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Yahoo
20 minutes ago
- Yahoo
Higher U.S. tariffs will extend uncertainty for businesses, experts say
President Trump's executive order hiking tariffs on U.S. imports could drive up consumer prices and prolong uncertainty for millions of businesses, trade experts said. Materials issued by the White House on Thursday outline new tariff rates for dozens of countries, but details remain scant on how to implement the trade agreements, said Barry Appleton, co-director of the New York Law School Center for International Law. "The last thing businesses want to have are unanswered questions. They were looking for certainty, and what we have instead is a gigantic Rubik's Cube," he told CBS MoneyWatch. "Everyone has been waiting for 'Liberation Day' to be finished," he added, referring to the country-based tariff announcements Mr. Trump first made in early April. "Instead, with this announcement, we have another perpetuation of what's going on." Under the Trump administration's new import duties, most countries will face a baseline tariff of at least 15%, although other nations will faces levies of more than 40%. The U.S. effective tariff rate is now 17%, according to Fitch Ratings — the highest in decades. That could mean pricier garments from Vietnam, shoes and toys from China, chocolate from Switzerland, and coffee from Brazil, according to economists. As a result, the revised U.S. tariffs could cost Americans an average of $2,048 per year, according to a new analysis from the National Taxpayers Union, a nonpartisan advocacy organization. Mr. Trump has argued his tariff strategy is necessary to correct what he views as unfair trading practices and revive American manufacturing, and points to still-fairly-low inflation rates. But many economists warn tariffs can lead to higher inflation and more sluggish economic growth, and some of the president's early trade moves rattled financial markets. The White House has said that Mr. Trump's trade policies benefit Americans. "President Trump's trade deals have unlocked unprecedented market access for American exports to economies that in total are worth over $32 trillion with 1.2 billion people," White House spokesperson Kush Desai said in a statement to CBS MoneyWatch. "As these historic trade deals and the Administration's pro-growth domestic agenda of deregulation and The One Big Beautiful Bill's tax cuts take effect, American businesses and families alike have the certainty that the best is yet to come." On social media, U.S. Trade Representative Jamieson Greer said the tariffs are "a knockout win over the distorted global trading order that has disadvantaged American workers, farmers, and manufacturers for decades." He added that Trump's foreign trade policy has achieved "expansive new market access for U.S. exporters, increased tariffs to defend critical industries, and trillions of new manufacturing investments that will create great American jobs." Which products could get pricier? In the U.S., the products most commonly imported from abroad — and therefore most likely to see their prices rise because of sharply higher tariffs — include household appliances, furniture, cars, clothing, sports equipment, toys and cleaning products, according to an analysis from Oxford Economics. The price of such goods rose about 1% in June, or more than double the increase in May, according to the investment research firm's analysis of consumption data, a sign that tariffs are starting to seep into the cost of everyday items. "The question is really what's not going to go up in price. The costs were being eaten in the profits of companies, but that's not sustainable," Appleton said. Mr. Trump slapped some of the highest tariffs on key trade partners like Canada, a major provider of lumber to U.S. companies. That could lead to higher housing costs, according to Oxford. Some fruits and vegetables also could get pricier this winter as grocery stores leans on imports to stock store shelves, he said. U.S. automakers including Ford, GM and Stellantis have recently warned that higher U.S. tariffs will reduce their profits by billion of dollars. That is likely to increase new car prices, said Terence Lau, dean of the Syracuse University College of Law and formerly a government affairs executive at Ford. "My advice to consumers back in April was that they should wait to buy cars," said Lau, who expects dealer prices for 2026 models to rise between 4% and 6%. "In August, my advice is to buy now." Although many businesses are still selling inventory they imported earlier this year in a bid to avoid higher tariffs, subsequent imports will likely be subject to the newly announced levies when they arrive at U.S. ports, according to trade experts. "A lot of businesses front-loaded goods to get them in the door before tariffs were announced. They'll now have to increase their costs as inventories dwindle and businesses start replenishing them," Oxford Economics' senior U.S. economist Matthew Martin told CBS MoneyWatch. "We expect cost hikes to peak in the second half of the year," Along with facing potentially higher prices, U.S. consumers could face reduced product choices stemming from supply-chain delays, according to economists. That's largely because companies unable to reshore manufacturing to the U.S. are likely to stop importing low-margin goods as they move to control costs. "In many cases, tariffs will be so high that we'll create embargoes," Martin said. "That will make it more difficult for retailers and distributors to get things out to market." Rodney Manzo, a supply-chain expert and senior director at Sage, a business management software company, said higher tariffs often end up affecting businesses and consumers in ways beyond the cash register. "For the average shopper, the effects don't always show up as a big price hike on the shelf. Instead, it's subtler — fewer options, smaller quantities and less generous promotions," he said. "Companies are quietly reducing [their stockpiles], reworking product specs or stripping out expensive components to hit margin targets." Arkansas officials reveal new details about Devil's Den murders of husband and wife The A.I. Divide | America Unfiltered Defense attorneys refuse new cases in Massachusetts, citing unfair pay 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
New York Times
22 minutes ago
- New York Times
Judge Declines to Order Trump Administration to Restore Research Cuts
A federal judge in New York declined in a ruling on Friday to order the Trump administration to restore hundreds of millions of dollars in terminated funding that had been awarded to research institutions by the National Science Foundation. The ruling came in a lawsuit filed in May in which a coalition of 16 states argued that the grants were critical to maintaining the United States as a leader in science, technology, engineering and math, or STEM, subjects, and that the cuts were 'in complete derogation of the policies and priorities set by Congress.' The science foundation had announced policy changes meant to align its mission with that of the broader Trump administration. The changes included updating what the plaintiffs call the foundation's priority directive to exclude the funding of activities related to diversity, equity and inclusion initiatives. The suit asked the court to find the foundation's new priority directive unconstitutional and to issue an injunction blocking further cuts to universities and other higher education institutions. The judge, John P. Cronan of Federal District Court in Manhattan, found that the court lacked jurisdiction to hear the suit because it sought monetary damages from the federal government. Such cases, he wrote, must be brought before the Court of Federal Claims in Washington. In his 78-page opinion, the judge also noted that plaintiffs seeking an injunction must, among other things, show a likelihood of success on the merits of a case. The states had not done that, he said. Want all of The Times? Subscribe.
