General Dynamics: Q2 Earnings Snapshot
The Reston, Virginia-based company said it had profit of $3.74 per share.
The results exceeded Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $3.59 per share.
The defense contractor posted revenue of $13.04 billion in the period, which also topped Street forecasts. Seven analysts surveyed by Zacks expected $12.35 billion.
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Yahoo
an hour ago
- Yahoo
Drugmakers are pouring billions of dollars into new US manufacturing. It still won't achieve all of Trump's tariff goals
Ever since President Donald Trump started promising to slap tariffs on pharmaceutical imports, drugmakers have unveiled a flurry of commitments to build or expand US manufacturing operations in the coming years. AstraZeneca is investing $50 billion to expand its drug manufacturing in the US. Johnson & Johnson is pouring $55 billion into domestic production and research. And Eli Lilly said it will spend $27 billion to build four new manufacturing plants here. In total, the planned investments exceed $250 billion, according to two industry analysts. Trump is wielding the threat of tariffs to get drugmakers to increase their domestic production, which he says will strengthen national security. He's also pushing pharmaceutical companies to reduce their prices, one of his longstanding goals. But the pharma companies' moves are not expected to decrease the United States' reliance on foreign sources for key pharmaceutical ingredients and drugs, experts say. Nor are they likely to result in lower costs for American consumers. Still, the White House regularly touts the steady drumbeat of commitments as proof Trump's strategy is working. 'Another win for American manufacturing. @AstraZeneca's $50 billion pledge to expand U.S. manufacturing and R&D shows our tariff strategy at work,' Commerce Secretary Howard Lutnick posted on X in late July. 'The investment will bring high-paying jobs to Virginia, Indiana, Texas, and across the country while hardening our supply chains. Reshoring pharma production is one of our top priorities.' But it's just not that simple. Complex supply chain The pharmaceutical industry is a global web, with ingredients and finished drugs being manufactured in a multitude of locations around the world. The economics of brand name and generic drug manufacturing vary widely, and the price that the US consumer ultimately pays is determined by multiple players and factors. Both American and foreign drugmakers already produce many medications in the US and have been investing in their operations here for years. The prospect of tariffs certainly has prompted some brand-name manufacturers to shift more production to the US. However, some of the investments were already in the works before Trump took office, and other commitments may never be fulfilled, analysts say. Johnson & Johnson's $55 billion investment announcement in March, for instance, included the building of a North Carolina facility that was originally unveiled in October. 'They are just reiterating it because they're probably trying to make sure that the president is aware that they have manufacturing here and that they are listening to him,' Evan Seigerman, senior biopharma analyst at BMO Capital Markets, said of pharmaceutical companies. 'They're playing ball. It's all about the deal with President Trump.' Generic drugmakers, however, are not making the same types of commitments – largely because they can't afford to, as their profit margins are much thinner. While certain generic medicines are made in the United States, including sterile injectable drugs, oral liquid medications and controlled substances, the majority of drugs in pill or capsule form are produced abroad, primarily in India. But two generic drug manufacturers have announced domestic investments in recent months, according to the Association for Accessible Medicines, a trade group for the generic and biosimilar drug industries. Hikma Pharmaceuticals USA said it would invest $1 billion by 2030 to expand its manufacturing and research and development capabilities in several US locations, while Amphastar Pharmaceuticals said it would quadruple its production in the next three to five years. They both manufacture sterile injectable drugs, among other products. Other companies are more hesitant. 'We're not sure the market will support it if we build it,' said John Murphy III, the industry association's CEO, noting that reimbursements are so low that companies may not get returns on their investments. Much of the national security concerns center on generic drugs, which account for more than 90% of US prescriptions and are also critical to medicine administered in hospitals and doctors' offices. A sizeable share of the supply chain for certain generic medications comes from abroad and could be disrupted during geopolitical crises, a risk that's been repeatedly flagged by a bipartisan group of senators. Blanket tariffs, however, won't spur more domestic manufacturing of these drugs, said Erin Fox, associate chief pharmacy officer at the University of Utah Health. 'It's highly, highly unlikely we will see generic production expand in the US without significant incentives for these companies,' she said. 