US inflation heats up as tariffs start to bite
Consumers are starting to feel the impact of President Donald Trump's trade policies. Costs are rising for products with the most exposure to tariffs, such as toys, sporting goods and household furnishings. Prices for each of these items jumped by at least 1 percent.
Trump responded to the figures by once again taking aim at the Federal Reserve. He wants policymakers to soften the blow of higher prices by lowering interest rates.
At the White House, Trump said: "Interest rates should be coming down where we have a very, very successful country. We should have the lowest interest rate anywhere in the world, and we don't."
Trump has been pressuring Fed Chair Jerome Powell to step down. Powell's term is set to expire next May, but he can technically remain on the Fed's board until 2028.
Treasury Secretary Scott Bessent said in an interview with Bloomberg TV that officials have begun a "formal process" to replace Powell. He said Powell should leave the Fed entirely when his term as chair ends.
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Japan Today
an hour ago
- Japan Today
U.S. tariff tussles stuff of nightmares for Bordeaux winemakers
A visitor enjoys the Bordeaux wine festival -- but US tariffs will hit hard a sector already under pressure By Marisol RIFAI French wine producers, already reeling from a downturn in their market, still do not know how bitter a taste the U.S. tariffs on wine will leave on their palates. In southwestern France, around the Bordeaux region's famed vineyards, months of talk on what U.S. President Donald Trump will decide on tariffs have been the stuff of nightmares for producers as they look on helplessly. The United States is by far the top export market for Bordeaux's wine, accounting for 400 million euros ($470 million) worth of annual sales -- or about 20 percent of the total. China lags behind with 300 million euros ahead of the United Kingdom with 200 million. Sunday's announcement of a trade deal between the United States and the European Union did not clear up what tariffs European wine and spirits producers will face in the United States. While Trump said European exports face 15 percent tariffs across the board, both sides said there would be carve-outs for certain sectors. EU head Ursula Von der Leyen said the bloc still hoped to secure further so-called "zero-for-zero" agreements, notably for alcohol, which she hoped to be "sorted out" in the coming days. Philippe Tapie, chairman of regional traders' union Bordeaux Negoce, which represents more than 90 percent of the wine trade in the Bordeaux area, is worried by the uncertainty. "One day, it is white, the next it is black -- the U.S. administration can change its mind from one day to the next and we have no visibility," he told AFP. In mid-March, Trump had threatened Brussels with 200 percent tariffs on alcohol in response to a proposed EU tax on U.S. bourbon. Then in April he brandished a new threat of 20 percent across the board on EU products, a threat ultimately suspended. Since then, the level first held at ten percent but, in late May, the U.S. leader threatened to revert to 50 percent before pivoting to 30 percent starting August 1st, the deadline for the negotiations with the EU that led to a preliminary accord after Trump and Von der Leyen met in Scotland on Sunday. "At 10 percent or 15 percent, we'll find solutions. At 30 percent, no. End of story," Tapie warned just ahead of the announcement as he criticized a "totally unpredictable American administration". To export wine, "there's a minimum of 30 days by boat. If you go to California, it's 60 days. We can't think in terms of weeks," says Tapie, who says he has "never been confronted with such a situation" in 30 years of business. Twins Bordeaux, one of Bordeaux's leading wine merchants, also laments the tariffs' impact. "The American market represents about a third of our turnover, or around 30 million euros," explains Sebastien Moses, co-director and co-owner of Twins, which usually ships upwards of a million bottles a year to the United States. Since January, "our turnover must have fallen by 50 percent compared to last year," he says. "So far, we've managed to save the situation, because as soon as Donald Trump was elected we anticipated this and sent as much stock as possible to the U.S.," explains Moses, though longer term he says this is not a "stable" strategy. As an attempted work around Twins Bordeaux even shipped cases of around 10,000 bottles by air in March. "But only very expensive wines, at no less than 150-200 euros per bottle, because by air it's at least two and a half times the price of shipping by sea," he said. For Bordeaux wine merchant Bouey, the U.S. market represents less than 10 percent of its exports. "We have long since undertaken a geographical expansion. Faced with the global chaos, commercial strategies can no longer be based on a single- or dual-country strategy," Jacques Bouey, its CEO, told AFP in April. The tariffs come with the industry already struggling with declining consumption that has led to overproduction and a collapse in bulk prices. By early 2023, a third of Bordeaux's approximately 5,000 wine growers admitted to being in difficulty. "We're starting to become world champions in terms of accumulating problems," complained Tapie. © 2025 AFP
Japan Today
an hour ago
- Japan Today
US, China to launch new talks on tariff truce extension, easing path for Trump-Xi meeting
