is scheduled to leave Doge on May 30, a strict 130-day cap on his service as a special government employee.

Tesla saw a 9% drop in revenue year over year in the first quarter of 2025. The company brought in $19.3bn in revenue, well below Wall Street expectations of $21.45bn. The company reported an earnings per share of 27 cents, also well under investor expectations of 43 cents in earnings per share.

Tesla profits also slid 71% to $409m compared with $1.39bn in net income the previous year.

The company suffered a 13% drop in vehicle deliveries, making it the company’s worst quarter since 2022. Tesla closed the quarter with 336,681 vehicles delivered.

Though Musk has acknowledged there have been “rocky moments” of late, he remained optimistic about the company’s future.

“The future for Tesla is better than ever,” he said. “The value of the company is delivering sustainable abundance with our affordable AI-powered robots. If you say, what’s the ideal future that you can imagine, that’s what you’d want. You’d want abundance for all in a way that’s sustainable, that’s good for the environment. Basically this is a happy future, this is the happiest future you can imagine.”

That “happy future” includes the company’s plans for fully self-driving cars, said the billionaire CEO as he laid out an ambitious timeline for when he expects the vehicles to hit US roads in some cities – “by the end of the year”. Tesla has historically struggled to meet timelines Musk has publicly set for the launch of new products, especially when it comes to self-driving.

“The acid test is, can you go to sleep in your car and wake up in your destination and I’m confident that will be available in many cities in the US by the end of this year,” he said.

This would be on top of the Robotaxi service the company plans to roll out in June. “I predict that there will be millions of Teslas operating fully autonomously in the second half of next year,” Musk said.

Despite missing Wall Street expectations on the top and bottom line, initial analyst reactions are optimistic given many had significantly lowered their expectations after the company reported a massive dip in vehicle deliveries.

“Against the backdrop of catastrophic expectations, with everything from sales to margins projected to continue the slump, the less-than-bad numbers have been received as welcome news by Tesla investors,” said Thomas Monteiro, senior analyst at Investing.com. “In a curious turn of events, it’s as if numbers show that even at the worst moment, Elon and the team’s operation can still bring a robust $19.3bn in revenue, with total revenue partly making up for the huge drop in auto revenue.

“If this is the worst it gets for Tesla, then certainly there must be some upside for the stock once tailwinds, such as the highly awaited cheaper model and the Robotaxi, finally hit the market later this year,” Monteiro continued.

Analysts attribute the company’s overall difficulties to a number of factors, but ultimately conclude Musk’s role in the White House has caused a branding crisis for Tesla. The company is at a major crossroads, analysts say, that will only be remedied if Musk leaves his role in Doge and returns to Tesla as CEO full time.

In addition to a drop in sales, a 50% dip in share prices, existing Tesla owners are looking to sell their vehicles in droves, Teslas have been vandalized across the country and in response to ongoing protests of the automaker, the Vancouver International Auto show removed the electronic carmaker from its March lineup. The company also recalled 46,000 Cybertrucks – nearly all that had been sold.

Musk said that the drop in demand is due to the macro economic trends – not branding. “Tesla is not immune to the macro demand for cars,” Musk said. “When there is economic uncertainty, people generally want to pause on doing a major capital purchase like a car. Absent macro issues we don’t see any reduction in demand.”

Analysts are not convinced.

“If Musk leaves the White House there will be permanent brand damage…but Tesla will have its most important asset and strategic thinker back as full time CEO to drive the vision and the long term story will not be altered,” read a Wedbush Securities analyst note. Wedbush remained bullish on the company’s chances of turning its financials around. “IF Musk chooses to stay with the Trump White House it could change the future of Tesla/brand damage will grow.”

The company declined to provide forward-looking guidance for the next quarter citing “shifting global trade policy on the automotive and energy supply chains”.

“While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment,” the earnings report reads. “We will revisit our 2025 guidance in our Q2 update.”

The company did warn, however, that “changing political sentiment” could meaningfully impact short-term demand for Tesla products.

Congressional lawmakers denounced the treatment of Mahmoud Khalil and Rümeysa Öztürk, the students being detained by US immigration authorities for their pro-Palestinian activism, as a “national disgrace” during a visit to the two facilities in Louisiana where each are being held.

