Summers on Recession Risks, Inflation, Trade War, Tariffs, Fed Outlook
Former US Treasury Secretary and Bloomberg Wall Street Week contributor Lawrence H. Summers talks about the risk of a recession in the US this year, President Donald Trump's trade war and the impact on the economy and the manufacturing sector. He speaks to Bloomberg's David Westin on "Bloomberg Open Interest." (Source: Bloomberg)
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Yahoo
an hour ago
- Yahoo
Trump's battle with Newsom, California expands beyond immigration
President Donald Trump's showdown with California is expanding from immigration enforcement to environmental protection after he signed three measures passed recently by Congress repealing state auto rules aimed at curbing vehicle emissions. Trump took aim during a June 12 White House event at California's environmental regulations during the same week that he tangled with the state's Democratic governor, Gavin Newsom, over sending troops to help police protests in Los Angeles that turned violent. The president deployed California National Guard and U.S. Marines to L.A. over Newsom's objections, prompting the governor to warn he's acting like a 'dictator.' The state filed a federal lawsuit seeking to block the move that's heading for court arguments later June 12. Newsom also has pledged to sue over Trump's moves to rollback California environmental rules. Trump signed resolutions of disapproval under the Congressional Review Act to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035, which has been adopted by 11 other states and representing a third of the U.S. auto market. 'We officially rescue the US auto industry from destruction by terminating California's electric vehicle mandate, once and for all,' Trump said June 12. More: 'Political props': From deployment to a parade, Trump's use of military prompts concerns One of the resolutions the president signed repeals a waiver granted by the U.S. Environmental Protection Agency under former Democratic President Joe Biden in December, allowing California to mandate that at least 80% of vehicles be electric vehicles by 2035. Trump also signed a resolution approved by Congress to rescind the EPA's 2023 approval of California's plans to require a rising number of zero-emission heavy-duty trucks, and another resolution on California's regulation to curb smog-forming air pollution from heavy-duty highway and off-road vehicles and engines. Since 1970, California has received more than 100 waivers under the Clean Air Act to address pollution caused by its unique geographic terrain and abundance of automobiles in the nation's most populous state. The Golden State in recent years has also been at the forefront in trying to transition to vehicles that don't produce greenhouse gas emissions that contribute to warming global temperatures. Last year was not only the hottest since record-keeping began in 1850 but was also the first to pass a threshold meant to limit the worst effects of climate change, the Copernicus Climate Change Service said. More: Elon Musk surrenders: World's richest man is caving to Trump after their epic feud Trump promoted Tesla's electric vehicles at the White House recently as the company's founder, Elon Musk, was being criticized for his work leading the Department of Government Efficiency and Tesla sales plummeted. Musk and Trump recently engaged in a high-profile public spat, which the president blamed on his push to repeal electric vehicle incentives. Musk later said he regretted some of his attacks on Trump. More: Will Trump invoke the Insurrection Act? 'We'll see,' he says Trump campaigned against electric vehicle mandates and has worked to unwind Biden's support for the industry. Legislation passed by the U.S. House of Representatives in May would end a $7,500 tax credit for new EVs, impose a new $250 annual fee on EVs for road repair costs and repeal vehicle emissions rules designed to prod automakers into building more EVs. It would also phase out EV battery production tax credits in 2028. Contributing: Reuters, Dinah Voyles Pulver, Doyle Rice, Elizabeth Weise, Ramon Padilla This article originally appeared on USA TODAY: Trump's battle with Newsom, California grows beyond immigration
Miami Herald
an hour ago
- Miami Herald
Starbucks CEO admits the struggling chain made a major mistake
Consumers have had a rude awakening this year. After President Donald Trump announced the finer details of his plan for tariffs on April 2, the reality of how they would affect Americans' everyday lives started to sink in. Don't miss the move: Subscribe to TheStreet's free daily newsletter Some of the biggest retailers in the country, from Walmart to Target, soon indicated that prices may have to rise in order to offset tariff cost increases. In other words, the businesses were planning to pass the costs along to the customer, something no one in the country struggling with an already-high cost of living wants to hear. Related: Starbucks makes huge investment to solve a key problem Customers quickly pivoted in response, pulling back on luxuries like eating out, getting coffee on the go, and vacation planning. In a recent survey from McKinsey & Company, 43% of consumers reported rising prices as their top concern, with more than half planning to cut back on nonessential spending. Retailers are scrambling as profits are dropping before their eyes, trying to find ways to coerce customers to spend, despite the current climate of uncertainty. Starbucks is taking an unusual approach to that, not only promising big in-store changes, but admitting that it made a big misstep. Starbucks CEO Brian Niccol recently told Axios in an interview that pulling back on in-store seating was a mistake, saying, "We had this strategy that I think was just a misfire of a purpose-driven store." More Retail: Huge retail chain closing more stores soon (locations revealed)Struggling drugstore chain announces second bankruptcyBeloved discount grocery chain has massive US plans Now Niccol says the focus needs to move away from purpose-driven efficiency and towards what he calls "community connection." As a part of its Back to Starbucks plan announced in September 2024, Niccol says new menu items are coming. Currently