Morning Bid: Remembering the downsides to tariffs
Asian markets have been quietly picking up the pieces after the U.S./EU tariff party turned into a bust. It was like being relieved because somebody only burned half your house down. Hey, at least they left the kitchen and the bathroom.
European stock futures are fractionally firmer and the single currency has steadied just under $1.1600. The euro's rapid retreat was not entirely a surprise given how crowded the long euro/short dollar trade had got, and the suspicion is speculators will soon be selling the dollar again.
After all, come Friday U.S. consumers will be paying a minimum of 15% on all imports into the country, and for the foreseeable future.
This tax will squeeze demand and profit margins at home, while eating into export earnings across the globe. These are called beggar thy neighbour policies for a reason.
There's also the rather naive notion that such "deals" guarantee a period of certainty ahead. Just look how Trump suddenly gave Russia 10 to 12 days to move on a ceasefire with Ukraine, having set a deadline of 50 days earlier this month.
This did not seem in any way planned. Trump just said it off the cuff at a media conference at his golf club in Scotland. If such a deadline can be changed on a whim, who's to say anything agreed in these trade deals cannot be altered at his pleasure.
Trump has seen how trade and tariffs can dominate the global news cycle; there's no way he's giving that up anytime soon.
Talks with China, for instance, are set to continue in Stockholm today and everybody assumes the deadline for an agreement will be extended by another 90 days. This, entirely incidentally, will allow time for Trump to meet Chinese President Xi Jinping and personally claim yet another biggest deal of all time.
For its part, Wall St remains in a world of its own, counting on upbeat results from megacaps this week to justify valuation measures that are the highest since the late 1990s. Meta (META.O), opens new tab and Microsoft (MSFT.O), opens new tab are due on Wednesday, Apple (AAPL.O), opens new tab and Amazon (AMZN.O), opens new tab the day after. A slew of European companies also report earnings today.
Key developments that could influence markets on Tuesday:
- U.S. data on job openings, June trade balance and Conference Board consumer confidence
- Fed's two-day meeting starts
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The Independent
23 minutes ago
- The Independent
All major Las Vegas Strip casinos are now unionized in historic labor victory
When Susana Pacheco accepted a housekeeping job at a casino on the Las Vegas Strip 16 years ago, she believed it was a step toward stability for her and her 2-year-old daughter. But the single mom found herself exhausted, falling behind on bills and without access to stable health insurance, caught in a cycle of low pay and little support. For years, she said, there was no safety net in sight — until now. For 25 years, her employer, the Venetian, had resisted organizing efforts as one of the last holdouts on the Strip, locked in a prolonged standoff with the Culinary Workers Union. But a recent change in ownership opened the Venetian's doors to union representation just as the Strip's newest casino, the Fontainebleau, was also inking its first labor contract. The historic deals finalized late last year mark a major turning point: For the first time in the Culinary Union's 90-year history, all major casinos on the Strip are unionized. Backed by 60,000 members, most of them in Las Vegas, it is the largest labor union in Nevada. Experts say the Culinary Union's success is a notable exception in a national landscape where union membership overall is declining. 'Together, we've shown that change can be a positive force, and I'm confident that this partnership will continue to benefit us all in the years to come," Patrick Nichols, president and CEO of the Venetian, said shortly after workers approved the deal. Pacheco says their new contract has already reshaped her day-to-day life. The housekeeper no longer races against the clock to clean an unmanageable number of hotel suites, and she's spending more quality time with her children because of the better pay and guaranteed days off. 