“We stand firm with them in support of free speech,” the Louisiana congressman Troy Carter, who led the delegation, said during a press conference after the visits on Tuesday. “They are frightened, they’re concerned, they want to go home.”

Öztürk, a Tufts University PhD student, and Khalil, a graduate of Columbia, have been detained for more than a month since US immigration authorities took them into custody. Neither have been accused of criminal conduct and are being held in violation of their constitutional rights, members of the delegation said.

The delegation included representatives Carter, Bennie Thompson, Ayanna Pressley, Jim McGovern, Senator Ed Markey, and Alanah Odoms, the executive director of the ACLU of Louisiana. They visited the South Louisiana Ice processing center in Basile, where Öztürk is being held, and traveled to the Central Louisiana Ice processing center in Jena to see Khalil.

They met with Öztürk and Khalil and others in Ice custody to conduct “real-time oversight” of a “rogue and lawless” administration, Pressley said.

Their detention comes as the Trump administration has staged an extraordinary crackdown on immigrants, illegally removing people from the country and seeking to detain and deport people for constitutionally protected free speech that it considers adverse to US foreign policy.

“It’s a national disgrace what is taking place,” Markey said. “We stand right now at a turning point in American history. The constitution is being eroded by the Trump administration. We saw today here in these detention centers in Louisiana examples of how far [it] is willing to go.”

McGovern described those being held as political prisoners. He said: “This is not about enforcing the law. This is moving us toward an authoritarian state.”

Late last month, officials detained Öztürk, who co-wrote a piece in a Tufts student newspaper that was critical of the university’s response to Israel’s attacks Palestinians. The 30-year old has said she has been held in “unsanitary, unsafe, and inhumane” conditions in a Louisiana facility and has had difficulty receiving medical treatment.

Öztürk was disappeared when she was detained, Pressley said, adding that she was denied food, water and the opportunity to seek legal council. Khalil missed the birth of his first child, she said. She described Donald Trump as a dictator with a draconian vision for the US.

“They are setting the foundational floor to violate the due process and free speech of every person who calls this country home, whatever your status is,” she said. “It could be you tomorrow for suffering a miscarriage. It could be you tomorrow for reading a banned book.”

Those in custody are shaken and were visibly upset and afraid, the delegation said. They have said they are not receiving necessary healthcare and that the facilities are kept extremely cold.

“We have to resist, we have to push back. We’re a much better country than this,” McGovern said.

Earlier this month a judge ruled that Khalil, who helped lead demonstrations at Columbia last year and has been imprisoned for more than a month, is eligible to be deported from the US.

The Trump administration has argued that Khalil, a lawful permanent resident of the US and child of Palestinian refugees, holds beliefs that are counter to the country’s foreign policy interests.

On Monday, Senator Peter Welch of Vermont met with Mohsen Mahdawi, a Palestinian green-card holder and Columbia student who was detained while at a naturalization interview.

Congressional lawmakers denounced the treatment of Mahmoud Khalil and Rümeysa Öztürk, the students being detained by US immigration authorities for their pro-Palestinian activism, as a “national disgrace” during a visit to the two facilities in Louisiana where each are being held.

“We stand firm with them in support of free speech,” the Louisiana congressman Troy Carter, who led the delegation, said during a press conference after the visits on Tuesday. “They are frightened, they’re concerned, they want to go home.”

Öztürk, a Tufts University PhD student, and Khalil, a graduate of Columbia, have been detained for more than a month since US immigration authorities took them into custody. Neither have been accused of criminal conduct and are being held in violation of their constitutional rights, members of the delegation said.

The delegation included representatives Carter, Bennie Thompson, Ayanna Pressley, Jim McGovern, Senator Ed Markey, and Alanah Odoms, the executive director of the ACLU of Louisiana. They visited the South Louisiana Ice processing center in Basile, where Öztürk is being held, and traveled to the Central Louisiana Ice processing center in Jena to see Khalil.

They met with Öztürk and Khalil and others in Ice custody to conduct “real-time oversight” of a “rogue and lawless” administration, Pressley said.

