Cornell close to White House settlement of up to US$100 million
A deal could be announced as soon as next week, said the people, who asked not to be named because the talks are private. One of the issues still under discussion is whether the pact would call for a resolution monitor to supervise how Cornell is carrying out changes required by the US – an arrangement accepted by Columbia University in a landmark US$221 million deal last month.
An agreement would make Cornell the latest Ivy League school to settle with President Donald Trump as the White House probes US colleges over allegations they mishandled antisemitic incidents on campus after the October 2023 attack by Hamas on Israel and the Jewish state's retaliatory response in Gaza. Brown University announced a US$50 million deal with the government this week.
Cornell declined to comment.
The Cornell terms are still under discussion and subject to change. One of the people familiar with the talks characterised US100 million as the maximum, while another described it as within the range of US$100 million.
Education Secretary Linda McMahon has said that additional settlements with universities are likely to use the Columbia agreement as a roadmap. That deal included a cash fine for civil-rights violations and a wide set of policy changes.
In addition to mounting probes of antisemitism on campus, the administration has also pushed colleges to dismantle diversity, equity and inclusion programs and criticised them for political bias against conservatives. The government agreed to restore funding to the University of Pennsylvania after the school reached a deal limiting the participation of transgender athletes in sports.
The broad-based push for change has fueled concerns that the government is impinging on academic freedom and seeking to use the universities to advance its own viewpoints and agenda. Harvard University, the primary target of Mr Trump's pressure campaign, has filed two lawsuits challenging the government's efforts to freeze research funding and block international student enrollment.
But the funding freeze has been taking a toll. Cornell warned in June that the pullback of US funding would force it to adopt 'financial austerity in all areas'. Cornell President Michael Kotlikoff said at the time that job cuts would likely be required, in addition to restrictions on discretionary spending and hiring.
Cornell's US$10.7 billion endowment is one of the smaller funds in the Ivy League. BLOOMBERG
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Business Times
2 hours ago
- Business Times
As Trump's tariffs bite, investors should ensure the companies they own have strong fundamentals
[SINGAPORE] It seemed like Groundhog Day again when US President Donald Trump unveiled revised reciprocal tariffs on imports from dozens of countries last Thursday (Jul 31). The adjusted rates came just one day before the previously announced reciprocal tariffs were due to kick in; the new duties will take effect only on Aug 7. To me, it initially appeared that Trump was once again delaying the full implementation of his tariffs while maintaining pressure on America's trading partners to open their markets. Some observers think Trump might be reaching his endgame on the country-specific tariffs, though. This could be good news. The revised tariff rates for many countries are, with a few notable exceptions, below the rates announced on Apr 2. For instance, the reciprocal tariffs on the European Union, Japan and South Korea are now all down to 15 per cent, from 20 per cent, 24 per cent and 25 per cent, respectively. India is down to 25 per cent from 26 per cent. Closer to home, reciprocal tariffs on Cambodia, Indonesia and Malaysia are now all down to 19 per cent, from 49 per cent, 32 per cent, 24 per cent, respectively. The reciprocal tariff on the Philippines is now also 19 per cent, although this is up from the 17 per cent announced on Apr 2. Vietnam is down to 20 per cent, from 46 per cent previously. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The bad news, however, is that these revised tariffs would still add to the squeeze on global trade when they are implemented. By some estimates , the revised tariffs will push the average US tariff rate up to 15.2 per cent – from 13.3 per cent currently, and from only 2.3 per cent back before Trump took office. The economic impact of higher tariffs was blunted in the first half of 2025 by US importers front-loading their orders. Market sentiment has also been buoyed by massive investment in the artificial intelligence field. The remaining months of the year will probably be tougher for investors. Trump's tariffs are likely to create a demand shock in Asia, resulting in slower growth and deflation. On the other hand, the US could suffer a supply shock that results in slower growth as well as higher inflation – leading to politically charged policy dilemmas. Politics and policymaking Last week, Trump ramped up his campaign to oust Federal Reserve chair Jerome Powell for refusing to cut rates, insinuating during