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Faced with geopolitics and trade war, US companies in China report record-low new investment plans

Faced with geopolitics and trade war, US companies in China report record-low new investment plans

The Hill5 days ago
WASHINGTON (AP) — American companies in China are reporting record-low new investment plans for this year and declining confidence in profits, while uncertainty in U.S.-China relations and President Donald Trump's tariffs have become their top concerns, according to a business survey released Wednesday.
The companies are also challenged by China's slowing economy, where weak domestic demand and overcapacity in local industries are eroding profitability for the Americans.
'Businesses in China are less profitable now than they were years ago, but risks, including reputational risk, regulatory risk, and political risk, are increasing,' said Sean Stein, the president of the U.S.-China Business Council, a Washington-based group that represents American companies doing business in China, including major multinationals.
The survey, conducted between March and May and drawing from 130 member companies, came after the two countries clashed over tariffs and non-tariff measures, including export controls on critical products such as rare-earth magnets and advanced computer chips. Following high-level talks in Geneva and London, U.S. and Chinese officials agreed to pull back from sky-high tariffs and restrictions on exports, but uncertainty persists as the two sides are yet to hammer out a more permanent trade deal.
Kyle Sullivan, vice president of business advisory services at the USCBC, said more than half of the companies in the survey indicated they do not have new investment plans in China 'at all' this year.
'That's a record high,' Sullivan said, noting that it is ''a new development that we have not observed in previous surveys.'
Around 40% of companies reported negative effects from U.S. export control measures, with many experiencing lost sales, severed customer relationships, and reputational damage from being unreliable suppliers, according to the survey. Citing national security, the U.S. government has banned exports to China of high-tech products, such as the most advanced chips, which could help boost China's military capabilities.
Stein argued that export controls must be very carefully targeted, because businesses from Europe or Japan, or local businesses in China would immediately fill the void left by American companies.
Silicon Valley chipmaker Nvidia won approval from the Trump administration to resume sales to China of its advanced H20 chips used to develop artificial intelligence, its CEO Jensen Huang announced on Monday, though the company's most powerful chips remain under U.S. export control rules.
While 82% of U.S. companies reported profits in 2024, fewer than half are optimistic about the future in China, reflecting concerns over tariffs, deflation, and policy uncertainty, according to the survey.
Also, a record high number of American businesses plan to relocate their business operations outside of China, Sullivan said, as 27% of the members indicated so, up from 19% the year before.
In a departure from past surveys, concerns over China's regulatory environment, including risks of intellectual property misuse and lack of market access, didn't make it to the top five concerns this year. That's likely a first, and not for a good reason, Stein said.
'It is not because things got dramatically better on the Chinese side, but the new challenges, often coming from the U.S., are now posing as much of a challenge,' Stein said.
Almost all the American companies said they cannot remain globally competitive without their Chinese operations.
A survey from the European Union Chamber of Commerce in China in May found that European companies were cutting costs and scaling back investment plans in China as its economy slows and fierce competition drives down prices.
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Taxes on Social Security benefits were not eliminated despite what you've heard
Taxes on Social Security benefits were not eliminated despite what you've heard

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Taxes on Social Security benefits were not eliminated despite what you've heard