Their detention comes as the Trump administration has staged an extraordinary crackdown on immigrants, illegally removing people from the country and seeking to detain and deport people for constitutionally protected free speech that it considers adverse to US foreign policy.

“It’s a national disgrace what is taking place,” Markey said. “We stand right now at a turning point in American history. The constitution is being eroded by the Trump administration. We saw today here in these detention centers in Louisiana examples of how far [it] is willing to go.”

McGovern described those being held as political prisoners. He said: “This is not about enforcing the law. This is moving us toward an authoritarian state.”

Late last month, officials detained Öztürk, who co-wrote a piece in a Tufts student newspaper that was critical of the university’s response to Israel’s attacks Palestinians. The 30-year old has said she has been held in “unsanitary, unsafe, and inhumane” conditions in a Louisiana facility and has had difficulty receiving medical treatment.

Öztürk was disappeared when she was detained, Pressley said, adding that she was denied food, water and the opportunity to seek legal council. Khalil missed the birth of his first child, she said. She described Donald Trump as a dictator with a draconian vision for the US.

“They are setting the foundational floor to violate the due process and free speech of every person who calls this country home, whatever your status is,” she said. “It could be you tomorrow for suffering a miscarriage. It could be you tomorrow for reading a banned book.”

Those in custody are shaken and were visibly upset and afraid, the delegation said. They have said they are not receiving necessary healthcare and that the facilities are kept extremely cold.

“We have to resist, we have to push back. We’re a much better country than this,” McGovern said.

Earlier this month a judge ruled that Khalil, who helped lead demonstrations at Columbia last year and has been imprisoned for more than a month, is eligible to be deported from the US.

The Trump administration has argued that Khalil, a lawful permanent resident of the US and child of Palestinian refugees, holds beliefs that are counter to the country’s foreign policy interests.

On Monday, Senator Peter Welch of Vermont met with Mohsen Mahdawi, a Palestinian green-card holder and Columbia student who was detained while at a naturalization interview.

The funeral of Pope Francis will be held on Saturday at St Peter’s Square, the Vatican said on Tuesday, as a host of world leaders and royals including Keir Starmer, Emmanuel Macron, Donald Trump and the Prince of Wales confirmed their attendance.

The pope, the head of the world’s 1.4 billion Catholics, died at his home in the Vatican on Monday aged 88 after a stroke. He had been recovering from double pneumonia for which he was hospitalised for five weeks.

His death certificate, released by the Vatican, said the stroke caused a coma and “irreversible” heart failure.

A Vatican official recounted some of his last moments on Tuesday, saying his death came quickly and he did not suffer. Francis fell ill at about 5.30am on Monday and was attended to by his team of medics. He later fell into a coma and died at 7.35am.

The funeral mass will begin at 10am local time and will be led by Cardinal Giovanni Battista Re, the dean of the college of cardinals, in what is expected to be a solemn ceremony.

Photographs of Francis’ body, dressed in his vestments, holding a rosary and lying in an open coffin in the chapel of his home at Casa Santa Marta, were released by the Vatican on Tuesday.

His coffin will be taken to St Peter’s Basilica on Wednesday morning in a procession led by cardinals. He will remain there until 7pm on Friday, to allow the public to pay their respects. The basilica will remain open until midnight on Wednesday and Thursday.

As confirmed by Francis in his final testament, he will be buried at the Santa Maria Maggiore Basilica in Rome’s Esquilino neighbourhood, breaking with longstanding Vatican tradition.

He specified that he wanted to be buried “in the ground, without particular decoration” but with the inscription of his papal name in Latin: Franciscus.

The cost of his burial will be covered by a sum provided by a benefactor, which Francis transferred to the basilica, he wrote in his will.

Popes are usually buried with much fanfare in the grottoes beneath St Peter’s Basilica in Vatican City, but Francis – loved by many Catholics for his humility – simplified rites for papal funerals last year.

The procession of his coffin from the Vatican to Esquilino, a journey of two or three miles through central Rome, would require the Vatican’s Swiss Guards.

