US-Led Global Trade Tiff Risks Stoking Inflation for Australia
A US-led global trade war may intensify price pressures in Australia by weakening its currency, according to a Westpac Banking Corp. economist.
US tariffs will make American goods more expensive, and so prices for the goods and services that Australia imports will go up too, Westpac's senior economist Mantas Vanagas said in a report Friday.
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Business Insider
6 minutes ago
- Business Insider
A YouTuber created a $75 grill scrubber to experience the challenges of making stuff in the US — and it sold out
A really nice grill brush will cost you about $25 at your local big box store, but YouTuber Dustin Sandlin is betting he can get customers to shell out three times that amount for a Made-in-America version. Sandlin traces his passion for US manufacturing to the COVID-19 pandemic in 2020, when he was bothered by the lack of American-made essential goods. "Everybody wanted N95 masks and face shields, and they couldn't get it," he said in a recent YouTube video. "This revealed to me how anemic our manufacturing capacity in America has become, because I was waiting on some billionaire to come save us, and it didn't happen." So began a yearslong deep dive into the challenges of making products in the US, which Sandlin documented for his series on YouTube called "Smarter Every Day." After working with John Youngblood, the owner of a local specialty grill accessories company, Sandlin got excited about the idea of developing a better scrubber. Sandlin and Youngblood wanted to produce it in the US with as many domestically sourced components as possible, and sell it at a retail price. In a video that went live Sunday and has since amassed more than 2 million views, Sandlin shares why he decided to get serious about US manufacturing, explains how he navigated the design process, and makes a sales pitch for viewers to buy it for themselves. On Tuesday, Youngblood told Business Insider the $75 scrubber has sold through its initial production run of several thousand units within a day, and his company is now taking pre-orders. "We're going to have a backlog for a while," Youngblood said. Most grill brushes are meant to be thrown away. This one isn't. Many lower-cost grill brushes aren't typically designed to last more than a year of use — grill-maker Weber recommends changing them after each grilling season. Another problem is that the bristles have been known to come off and can end up in grilled food. Sandlin and Youngblood found that welded chain mail — like the material of a medieval knight's armor — was highly effective at cleaning grill grates without breaking. There was one problem: "We could only find it in China." After a few tries, the team managed to find a US supplier who could make about 2,000 units a month and a supplier in India to augment the rest. Attaching the chain mail to a handle proved to be another adventure. Sandlin said the average one-inch industrial bolt costs around 9 cents when imported, but that jumps to 38 cents for versions made in the US. "Most machine shops I talked to directly, they said, 'Yeah, we can't even get the material for the price of the finished bolts that you're getting from a foreign supplier,'" Sandlin said. Then there was the process of making injection-molded parts to provide support and flexibility, which required machining custom tools and dies (the metal forms that shape a material) for shops to use in production. "This is the moment where this whole experiment came into focus for me," Sandlin said. "I realized at that moment we're screwed." American manufacturing has exported the smart part of making stuff The reason for Sandlin's pessimism is that many of the shops he spoke with send tool and die design files to China to be made and imported for use in US production lines. "I don't want my intellectual property in China, I want to make it here," he said. "And they said, 'Good luck.'" The problem illuminated by this episode goes far beyond a seemingly simple grilling accessory. "We're screwed as a nation if we can't do the intelligent work of tool and die: making the tools that make the things," Sandlin said. "We have flipped it. We are now to the point where the smart stuff is done somewhere else." Sandlin and Youngblood eventually found US suppliers for all of their custom components. They're working to get every piece sourced here. The video shows two instances where Sandlin was surprised by the apparent country of origin being different from what he says he was led to believe: The first batch of knobs arrived in packaging stating they were made in Costa Rica rather than the US. Several boxes of chain mail (ostensibly from India) had markings that suggested they were instead from China. "I'm shocked," Sandlin said. "It's pretty weird to set out to try to make a thing completely in America and to find out towards the end of the process that you made something in China anyways." Sandlin says he's not interested in having America be the dominant world player — he wants more opportunities for people here to have good jobs that allow them to take care of their communities. "If you are ever, ever in a position to make a decision about where your thing is manufactured, take a second and consider making a little less profit, maybe in order to invest in your local community," he said.