FILE PHOTO: The American and Chinese flags are photographed on the negotiating table, during a bilateral meeting between the United States and China, in Geneva, Switzerland, May 10, 2025. KEYSTONE/EDA/Martial Trezzini/Handout via REUTERS/ File Photo By David Lawder Top U.S. and Chinese economic officials will resume talks in Stockholm on Monday to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals. Without an agreement, global supply chains could face renewed turmoil from U.S. duties snapping back to triple-digit levels that would amount to a bilateral trade embargo. The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15% tariff on most EU goods exports to the U.S., including autos. The bloc will also buy $750 billion worth of American energy and make $600 billion worth of U.S. investments in coming years. No similar breakthrough is expected in the U.S.-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. A U.S. Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days. Trump's administration is poised to impose new sectoral tariffs that will impact China within weeks, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products. "We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters on Sunday before European Commission President Ursula von der Leyen struck their tariff deal. The Financial Times reported on Monday that the U.S. had paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support Trump's efforts to secure a meeting with Xi this year. The industry and security bureau of the Commerce Department, which oversees export controls, had been told to avoid tough moves on China, the newspaper said, citing current and former officials. Reuters could not immediately verify the report. The White House and the department did not respond to Reuters' requests for comment outside business hours. DEEPER ISSUES Previous U.S.-China trade talks in Geneva and London in May and June focused on bringing U.S. and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include U.S. complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that U.S. national security export controls on tech goods seek to stunt Chinese growth. "Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington. "I'd be surprised if there is an early harvest on some of these things but an extension of the ceasefire for another 90 days seems to be the most likely outcome," Kennedy said. U.S. Treasury Secretary Scott Bessent has already flagged a deadline extension and has said he wants China to rebalance its economy away from exports to more domestic consumption -- a decades-long goal for U.S. policymakers. Analysts say the U.S.-China negotiations are far more complex than those with other Asian countries and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on U.S. industries. TRUMP-XI MEETING? In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon on a landmark trip to China, and a new flare-up of tariffs and export controls would likely derail planning. Sun Chenghao, a fellow at Tsinghua University's Center for International Security and Strategy in Beijing, said that a Trump-Xi summit would be an opportunity for the U.S. to lower the 20% tariffs on Chinese goods related to fentanyl. In exchange, he said the Chinese side could make good on its 2020 pledge to increase purchases of U.S. farm products and other goods. "The future prospect of the heads of state summit is very beneficial to the negotiations because everyone wants to reach an agreement or pave the way in advance," Sun said. Still, China will likely request a reduction of multi-layered U.S. tariffs totaling 55% on most goods and further easing of U.S. high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the U.S. trade deficit with China, which reached $295.5 billion in 2024. © (c) Copyright Thomson Reuters 2025.
Japan Times
an hour ago
- Japan Times
U.S. alcohol sector prepares to fight back against buzzy cannabis drinks
Top alcohol makers have been sitting on the sidelines of a cannabis beverage boom, watching brands in the fast-growing category like Cann and Wynk make deals with beer and booze distributors and gain valuable space on liquor store shelves. Now some alcohol companies, seeing their sales falter, are laying the groundwork to potentially enter the lucrative but risky market, a dozen founders of cannabis brands, ingredients suppliers and drinks manufacturers said. Drinks containing THC, the mood-altering ingredient in marijuana, are restricted to licensed dispensaries in 24 U.S. states where recreational use of pot is legal. But small amounts of THC can also be extracted from hemp, a crop that's related to marijuana but is legal federally. Beverages containing THC derived from hemp can be sold in many liquor shops, convenience stores and supermarkets. That's where Big Alcohol sees opportunity, despite some companies having been burned by past cannabis investments. Corona brewer Constellation Brands has been internally researching hemp-based cannabis drinks to weigh its next steps, a source familiar with the company's thinking said. Absolut Vodka distiller Pernod Ricard has met with Brez, maker of drinks with THC derived from hemp, as recently as last month to discuss a possible investment, Brez's founder Aaron Nosbisch said. "They did not invest now but are circling," Nosbisch said. Corona brewer Constellation Brands has been internally researching hemp-based cannabis drinks to weigh its next steps. | Reuters Pernod declined to comment on the meeting. Constellation Brands said it does not comment on rumors and speculation. Alcohol makers are still suffering a hangover following America's pandemic drinking binge, when sales spiked as cash-flush consumers splurged on pricey bottles of liquor for their homes, and then rushed back to bars when lockdown restrictions lifted. Alcohol sales have been falling ever since as inflation and interest rates rose and wallets became stretched. The companies also now face growing warnings from public health authorities who say drinking even small amounts of alcohol is associated with at least seven types of cancer. Overall U.S. beer volumes fell nearly 