a visit to the Fed's headquarters that the cost of renovating its buildings was out of control. Trump also fired the commissioner of the US Bureau of Labor Statistics (BLS) last week, after US job numbers for July came in weaker than expected . The BLS said on Aug 1 that total nonfarm payroll employment increased by only 73,000 last month. Adjustments for the previous two months were also larger than normal. Revised data showed US employers added only 19,000 jobs in May and 14,000 jobs in June, versus the previously reported 144,000 jobs and 147,000 jobs, respectively, for the two months. These political overtones could make it all the more complicated for investors to navigate the markets in the months ahead, as the full impact of Trump's tariffs is felt on growth, inflation and corporate earnings. At its policy meeting on Jul 29-30, the Fed decided to hold the target range for the federal funds rates unchanged, at between 4.25 per cent and 4.5 per cent. Two members of the 12-person rate-setting committee – Michelle Bowman and Christopher Waller – preferred a 25-basis-point cut and voted against the decision. This was reportedly the first time since 1993 that two members dissented at a single meeting. A third member, Adriana Kugler, was absent and did not vote. On Aug 1, the Fed said Kugler had submitted her letter of resignation to Trump and would step down on Aug 8. She has served as a governor of the Fed since 2023. Tariff impact in 'early days' Powell said during the post-meeting press conference that the impact of the tariffs on inflation is not only uncertain, but is probably still in its 'early days'. 'What we're seeing now is substantial amounts of tariff revenue being collected, on the order of US$30 billion a month,' he said, adding that most of this is currently being paid by companies that are 'upstream from the consumer'. Powell went on to say that many companies have indicated their intention to eventually push the cost of the tariffs onto their customers. 'But, you know, the truth is they may not be able to in many cases.' The state of the US labour market is also something of a puzzle. While the pace of job creation has been weakening, the unemployment rate in July was little changed from previous months, at 4.2 per cent. 'What that's telling you is that demand for workers is slowing, but so is the supply,' Powell said. He added, 'Because of immigration policy, really, the flow into our labour force is just a great deal slower.' This suggests underlying weakness in the seemingly robust US economy. 'I think you've got downside risks in a world where unemployment is being held down because both demand and supply are declining. And, I think that it's worth paying close attention to it,' Powell said. Less forgiving markets These macro concerns do not appear to be hurting the US corporate earnings for now, though. On Aug 1, financial data provider FactSet said 82 per cent of the S&P 500 companies that have reported their results for Q2 2025 delivered positive earnings-per-share (EPS) surprises. Also, 79 per cent achieved positive revenue surprises. The market is, however, rewarding positive surprises slightly less than it has in the past, and punishing negative surprises more severely. S&P 500 companies that have reported positive earnings surprises for Q2 2025 have seen an average stock price increase of 0.9 per cent over the period spanning two days before their earnings release and two days after. This is below the five-year average of a 1 per cent increase. On the other hand, S&P 500 companies that reported negative earnings surprises for Q2 2025 have seen an average price decrease of 5.6 per cent – versus a five-year average price decline of 2.4 per cent. Among the notable losers last week was Apple, which saw its shares tumble 5.4 per cent despite reporting financial numbers that topped expectations . The S&P 500 ended last week 2.4 per cent lower. The Nasdaq 100 was down 2.2 per cent. The Singapore market was equally unforgiving last week, with the Straits Times Index suffering a 2.5 per decline. Among the notable losers was Seatrium – which ended last week 5.4 per cent lower, despite reporting sharply higher revenue and earnings for H1 2025 and drawing a line under its past involvement in a corruption scandal in Brazil. Singapore Airlines fell 9.9 per cent during the week, after reporting a steep slump in earnings for the quarter to Jun 30 that seemed to catch analysts off-guard and sparked a wave of 'sell' recommendations . Then, there was OCBC – the first of the three local banks to report financial numbers for H1 2025 – which suffered narrower net interest margins as interest rates sank. OCBC ended last week 2.3 per cent lower. DBS and UOB, which are both scheduled to report their H1 2025 numbers on Aug 7, ended last week down 3 per cent and 2.9 per cent, respectively. As Trump's tariffs begin to bite, investors should carefully parse the financial statements of companies in their portfolios to ensure their micro fundamentals are strong enough to weather the tough months ahead.