Axios
30 minutes ago
- Axios
U.S. races to break China's hold on rare earth magnets
While U.S. trade negotiators work to ease an immediate shortage of rare earth magnets from China, the Trump administration is scrambling to line up viable alternatives that would reduce America's reliance on its chief economic rival. Why it matters: Small-but-powerful rare earth magnets are essential to high-tech products, from cars and robots to electronics and weapons. But China controls 90% of the world's supply of the critical components. The contentious trade relationship between the U.S. and China has amplified the economic and security risks of that reliance. Global automakers are "in full panic" that China's limits on rare earth exports will trigger supply chain shocks like the pandemic-related semiconductor shortages that occurred in 2021 and 2022. The big picture: It's not a new problem. U.S. officials have been talking about the need to mitigate American dependence on China for years. China also dominates processing of metals like lithium, cobalt, nickel and graphite used in batteries. The latest: U.S. and Chinese officials met Monday and Tuesday in London to try to iron out their trade issues, amid reports that China was willing to expedite export licenses for U.S. and European automakers if the U.S. loosened export controls on jet engine parts and software. Late Tuesday both sides said they'd reached a framework of a deal, pending approval from both countries' leaders, that would in theory resolve the most recent export issues. Yes, but: There's still an urgency to find alternative sources. President Trump in April called for an investigation into national security risks posed by U.S. reliance on imported processed critical minerals, including rare earth elements. He has also used a series of executive orders to try to bolster domestic supply chains, like fast-tracking environmental reviews for U.S. mining projects. In Congress, meanwhile, rare earth competition with China has galvanized both parties. A spate of bills would create a tax credit for production of high-performance rare earth magnets, use Defense Production Act authority to direct emergency funding, and establish an Energy Department program to finance minerals projects. Two Republicans and two Democrats are pressing legislation that allows the president to strike free trade agreements exclusively focused on critical minerals and rare earth elements. "There is fairly broad bipartisan support around becoming more resilient, especially in areas that invoke national security — and this is clearly one of them," Sen. Todd Young, an Indiana Republican leading that bill, told Axios last month. Zoom in: One deal that's getting a lot of attention is a potential partnership between California-based MP Materials and Saudi Arabia's flagship mining company, Maaden. The deal was inked in May on the sidelines of the U.S.-Saudi Investment Forum, coinciding with a broader agreement between the U.S. and Saudi Arabia to cooperate on energy and critical minerals. MP Materials operates California's Mountain Pass, the only rare-earths mine in the U.S., which produces 12% of the global supply. At maximum production, Mountain Pass could yield enough rare earths to supply more than 6 million electric vehicles, the company says. But the bottleneck is magnets, which MP Materials is just beginning to produce. Maaden, a fast-growing, government-controlled mining company, is developing mines for a variety of critical minerals, but doesn't produce rare earths today. What to watch: Together, the companies seek to jointly develop a vertically integrated rare earths supply chain in Saudi Arabia—mining, separation, refining and magnet production—for global consumption. Zoning and environmental regulations in the U.S. make it hard to open a rare earth mine, but Saudi Arabia moves more quickly and is anxious to wean its economy off of oil. Saudi expertise in petrochemical refining can be leveraged for minerals processing, while MP brings experience across the entire rare earths supply chain, including mining, refining and magnet production. Reality check: The preliminary deal is non-binding, so it could still fall apart.
USA Today
31 minutes ago
- USA Today
As trade talks continue, new data shows Chinese imports hit 5-year low
As trade talks continue, new data shows Chinese imports hit 5-year low Show Caption Hide Caption Commerce Secretary Lutnick optimistic about US-China trade talks As delegations from the US and China begin a second day of trade talks, US Commerce Secretary Howard Lutnick said things are "going well." Bloomberg As U.S. and Chinese officials hold trade talks this week, new data shows massive tariffs drove Chinese imports to their lowest levels in more than five years. U.S. tariffs on Chinese goods topped out at 145% in April when the Census Bureau collected trade data that showed a continuing decline in Chinese imports from March. In May, the nations agreed to a 90-day pause in mutual triple-digit tariffs ahead of trade talks. Through February and March, overall imports to the U.S. hit record highs as traders anticipated rising tariffs. But under the withering tariff rates President Donald Trump announced on April 2, what he called 'Liberation Day,' that overall import number plunged from more than $340 billion in March to just $273 billion in April. 'People were importing in anticipation of the imposition of tariffs. Then, when he made the Liberation Day announcement, everything collapsed,' said Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics, a think tank based in Washington, D.C. 'China is just the best example because when the United States does something, China retaliates. And so that's why we got into the escalatory spiral and ended up with triple-digit tariffs,' Noland added. 'People couldn't import. Some people literally did not have the money to pay the import tariff.' Ocean freight volumes from China to the U.S. fell sharply in April, down 34% from a year earlier, according to Kristy Garcia-Quintela, director of ocean freight at GEODIS, a global logistics company. '34% is pretty big,' said Garcia-Quintela, who added the U.S. demand for global ocean shipping saw a 6% decline in April compared to the same month last year. Besides Chinese imports dropping to a post-pandemic low, shipments from the United States' other largest trading partners – the European Union, Mexico, and Canada – also fell in April. Purchases from the European Union, for example, dropped in April to $53 billion after surging to an all-time high just a month earlier at nearly $82 billion. Despite a partial pullback in tariffs and ongoing trade talks, the trade tensions still remain high, and experts expressed concerns about the road ahead. 'The truly catastrophic tariffs that were announced on Liberation Day have been avoided, but it's not like everything is looking good right now,' said Noland, the economist.
