U.S. and China delegations arrive for trade talks in Stockholm
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CNBC
20 minutes ago
- CNBC
Trump's tariffs could soon bring higher food prices for some Americans, analysis finds
President Donald Trump's blanket tariffs scheduled to begin on Aug. 1 could soon bring higher prices on certain foods, according to some experts. Tariffs are a tax imposed by foreign nations, paid by domestic companies that import goods or services. U.S. consumers are expected to pay higher prices via companies negatively impacted by the trade policy. One of the goals of Trump's tariffs is to drive demand for American products. But certain items, such as Brazilian coffee, aren't produced domestically. Other imports, like bananas, have limited U.S. production, which wouldn't meet American demand, according to a Tax Foundation analysis published Monday. More from Personal Finance:Credit cards are an 'amazing tool' for your wedding, expert saysTrump floats tariff 'rebate' for consumers. Experts say it may be a challengeEven many high-earning Americans don't feel wealthy. Here's why In some cases, U.S. consumers may decide to pay more for these imported food products rather than choosing a substitute, wrote Tax Foundation senior economist Alex Durante. In 2024, U.S. food product imports totaled about $221 billion. Most of these products already face tariffs ranging from 10% to 30%. However, levies could exceed 30% for some countries if Trump's Aug. 1 tariffs go into effect, the Tax Foundation found. "We could see some large movements in prices over the next few months if the administration holds firm to that Aug. 1 deadline," Durante told CNBC. The top five imported foods by volume that could face tariffs are liqueurs and spirits, baked goods, coffee, fish and beer, which account for roughly 21% of total U.S. food imports, according to the Tax Foundation analysis. Grocery prices were about 2.4% higher than one year ago, according to the latest inflation report based on June data. But the full impact of Trump's tariffs is not yet reflected, experts say. "It's way too soon for the administration to be doing a victory lap because most of their planned tariff increases have not gone into effect yet," Durante told CNBC. A separate analysis by The Budget Lab at Yale, also from Monday, estimated that tariff price increases to date will raise food costs by 3.4% in the short-run, and that prices will stay 2.9% higher in the long-run. Fresh produce could initially be 6.9% more expensive while stabilizing at 3.6% higher, the analysis found. "The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world's biggest and best consumer market," White House spokesperson Kush Desai told CNBC in a statement. Desai also shared a July analysis from the White House's Council of Economic Advisers, which showed the prices of imported goods, as measured by the personal consumption expenditure price index, fell from December through May.
CNBC
2 hours ago
- CNBC
The EU-U.S. trade deal could have one unexpected winner: The UK
As world leaders and economists across Europe digest the news of the EU-U.S. trade agreement, some experts told CNBC that while it may be bad news for the bloc, the deal could serve as an unexpected boost to the U.K. The European Union is facing a higher 15% tariff rate on its goods imported to the U.S. compared to the 10% levy the U.K. has agreed to. "In theory, the UK benefits," Philip Shaw, chief economist at Investec, told CNBC. "The new EU tariff of 15% means that UK exports to the US have become relatively cheaper, which could boost British trade with the US as American firms buy goods from Britain rather than the EU," he explained. U.K. goods would also be cheaper for U.S. consumers due to the lower tariff rate, meaning they may favor British products over those manufactured in the EU, Alex Altmann, partner and head of Lubbock Fine LLP's German desk, suggested in a note published shortly after the EU-U.S. deal was announced. "The UK's lower US tariffs do offer a major incentive for EU companies to shift some of their manufacturing bases to the UK or to expand their existing UK facilities," he added. EU-based manufacturers with low profit margins in particular could find the idea of moving to the U.K. attractive to avoid a further squeeze on those margins, Altmann explained, noting that the U.K. has spare manufacturing capacity due to Brexit. "The UK could be a big indirect winner of this agreement," Altmann added. But the benefits to the U.K. are not only linked to the country's lower tariff rate. Indeed, the EU managing to secure a 15% levy, which is far lower compared to the 30% the bloc was threatened with by U.S. President Donald Trump, could also be a positive for the U.K. according to Investec's Shaw. "The EU has escaped from a possible major downturn from a more onerous (i.e. 30%) tariff regime and possibly a series of retaliatory measures between the two trading blocs. Here the UK benefits from its major trading partner averting a recession which could have resulted in a decline in UK exports to the EU," he said in written comments. The EU-U.S. reaching an agreement has also hampered the potential impact, Beth McCall, an international trade lawyer at Dentons told CNBC. "If the US had proceeded with 30% tariffs against most EU goods, UK goods with a 10% tariff, which is paid by the US importer in most circumstances, could have appeared significantly more attractive," she said. McCall noted that the expected difference in the baseline tariff rate, which amounts to just 5%, may still make some U.K. goods more attractive. However, she noted, "this will take time to be seen as existing contracts come to an end and US importers search for imports from countries carrying a lower tariff." Questions have been raised about the timeframe for the impact of tariffs being felt around the world has been a frequently debated question. Companies have already flagged that tariffs are expected to weigh on their earnings, and there have been widespread warnings of how the duties could impact economic growth. But as many details of the trade agreements have yet to be ironed out, their precise exact impact is still unclear. Some of the effects may also take time to be felt, for example rising costs for consumers may only materialize after some time. Ultimately, both the U.K. and EU are now facing a more difficult environment, McCall said. "Whether the new rate is 10% or 15%, UK and EU businesses will still face far higher tariffs when exporting to the US than they did three months ago," she said.