Heads of state and government who have so far confirmed their attendance at the funeral include Emmanuel Macron, Donald Trump, Keir Starmer and Javier Milei, the president of Francis’s native Argentina. Francis had a delicate relationship with politics in his home country, but Milei hailed his “goodness and wisdom”.

Macron said at a press conference during a visit to Réunion: “We will be present at the pope’s funeral, as is only right.”

Trump, who repeatedly clashed with Francis over immigration, said on Monday that he would be attending with his wife. “Melania and I will be going to the funeral of Pope Francis, in Rome. We look forward to being there!” he wrote on Truth Social.

The Ukrainian president, Volodymyr Zelenskyy, who said Francis “prayed for peace in Ukraine”, will attend with his wife Olena Zelenska. The Russian president, Vladimir Putin, who is subject to an international criminal court arrest warrant over his invasion of Ukraine, will not attend, the Kremlin said.

The president of the European Commission, Ursula von der Leyen, and António Costa, the president of the European Council, will both travel to Rome, officials said.

Prince William will attend the funeral on behalf of King Charles, Kensington Palace said. Charles and Camilla visited the late pope during a state visit to Italy earlier this month.

Other royal guests include King Felipe VI and Queen Letizia of Spain, with Felipe calling the 88-year-old pontiff “an enormous ethical beacon of our world, of our time”.

Traditional papal funerals involved three coffins, one made out of cypress wood, one of lead and one of elm, which were placed one inside the other before the body was placed inside and then buried beneath St Peter’s.

But Francis shunned these rituals when he approved the simplified rules in April 2024. People will still be able to see his body in the basilica, but his remains will be placed in one simple coffin made of wood and lined with zinc, and will not be raised on a platform.

Francis almost died twice in February during treatment for severe pneumonia at Gemelli hospital in Rome. He was discharged on 23 March and ordered by doctors to rest for at least two months. Although his work duties were vastly scaled back, he made several appearances in recent weeks, including a visit to St Peter’s Basilica to thank the restorers finishing work on the 17th-century tomb of Pope Urban VIII. On Easter Sunday, he entered St Peter’s Square in the popemobile before giving a blessing from the central balcony of the basilica.

The pontiff’s death is likely to exacerbate divisions within the curia, with conservatives seeking to wrest control of the church away from reformers. A conclave – the secretive process by which Francis’s successor will be chosen – should begin no fewer than 15 and no more than 20 days after the death of the pope.

Israel has quietly stopped designating areas of Gaza as humanitarian zones since it resumed its strikes on the Palestinian territory last month.

The move has heightened fears among aid workers for the safety of civilians sheltering in places previously deemed protected.

A small strip of land in south Gaza was assigned by Israel in December 2023 as a “humanitarian zone” where civilians were told they could safely gather. The area was expanded last May to cover a larger area in south-west Gaza, including Khan Younis, Deir al-Balah and al-Mawasi.

Up to January, the humanitarian zone had been marked on maps that were posted online and dropped from the air by the Israel Defense Forces (IDF). More than a million people had flocked to the areas as a result.

The humanitarian zones were not entirely safe. Official figures showed they were hit by at least 28 Israeli strikes before January and an investigation by the BBC put the number as high as 97, with 550 people killed. The IDF accused Hamas militants of using the zones as protection and as a launchpad for attacks on Israeli troops.

Mention of the humanitarian zones has disappeared from maps since Israel’s ceasefire with Hamas collapsed in March. The IDF has resumed its airstrikes and seized swathes of land as a “security buffer zone” and the UN estimates that 70% of Gaza is now under either an evacuation order or is a “no-go zone”.

In meetings with aid agencies, the IDF and Cogat – the Israeli government unit coordinating policy in Gaza – have sidestepped questions about humanitarian zones, according to a senior international official who asked not to be named in order to speak freely.

The source added: “[The Israeli authorities] have not indicated if they will reinstate some of the humanitarian zone designations. There’s a logic there: if they don’t reinstate the humanitarian zones, they therefore can’t guarantee security of movement within that zone for aid workers or civilians.”

The IDF did not respond to questions on the issue.

