Latest news with #American-bound
Yahoo
19-05-2025
- Business
- Yahoo
Does Donald Trump Know He Has Lost His Trade War?
The U.S. has already lost Donald Trump's trade war. It's now up to the president to decide how disastrous that loss will be. The best-case scenario for the U.S. economy right now is the Trump administration fully backing down and acknowledging this loss, and quickly. Each day that passes locks in more economic damage. Like a recalcitrant general, Trump doesn't appear ready to surrender, saying Friday that he wants to reinstate the tariffs he put in place in early April and paused shortly thereafter. 'We have, at the same time, 150 countries that want to make a deal, but you're not able to see that many countries,' he said Friday in Abu Dhabi. 'So at a certain point, over the next two to three weeks, I think [Treasury Secretary] Scott [Bessent] and [Commerce Secretary] Howard [Lutnick] will be sending letters out, essentially telling people ― we'll be very fair ― but we'll be telling people what they'll be paying to do business in the United States.' That is an economically ominous statement. If Trump is buoyed by how the stock market has recovered from its Trump-tariff induced dive, he's ignoring the mounting tolls elsewhere. His trade war has already created something akin to the largest tax hike in post-war U.S. history, according to J.P. Morgan analysis. Even after the rollbacks and pauses, economists at the bank wrote in a briefing to clients that 'the trade war shock is still material... we now estimate an effective ex-ante tariff rate of 14.4%. This is akin to a $475bn tax hike on US households and businesses, worth 1.6% of GDP (still sitting close to the largest tax hike in the post WWII period).' Not only has a massive effective tax hike been put in place, but government spending is dropping, and the U.S. economy shrank 0.3% in the first quarter of the year. The tariffs against China caused a more than 60% decline in ocean container bookings from China to the U.S. Now that the U.S.'s punitive Chinese tariffs have been largely paused, there's such a rush to book space on American-bound ships from China that capacity will sell out, leading to a backlog, Flexport's chief executive Ryan Petersen said earlier this week. This kind of import-export whiplash, with weeks of incoming goods lost sitting on foreign docks, can destroy the ability of a business to plan and manage inventory, cause shortages, and lead to price increases. Indeed, Walmart said Thursday morning that tariff-induced price hikes will start hitting their stores in just a few weeks. As Paul Krugman, a Nobel-winning trade economist, pointed out Friday, the trade war never ended: 'Even after Trump's 'climbdown' we're still looking at a shock to the economy 7 or 8 times as big as Smoot-Hawley, the previous poster child for destructive tariff policy.' At its current 30% tariff rate, Krugman estimates that trade with China will drop by 65%. Trump is now saying he wants to take a policy and make it more economically destructive. The 'announce, cave, tough statement, re-announce' cycle has been a constant of this administration's trade policy. After Trump's initial announcement of massive tariffs on April 2, the Trump administration struggled to find a consistent message to explain the point of the crippling charges on trade with Europe, China and global industrial powerhouses like Madagascar. Was it a bold negotiating gambit that would force world leaders to the table to strike trade deals that were favorable to the United States? Or was this, in fact, the true, optimal trade policy that the president had been working diligently to craft, backing down from which would be a betrayal? 'I don't think there's any chance that President Trump's going to back off his tariffs,' Lutnick said the day after they were announced. 'The tariffs are coming,' he told CBS' 'Face the Nation'. 'He announced it and he wasn't kidding,' a senior administration official told Axios. 'No. No, no, no,' was Bessent's response when asked on 'Meet the Press' if the president was going to negotiate with countries to reduce tariffs. Then Trump posted that 'negotiations with other countries... will begin taking place immediately.' The same day, Trump's trade advisor, Peter Navarro, published an op-ed in the Financial Times, writing that 'this is not a negotiation. For the US, it is a national emergency triggered by trade deficits caused by a rigged system.' Bessent then told CNBC that the plan had been to wait for other countries to think the U.S. was serious in order to kickstart negotiations. Then, before any of those negotiations had actually been conducted, Trump got spooked to some extent by sliding stocks but particularly by cratering demand for U.S. government debt, and paused the tariffs he had imposed. The U.S. and the United Kingdom proceeded to announce a bilateral trade deal. The deal, however, wasn't a formal trade deal and didn't change much about the U.S.'s economic relationship with a relatively small trading partner. As the BBC put it, the informal agreement with America's eighth-largest trading partner 'did not appear to meaningfully alter the terms of trade between the countries, as they stood before the changes introduced by Trump this year.' Meanwhile, the U.S.'s third largest trading partner, China, effectively negotiated with the Trump administration by refusing to do anything and getting pretty much everything they wanted from the U.S. After the Trump administration ratcheted up to a 145% tariff on most Chinese imports, the U.S.-China deal pauses almost all of the recent, punitive tariffs the two countries placed on one another for 90 days. To get back to that status quo, Chinese negotiators only had to roll back the tariffs they had put in place in response to U.S. tariffs. 'It's clear that Trump wants to ease the tariffs, not increase them,' AGF Investments' Greg Valliere wrote of the deal. 'The Trump Administration has blinked, big time.' No wonder The Wall Street Journal reported that Chinese President Xi Jinping feels vindicated and triumphant. Bloomberg summed up the outcome with the headline: 'Xi Defiance Pays Off As Trump Meets Most Chinese Trade Demands.' Not surprisingly, neither the European Union nor Japan is in a hurry to strike a deal with the U.S: Why do that when you can get a great deal by just waiting and letting the Trump administration negotiate with itself? Trump Says He Will Call Putin On Monday To Discuss The War In Ukraine Larry Summers Says 'It's Very Clear' Who Blinked On U.S.-China Trade War Trump Retreats On His Trade War's Chinese Front, Claims Big Victory
CNBC
12-05-2025
- Business
- CNBC
Trump says he talked to Apple CEO Tim Cook after China tariff rollback
President Donald Trump said Monday that he talked to Apple CEO Tim Cook after the U.S. and China agreed to suspend most tariffs for 90 days. Wall Street and Apple investors cheered the pause on Chinese tariffs. Apple stock was up 5% in trading on Monday, versus 3% for the Nasdaq. "I spoke to Tim Cook this morning, and he's going to, I think, even up his, his numbers," Trump said in the Oval Office. "$500 billion, he's going to be building a lot of plants in the United States for Apple. And we look forward to that." Apple previously said in February it would spend $500 billion to expand many of its operations in the U.S., including assembling AI servers in Houston. Any cooling of a U.S.-China trade war is expected to boost Apple, which does the majority of its device production in the country, and also counts the region as its third-largest by sales. Still, it's not clear how much Monday's announcement immediately helped Apple. In April, most of Apple's most important products, such as smartphones and computers, received exemptions on some of the highest 145% tariffs, but there are still 30% tariffs on Chinese imports even after Sunday's deal. Apple still faces 10% tariffs in some of its secondary production locations, such as India and Vietnam. The Trump administration wants Apple to bring device production, including iPhone manufacturing, to the United States, a move that many experts believe would be unlikely and expensive. Earlier this month, Cook told investors about the company's tariff strategy on an earnings call. He said that Apple is currently sourcing American-bound products from production locations in Vietnam and India, but didn't want to speculate beyond June, calling the situation "difficult to predict." An Apple spokesperson declined to comment.