CNBC
2 hours ago
- CNBC
Samsung backs South Korean AI chip startup Rebellions ahead of IPO
South Korean artificial intelligence chip startup Rebellions has raised money from tech giant Samsung and is targeting a funding round of up to $200 million ahead of a public listing, the company's management told CNBC on Tuesday. Last year, Rebellions merged with another startup in South Korea called Sapeon, creating a firm that is being positioned as one of the country's promising rivals to Nvidia. Rebellions is currently raising money and is targeting funding of between $150 million and $200 million, Sungkyue Shin, chief financial officer of the startup, told CNBC on Tuesday. Samsung's investment in Rebellions last week was part of that, Shin said, though he declined to say how much the tech giant poured in. Since its founding in 2020, Rebellions has raised $220 million, Shin added. The current funding round is ongoing and Shin said Rebellions is talking to its current investors as well as investors in Korea and globally to participate in the capital raise. Rebellions has some big investors, including South Korean chip giant SK Hynix, telecommunication firms SK Telecom and Korea Telecom, and Saudi Arabian oil giant Aramco. Rebellions was last valued at $1 billion. Shin said the current round of funding would push the valuation over $1 billion but declined to give specific figure. Rebellions is aiming for an initial public offering once this funding round has closed. "Our master plan is going public," Shin said. Rebellions designs chips that are focused on AI inferencing rather than training. Inferencing is when a pre-trained AI model interprets live data to come up with a result, much like the answers that are produced by popular chatbots. With the backing of major South Korean firms and investors, Rebellions is hoping to make a global play where it will look to challenge Nvidia and AMD as well as a slew of other startups in the inferencing space. Rebellions has been working with Samsung to bring its second-generation chip, Rebel, to market. Samsung owns a chip manufacturing business, also known as foundry. Four Rebel chips are put together to make the Rebel-Quad, the product that Rebellions will eventually sell. A Rebellions spokesperson said the chip will be launched later this year. The funding will partly go toward Rebellions' product development. Rebellions is currently testing its chip which will eventually be produced on a larger scale by Samsung. "Initial results have been very promising," Sunghyun Park, CEO of Rebellions, told CNBC on Tuesday. Park said Samsung invested in Rebellions partly because of the the good results that the chip has so far produced. Samsung is manufacturing Rebellions' semiconductor using its 4 nanometer process, which is among the leading-edge chipmaking nodes. For comparison, Nvidia's current Blackwell chips use the 4 nanometer process from Taiwan Semiconductor Manufacturing Co. Rebellions will also use Samsung's high bandwidth memory, known as HBM3e. This type of memory is stacked and is required to handle large data processing loads. That could turn out to be a strategic win for Samsung, which is a very distant second to TSMC in terms of market share in the foundry business. Samsung has been looking to boost its chipmaking division. Samsung Electronics recently entered into a $16.5 billion contract for supplying semiconductors to Tesla. If Rebellions manages to find a large customer base, this could give Samsung a major customer for its foundry business.
