Big Oil's Profits Are Taking a Hit Even Before Trump's Tariffs Start to Bite
Signs are emerging that Big Oil's profits are sliding, with European supermajors reporting a challenging start to the year — and that's before they see serious stress.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Boston Globe
2 hours ago
- Boston Globe
Whitmer told Trump in private that Michigan auto jobs depend on a tariff change of course
The fact that Whitmer had 'an opening to make direct appeals' in private to Trump was unique in this political moment, said Matt Grossman, a Michigan State University politics professor. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up It was her third meeting with Trump at the White House since he took office in January. This one, however, was far less public than the time in April when Whitmer was unwittingly part of an impromptu news conference that embarrassed her so much she covered her face with a folder. Advertisement On Tuesday, she told the president that the economic damage from the tariffs could be severe in Michigan, a state that helped deliver him the White House in 2024. Whitmer also brought up federal support for recovery efforts after an ice storm and sought to delay changes to Medicaid. Trump offered no specific commitments, according to people familiar with the private conversation who were not authorized to discuss it publicly and spoke only on condition of anonymity to describe it. Advertisement Whitmer is hardly the only one sounding the warning of the potentially damaging consequences, including factory job losses, lower profits and coming price increases, of the import taxes that Trump has said will be the economic salvation for American manufacturing. White House spokesman Kush Desai said no other president 'has taken a greater interest in restoring American auto industry dominance than President Trump.' Trade frameworks negotiated by the administration would open up the Japanese, Korean and European markets for vehicles made on assembly lines in Michigan, Desai said. But the outreach Trump has preferred tends to be splashy presentations by tech CEOs. In the Oval Office on Wednesday, Apple CEO Tim Cook gave the president a customized glass plaque with a gold base as Cook promised $600 billion in investments. Trump claims to have brought in $17 trillion in investment commitments, although none of those numbers has surfaced yet in economic data. Under his series of executive orders and trade frameworks, U.S. automakers face import taxes of 50% on steel and aluminum, 30% on parts from China and a top rate of 25% on goods from Canada and Mexico not covered under an existing 2020 trade agreement. That puts America's automakers and parts suppliers at a disadvantage against German, Japanese and South Korean vehicles that only face a 15% import tax negotiated by Trump last month. On top of that, Trump this past week threatened a 100% tariff on computer chips, which are an integral part of cars and trucks, though he would exclude companies that produce chips domestically from the tax. Advertisement Whitmer's two earlier meetings with Trump resulted in gains for Michigan. But the tariffs represent a significantly broader request of a president who has imposed them even more aggressively in the face of criticism. Materials in the presentation brought by Whitmer to the meeting and obtained by The Associated Press noted how trade with Canada and Mexico has driven $23.2 billion in investment to Michigan since 2020. General Motors, Ford, and Stellantis operate 50 factories across the state, while more than 4,000 facilities support the auto parts supply chain. Altogether, the sector supports nearly 600,000 manufacturing jobs, forming the backbone of Michigan's economy. Whitmer outlined the main points of the materials to Trump and left copies with his team. To Grossman, the Michigan State professor, a key question is whether voters who expected to be helped by tariffs would react if Trump's import taxes failed to deliver the promised economic growth. 'Everyone's aware that Michigan is a critical swing state and the auto industry has outsized influence, not just directly, but symbolically,' Grossman said. AP VoteCast found that Trump won Michigan in 2024 largely because two-thirds of its voters described the economic conditions as being poor or 'not so good.' Roughly 70% of the voters in the state who felt negatively about the economy backed the Republican. The state was essentially split over whether tariffs were a positive, with Trump getting 76% of those voters who viewed them favorably. The heads of General Motors, Ford and Stellantis have repeatedly warned the administration that the tariffs would cut company profits and undermine their global competitiveness. Their efforts have resulted in little more than a temporary, monthlong pause intended to give companies time to adjust. The reprieve did little to blunt the financial fallout. Advertisement In the second quarter alone, Ford reported $800 million in tariff-related costs, while GM said the import taxes cost it $1.1 billion. Those expenses could make it harder to reinvest in new domestic factories, a goal Trump has championed. 'We expect tariffs to be a net headwind of about $2 billion this year, and we'll continue to monitor the developments closely and engage with policymakers to ensure U.S. autoworkers and customers are not disadvantaged by policy change,' Ford CEO Jim Farley said on his company's earning call. Since Trump returned to the White House, Michigan has lost 7,500 manufacturing jobs, according to the Bureau of Labor Statistics. Smaller suppliers have felt the strain, too. Detroit Axle, a family-run auto parts distributor, has been one of the more vocal companies in Michigan about the impact of the tariffs. The company initially announced it might have to shut down a warehouse and lay off more than 100 workers, but later said it would be able to keep the facility open, at least for now. 'Right now it's a market of who is able to survive, it's not a matter of who can thrive,' said Mike Musheinesh, owner of Detroit Axle.
