Latest news with #AlexJacquez
Axios
21 hours ago
- Business
- Axios
Tariffs are raising prices, surveys show
Tariffs raise prices. It's textbook economics, and we're starting to see it happen now, anecdotally at least. Why it matters: To put it mildly, Americans dislike high inflation. It's politically toxic, as Democrats recently learned. The big picture: Tariffs are happening fast, and they're a moving target. Yesterday's 25% is today's 50%. Increases have yet to show up in the official inflation data. State of play: Surveys and anecdotes about price increases are piling up. "Tariffs have increased the cost of doing business," a firm in transportation and warehousing said in the comments of yesterday's Institute for Supply Management report on activity in the service sector. The Beige Book, a collection of nationwide business anecdotes published by the Federal Reserve, said prices increased at a "moderate pace" since its last report in April. One standout anecdote: A clothing retailer told the Boston Fed it took a "rare step" to re-tag its inventory "with higher prices to cover the cost of tariffs, and those items will hit store shelves this summer." Tariff-related price hikes appear to be hitting the shelves at Walmart and Target, Business Insider reported this week. Employees have been posting pictures of certain products showing sharp increases. Zoom in: About three-fourths of companies said they were either fully or somewhat passing along higher tariffs by raising prices, per a survey of businesses out Wednesday from the New York Fed. The survey was conducted among manufacturers and service firms early last month, before President Trump lowered tariffs on Chinese imports to 30% from 145%. While this is a regional survey of New York and New Jersey firms, the authors indicated that these are trends observed nationwide. The intrigue:"A significant share" of firms surveyed said they raised prices of goods and services unaffected by tariffs, as a way to spread higher costs across inventory, or to take advantage of customer expectations that prices are rising. It's not a new phenomenon. After the first Trump administration raised tariffs on washing machines, the price of dryers — unaffected by tariffs — increased as well, while companies took advantage of the moment. A significant point of contention during the high inflation of 2022 was whether businesses were "taking price," or using the moment to fatten their profit margins at a time when consumers expected to pay more. "A big increase in the tariff level is a perfect opportunity for companies to use a price shock to raise prices," Alex Jacquez, an economist who served in the Biden White House, said on a press call Wednesday. Nearly everyone has heard about the tariffs. "People are primed to expect prices to go up," he said. Reality check: Tariff policies will increase inflation by 0.4 points in 2025 and 2026, "reducing the purchasing power of households and businesses," per the latest estimates from the Congressional Budget Office out yesterday. That's not nothing, but it's not near what we saw in 2022 and 2023. The other side: There are some, particularly in the Trump administration, who argue the costs of tariffs are outweighed by the benefits, like returning production back to the U.S., creating better jobs, and strengthening supply chains. Between the lines: Higher prices are going to hit differently than they did when inflation spiked in 2022. Back then the economy kept chugging along thanks to an overheated labor market, which gave companies the freedom to keep raising prices, and people had jobs and could afford to pay. The cushion is missing now, former Fed economist Claudia Sahm wrote on Substack. And that could make it harder to raise prices, she said.
