Japan, US Can Reach a Good Trade Deal, Bessent Tells Ishiba
Ishiba urged Bessent to continue talks vigorously with Japan's chief negotiator Ryosei Akazawa to achieve a mutually beneficial agreement. The two sides didn't discuss specifics on trade as a Aug. 1 deadline for higher levies approaches, Ishiba told reporters after meeting Bessent in Tokyo on Friday.
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Business Insider
4 minutes ago
- Business Insider
Navigating headwinds: Nigeria's economic outlook for H2 2025
As the second half of 2025 begins, Nigeria finds itself at a critical economic crossroads. With mixed signals emerging from both global and local environments, policymakers, business leaders, and financial institutions must prepare for a delicate balancing act. From shifting geopolitical dynamics to domestic fiscal pressures, the outlook for H2 2025 is characterized by uncertainty but also opportunity. FSDH's latest macroeconomic update, titled 'Balancing on the Edge in a Fragile World,' provides timely insights into what lies ahead and how stakeholders can navigate this complex terrain. Globally, two major developments have reshaped the economic outlook: the return of Donald Trump to the U.S. presidency and the escalation of the Israel-Iran conflict. Trump's reintroduction of import tariffs—10% across the board, with additional levies on selected countries—has renewed global trade tensions, undermined multilateralism, and triggered capital flow reversals to emerging markets. Meanwhile, the Middle East conflict has disrupted oil supply routes, increased freight costs, and spurred volatility in global commodity prices. These external shocks have led the International Monetary Fund (IMF) to revise its global GDP growth forecast downward to 2.8% in 2025, from an earlier 3.3%. Although Sub-Saharan Africa is expected to grow by 3.8%, driven by structural reforms and improved export performance; however the region remains vulnerable to external shocks, especially in energy markets and financial flows. Domestic Realities: Falling Short of Oil Expectations Nigeria, still heavily reliant on oil, has felt the weight of these developments. Despite commendable efforts to diversify her export base, oil remains the lifeblood of government revenue. The Federal Government's ₦54.99 trillion 2025 budget was benchmarked at US$75 per barrel and 2.06 million barrels per day in production. However, actual performance in H1 2025 has fallen short, with oil prices averaging US$72 per barrel and production consistently below target. This has created a growing fiscal gap and raised questions about Nigeria's ability to meet her ₦35 trillion revenue projection. Positive Signs: PMI Growth and Inflation Tapering Despite these challenges, there are positive signals in the local economy. The Purchasing Managers' Index (PMI), a reliable indicator of economic activity, remained above 50 points between January and May 2025, indicating expansion in key sectors such as agriculture, industry, and services. Inflation, while still high, has begun to decline—from 24.5% in January 2025 to 23% by May 2025—thanks to the combination of improved food supply, relative exchange rate stability, and methodological adjustments by the National Bureau of Statistics. Exchange Rate Stability: Progress or Pause? Exchange rate dynamics have also shown signs of stabilisation. The Naira stood at ₦1,539/US$ as of June 2025, reflecting only a marginal 0.2% depreciation year-to-date. The 'willing buyer, willing seller' FX policy has improved transparency and market confidence, although Nigeria's external reserves declined by 8.5% in H1—from US$40.9 billion to US$37.3 billion—due to rising import bills and debt repayments. FSDH projects that exchange rate stability will depend on continued FX inflows, investor confidence, and fiscal discipline. With oil prices expected to hover around US$75-US$78 per barrel, maintaining production and boosting non-oil exports will be critical. Analysts caution that a renewed slump in oil output or a further deterioration in global trade conditions could reignite currency volatility. Fiscal Reform in Focus: Tax Administration Shake-Up A major turning point in H1 2025 came in June, when President Tinubu signed four transformational tax reform bills into law. These include the Nigeria Tax Act, Nigeria Tax Administration Act, Joint Revenue Board Act, and Nigeria Revenue Service Act. Collectively, these reforms aim to harmonise tax administration, improve compliance, and empower a new, independent national revenue service. Highlights of the reforms include raising the Capital Gains Tax for corporates from 10% to 30%, introducing a Development Levy on large firms, zero-rating VAT for essential goods, and exempting small businesses with under ₦100 million turnover from filing taxes. The reforms are expected to grow Nigeria's tax-to-GDP ratio from 10% to 18% within three years. While implementation remains a hurdle—especially at state and local levels—this marks a significant shift in Nigeria's revenue strategy. In the capital markets, optimism is quietly building. The Nigerian Exchange (NGX) posted a 16.6% year-to-date return as of June 2025, outperforming many global indices. Banking and