Straits Times
4 hours ago
- Straits Times
Trump is winning his trade war, but Americans will pay the price
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Nevertheless, it has been slapped with a rate of 50 per cent at least partly because Mr Trump has an issue with the government prosecuting former president and Trump ally Jair Bolsonaro on coup charges. India, at a 25 per cent rate , also faces an unspecified penalty for its import of Russian energy and arms. The US has also caught on to transshipping, the sly rerouting of goods through lower-tariff nations. This practice now invites a 40 per cent penalty. More deals are to come, if the President wants them, according to Trade Representative Jamieson Greer in an Aug 1 TV interview. It is not clear what kind of deal will be struck with America's near peer rival . China poses a peculiar problem and the US is still alternating between confrontation and pressing for an advantage. 'Their economy and ours are like a square peg and a round hole, they don't really fit together very well,' Mr Greer said. But what is crystal clear is that America has just executed a major turn, reshaping the post-World War II economy to reflect Mr Trump's priorities of preserving American dominance in all spheres, from military might and manufacturing to energy. And the man is just six months into the job. Costs are more tangible than benefits As Mr Trump is never tired of pointing out, the threat of tariffs has persuaded the European Union and Japan to commit to investing US$600 billion (S$774 billion) and US$550 billion in the US, respectively. Combined with earlier investment commitments, including from Saudi Arabia, Mr Trump has touted the figure of US$12 trillion. Tariff revenues now make up 5 per cent of federal revenues, much higher than the historical average of 2 per cent. The figures are impressive – US$150 billion was collected in mere months, with projections of 'several hundred billions' by the year end. And American companies can now sell their goods – beef, rice, cars and other items – with zero tariffs in many more nations. Key American industries are sheltered through sectoral tariffs enacted in auto, steel, aluminium and copper industries. Pharmaceuticals and semiconductors are next in line. But plenty of fine print applies. Analysts caution that many pledges from foreign partners may be delayed, only partially fulfilled, or merely symbolic. Foreign investments in the US usually flow in tandem with dollars earned by companies from exports to the US. If tariffs penalise these exports, investing more dollars is challenging. The actual inflow of foreign investment will likely surpass the levels seen in recent years, say analysts at the Peterson Institute of International Economics (PIIE) in Washington. Just not, they add, by the large margins claimed publicly by Mr Trump. Dr Marcus Noland, an international trade economist at PIIE, found a clear example of the impact of Mr Trump's tariffs right in his own kitchen. The granola he has for breakfast is made by an American company with a plant in Ontario, Canada. Due to higher tariffs, the price of this granola has risen more than 40 per cent. 'Shortages and higher prices, there's no good here,' he maintains. Experts have tallied the costs. The average US tariff rate in the first quarter was 2.4 per cent, but climbed to 10 per cent in June. The latest levy announcements are set to bring that to more than 18 per cent, according to analysts at Gavekal Research. The median US household stares down an extra US$1,270 in expenses for 2025, a number projected to reach US$1,619 next year. Economic growth slowed from near 3 per cent in 2024 to about 1.2 per cent over the first half of 2025 and may be zero for the rest of the year. Some models predict wages will fall and leave scars that will stay raw for a generation. A recession now appears 'very, very likely', to quote Moody's Analytics chief economist Mark Zandi, who has been warning of this outcome since Mr Trump made his 'Liberation Day' tariffs announcement in early April. Corporate bottom lines tell a similar story. Apple's June quarter results dazzled, but only because buyers rushed to beat tariffs. The 25 per cent levy on India – where the company now produces its smartphones for the US market – darkens the next quarter. Amazon says inventories are its buffer now. But the future is 'impossible to know', says its chief executive Andy Jassy as supply chains in China, where the e-commerce giant sources its vast array of products, are in the crosshairs. Manufacturers, wholesalers and retailers increasingly report paying higher prices for the goods and services they buy and are slowly beginning to raise the prices they charge their customers, says the US Chamber of Commerce. Higher tariffs will directly punish the domestic manufacturing industry given that approximately 56 per cent of US imports are composed of raw materials and intermediary and capital goods. These will especially hit the small businesses which operate on thin margins and will find it harder to absorb the tariffs. Defined as those with fewer than 500 employees, they account for over 40 per cent of the country's economic activity. Industry insiders are also sceptical of Mr Trump's push to expand access for American products. 