CNBC
01-05-2025
- Business
- CNBC
Apple has managed tariffs so far, but Cook says it's tough to predict beyond June
Apple CEO Tim Cook, after nearly a month of anticipation from investors, on Thursday finally revealed how Apple was navigating the Trump administration's tariffs. The company only saw a "limited impact" on tariffs between January and the end of March, Cook told investors on an earnings call for the company's second quarter results. For the current quarter which ends in June, Apple is predicting about $900 million in additional costs for those tariffs — assuming nothing changes, Cook said. That surprised analysts who said on the call that they expected the costs to be higher. The vast majority of Apple's products are "currently not subject" to Trump's tariffs, Cook said. But beyond June, he didn't say much. "I don't want to predict the future because I'm not sure what will happen with tariffs," said Cook, adding that "it's very difficult to predict beyond beyond June." Apple doesn't usually give a lot of details or guidance beyond the current quarter, but investors didn't like Thursday's lack of clarity. Apple shares fell as much as 4% in extended trading on Thursday despite the company reporting results that beat Wall Street expectations for revenue and showed strong sales growth for iPads and Mac computers. "As we look ahead, we remain confident," Cook said. Apple's uncertainty highlights how even a company with a reputation for world-class operations can get whacked by the unpredictability of the Trump administration's shifting tariff rates and dates. Cook, who built his reputation in Silicon Valley as Apple's operations guru, discussed how the company has dealt with the tariffs to minimize their impact so far on Thursday. He praised his old division on a call with analysts. "'l'll just say that the operational team has done an incredible job around optimizing the the supply chain and the inventory," he said. Apple is currently sourcing American-bound products from India and Vietnam, Cook said. Those countries currently have 10% tariffs on them, and the company is sourcing Apple computers for rest of the world from China, which the Trump administration has hit with a 145% tariff rate. Cook also said that Apple had built up inventory ahead of the tariffs, which would be reported as manufacturing purchase obligations in the company's filings with the Securities and Exchange Commission. Cook said there was no "obvious evidence" that consumers were buying more Apple products ahead of tariffs. "We do expect the majority of iPhones sold in the U.S. will have India as their country of origin," Cook said. "Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the U.S." Apple will still pay higher 145% tariffs on some Chinese imports for AppleCare, its extended warranty program, and accessories, Cook said. One issue for forecasting tariffs going forward is that both Vietnam and India are in line to get hit with hefty tariffs on imported goods as soon as July. Trump previously targeted both countries under his "reciprocal tariffs" on April 2, but a week later, he paused the tariffs for 90 days. Apple expanded its supply chain to those countries in recent years as a hedge for its business, but the Vietnam and India strategy won't work if Trump's tariffs ultimately take effect. Cook also mentioned the possibility that technology products such as semiconductors might receive additional tariffs under a process called a Section 232 Investigation. Apple is not the only big tech company to get rattled by the Trump administration's tariffs. Amazon finance chief Brian Olsavsky said Thursday that Amazon would offer a wider range of guidance because of tariff uncertainty, and he also alluded to the possibility of weakening consumer demand. Microsoft raised Xbox prices on Thursday, despite tariffs coming up just once on the company's Wednesday earnings call. Apple didn't offer guidance for its profitable Services division on Thursday, but offered the same kind of top-line forecast that it has in previous quarters. Apple expects overall revenue to grow "low to mid-single digits" on an annual basis during the current quarter. Apple reported $85.78 billion in sales during the June quarter last year. And at least during that quarter, Apple investors will know what to expect.
Bloomberg
13-02-2025
- Business
- Bloomberg
SharkNinja CEO Says There's No Supply Chain for US-Made Blenders
SharkNinja Inc., the maker of Ninja Creami ice cream machines and Shark FlexStyle hair tools, is planning to largely cut China out of its supply chain for the US market as tariffs increase costs. But it's not going to make those products in America, either, Chief Executive Officer Mark Barrocas said. The household appliance company started curbing its reliance on China after President Donald Trump's last trade war and has accelerated that process in recent months. SharkNinja is planning to source almost all of its products for the US from places other than China by the end of 2025, with an interim goal of shifting 90% of its American-bound production elsewhere by the end of the second quarter.