in testing is a "chocolate protein cold foam" and banana bread lattes. But another innovation Niccol mentioned is of significant interest: food that's actually baked in stores. Starbucks has traditionally stocked frozen foods that it reheats before serving to customers, but this approach would support Niccol's plan to attract a community who would prize fresh over frozen foods. Related: Starbucks faces huge new rival Niccol also told Axios that the company has to create new "fastballs" for the business, like its oh-so-famous Pumpkin Spice Latte. Starbucks is also investing heavily in its workforce as a part of the plan. "Starbucks is expanding its workforce by adding at least one full-time assistant store manager to most company-operated stores nationwide beginning this fall," TheStreet's Fernanda Tronco reports. Lastly, Starbucks is also working on a plan that will make many customers happy: its "Green Apron Service Model," which aims to deliver drinks into customers' hands in four minutes. While Niccol's planned changes sound promising, they're also necessary to revive a struggling business. Starbucks' sales have fallen for four quarters in a row, and the company reported during its April 29 earnings call that net earnings fell 50% to $384.2 million from the prior year. Starbucks attributed some of the decline to hiring efforts focused on its turnaround strategy and various restructuring costs. While tariff fears certainly have had an impact on this year's sales, it's clear that Starbucks' current problem predates that. Naturally, Niccol's ambitious plans will take time to crystallize. "We're not just building back our business," he said. "We're building back a better business," he told investors and Wall Street analysts during the call. Related: McDonald's launches unusual new drink to recover customers The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Time Magazine
2 hours ago
- Time Magazine
The Grim Reality of the Conflict Between Iran and Israel
In the early hours of Friday morning, Israel launched a sweeping military campaign against Iran. The ongoing operation, which was reportedly planned to unfold over several days, is targeting a list of nuclear and military facilities, as well as senior regime officials, that grows longer by the hour. Iran has thus far retaliated with drones and a substantial missile barrage that could see Israel expand its targeting further still. In a region that has seen endless bloodshed since Hamas's October 2023 attacks, the grim reality is that things may get much worse before they get even worse. Under the Islamic Republic that took power in 1979, enmity toward Israel has been a core ideological tenet of Iranian foreign policy and a key driver in its regional policy. Over decades, their rivalry played out mainly through indirect actions by Iran and by covert operations from Israel. That dynamic changed last year. In April and again in October, the two sides engaged in direct hostilities, with Iran twice launching massive missile salvoes largely repelled by Israeli and allied air defenses. After the second strike, which came shortly after Israel severely degraded the upper ranks of Hizbollah in Lebanon—the most powerful of Iran's proxies—Israel targeted Iranian air defences and missile production facilities, facing little resistance or response. But while Iran's regional power projection was diminishing and its arsenal of missiles and drones twice proved largely ineffective, a third concern—a nuclear threat which Israel considered existential—was still growing. Tehran had been steadily expanding the scale and scope of its nuclear activity ever since President Donald Trump withdrew from the Iran Nuclear Deal during his first term; President Joe Biden's Administration sought and failed to revive it. In March, Trump announced that he had reached out to Iran's leadership to negotiate a new deal, and his administration conducted five rounds of talks in Muscat and Rome in attempts to reach one. For Iran, which sought sanctions relief for its embattled economy, the success of negotiations with the U.S. hinged on concessions it has long opposed: Dismantling its nuclear program altogether or even ceasing the domestic enrichment of uranium. For Israel, eliminating, rather than merely restricting, the production of fissile material that could be used to fuel a weapon has been paramount. For President Trump, the prospect of a military strike by Israel seems a means of strengthening Washington's hand in a diplomatic agreement in which he still remains interested. But at the moment, the question may be less a matter of whether diplomacy can succeed than how grievously the situation could escalate. The worst-case scenarios are dire: A cycle of Israeli and Iranian counterstrikes that draw in the U.S., Iran's non-state allies, and regional states, cause grievous harm to civilians on all sides, and inject profound uncertainty into global markets. Over time, Iran's regime could attempt to reconstitute its nuclear activity from the rubble, only with an explicit aim of fashioning a weapon in the shortest possible time as a means of deterrence in the future. Another disastrous scenario is that the regime in Tehran falls and there is a protracted war for power and chaos or an even harder line regime armed with nuclear weapons. Is there a path out of this deepening crisis? Perhaps, though not a particularly promising one. Trump's stated objective—even as the fire is exchanged in two directions—remains a deal with Iran, and Tehran could offer concessions on the stipulation that it also involve an immediate cessation of hostilities with Israel. Were Iran to concede on its red lines in an effort to stave off greater destruction, perhaps Trump would be keen enough to avert a widening conflagration to also press Israel into ending the escalation cycle as well. Iran's government has previously demonstrated that when facing particularly inauspicious circumstances, especially those that might threaten the very foundations of the regime itself, it can make concessions necessary for its survival. But facing perhaps the gravest crisis it has faced since the eight-year-long war with Iraq in the 1980s, it may end up doubling down to the detriment of its people and the region.