Yahoo
24-05-2025
- Business
- Yahoo
Manufacturers could benefit from Trump's 'big, beautiful' bill depending on what they make
Advocates for the manufacturing sector have hailed the advancement of President Trump's "big, beautiful bill" as a landmark moment for the sector, but at least two provisions could cut the ebullience for some factory owners, depending on what they produce and their company structure. The dynamic appears particularly acute for green energy manufacturers, as well as for multinational manufacturers with facilities both in the US and elsewhere. Both are set to eat some proverbial spinach alongside the range of goodies clearly on offer in the 1,000-plus-page package. Overall though, the focus from many is on tax provisions in the bill that could boost company bottom lines, like an increase in the pass-through deduction as well as tax credits for things like depreciation, interest payments, and factories. "In short, this is a manufacturers' bill," said Jay Timmons, the National Association of Manufacturers president, touting the tax credits in particular that will be implemented if they are eventually signed into law by the president. Yet some were quick to point out that other subsectors will face challenges. None more so than green energy, with the bill set to include a rollback of clean energy credits implemented during the Biden administration for things like the making of solar panels and electric vehicles. "These are just massive headwinds for US manufacturing clean energy, which was already facing a tough global environment," said Alex Jacquez, a former special assistant to Biden for economic development and industrial strategy, in an interview. Passage of the bill as it is could lead to "much lower levels of ongoing investment," he added, as well as outright project cancellations "for sure." And markets may agree, to an extent. Clean energy stocks were down this past week, with solar stocks especially hard hit after the bill advanced. Overall, the bill has a range of provisions for factory owners, most notably a new plan for 100% expensing for structures that could be felt quickly. This would allow companies to immediately deduct the costs of building new factories and updating existing ones, with the credit currently set to be in force from 2025 through 2028. This provision is set to join other parts of the bill that would reinstitute previous business-world deductions around things like depreciation of property, interest expenses, and research and development costs. The bill also makes permanent the 199A deduction at a new rate of 23%. That deduction — also known as the pass-through deduction — is focused on often smaller businesses organized as S corporations or partnerships. The National Association of Manufacturers says 96% of manufacturers are organized as pass-throughs. Overall, it's a suite of tax credits that has also led to highly ambitious estimates from some of what the legislation will mean for economic growth. The White House, for instance, has projected that the bill — fueled by these provisions in particular — could lead to GDP growth around 4%-5% annually in the coming years. Most outside analysts suggest much more modest growth will be in the offing. Part of these estimates for slower growth are the result of a bill that is primarily focused on extending existing tax cuts for both individuals and businesses — as well as new cuts in the offing. In addition to the green energy cuts, another change in the bill is around section 899 of the IRS code to tighten restrictions on what Republicans call 'discriminatory foreign countries' with new taxes to combat some of their practices. This could directly impact companies that operate or are based in these nations. A release from a group called the Global Business Alliance reacted to those provisions, saying changes to this section will threaten US manufacturing and reporting that impacted international companies support 2.9 million manufacturing jobs — or 22% of US manufacturing employment. "The impact of this punitive and discriminatory provision will be felt by workers in communities like Paris, Kentucky, and London, Ohio, not Paris, France, or London, England," Jonathan Samford, the group's president and CEO, said in a statement. And that's in addition to an energy rollback in the bill that includes last-minute changes put into place just before the final vote that could make the credits expire more quickly. One last-minute change would require projects to break ground within 60 days of the bill's signing to qualify for some credits. Jacquez calls the passed bill "as close to full repeal as they can get" of that piece of Biden's Inflation Reduction Act (IRA). Groups have estimated wide-reaching effects could follow. Advanced Energy United says that the provisions could undermine $3 trillion in economic benefits currently being felt in the green and "advanced" energy sector. They also say it could jeopardize the 13.7 million American jobs that these credits had been projected to generate in the coming decade. "We call on the Senate and allies across Capitol Hill to ensure that the final reconciliation package preserves key tax policies," said the group's CEO, Heather O'Neill. And