Epoch Times
7 hours ago
- Epoch Times
The Muscle of Brussels
Opinion Opinion How the European Union became the world's regulatory superpower. In a world where global power is measured by military strength, technological innovation, or cultural influence, it is striking that the European Union, without housing major tech giants or centers of disruptive innovation, has turned bureaucracy into a tool of global power. It shapes the behavior of global companies, including American big tech firms, which adapt their products to comply with European norms. This phenomenon is known as the 'Brussels Effect' and has positioned the EU as the world's regulatory superpower, fueling growing tensions, particularly with the United States following the re-election of Donald Trump.
Yahoo
12 hours ago
- Yahoo
Is August the worst month to invest in European stocks?
European equities have entered what is historically the most challenging stretch of the calendar year, as August and September consistently deliver the weakest returns for the region's stock markets. Following a strong first half in 2025 and a slightly positive July, history suggests that the summer momentum in European equities often loses steam as August arrives. The month is typically defined by thinner trading volumes, greater market sensitivity to economic and geopolitical headlines, and a consistent pattern of higher volatility. August: The weakest month for European indices Analysis of the past three decades reveals a clear seasonal downturn in August. The EURO STOXX 50, Europe's blue-chip benchmark, has averaged a 1.66% decline during the month over the past 30 years, making it the worst-performing month of the year. It has ended August in positive territory only 43% of the time, and the broader STOXX Europe 600 tells a similar story. Over the past 24 years, this index has fallen by an average 0.7% in August, also with a 43% winning ratio. The most brutal August came in 1998, when the EURO STOXX 50 plunged 14.4%, followed closely by 2001's 13.79% loss. Country indices echo August's negative trend Zooming in on national markets, the pattern of August weakness is equally pronounced. This period is the weakest month for Germany's DAX, which posts an average decline of 2.2% and finishes in positive territory just 47% of the time. In France, the CAC 40 drops by 1.47% on average in August, narrowly ahead of September's 1.49% average fall, and sees only a 37% winning rate. Italy's FTSE MIB and Spain's IBEX 35 also see the negative sign, logging average August losses of 0.7% and 0.9%, respectively. German stocks: Some of the weakest August seasonality A group of Germany's blue chips consistently show downward August bias, with some of them marking it as their worst month of the year, both in terms of returns and win probability. According to TradingView data, some of the hardest-hit stocks include: • Thyssenkrupp AG leads the decline, tumbling an average 4.6% in August with a win rate of just 30%, meaning it has posted gains in only 9 of the past 30 years. • BMW AG averages a 4.1% loss in August with just a 37% win rate. Volkswagen AG, meanwhile, falls 3.3% and ends the month higher only 27% of the time — proof that even automakers aren't spared from late-summer volatility. • Deutsche Bank AG, Germany's largest lender, averages a 3.47% drop in August and matches Thyssenkrupp's 30% win ratio. • Utility giant SE and industrial titan Siemens AG also feel the seasonal drag, both slipping by nearly 2%, with win rates of 37% and 40%, respectively. • Deutsche Börse AG, operator of Germany's stock exchange, and consumer goods firm Beiersdorf AG both see their weakest performance in August, falling 1.72% and 1.66% on average, with win rates of 48% and 39%, respectively. Bottom line: August's seasonal slump hard to ignore With the EURO STOXX 50 and STOXX 600 up 8% and 7%, respectively, European equities have delivered a solid year-to-date performance. Much of this rebound has come on the back of a strong recovery from April's tariff-induced downturn, mirroring a broader global equity upswing. But history warns that August marks a persistent seasonal soft spot — particularly for Germany's corporate heavyweights, which tend to underperform more than their European peers. From broad indices to blue-chip stocks, the month shows a consistent pattern of lower returns, thinner liquidity, and heightened vulnerability to negative news flow. While no seasonal trend guarantees future performance, August remains, by many measures, the most challenging month for European investors. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