Tens of thousands of Palestinians have continued to flock to al-Mawasi, a sandy area with few buildings, many in the belief it is still a protected zone. But the area has been hit by 23 airstrikes since the ceasefire ended, according to the UN.

Last week, two Israeli missiles struck refugee camps in al-Mawasi, setting fire to dozens of tents, many with women and children inside. The attacks killed at least 16 people and wounded many more. “Images of children burning while sheltering in makeshift tents should shake us all to our core,” said Catherine Russell of Unicef.

Nasser, a father of four, sought sanctuary with his family at al-Mawasi after their home in Deir al-Balah was wrecked last year.

“Mawasi was not really better,” said the 35-year-old accountant. “The conditions were crowded, hot, and dirty, there was nowhere to wash or have any privacy. Sometimes there were airstrikes on al-Mawasi when we were displaced there and they set the tents on fire. The Israelis told us to move again even inside the camp.”

The family went back home when the ceasefire was declared but Nasser said it was now clear to everyone in Gaza that nowhere was safe.

“We don’t know what to do,” he added. “I spent all day looking for clean water and firewood to make a fire to boil wastewater. But Mawasi is dangerous too, it has been targeted 20 times in the last month and there were many martyrs.”

The UN warned on Tuesday that Gaza was facing famine after more than 50 days of a total Israeli blockade on aid entering the territory. Also on Tuesday, Israel airstrikes killed 17 people, mostly women and children, according to Gaza’s health ministry.

Philippe Lazzarini, head of the UN agency for Palestinian refugees, described Gaza as a “land of desperation”.

“Hunger is spreading and deepening, deliberate and manmade,” said Lazzarini on Tuesday. He said the 2 million people of Gaza were “undergoing collective punishment” and he charged Israel with using humanitarian aid as “a bargaining chip and a weapon of war”.

His comments were echoed by Jens Laerke, a spokesperson for the UN humanitarian agency OCHA, who told reporters on Tuesday: “It is true that right now is probably the worst humanitarian situation we have seen throughout the war in Gaza.”

Images of child sexual abuse created by artificial intelligence are becoming “significantly more realistic”, according to an online safety watchdog.

The Internet Watch Foundation (IWF) said advances in AI are being reflected in illegal content created and consumed by paedophiles, saying: “In 2024, the quality of AI-generated videos improved exponentially, and all types of AI imagery assessed appeared significantly more realistic as the technology developed.”

The IWF revealed in its annual report that it received 245 reports of AI-generated child sexual abuse imagery that broke UK law in 2024 – an increase of 380% on the 51 seen in 2023. The reports equated to 7,644 images and a small number of videos, reflecting the fact that one URL can contain multiple examples of illegal material.

The largest proportion of those images was “category A” material, the term for the most extreme type of child sexual abuse content that includes penetrative sexual activity or sadism. This accounted for 39% of the actionable AI material seen by the IWF.

The government announced in February it will become illegal to possess, create or distribute AI tools designed to generate child sexual abuse material, closing a legal loophole that had alarmed police and online safety campaigners. It will also become illegal for anyone to possess manuals that teach people how to use AI tools to either make abusive imagery or to help them abuse children.

The IWF, which operates a hotline in the UK but has a global remit, said the AI-generated imagery is increasingly appearing on the open internet and not just on the “dark web” – an area of the internet accessed by specialised browsers. It said the most convincing AI-generated material can be indistinguishable from real images and videos, even for trained IWF analysts.

The watchdog’s annual report also announced record levels of webpages hosting child sexual abuse imagery in 2024. The IWF said there were 291,273 reports of child sexual abuse imagery last year, an increase of 6% on 2023. The majority of victims in the reports were girls.

The IWF also announced it was making a new safety tool available to smaller websites for free, to help them spot and prevent the spread of abuse material on their platforms.

The tool, called Image Intercept, can detect and block images that appear in an IWF database containing 2.8m images that have been digitally marked as criminal imagery. The watchdog said it would help smaller platforms comply with the newly introduced Online Safety Act, which contains provisions on protecting children and tackling illegal content such as child sexual abuse material.

Derek Ray-Hill, the interim chief executive of the IWF, said making the tool freely available was a “major moment in online safety”.