advocates like O'Neill could find an audience when the bill reaches the Senate in the weeks ahead. A range of red-state Republicans already highlighted the positive effects these green energy credits are having in their states as they've suggested changes need to be in the offing. Jacquez added "the pro-IRA caucus in the House just was not willing to go to the mat in the way, say, the SALT caucus was," in reference to last-minute changes that blue-state Republicans were able to secure over state and local tax deductions. "I think in the Senate, the negotiations will be much different," he added. Other changes in the Senate potentially in the offing could make the bill into a further win for manufacturers, with some senators already suggesting that some of the business-world provisions currently written with an expiration date — like for factories — be made permanent. In his statement following the bill's advancement, NAM's Timmons pledged to keep working with lawmakers to make sure the final bill is "maximally effective." Ben Werschkul is a Washington correspondent for Yahoo Finance. 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USA Today
15-05-2025
- Business
- USA Today
From dishes to dresses, the household items most likely to come from China
From dishes to dresses, the household items most likely to come from China Show Caption Hide Caption US and China agree to trade deal that will lower tariff levels The U.S. and China agreed to a trade deal after face-to-face meetings between senior economic officials. Amid the tariff tumult of recent weeks, perhaps you have found yourself pulling random plates and mugs from your shelves and turning them over to learn their country of origin. Quite often, the answer is China. China ranks as America's third-largest source of imported goods in 2025, according to Census data, with $103 billion in imports through March. In all of 2024, China ranked second, behind Mexico. President Trump's campaign of import tariffs has consumers spooked about looming price hikes on imports from around the globe. Many of the biggest fears, however, center on China. Trump enacted massive 145% import taxes on Chinese goods in April, then announced a trade deal on May 11 that slashed them to 30%, at least for now. But 30% is still a large number. If you've already taken a 'tariff tour,' strolling around your home, upending lamps and couch cushions to discover their provenance, then you already know how much we depend on products from China. 'This might be a bit of a wakeup call to where all of our stuff actually comes from,' said Alex Jacquez, chief of policy and advocacy at the progressive Groundwork Collaborative. If you haven't inventoried your household imports, then allow us to lead the tour. Here's how much household stuff comes from China A breathtaking share of our pots and pans, 90%, hail from China. A relatively small quotient of washers and dryers, 30%, originate there. But those figures understate the full scale of Chinese imports. 'Even products that seemingly have another country of origin embody significant content that originates from China,' said Adam Hersh, a senior economist at the left-leaning Economic Policy Institute. Here is a list of 11 common household items, showing what percentage of all imports came from China in 2024. The numbers were compiled using the U.S. International Trade Commission's DataWeb from official U.S. merchandise trade statistics published by the Department of Commerce. Dishes : 66% made in China. Next biggest source: Mexico. : 66% made in China. Next biggest source: Mexico. Pots and pans : 90% made in China. Next biggest source: India. : 90% made in China. Next biggest source: India. Utensils : 87% made in China. Next biggest source: Vietnam. : 87% made in China. Next biggest source: Vietnam. Refrigerators : 87% made in China. Next biggest source: Vietnam. : 87% made in China. Next biggest source: Vietnam. Televisions : 48% made in China. Next biggest source: Mexico. : 48% made in China. Next biggest source: Mexico. Couches : 43% made in China. Next biggest source: Vietnam. : 43% made in China. Next biggest source: Vietnam. Lamps : 48% made in China. Next biggest source: Mexico. : 48% made in China. Next biggest source: Mexico. Dresses : 40% made in China. Next biggest source: Vietnam. : 40% made in China. Next biggest source: Vietnam. Toilets : 44% made in China. Leading source (47%): Mexico. : 44% made in China. Leading source (47%): Mexico. Vacuum cleaners : 35% made in China. Leading source (42%): Vietnam. : 35% made in China. Leading source (42%): Vietnam. Washer-dryers: 30% made in China. Next biggest source: South Korea. The current tariff deal between the United States and China is only good for 90 days, while the two nations negotiate. Where will tariff rates stand after that? Even some trade experts are reluctant to say. "That's the million-dollar question, right there," said Colin Grabow, an associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies. "You get the sense that they're kind of making it up as they go." This story has been updated with additional information.
Yahoo
14-05-2025
- Business
- Yahoo
How much of your stuff was made in China? Here are the sobering numbers.
