Latest news with #AmericanBusinesses
Yahoo
2 days ago
- Business
- Yahoo
Hicks: Grim recessionary facts since erratic U.S. economic policies took hold
In March, I predicted the U.S. economy would enter recession and in April I explained how Indiana would be especially vulnerable to this downturn (see and Unfortunately, I was right. A large tranche of data — both public and private — makes that clear. The tariffs have descended hard upon American businesses and consumers. Estimates of their downstream effects cluster around a $2,400 cost per family by the end of 2025, dropping to $2,000 a year in 2026 and later years as Americans buy fewer goods (see This has led economist Justin Wolfers to quip, "Trump has a pronoun problem. He keeps saying he's imposing tariffs on they/them. But he's actually imposing them on us." (See Consumer sentiment has dropped by more than 10 percentage points since President Trump's inauguration day and labor markets have stalled. Help wanted ads nationally dropped by 21% since Trump's 'Liberation Day' tariff announcements and by 27% here in Indiana. The private sector jobs number from ADP shows job growth effectively stopped in April. These private data tell a rich and consistent story about the economy, but public sector data are more accurate and complete. This requires comment on data integrity and character. U.S. economic data has been the envy of the world since the Great Depression. It is fast, accurate, nonpartisan and profoundly transparent. It is collected by a group of quiet professionals with input from hundreds of organizations and individuals. These data make the U.S. the most trustworthy and reliable destination for foreign investment. Trump fired the director of the Bureau of Labor Statistics on Aug. 1 because he didn't like these data. Trump claimed the data were biased against him. That is false. Trump is afraid of facts and likely to become more fearful as more facts emerge, economic or otherwise. He has good reason to be scared on all counts. The latest federal jobs report indicated that the U.S. economy stalled shortly after tariffs were announced. Overall job creation dropped to near zero, and manufacturing employment declined by 33,000 jobs in just three months. Since the tariffs were announced, Indiana lost 2,600 factory jobs — and that is without the most recent month's data, which have not been released. Factory orders have plummeted to levels not seen since COVID and, before that, the Great Recession. On a scale of self-inflicted economic wounds, this is unparalleled. Formally, recessions are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research, which uses six indicators. Between March and April — when I first said we had walked into a recession — four of these six turned negative. Only employment and industrial production remained (modestly) positive. By the next data release, both of those indicators will be negative. Trump inherited an economy that grew at 2.4% last year. Job creation has slowed dramatically under Trump, from more than 180,000 monthly in 2024 to just 35,000 since the tariffs began. If the BLS continues to deliver honest job numbers, we should expect no job growth until 2026 — if then. Unlike typical recessions, prices are rising because of tariffs, making it harder for the Federal Reserve to cut interest rates to help the economy. So, as we move into fall, we should expect accumulating job losses, higher prices and a Fed hesitant to cut rates when the problem is solely that of bad tariffs, not monetary policy. Trump's criticism of the Fed, like that of the BLS, is at best a transparent effort to deflect blame for the ill effects of his tariff obsession. Another uncommon aspect of this recession is that it is isolated to the U.S. We did this to ourselves by starting a trade war with the rest of the world. No other countries seem especially interested in crashing their own economies. This diminishes the attractiveness of the U.S. as a destination for foreign investment. The situation is worsened by the reasonable suspicion that the Trump administration will deliver fictional economic data. Foreign investors may flee, driving up borrowing costs. So, as the U.S. enters a downturn all alone, with the specter of falsified economic data, we should all expect home mortgages, credit card rates and car loans to be higher in the months and years to come. Capital markets are ruthless toward erratic and bizarre economic policies; and whatever else they might be, Trump's economic policies are erratic and bizarre. Michael J. Hicks is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. This article originally appeared on Muncie Star Press: Hicks: Grim recessionary facts since erratic U.S. economic policies took hold Sign in to access your portfolio
Wall Street Journal
13-07-2025
- Business
- Wall Street Journal
Trump's Brazilian Trade War
President Trump fired off a letter to Brazilian President Luiz Inacio 'Lula' da Silva Wednesday announcing new 50% tariffs on imports from the South American behemoth. Lula immediately pledged to retaliate at an equal rate. If both sides carry through on their threats, a trade war is on between the two largest countries in the Western Hemisphere. Lucas Ferraz, a former Brazilian secretary of foreign trade, estimates that the new tariffs could spark a 75% drop in Brazilian exports to the U.S. But it won't be a party for American businesses either. Brazilian commodities fuel American consumption and production. Notwithstanding Mr. Trump's assertions to the contrary, the U.S. has a trade surplus with Brazil. American exporters, particularly industrial manufacturers, will be harmed if they lose market access to this huge middle-income economy.