'Now with the union, we have a voice,' Pacheco said. Union strength is fading nationally These gains come at a time when union membership nationally is at an all-time low, and despite Republican-led efforts over the years to curb union power. About 10% of U.S. workers belonged to a union in 2024, down from 20% in 1983, the first year for which data is available, according to U.S. Bureau of Labor statistics. President Donald Trump in March signed an executive order seeking to end collective bargaining for certain federal employees that led to union leaders suing the administration. Nevada and more than two dozen other states now have so-called 'right to work' laws that let workers opt out of union membership and dues. GOP lawmakers have also supported changes to the National Labor Relations Board and other regulatory bodies, seeking to reduce what they view as overly burdensome rules on businesses. Ruben Garcia, professor and director of the workplace program at the University of Nevada, Las Vegas law school, said the Culinary Union's resilience stems from its deep roots in Las Vegas, its ability to adapt to the growth and corporatization of the casino industry, and its long history of navigating complex power dynamics with casino owners and operators. He said the consolidation of casinos on the Las Vegas Strip mirrors the dominance of the Big Three automakers in Detroit. A few powerful companies — MGM Resorts International, Caesars Entertainment and Wynn Resorts — now control most of the dozens of casinos along Las Vegas Boulevard. 'That consolidation can make things harder for workers in some ways, but it also gives unions one large target," Garcia said. That dynamic worked in the union's favor in 2023, when the threat of a major strike by 35,000 hospitality workers with expired contracts loomed over the Strip. But a last-minute deal with Caesars narrowly averted the walkout, and it triggered a domino effect across the Strip, with the union quickly finalizing similar deals for workers at MGM Resorts and Wynn properties. The latest contracts secured a historic 32% bump in pay over the life of the five-year contract. Union casino workers will earn an average $35 hourly, including benefits, by the end of it. The union's influence also extends far beyond the casino floor. With its ability to mobilize thousands of its members for canvassing and voter outreach, the union's endorsements are highly coveted, particularly among Democrats, and can signal who has the best shot at winning working-class votes. The union has — and still — faces resistance The union's path hasn't always been smooth though. Michael Green, a history professor at UNLV, noted the Culinary Union has long faced resistance. 'Historically, there have always been people who are anti-union,' Green said. Earlier this year, two food service workers in Las Vegas filed federal complaints with the National Labor Relations Board, accusing the union of deducting dues despite their objections to union membership. It varies at each casino, but between 95 to 98% of workers opt in to union membership, according to the union. 'I don't think Culinary Union bosses deserve my support,' said one of the workers, Renee Guerrero, who works at T-Mobile Arena on the Strip. 'Their actions since I attempted to exercise my right to stop dues payments only confirms my decision.' But longtime union members like Paul Anthony see things differently. Anthony, a food server at the Bellagio and a Culinary member for nearly 40 years, said his union benefits — free family health insurance, reliable pay raises, job security and a pension — helped him to build a lasting career in the hospitality industry. 'A lot of times it is an industry that doesn't have longevity," he said. But on the Strip, it's a job that people can do for '20 years, 30 years, 40 years.' Ted Pappageorge, the union's secretary-treasurer and lead negotiator, said the union calls this the 'Las Vegas dream.' 'It's always been our goal to make sure that this town is a union town," he said.