Amid the tariff tumult of recent weeks, perhaps you have found yourself pulling random plates and mugs from your shelves and turning them over to learn their country of origin. Quite often, the answer is China. China ranks as America's third-largest source of imported goods in 2025, according to Census data, with $103 billion in imports through March. In all of 2024, China ranked second, behind Mexico. President Trump's campaign of import tariffs has consumers spooked about looming price hikes on imports from around the globe. Many of the biggest fears, however, center on China. Trump enacted massive 145% import taxes on Chinese goods in April, then announced a trade deal on May 11 that slashed them to 30%, at least for now. But 30% is still a large number. If you've already taken a 'tariff tour,' strolling around your home, upending lamps and couch cushions to discover their provenance, then you already know how much we depend on products from China. 'This might be a bit of a wakeup call to where all of our stuff actually comes from,' said Alex Jacquez, chief of policy and advocacy at the progressive Groundwork Collaborative. If you haven't inventoried your household imports, then allow us to lead the tour. A breathtaking share of our pots and pans, 90%, hail from China. A relatively small quotient of washers and dryers, 30%, originate there. But those figures understate the full scale of Chinese imports. 'Even products that seemingly have another country of origin embody significant content that originates from China,' said Adam Hersh, a senior economist at the left-leaning Economic Policy Institute. Here is a list of 11 common household items, showing what percentage of all imports came from China in 2024. The numbers were compiled using the U.S. International Trade Commission's DataWeb from official U.S. merchandise trade statistics published by the Department of Commerce. Dishes: 66% made in China. Next biggest source: Mexico. Pots and pans: 90% made in China. Next biggest source: India. Utensils: 87% made in China. Next biggest source: Vietnam. Refrigerators: 87% made in China. Next biggest source: Vietnam. Televisions: 48% made in China. Next biggest source: Mexico. Couches: 43% made in China. Next biggest source: Vietnam. Lamps: 48% made in China. Next biggest source: Mexico. Dresses: 40% made in China. Next biggest source: Vietnam. Toilets: 44% made in China. Leading source (47%): Mexico. Vacuum cleaners: 35% made in China. Leading source (42%): Vietnam. Washer-dryers: 30% made in China. Next biggest source: South Korea. The current tariff deal between the United States and China is only good for 90 days, while the two nations negotiate. Where will tariff rates stand after that? Even some trade experts are reluctant to say. "That's the million-dollar question, right there," said Colin Grabow, an associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies. "You get the sense that they're kind of making it up as they go." This story has been updated with additional information. This article originally appeared on USA TODAY: How much of your stuff was made in China? We have the numbers.
USA Today
14-05-2025
- Business
- USA Today
How much of your stuff was made in China? Here are the sobering numbers.
How much of your stuff was made in China? Here are the sobering numbers. Show Caption Hide Caption US and China agree to trade deal that will lower tariff levels The U.S. and China agreed to a trade deal after face-to-face meetings between senior economic officials. Amid the tariff tumult of recent weeks, perhaps you have found yourself pulling random plates and mugs from your shelves and turning them over to learn their country of origin. Quite often, the answer is China. China ranks as America's third-largest source of imported goods in 2025, according to Census data, with $103 billion in imports through March. In all of 2024, China ranked second, behind Mexico. President Trump's campaign of import tariffs has consumers spooked about looming price hikes on imports from around the globe. Many of the biggest fears, however, center on China. Trump enacted massive 145% import taxes on Chinese goods in April, then announced a trade deal on May 11 that slashed them to 30%, at least for now. But 30% is still a large number. If you've already taken a 'tariff tour,' strolling around your home, upending lamps and couch cushions to discover their provenance, then you already know how much we depend on products from China. 'This might be a bit of a wakeup call to where all of our stuff actually comes from,' said Alex Jacquez, chief of policy and advocacy at the progressive Groundwork Collaborative. If you haven't inventoried your household imports, then allow us to lead the tour. Here's how much household stuff comes from China A breathtaking share of our pots and pans, 90%, hail from China. A relatively small quotient of washers and dryers, 30%, originate there. But those figures understate the full scale of Chinese imports. 'Even products that seemingly have another country of origin embody significant content that originates from China,' said Adam Hersh, a senior economist at the left-leaning Economic Policy Institute. Here is a list of 11 common household items, showing what percentage of all imports came from China in 2024. The numbers were compiled using the U.S. International Trade Commission's DataWeb from official U.S. merchandise trade statistics published by the Department of Commerce.