'I don't know that we wanted zero tariffs on American goods,' said an analyst who advises American businesses operating in South-east Asia. 'The more important things are the non-tariff barriers.' Hoover Institution economist David Henderson narrowed in on the impact of tariffs on the most important actor in the US economy – the consumer. 'For some countries, notably those in the European Union, tariff rates will be lower than they were before Trump began. That is a victory. But we should be clear about whom it's a victory for,' he noted in a July 31 commentary. 'The main gainers are European consumers, and the secondary gainers are US exporters. The big losers, though, from the high US tariffs, are US consumers and producers who use the tariffed items as inputs, and the secondary losers are foreign exporters,' he said. He noted that while US consumers will pay a 19 per cent tariff rate on goods from the Philippines and Indonesia, and a 20 per cent on those from Vietnam, their consumers will pay a zero per cent tariff on imports from the US. 'Don't get me wrong. I'm glad that people in those three countries, almost all of whom are poorer than the average American, will get the benefits of one-way free trade,' he said. 'But I feel bad for Americans, who will pay higher taxes,' he said. The deals, although heralded as victories by the Trump Administration, have not been struck in the traditional way. No formal texts bind them; and there seem to be differences in how they are regarded in Washington and overseas. In his quest for a 'good' deal, nation by nation, Mr Trump may have squeezed out some advantages. But will a refusal to consider the reality of an interdependent world come back to bite America in ways not yet apparent? And no monetary or symbolic victory can be counted as a 'good deal' if it results in squandering a precious asset that took the US years to earn – global goodwill. Can America afford to arm-twist the very same countries whose help it needs in its geopolitical rivalry with China? And if tariffs continue to be applied in purely mercantilistic terms, they may have the effect of transforming America First into America Alone.
Straits Times
5 hours ago
- Straits Times
Israel's Ben-Gvir says he prayed at Al-Aqsa mosque compound
Sign up now: Get ST's newsletters delivered to your inbox JERUSALEM - Israel's far-right National Security Minister Itamar Ben-Gvir visited the flashpoint Al-Aqsa mosque compound in Jerusalem on Aug 3 and said he prayed there, challenging rules covering one of the most sensitive sites in the Middle East. Under a delicate decades-old "status quo" arrangement with Muslim authorities, the Al-Aqsa compound is administered by a Jordanian religious foundation and Jews can visit but may not pray there. Videos released by a small Jewish organisation called the Temple Mount Administration showed Mr Ben-Gvir leading a group walking in the compound. Other videos circulating online appeared to show Mr Ben-Gvir praying. Reuters could not immediately verify the content of the other videos. The visit to the compound known to Jews as Temple Mount, took place on Tisha B'av, the fast day mourning the destruction of two ancient Jewish temples, which stood at the site centuries ago. The Waqf, the foundation that administers the complex, said Mr Ben-Gvir was among another 1,250 who ascended the site and who it said prayed, shouted and danced. Israel's official position accepts the rules restricting non-Muslim prayer at the compound, Islam's third holiest site and the most sacred site in Judaism. Mr Ben-Gvir has visited the site in the past calling for Jewish prayer to be allowed there and prompting Prime Minister Benjamin Netanyahu to issue statements saying that this was not the policy of Israel. Mr Ben-Gvir said in a statement he prayed for Israel's victory over Palestinian militant group Hamas in the war in Gaza and for the return of Israeli hostages being held by militants there. He repeated his call for Israel to conquer the entire enclave. The hillside compound, in Jerusalem's Old City, is one of the most sensitive locations in the Middle East. Suggestions that Israel would alter rules at the compound have sparked outrage in the Muslim world and ignited violence in the past. There were no immediate reports of violence on Aug 3. A spokesman for Palestinian President Mahmoud Abbas condemned Mr Ben-Gvir's visit, which he said "crossed all red lines." "The international community, specifically the US administration, is required to intervene immediately to put an end to the crimes of the settlers and the provocations of the extreme right-wing government in Al-Aqsa Mosque, stop the war on the Gaza Strip and bring in humanitarian aid," Mr Nabil Abu Rudeineh said in a statement. REUTERS