The technology secretary, Peter Kyle, said the rise in AI-generated abuse and sextortion – where children are blackmailed over the sending of intimate images – underlined how “threats to young people online are constantly evolving”. He said the new image intercept tool was a “powerful example of how innovation can be part of the solution in making online spaces safer for children”.

A panel of Brazil’s supreme court justices has unanimously accepted criminal charges against six more key allies of former president Jair Bolsonaro over an alleged coup plot to keep him in office after his 2022 election defeat.

Last month, the panel unanimously accepted charges against Bolsonaro and seven close allies over the alleged coup plot following his loss to current president Luiz Inácio Lula da Silva, and ordered the former rightwing leader to stand trial.

When the prosecutor general, Paulo Gonet, accused Bolsonaro and 33 others of attempting a coup, he divided them into five different groups, based on their roles and positions in the alleged plot.

Bolsonaro and his closest allies, including running mate Gen Braga Netto, were placed in the “core group”, according to the charges. On Tuesday, the supreme court panel reviewed charges against the second group, which Gonet said held managerial roles.

The second group includes the former presidential foreign affairs adviser Filipe Martins, retired Gen Mario Fernandes, former federal highway police director Silvinei Vasques, former presidential aide Col Marcelo Câmara and two federal police officers, Fernando Oliveira and Marilia Alencar.

These individuals coordinated actions planned by the core group, Gonet said in the indictment. These included mobilizing police officers to support the alleged coup, monitoring authorities and drafting a document intended to justify a state of emergency.

Bolsonaro and his allies have repeatedly denied wrongdoing. The former president says that he is being politically persecuted. He has been hospitalized for more than a week, recovering from bowel surgery. On Monday, from his hospital bed in Brasília, he gave an interview to the local television network SBT and said that his trial was not technical, but political.

Under Brazilian law, a coup conviction alone carries a sentence of up to 12 years, but when combined with the other charges, it could result in a sentence of decades behind bars. Bolsonaro is expected to stand trial in the next few months at Brazil’s supreme court.

David Cameron’s former top adviser Steve Hilton has joined the 2026 race for California governor, running as a Republican to replace the Democrats’ Gavin Newsom, who is prevented by law from seeking a third term.

Hilton, who hosted a show on Fox News for six years, launched his campaign with the theme “Golden Again: Great Jobs, Great Homes, Great Kids”. His campaign said Hilton would be “reinforcing his commitment to positive, practical solutions instead of today’s ideology and dogma”, and that his brand of “positive populism” would focus on helping working families.

Hilton was one of the then UK prime minister’s closest advisers before the pair fell out over immigration and Brexit in 2016. Hilton, a former advertising executive, is thought to have been largely responsible for a host of early Cameron measures and photo opportunities including the husky expedition to Alaska to popularise his “Vote Blue, Go Green” message.

At his campaign launch in Los Angeles, Hilton took aim at state Democrats over notoriously high state taxes, soaring home prices and “the destruction of the California dream.”

He said he would welcome running against the former vice-president Kamala Harris, a one-time California senator and attorney general who has not ruled out a run for the governorship.

Hilton said the governor’s job was not a “consolation prize to be handed out to a failed and rejected machine politician from Washington … who thinks she should get this job because of her identity, not her ability”.

Harris is the daughter of a Jamaican father and an Indian mother and would become the first Black woman elected governor in the US if she were to run and win.

California operates a top-two primary system where all candidates compete on one ballot, regardless of party, and the two who receive the most votes go on to the general election in November.

Republicans have not won a statewide race in heavily Democratic California in nearly two decades. Arnold Schwarzenegger was the last Republican to be elected governor, in 2006.

As Cameron’s head of strategy, Hilton was the inspiration for Stewart Pearson in the BBC satire The Thick of It and described as “the eco-friendly, media-savvy, blue-sky-thinking director of communications for the Cabinet Office”.

After leaving Cameron’s team in 2012, Hilton backed Donald Trump over Hillary Clinton for the US presidency in 2016. He supported Brexit but criticised the former Conservative government for “dark” policies that “pull up the drawbridge” to the rest of the world.

With the Associated Press