The Independent
04-07-2025
- Business
- The Independent
Trump to hit nations with tariffs of up to 70 per cent after trade deals fail
Donald Trump is set to reinstate tariffs of up to 70 per cent on numerous countries, as many anticipated trade deals have not materialised. Letters will be dispatched to 10 countries at a time from Friday, ahead of the 9 July deadline for nations to finalise trade agreements to avoid higher duties. The president did not specify which countries would be affected but noted the complexity of negotiating with over 170 nations. Treasury Secretary Scott Bessent indicated that approximately 100 countries could face 10 per cent reciprocal tariffs, with the president determining if negotiations are in good faith. Despite a previous promise of "90 trade deals in 90 days," only agreements with the UK and Vietnam have been announced, leading to scepticism about progress and economic uncertainty for American businesses.
Yahoo
29-06-2025
- Business
- Yahoo
Trump turns trade talks into foreign policy wish list
President Donald Trump's trade talks aren't just about trade. They're about tech regulation, defense spending, critical minerals — even war and peace. Since slapping sweeping tariffs on nearly every country in April, Trump has turned narrow, trade-focused talks into kitchen-sink diplomatic forums. In closed-door negotiations, the president's top lieutenants have pressured foreign governments to significantly increase their military budgets, upend their tax systems and scuttle domestic legislation that could hurt U.S. businesses. The president has even leveraged U.S.-brokered ceasefires, such as the one between Israel and Iran, to induce other countries to buy more American goods It's part of a broader effort by Trump to use tariffs not only as a tool to boost domestic manufacturing and revenue, but as a lever to extract concessions on a host of unrelated issues. 'Access to the American market should cost you. Additional tariffs or additional levies — of course it makes sense to tie it to foreign policy. Why wouldn't we?' said former Trump adviser Steve Cortes. 'I get why countries are like, 'What the hell? This isn't the America we've been dealing with.' No, it isn't,' Cortes added. 'You just have to decide, is it worth it? If it is, well, play by our rules.' Trump sees a win-win: If countries refuse to bend to his will, he keeps his 'Liberation Day' tariffs in place, protecting domestic businesses and boosting U.S. coffers. Case in point: Trump on Friday ended trade negotiations with Canadain part because of its digital services tax on American tech companies slated to start being collected Monday, which he called a 'direct and blatant attack on our Country' in a post on Truth Social. The broad set of issues at play has frustrated other negotiations ahead of the president's self-imposed July 8 deadline to broker trade deals, as foreign leaders grapple with the fact that everything is on the table when negotiating with the United States. The ongoing uncertainty threatens to upend the global economy, confuse American industry, alienate U.S. allies and drive countries into the arms of China. 'It's unprecedented, if not completely dubious,' said one official from an Asian country, pointing to the Trump administration raising antitrust legislation in talks with South Korea and export controls in talks with China, as an example. The person, granted anonymity to discuss the negotiations, added: 'There is no indication it's working, and Trump will not reverse course.' But White House aides argue that the administration's kitchen-sink approach matches the scope of the problem. 'This whole thing is unprecedented. I mean, we are trying to basically reset what's a four or five decade-old status quo in which the United States was basically subject to free riding by a lot of our trading partners and other countries in the world, whether it be on trade, on defense and national security,' said a White House official, granted anonymity to share the administration's thinking. 'I push back on the idea that you can silo off trade,' the official added. 