'If we do move production on some drugs to the US because we want to be sure from a national security standpoint, that's fine, but that's going to cost money.' Just what tariffs the pharmaceutical industry will face – and on which products from which countries – remain to be seen. The Trump administration is in the midst of negotiating various trade deals and has yet to release the findings of its investigation into national security implications of drug imports, which is expected to set the stage for tariffs on the industry. In late July, Trump unveiled the framework of a deal with the European Union, which calls for a 15% tariff on pharmaceutical imports – though some generic drugs could be exempt. Trump had been signaling in recent weeks that he would soon announce drug tariffs of up to 200%, but that he would give drugmakers a year or so to expand their domestic production before the full amount kicks in. That would be enough time for some companies to expand existing operations, though building new facilities could take three to five years, experts said. Even so, it's difficult for the manufacturers to make significant longer-term investment decisions amid the uncertainty of both the tariffs and future presidential administrations. Cost considerations Increasing their domestic manufacturing will help brand name drug companies escape tariffs, though they may have to pay some levies if they import pharmaceutical ingredients from other countries. Still, making more drugs in the US doesn't mean that the products will be any cheaper for patients, experts say. For one thing, the cost of production is typically higher in the US, said Stephen Farrelly, ING's global health care sector lead. Plus, the prices that consumers pay are largely governed by the nation's complex health system, which includes manufacturers, insurers and pharmacy benefit managers, known as PBMs. So whether Americans get a break on the high cost of their prescriptions will also depend on whether the president can achieve his other initiatives, including bringing US prices more in line with those in Europe and reforming the PBM industry, he said. While brand name manufacturers have more wiggle room to absorb some of the increased expenses, many experts believe they will pass along at least some of the added burden to consumers – who could eventually feel it in their out-of-pocket cost at the pharmacy counter or in their monthly insurance premiums. As for generic medicine, shifting more manufacturing to the US would entail higher production costs, which these companies could not afford to cover. Tariffs would be more likely to prompt these drugmakers to pull out of the US market, exacerbating shortages. 'At a time when the administration is clearly looking to still keep the cost down, we don't see a wholesale redistribution of generic capacity towards the US anytime soon,' Farrelly said. Sign in to access your portfolio
The Hill
an hour ago
- The Hill
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
WASHINGTON (AP) — President Donald Trump's tariff onslaught this week left a lot of losers – from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes – tariffs – on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands — and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump's protectionist policies. 'In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. 'The biggest winner is Trump,' said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. 'He bet that he could get other countries to the table on the basis of threats, and he succeeded – dramatically.'' Everything goes back to what Trump calls 'Liberation Day'' – April 2 – when the president announced 'reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% 'baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs — all of which is now being challenged in court. Winners will still pay higher tariffs than before Trump took office Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States — up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year — but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. '20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Bashing Brazil, clobbering Canada, shellacking the Swiss Countries that didn't knuckle under — and those that found other ways to incur Trump's wrath — got hit harder. Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 — versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax — even higher than the 31% Trump originally announced on April 2. 'The Swiss probably wish that they had camped in Washington' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. 'They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. 'If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Paying more for knapsacks and video games Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits — or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs 'This is a consumption tax, so it disproportionately affects those who have lower incomes,' Appleton said. 'Sneakers, knapsacks … your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates. 'The U.S. consumer's a big loser,″ Wolff said.
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
WASHINGTON (AP) — President Donald Trump's tariff onslaught this week left a lot of losers – from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes – tariffs – on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands — and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump's protectionist policies. 'In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. 'The biggest winner is Trump,' said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. 'He bet that he could get other countries to the table on the basis of threats, and he succeeded – dramatically.'' Everything goes back to what Trump calls 'Liberation Day'' – April 2 – when the president announced 'reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% 'baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs — all of which is now being challenged in court. Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States — up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year — but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. '20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Bashing Brazil, clobbering Canada, shellacking the Swiss Countries that didn't knuckle under — and those that found other ways to incur Trump's wrath — got hit harder. Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 — versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax — even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. 'If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Paying more for knapsacks and video games Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits — or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs "This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. 'Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates.