CBS News
22 minutes ago
- CBS News
Repealing rule to curb greenhouse gas emissions will increase gas prices, Trump administration's own analysis finds
When the Environmental Protection Agency announced it would roll back regulations aimed at curbing greenhouse gas emissions — especially from motor vehicles — it touted annual savings for Americans of $54 billion. The EPA said eliminating Biden-era policies, which encouraged higher fuel efficiency standards for cars and electric vehicle adoption to limit tailpipe emissions, would enable consumers to "have affordable choices when deciding to buy a car." But a CBS News review of the agency's own regulatory impact analysis of the proposal found that gasoline prices would increase, and nearly a half million jobs would be lost by 2035, according to data from the U.S. Energy Information Agency, which was cited in the EPA's report. In the EPA's July analysis, the U.S. Energy Information Administration, which collects and analyzes energy data, showed Biden-era policies that were adopted by the end of 2024 would dramatically bring down the future cost of gasoline because more consumers would be driving electric vehicles, hybrids and fuel-efficient cars that require less gas. It is challenging to predict the future gas prices because they're subject to high uncertainty and market volatility, but under a future scenario where Biden-era policies have been revoked under the Trump administration, the EIA projects gasoline prices will continue to increase because of a higher demand for gas-powered cars and fuel. The former administrator of the EIA, Joseph DeCarolis, explained in an email that if the government "disincentivizes electric vehicle purchases, more consumers will purchase gasoline vehicles resulting in higher gasoline consumption and high gasoline prices for everyone." "There's a clear causal connection between rescinding measures promoting electric vehicles, such as EPA tailpipe standards, and the projection of higher gasoline prices," he said. When asked in an interview with CBS News' "The Takeout with Major Garrett" about how this plan could raise gas prices, Zeldin did not directly address the question. Instead, he argued that previous policies like an electric vehicle mandate were costing trillions of dollars to regulate climate pollution, saying the policies were "seeking to strangulate out of existence, entire sectors of our economy, and specifically our energy economy. 'It's important that we are applying common sense," Zeldin said, "that we are cognizant of these economic demands and that, wherever possible, when we can protect the environment and grow the economy that we will choose both." Neither the Biden nor Obama administrations implemented EV mandates, though both encouraged EV adoptions by Americans and businesses. Zeldin reiterated the Trump administration's stance that the EPA does not have the power to regulate greenhouse gas emissions under the Clean Air Act unless an act of Congress changes that. "Here's my message: If Congress wants the EPA to be regulating the heck out of carbon dioxide, well, they could put it inside of law," Zeldin said. Along with rolling back greenhouse gas emissions standards to limit tailpipe emissions, the EPA would also rescind fuel efficiency measures. Under Biden-era fuel efficiency policies, a new standard gas-powered car was expected to get 47.1 miles per gallon by 2027, and by 2035, cars were expected to achieve 61.2 mpg, according to EIA data. Without the Biden policies, model 2027 cars are supposed to meet a 43.6 mpg standard and gradually increase to 50.5 mpg by 2035. Light trucks and SUVs, beginning in model year 2027, under a scenario where Biden policies are revoked by the Trump administration, are set to reach fuel efficiency of 27.2 mpg and increase to 28.6 mpg by 2035. Had the Biden policies remained in place, SUVs and light trucks were expected to meet a 28.4 mpg standard in 2027 and increase to 46.2 mpg by 2035, according to EIA data. The EIA's own data estimates that a future scenario — where Biden-Obama emissions standards are revoked — would lead to a loss of 450,000 jobs by 2035. Jobs would begin to rebound by 2045, but not enough to overcome the significant losses suffered in previous decades. Peter Huether, senior transportation research associate at the American Council for an Energy-Efficient Economy, said in a statement, "Drivers would pay thousands of dollars more in fuel and maintenance costs over the life of a vehicle, and businesses could lose billions annually from higher trucking costs" as a result of the Trump administration's deregulation. "These costs would ripple through the economy, raising prices for everyday goods and undercutting job growth," Huether said.