The Independent
23 minutes ago
- The Independent
Vietnam automaker Vinfast to build factory in India, eyeing growth in Asia
Vietnam's Vinfast is due to break ground Monday on a $500 million electric vehicle plant in southern India's Tamil Nadu state, part of a planned $2 billion investment in India and a broader expansion across Asia. The factory in Thoothukudi will initially make 50,000 electric vehicles annually, with room to triple output to 150,000 cars. Given its proximity to a major port in one of India's most industrialized states, Vinfast hopes it will be a hub for future exports to the region. It says the factory will create more than 3,000 local jobs. The Vietnamese company says it scouted 15 locations across six Indian states before choosing Tamil Nadu. It's the center of India's auto industry, with strong manufacturing, skilled workers, good infrastructure, and a reliable supply chain, according to Tamil Nadu's Industries Minister T.R.B. Raaja. 'This investment will lead to an entirely new industrial cluster in south Tamil Nadu, and more clusters is what India needs to emerge as a global manufacturing hub,' he said. A strategic pivot to Asia Vinfast's foray into India reflects a broader shift in strategy. The company increasingly is focusing on Asian markets after struggling to gain traction in the U.S. and Europe. It broke ground last year on a $200 million EV assembly plant in Indonesia, where it plans to make 50,000 cars annually. It's also expanding in Thailand and the Philippines. Vinfast sold nearly 97,000 vehicles in 2024. That's triple what it sold the year before, but only about 10% of those sales were outside Vietnam. As it eyes markets in Asia, it hopes the factory in India will be a base for exports to South Asian countries like Nepal and Sri Lanka and also to countries in the Middle East and Africa. India is the world's third-largest car market by number of vehicles sold. It presents an enticing mix: A fast growing economy, rising adoption of EVs, supportive government policies and a rare market where players have yet to completely dominate EV sales. 'It is a market that no automaker in the world can ignore,' said Ishan Raghav, managing editor of the Indian car magazine autoX. . A growing EV market in India EV growth in India has been led by two and three-wheelers that accounted for 86% of the over six million EVs sold last year. Sales of four wheel passenger EVs made up only 2.5% of all car sales in India last year, but they have been surging, jumping to more than 110,000 in 2024 from just 1,841 in 2019. The government aims to have EVs account for a third of all passenger vehicle sales by 2030. 'The electric car story has started (in India) only three or four years ago,' said Charith Konda, an energy specialist who looks at India's transport and clean energy sectors for the think-tank Institute for Energy Economics and Financial Analysis or IEEFA. New cars that 'look great on the road,' with better batteries, quick charging and longer driving ranges are driving the sector's rapid growth, he said. The shift to EVs is mostly powered by Indian automakers, but Vinfast plans to break into the market later this year with its VF6 and VF7 SUV models, which are designed for India.. Can Vinfast Succeed Where Chinese EVs Faltered? Chinese EV brands that dominate in countries like Thailand and Brazil have found India more challenging. After border clashes with China in 2020, India blocked companies like BYD from building their own factories. Some then turned to partnerships. China's SAIC, owner of MG Motor, has joined with India's JSW Group. Their MG Windsor, a five-seater, sold 30,000 units in just nine months, nibbling Tata Motors' 70% EV market share down to about 50%. Tata was the first local automaker to court mass-market consumers with EVs. Its 2020 launch of the electric Nexon, a small SUV, became India's first major EV car success. Vinfast lacks the geopolitical baggage of its larger Chinese rivals and will also benefit from incentives like lower land prices and tax breaks for building locally in India. That's part of India's policy of discouraging imports with high import duties to help encourage local manufacturing and create more jobs. The push for onshore manufacturing is a concern also for Tesla, which launched its Model Y in India last month at a price of nearly $80,000, compared to about $44,990 in the U.S without a federal tax credit. 'India's stand is very clear. We do not want to import manufactured cars, even Teslas. Whether it's Tesla or Chinese cars, they are taxed heavily,' added Konda. An uphill battle in a tough market The road ahead remains daunting. India's EV market is crowded with well-entrenched players like Tata Motors and Mahindra, which dominate the more affordable segment, while Hyundai, MG Motors and luxury brands like Mercedes-Benz and Audi compete at high price points. Indians tend to purchase EVs as second cars used for driving within the city since the infrastructure for charging elsewhere can be undependable. Vinfast will need to win over India's cost-sensitive and conservative drivers with a reputation for quality batteries and services while keeping prices low, said Vivek Gulia, co-founder of JMK Research. 'Initially, people will be apprehensive,' he said. Vinfast says it plans to set up showrooms and service centers across India, working with local companies for charging and repairs, and cutting costs by recycling batteries and making key parts like powertrains and battery packs in the country. Scale will be key. VinFast has signed agreements to establish 32 dealerships across 27 Indian cities. Hyundai has 1,300 places for Indians to buy their cars. Building a brand in India takes time — Hyundai, for instance, pulled it off over decades, helped by an early endorsement from Bollywood superstar Shah Rukh Khan. VinFast can succeed if it can get its pricing right and earn the trust of customers, Gulia said, 'Then they can actually do really good.' ___ Sibi Arasu contributed from Bengaluru and Aniruddha Ghosal contributed from Hanoi, Vietnam. ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