All the misleading buzz about Social Security and tax cuts for seniors in "One Big Beautiful Bill" foreshadows one ugly scene after another at tax preparation offices next year. It's not going to be pretty when many ill-informed retirees file 2025 tax returns. "What do you mean I'm paying taxes on my Social Security benefits?" some will no doubt ask. Already in July, I've spotted social media posts by tax professionals who dread the day when they will have to say "welcome to reality" to clients. "'Yes, your Social Security is still 85% taxable. Yes, I know that's what Trump's still saying. But pay attention to what he signed, not what he says,' he yelled for the 792,682,314th time into the void," posted Adam Markowitz, an enrolled agent in Florida, on X. What's sparking confusion for retirees about taxes The White House proclaimed, once again, "NO tax on Social Security" on July 4 when President Donald Trump signed what he calls "The One Big Beautiful Bill" into law. It's not an accurate statement. He also sent a mass email on July 12 making the same point. The Social Security Administration sent a gushy, questionable email July 4 to millions of people collecting Social Security benefits and others. Soon afterward, I heard from some retirees who couldn't believe how a federal agency was doing a hard sell about the supposed benefits and creating even more confusion. "The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation's economy," Social Security stated in its email and online. Ninety percent, really? More on that one later. At one point, the email seemed to suggest that retirees were getting two tax breaks. "The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned," according to a copy of the email forwarded to me. Additionally? There is no "additionally." The tax cut is an enhanced deduction for taxpayers aged 65 and older. That's it. The law doesn't eliminate the risk that some will pay taxes on their Social Security benefits. Trump taxes in 2025: Gamblers will pay more taxes in 2026 and beyond when Trump's 'Big, Beautiful Bill' hits The Social Security blog online now refers to a correction without saying what was wrong. "Correction Notice: This blog was updated on July 7, 2025. The second sentence of the fourth paragraph originally read, 'Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned.'' The word "additionally" is no longer in the copy. Instead, the paragraph in the online blog at now reads: "The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. It does so by providing an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they earned." Clear as mud, as one of my relatives might say. How does the 'senior bonus' work? A new, temporary "senior bonus" deduction of up to $6,000 will apply to taxpayers who are 65 and older in 2025, 2026, 2027 and 2028. It ends after that without congressional action. Tax professionals call this a "special personal exemption" that aims to reduce the tax bill for many seniors. In general, seniors with high incomes would not qualify; lower income seniors who do not pay taxes would not benefit, either. "As a deduction and not a refundable credit, it will not help seniors who already owe no income taxes," said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois. Luscombe explained that higher income seniors receive a smaller tax break or no tax break because the deduction starts phasing out for those with a modified adjusted gross income of $75,000 for singles and $150,000 for joint filers. And, yes, there are plenty of other rules but, oddly enough, you do not have to be receiving Social Security benefits each month to qualify. It will not pay to be young — no matter what your income. Taxpayers who are 62, 63 and 64 at the end of a tax year do not qualify for the "senior bonus" deduction. They could still pay income taxes on Social Security benefits, if they're collecting benefits and hit certain income thresholds, without any offsetting bonus deduction. Here's a breakdown of some more rules that you'll need to know when filing a 2025 return: Some married couples can get a better deal: If both spouses are 65 or older, each could receive up to $6,000 or up to $12,000 total for the senior bonus deduction in a given tax year. Married couples face another rule: Married couples must file jointly to claim the senior deduction. If you opt for "married filing separately," you will not qualify for the senior bonus deduction, according to Tom O'Saben, enrolled agent and director of tax content and government relations for the National Association of Tax Professionals. Social Security number required: To claim the deduction, the senior must have a valid Social Security number. Those with higher incomes face limits: The tax break would phase out entirely for single taxpayers 65 and older with a modified adjusted gross income at $175,000. It would phase out entirely for married taxpayers 65 and older with a modified adjusted gross income at $250,000. 6% is the phase out number. When your income climbs above the threshold, the deduction phases out at a rate of 6%. The National Association of Tax Professionals, which has 23,000 members, offered an example for a 70-year-old retiree who is single and has a modified adjusted gross income (MAGI) of $90,000. In this example, $15,000 of MAGI exceeds the $75,000 threshold for a single tax filer. Take out your calculator and multiple $15,000 by 6% to hit $900. The maximum $6,000 senior bonus deduction is then reduced by $900 in this example to reach a senior deduction of $5,100. Tax relief for parents: How the Child and Dependent Care Credit can cut summer camp costs in 2025 Taxes on Social Security were never eliminated Believe me, you're not doing your friends any favors now by insisting that there are no taxes on Social Security benefits. Some people still need to withhold taxes on their Social Security benefits, if they have other significant sources of income. At no point did the House bill or Senate version, which was later passed by the House and signed into law by Trump, ever include a provision to eliminate the tax on Social Security or provide a deduction for Social Security income, according to a summary of the massive reconciliation bill provided by Wolters Kluwer, an information services company. Trump famously proposed making Social Security income tax-free during his 2024 campaign. But such a change could not be part of the budget reconciliation process. One provision of the Congressional Budget Act of 1974 prohibits Senate reconciliation bills from including any measure that changes Social Security benefits or taxes. "It's fair to frame this new deduction