consumer goods stocks led gains, buoyed by strong corporate earnings and macro reforms. Treasury Bill yields and long-term bond rates have declined, signaling renewed investor appetite for Nigerian assets. Foreign Portfolio Investments (FPIs) flows have increased significantly, hitting US$5.46 billion in Q1—a 67% jump from the previous quarter. This resurgence has been fueled by FX reform, positive real interest rates, and improved clarity on policy direction. However, the risk of 'hot money' outflows remains, underscoring the need for deeper, longer-term capital investments. Strategic Priorities for H2 2025 Looking ahead, FSDH outlined several strategic imperatives for economic stakeholders in H2 2025. First, there is an urgent need to boost oil production, not just to meet budget benchmarks, but to enhance export earnings. Second, the country must deepen its non-oil export capabilities, especially in agriculture and manufacturing, to diversify FX sources. Third, unlocking private-sector credit by reducing the high Cash Reserve Ratio (CRR) remains key to real sector growth. Fourth, leveraging ongoing tax reforms to enhance state-level revenue and improve the business climate is vital. Importantly, Nigeria's digital economy and financial technology space also hold promise. The integration of AI, open banking frameworks, and digital payment systems are transforming how financial services are delivered. FSDH notes that institutions that embed digital transformation into their service models will lead in agility, customer retention, and market expansion. Cautious Optimism: Nigeria's Path Forward While global risks remain—from U.S. monetary policy to geopolitical tensions and potential oil shocks—Nigeria has the tools to stay on a path of gradual stabilisation. The success of H2 2025 will depend on disciplined execution of reforms, coordinated fiscal and monetary policy, and institutional accountability. Nigeria's economic outlook for the rest of 2025 is cautiously optimistic. Inflation is expected to decline further which may allow for monetary easing later in the year. The Naira is likely to remain within the current range, while GDP growth will be modest, driven by agriculture, services, and rising investor interest. Structural reforms are beginning to take root, but the second half of the year will require political will, macroprudential discipline, and bold leadership. And as FSDH aptly notes in its report, 'Resilience is not just about surviving the storm; it's about building structures that thrive within it.' Nigeria has the opportunity to prove that in H2 2025.
Yahoo
21 minutes ago
- Yahoo
Buried in Trump's beautiful bill is a new $250 fee on travelers to the U.S. Estimates project it could cut the federal deficit by nearly $30 billion
A provision in the One Big Beautiful Bill Act states all visitors who need nonimmigrant visas to enter the U.S.—tourists, business travelers and international students, to name a few—must pay a 'visa integrity fee,' currently priced at $250. Travelers who comply with their visa conditions will be eligible for reimbursement. The provision is estimated to bring in $28.9 billion over the next decade. Visitors to the United States will need to pay a new fee to enter the country, according to the Trump administration's recently enacted bill. A provision in the One Big Beautiful Bill Act states all visitors who need nonimmigrant visas to enter the U.S.—tourists, business travelers and international students, to name a few—must pay a 'visa integrity fee,' currently priced at $250. The fee cannot be waived or reduced, but travelers are able to get their fees reimbursed, the provision states. All told, the Congressional Budget Office estimates the new fee could cut the federal deficit by $28.9 billion over the next ten years. During the same period, the CBO expects the Department of the State to issue about 120 million nonimmigrant visas. In 2023 alone, more than 10.4 million nonimmigrants were issued visas, according to DOS data. CBO expects a 'small number' of people will seek reimbursement, as many nonimmigrant visas are valid for several years. CBO also expects the Department of State would need several years to implement a process for providing reimbursements. Still, the fee could generate billions, the agency estimates. The fee is set at $250 during the U.S. fiscal year 2025, which ends Sept. 30, and must be paid when the visa is issued, according to the provision. The secretary of Homeland Security can set the current fee higher, the provision states. During each subsequent fiscal year, the fee will be adjusted for inflation. Those eligible for reimbursement are visa holders who comply with conditions of the visa, which include not accepting unauthorized employment or not overstaying their visa validity date by more than five days, according to the provision. Senior Equity Analyst at CFRA Research Ana Garcia told Fortune in an email she expects the 'vast majority' of affected travelers to be eligible for reimbursement, as historical U.S. Congressional Research Service data indicates that only 1% to 2% of nonimmigrant visitors overstayed their visas between 2016 and 2022. 