Reuters
23 minutes ago
- Reuters
Taiwan cultivates young overseas chip talent with summer camps, university courses
TAIPEI, Aug 4 (Reuters) - Dressed in a white protective suit and face mask, Nicolas Chueh listened intently as a guide introduced a series of silver machines used in manufacturing Taiwan's cutting-edge semiconductors. The 16-year-old was among students from eight countries at the summer camp staged to raise interest in Taiwan's most vital industry amid a fast-declining birth rate that could leave tens of thousands of critical jobs vacant. "I myself really enjoy playing video games. So I'm really just always using these semiconductor products," said Chueh, whose parents enrolled him after he expressed interest. The camp, organised by U.S. chip design software firm Synopsys (SNPS.O), opens new tab , is among several such events staged by chip companies and Taiwanese universities in recent years as demand for semiconductors, which power most electronics and AI servers, surges across the globe. But for the first time this year, Synopsys, which has significant operations in Taiwan to be closer to the semiconductor supply chain, hosted the events both in Mandarin and English as Taiwan searches for overseas talent. "There is an urgent need to strengthen STEM education from an early age," said Robert Li, Synopsys's Taiwan chairman, who believes the camps can increase interest in the chip industry and help prime some of its future leaders. "That is why we are launching this initiative in Taiwan, where its strength in semiconductors meets the challenge of demographic decline. Taken together, it is clear we must act here first." Given limitations posed by Taiwan's ageing population, Synopsys is also considering hosting camps internationally to spur interest in chip making and designing, he added. The company charges T$33,000 ($1,103) for the English versions and T$10,900 for Mandarin. Chueh, a dual Taiwan-Belgian national who lives in Singapore, said he views semiconductors as an attractive career choice. "I want to lean into it to some extent because I think it will be crucial in the future with AI." Taiwan, which has a population of around 23 million, holds outsized influence over the global semiconductor supply chain, thanks to its chip companies such as Taiwan Semiconductor Manufacturing Co ( opens new tab, the world's largest contract chipmaker, MediaTek ( opens new tab, and UMC ( opens new tab. Any decline in the industry poses an existential threat to Taiwan, which faces the threat of invasion from Beijing and draws much of its global significance from the chip behemoths. But job openings in the semiconductor sector have risen from 19,401 in the second quarter of 2020 to 33,725 in the same period this year, according to 104 Corporation, a local human resources firm. The industry is grappling with a shortage of both highly skilled professionals, such as IC design and semiconductor R&D engineers, and essential production staff, including operators and assembly technicians. Filling those jobs locally is becoming harder each year as Taiwan's annual number of births has dropped from over 210,000 in 2014 to around 135,000 in 2024, according to government statistics. STEM graduates have also fallen by around 15% in that period, Ministry of Education statistics showed. "Growth in Taiwan's semiconductor industry has been quite rapid, faster than what our schools can produce in terms of engineering talent each year," said Leuh Fang, chairman of Vanguard International Semiconductor( opens new tab , a Taiwan-based chipmaker affiliated with TSMC. Last year, the National Taiwan University launched a global undergraduate semiconductor program for foreign students, which included Mandarin courses to help them reach the proficiency needed to stay and work in Taiwan. The program now enrols over 40 students from more than 10 countries. TSMC also began looking toward foreign talent by throwing its weight behind a program in Germany's Saxony state, which would send German students to study for a semester at Taiwanese universities before interning at TSMC. Other initiatives are attempting to create interest among children as young as 10. Taiwan's National Yang Ming Chiao Tung University (NYCU) launched an outreach program in July, backed by TSMC, aimed at making chip science fun through interactive teaching tools and online games. "The issue everyone is discussing now is where the future workforce will come from," said NYCU President Chi-Hung Lin. "If they're curious now, they won't reject it later and some may even grow to like this kind of work."