as an attempt to fulfill the spirit of the president's campaign proposal consistent with the limits imposed in the reconciliation process," said Garrett Watson, director of policy analysis at the nonpartisan Tax Foundation. "But selling this politically as exempting Social Security from income tax is not accurate and will confuse or upset the seniors who end up paying tax on some benefits," Watson said. The senior bonus deduction, Watson points out, applies to any source of taxable income that a taxpayer who is 65 or older has and may not necessarily eliminate all tax on Social Security benefits. Social Security benefits began being taxed at the federal level in 1984 to shore up the Social Security trust fund, which was facing insolvency. At best, the new tax break means many seniors will save some money on taxes over four years. "Despite the SSA claims, most would see their income taxes on Social Security benefits reduced, not eliminated," wrote Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center. In an online report July 9, Gleckman wrote that the biggest beneficiaries are seniors making between about $80,000 and $130,000. The senior bonus deduction would for that group would amount to an average tax cut of about $1,100 or roughly 1% of their after-tax income, he said. The tax deduction of up to $6,000 would benefit fewer than half of older adults, according to the Tax Policy Center estimates. How much a senior who qualifies for the "senior bonus" will save on taxes will depend on their taxable income, which determines your marginal tax rate. At a 12% marginal tax rate, for example, the $6,000 deduction for a single taxpayer who is 65 or older would result in $720 in tax savings, according to Watson. For a single taxpayer, the 12% tax rate applied on taxable income from $11,926 through $48,475 in 2025. Annual inflation adjustments can be made to marginal tax brackets. Hype, complexities and more can get your head spinning All this begs the question: How can Trump say there will be no taxes on Social Security benefits? Well, retirees will need to treat this one as one of those Trumpisms where, maybe, you need to study the fine print first. "The president often seems to try to put as positive a spin as possible on an issue without being totally consistent with the facts," Luscombe said. The 90% number used in the email sent by the Social Security Administration appears to track a 90% figure used by the White House. It is misleading. Many people did not have to pay taxes on Social Security benefits based on their income before the mega tax bill was signed into law July 4. About 40% of people who get Social Security currently pay income taxes on their benefits, according to an earlier report issued by the Social Security Administration in 2025. Other estimates, though, suggest that a bit more than 50% currently pay taxes. The Tax Foundation did not estimate the portion of seniors who would not pay tax on benefits under the new deduction. But noted that roughly half of all Social Security beneficiaries did not pay federal income tax on their Social Security benefits before the new tax law. Gleckman, at the Tax Policy Center, told the Detroit Free Press — part of the USA TODAY Network — that the 90% figure being used by the Social Security Administration isn't close to reality. In his online blog, Gleckman said the administration apparently came up with its 90% estimate by "assuming all tax deductions, including the new senior deduction, are used only to reduce Social Security benefit taxes." "But, of course, older adults pay taxes on all their taxable income, including from sources other than Social Security," Gleckman wrote. The Tax Policy Center's estimate is that about half of all recipients will pay at least some income taxes on their Social Security benefits, Gleckman wrote. "That is, they face higher tax liability than they would if benefits were not taxable. "The Social Security system is complicated, and, in many ways, its complexity is terrifying for older adults, many of whom rely on its benefits to pay living expenses in old age. The latest SSA communication does not help and indeed may make matters worse," Gleckman wrote. How Social Security benefits are taxed will remain a complex headache for many people aged 62 and up. Based on Social Security data, nearly 23% of men and 24.5% of women who claimed retirement benefits in 2022 were age 62. The earliest age that you can claim Social Security retirement benefits is 62. By collecting as early as possible, though, you'd receive a reduced monthly retirement benefit that is cut by a small percentage for each month before your full retirement age. The full retirement age is 67 now for those born in 1960 and after. For those born earlier, the full retirement age varies and is less than 67 based on when you were born. How Social Security benefits are taxed Unfortunately, it doesn't take much extra income to get hit with some taxes because income thresholds that trigger the tax on Social Security benefits do not adjust for inflation. For single filers, the threshold for paying taxes on up to 50% of Social Security benefits applies when your combined income is between $25,000 and $34,000 a year. Once the combined income is higher, up to 85% of benefits may be taxable. Couples filing a joint return face taxes on up to 50% of their Social Security benefits if their combined income is between $32,000 and $44,000. If the couple's combined income is higher than that, up to 85% of benefits would be taxable. Combined income is your adjusted gross income, plus nontaxable interest, such as interest on certain bonds, plus half of your Social Security benefits received that year. As a result, someone who is working while collecting Social Security benefits would need to take their earnings from a job into account. The same's true for someone who is retired and taking taxable withdrawals from traditional 401(k) plans. All that tax complexity isn't going to vanish. O'Saben, of the National Association of Tax Professionals, said he's frustrated by how the senior bonus deduction is being marketed. He heard a news story on the radio that implied that Social Security benefits were no longer taxable and he found himself yelling at the radio while driving. "There is no provision making Social Security benefits tax free," O'Saben said. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor. This article originally appeared on Detroit Free Press: Trump didn't kill taxes on Social Security, despite what you've heard Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Why Solana Is Surging Today
Why Solana Is Surging Today