6% through May of this year, according to the Beer Institute. Volumes of spirits and wine sold in the same time period have declined by 5.6% and 9%, respectively, according to the Wine & Spirits Wholesalers of America. In a sign of tumult in the industry, the CEO of the world's biggest alcohol maker, Diageo, stepped down last week as the company struggles to revive growth. But hemp-based drinks are expanding fast. The market for drinks infused with THC from hemp is projected to top $1 billion in sales this year, according to market research firm Euromonitor, and climb past $4 billion in 2028. Molson Coors CEO Gavin Hattersley said in January he'd be naive to say THC beverages aren't having an effect "at least in a small way." Tilray Brands, the fourth-largest U.S. craft brewer with brands including Montauk and Shock Top, is selling its new hemp-derived THC seltzers through its beer distributors such as United Distributors in Georgia, executives said in an interview. The company's THC drinks are for sale in 13 states. "There's not a real leader that's taken a hold of the (market) so far, and that's what we look to do," Tilray's CEO Irwin Simon said earlier this year. Others, including Heineken's Lagunitas brand and Pabst Blue Ribbon, the fifth-largest U.S. brewer, have lent their names to THC seltzers for sale in dispensaries in California. Lagunitas is looking to grow distribution of its THC seltzer, potentially using hemp, to other states, a representative from Cannacraft, its ingredient supplier, said. A spokesperson for Lagunitas said it has no immediate plans to expand, but monitors market development and looks for opportunities as consumer tastes and regulations change. Boston Beer, the maker of Samuel Adams, is one of the brewers with the clearest path to eventually enter the U.S. cannabis drinks market, although it has not provided a time frame for doing so. The company is already selling its Teapot brand of THC-infused tea in Canada where weed is legal, and in the last year tested a potential U.S. version made from THC derived from hemp. To test the reformulated product, a panel of trained sensory experts sampled Teapot with both THC from hemp and marijuana, and could not taste a difference, said the company's head of cannabis, Paul Weaver. "This is a source of growth for our organization, flat out," Weaver said. Big Alcohol is treading carefully in cannabis drinks because state and federal regulations have shifted, and could change again, said five executives at ingredients suppliers and THC beverage brands. California, which has legal weed, banned hemp-based drinks last year to try to prevent children from consuming them. Other states have introduced special taxes or restricted sales, ambiguity that has held alcohol companies back from entering the market. Sen. Mitch McConnell, who helped first legalize hemp in 2018 to support farmers in his home state of Kentucky, in July introduced a provision in a government spending bill that could ban intoxicating products using the plant. McConnell wrote in an op-ed published in the Louisville Courier Journal on July 17 that his efforts are aimed at keeping THC gummies that look like familiar candies out of the hands of children. He did not provide comment beyond the op-ed. Big brewers have been burned by past cannabis investments. In 2022, the biggest U.S. brewer Anheuser-Busch inBev exited a deal with Tilray to research cannabis drinks in Canada. The same year, Molson Coors shuttered its U.S. business selling beverages infused with CBD, a compound in marijuana and hemp that does not have psychoactive effects, citing an uncertain regulatory environment. Constellation Brands restructured its investment in Canadian cannabis company Canopy Growth last year after poor sales. Now, however, hemp-based THC drinks are sold widely. Beyond beer's declining sales, brewers face an additional squeeze from tariffs, which threaten to push up prices for imported drinks, and Hispanic consumers, who are staying home due to fears of U.S. immigration enforcement. Liquor stores are embracing the buzzy beverages to boost their margins as the drinks, typically more expensive than a six-pack of beer, start to outsell other types of alcohol. Jon Halper, CEO of Minnesota liquor store chain Top Ten Liquors, said in June that THC beverages now make up 15% of his business after the company introduced them two years ago. By next year, they could grow to rival wine, currently in the mid-20% of his sales, he said. The drinks take shelf space mostly from beer because they are in coolers, Halper said. The margins on cannabis beverages are higher than those for beer and spirits, helping his firm offset softening alcohol sales. Charleston, South Carolina-based Southern Horizon Logistics, a sister company of Budweiser distributor Southern Crown Partners, is now selling more hemp-based drinks than wine and spirits, said Justin Ashby, the company's chief administrative officer. Ryan Moses, CEO of Nashville, Tennessee-based beer, wine and spirits distributor Best Brands, said that growth from THC-infused drinks has helped offset flat and declining alcohol sales. Instead of possible layoffs, Moses has been able to re-allocate employees to the new category. "It could be as big as the other categories five to 10 years from now," Moses said. Consumers like Josh Goldberg, 39, of Lindenhurst, New York, are also trading out beer and tequila for THC seltzers. Goldberg made the switch almost two years ago, and hasn't had a drink since. "It replaces the physical act of drinking with drinking something else," Goldberg said. Halper, the owner of Minnesota liquor stores, said the customers buying THC-infused drinks tend to skew female and over the age of 35. "The soccer mom has really embraced the category in a big way," Halper said.