'The fee's design as a refundable security deposit, contingent upon visa compliance, should mitigate concerns among legitimate travelers.' Garcia wrote. Reimbursements will be made after the travel visa expires, the provision said. Any fees not reimbursed will be deposited into America's Checkbook, or the General Fund of the Government. What's unclear is the effective date of the 'visa integrity fee.' Steven A. Brown, a partner at the Houston-based immigration law firm Reddy Neumann Brown PC, wrote in a post on his firm's website the fee's 'specific start dates have not yet been confirmed.' Brown points out that the fee is an add-on to others already required by U.S. travelers. 'For example, an H-1B worker already paying a $205 application fee may now expect to pay a total of $455 once this fee is in place,' Brown wrote. Most travelers are also required to pay a fee that comes with submitting a Form 1-94 arrival and departure record. The One Big Beautiful Bill Act increased this charge from $6 to $24. CFRA's Garcia expects demand to be unmoved by the fee, considering 'higher-income' consumers comprise the majority of international leisure and business travelers to the U.S. 'For affluent travelers, the additional $250 represents a manageable increment relative to overall trip costs,' Garcia wrote. 'The fee structure appears strategically designed to enhance compliance rather than broadly restrict travel.' This story was originally featured on Solve the daily Crossword
Yahoo
32 minutes ago
- Yahoo
Big food companies undergo 'self reflection' on business future as deals sweep the sector
Big food companies are facing big questions about their futures. Between a potential breakup at Kraft Heinz (KHC), a multibillion-dollar deal between Ferrero and WK Kellogg (KLG), and PepsiCo's (PEP) acquisition of soda brand Poppi, big food brands are taking a hard look at their US portfolios as consumer tastes shift, growth stalls, and regulatory pressure over products continues. "The self-reflection is building," Mizuho analyst John Baumgartner told Yahoo Finance last week, "there's a lot of flux in the industry right now." "This has typically been a pretty sleepy sector, and to be hit with all of these headwinds or uncertainties and have it happen all at the same time... does really cause reason for pause and reflection on the business ... [and] what the trends are going forward," Baumgartner added. Just this week, PepsiCo posted a 2% volume decline in its North America beverage business in the second quarter, a drop that follows 1% and 3% declines in the prior two quarters, respectively. The same day, Coca-Cola (KO) faced a new political hurdle when President Trump posted to social media that the company would begin using real cane sugar in its US sodas. In a statement, the company said it appreciated Trump's enthusiasm for the brand. Coca-Cola will report quarterly earnings on Tuesday morning. 'Their core businesses are not performing' In many industries facing uncertain growth trajectories, the options for executives can become simple: buy or sell. This year, PepsiCo announced a $1.95 billion deal for soda brand Poppi and a $1.2 billion deal for Siete Foods. Hershey (HSY) acquired popcorn brand Lesser Evil. "It's a bit reactive," Bank of America analyst Peter Galbo said. "These companies are observing that their core businesses are not performing the way that they thought they would." And in Galbo's view, this year's actions show companies saying to themselves that if the core business won't work, "I have to buy something that is going to augment the core." Connor Rattigan, an analyst at Consumer Edge Research, said most of these deals are for "higher growth smaller brands that tend to be indexed to ... thematic trends in the industry," whether that's health, flavor, or packaging. On the flip side, other big companies have seen this environment as offering an opportunity to break up a large enterprise. Nearly two years after Kellogg split into two companies, WK Kellogg and Kellanova (K), both have been scooped up by private players. Kellanova, which houses snack brands like Pop-Tarts and Cheez-Its, is set to be acquired by Mars Candy for close to $36 billion, pending European Union regulatory approval. Last week, Ferrero said it would buy WK Kellogg, the company behind Frosted Flakes and Froot Loops, for $3.1 billion. "There has been pressure from activist investors, or just larger investors, that are maybe growing tired of a stagnant share price and are looking for opportunities to drum up appreciation in that regard," Morningstar analyst Erin Lash said. TD Cowen analyst Robert Moskow wrote in a recent note that investors have realized a roughly 40% gain since Kellogg broke up. Consumer Staples (XLP) stocks have dropped about 6% over that same period. And Kraft Heinz could reportedly be next in line for a breakup. Bank of America's Galbo sees the split putting Kraft Heinz's Taste Elevation platform, mostly condiments like Heinz ketchup and Philadelphia cream cheese, in one company, with its grocery brands like Kraft, Oscar Mayer, Lunchables, and Capri-Sun in another business. Since H.J. Heinz Company and Kraft merged 10 years ago, shares of the combined company have gone down more than 65%. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@