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Why Solana Is Surging Today

Key Points There's no obvious reason behind Solana's weekend move. The U.S. House of Representatives voted in favor of several important crypto bills last week. Institutional interest around Solana appears to be growing. 10 stocks we like better than Solana › Since Friday afternoon at 4 p.m., the price of Solana (CRYPTO: SOL) had surged nearly 10%, as of 11:09 a.m. ET today. While there's not an exact reason for the move, a few events could be driving it. Institutional interest picking up Last week, the U.S. House of Representatives voted in favor of three crypto bills that investors view as bullish for the entire sector, two of which would create a framework for stablecoins and digital assets. President Donald Trump recently signed the Genius Act (the one for stablecoins) into law because both the House and Senate approved the bill. But it's also become clear that institutional interest in Solana is picking up. According to CoinShares' digital fund flows data, more than $39 million flowed into Solana-linked financial products last week. CoinShares also estimates that year-to-date inflows total $245 million. Furthermore, there have now reportedly been seven applications for a Solana spot exchange-traded fund (ETF). Crypto spot ETFs increase liquidity for tokens and have previously proven to be bullish. There are already extremely high odds that the Securities and Exchange Commission (SEC) will eventually approve a spot-Solana ETF before the year ends. A token to watch Solana is one of the few cryptocurrencies with immense potential. The technical strength of its network allows it to, in theory, process tens of thousands of transactions per second. But it's still hard to translate this capability into a price target. For this reason, I'd recommend keeping positions smaller and more speculative right now. Should you invest $1,000 in Solana right now? Before you buy stock in Solana, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Solana wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Solana. The Motley Fool has a disclosure policy. Why Solana Is Surging Today was originally published by The Motley Fool

Key senator makes bipartisan plea to Trump to invest in weather and early warning networks
Key senator makes bipartisan plea to Trump to invest in weather and early warning networks

CNN

time13 minutes ago

  • CNN

Key senator makes bipartisan plea to Trump to invest in weather and early warning networks

A prominent senator is calling on President Donald Trump to reverse course on his proposal to slash the budget for the National Oceanic and Atmospheric Administration, making a case for America to be a world leader in the weather forecasting space instead. Sen. Maria Cantwell, a Democrat from Washington and the ranking member of the Senate commerce, Science and Transportation Committee, is advocating that the administration work with Congress to pursue bipartisan investments and outlined her plans in a letter addressed to Trump sent Monday. The letter spells out five recommendations to improve America's weather forecasting infrastructure, such as collecting far more observations and modernizing alert systems. The letter comes in the wake of devastating flash floods in Texas on the night of July 4 that killed more than 130 people. It also is being sent at a time when the Trump administration has reduced staffing at the National Weather Service and proposed even more significant cuts, such as eliminating NOAA's research arm and shutting down its many research centers. These labs contribute to forecast, technology and warning improvements. CNN has reached out to the White House for comment. All told, the Trump White House's budget proposal would shave off about $1.7 billion from the NOAA budget, about a 27% cut from current levels. Cantwell does not push back against the cuts in the letter but rather pitches an investment plan to try to appeal to the administration's desire to make America the leading nation again in many areas. 'We have a once-in-a-lifetime opportunity to create the world's best weather forecasting system that would provide Americans with much more detailed and customized alerts days instead of minutes ahead of a looming extreme weather event,' Cantwell wrote. A noteworthy omission from the letter is any reference to climate change and the relationship between climate change and extreme weather events. The administration has taken a host of actions to rollback climate regulations and stifle climate science research at multiple agencies. The Texas floods have raised questions about NWS readiness for extreme weather events in the wake of staff cuts. The agency is scrambling to hire about 150 forecasters to fill the most critical gaps left by layoffs, early retirements and other incentives the Trump administration offered people to leave government service. Even with 150 new hires, who will take time to train, the NWS will still be more thinly staffed than at the start of the Trump administration. Prev Next The letter endorses next generation weather satellites, radars and new hurricane hunter aircraft to replace the current aging fleet, along with computing capabilities to catch up with, and eventually pass, the superior accuracy of European forecast centers. It also puts an emphasis on modernizing weather alert systems — a key topic in the wake of the disaster in Texas. Notably, it also endorses putting more money, not less, into 'basic and applied research.' Cantwell is in step with her colleagues on both sides of the aisle on the Senate Commerce Committee, who rejected most of the administration's proposed cuts in an initial fiscal year 2026 spending bill. House appropriators did the same, although the Trump administration has indicated it may seek other ways to restrict funding for agencies such as NOAA. 'Americans should have the best weather system. Why not?' Cantwell said on CNN this morning.

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