'They're all connected here.' At the NATO summit in the Netherlands this week, Trump threatened new tariffs on Spain after the country refused to increase its defense spending in line with other NATO allies — even though Spain is part of the European Union and doesn't negotiate trade deals independently. It's also been a hot topic in negotiations with Japan and South Korea, which have balked at the 5 percent across-the-board defense spending target the U.S. has set for its allies in Asia despite their exclusion from NATO. Trump this month said the U.S., which spends roughly 3.4 percent of its GDP on defense, would not abide by the 5 percent pledge. Trump has positioned Canadian investment in his 'Golden Dome' missile defense system for the United States as a way for the country to 'prove' itself amid ongoing trade negotiations — though the U.S. actually can't build the system without help from its northern neighbor. At the same time, the U.S. is pressuring South Korea to abandon antitrust legislative proposals aimed at regulating online platforms that are opposed by Google, Apple and Meta. It has also, like Canada, pressured the U.K. and EU countries to eliminate their digital services tax. On Tuesday, Trump added another demand, suggesting that China boost purchases of American oil as a thank you for the Israel-Iran ceasefire — an ask that comes as the president pushes Beijing to increase its imports from the U.S. And he's implied that he used the cudgel of trade wars to negotiate peace between India and Pakistan this spring, though India has disputed the suggestion. Trump took a similar approach during his first term when he threatened hefty levies to get Mexico to curb the flow of Central American migrants to the U.S., and tariffed China over 'unfair practices' in part related to the theft of U.S. intellectual property. In his second term, Trump has built on that strategy. He levied tariffs on Mexico, Canada and China in February aimed at curbing the tide of fentanyl and undocumented immigrants into the U.S. He also in April threatened 25 percent 'secondary tariffs' on any country that imports oil from Venezuela, a move he framed as targeting the country's authoritarian leader Nicolás Maduro and the Tren de Aragua gang. Foreign leaders are confronting the very real possibility that if they slow walk negotiations or abandon talks, Trump would happily slap a tariff large enough to effectively serve as an embargo with the U.S. — cutting off access to the world's largest economy. 'The president feels that tariffs are leverage — leverage for the relationship, of which trade is one component. That's why each of these negotiations has unique elements to it, which makes matters more unpredictable,' said one former White House official, granted anonymity to speak candidly about the president's approach. But giving into the president's demands on non-trade issues isn't a guarantee of tariff relief. Trump has shown no signs that he will heed French President Emmanuel Macron's calls for an end to the U.S.'s trade war with the European Union after NATO members agreed to hike defense spending to 5 percent of their gross domestic product. That unwillingness to significantly budge on his array of tariffs has bogged down trade negotiations and hindered the administration from crafting substantial trade deals. As the U.S. has set out to negotiate deals with more than 60 trading partners, world leaders have grown increasingly frustrated with what they say are unbalanced demands from the U.S. Other trading partners, including the European Union, have bristled at the terms of the UK framework and said they would not agree to a similar deal. That arrangement left a 10 percent so-called baseline tariff in place, while laying out a path to slash sector-specific tariffs. The bloc isn't alone, and Trump's numerous demands and "do-it-or-else" approach have made it challenging for countries to corral the domestic political support they'll need in order to sell any deal at home. 'If the deal gets too imbalanced, it will get a very bad reception by most of our national public opinions,' said one European official granted anonymity to speak candidly about the state of negotiations with the United States. 'I don't think the EU side and countries can really accept a very imbalanced deal without risk of it backfiring." But former Trump administration officials doubt the White House is about to change course. 'I see no evidence that the administration intends to reverse or scale back its use of this approach,' said Patrick Childress, a former U.S. Trade Representative assistant general counsel.
Bloomberg
23-06-2025
- Business
- Bloomberg
US Braces for ‘Low-Level' Cyberattacks by Iran After Airstrikes
US officials are warning businesses to brace for potential Iranian cyberattacks following American airstrikes on the country's nuclear sites, an event that experts say could draw a relatively small response from hackers. A bulletin from the Department of Homeland Security warned that Iranian hackers routinely target American technology, and that such activity is poised to occur after the US military operation. The message said that DHS hadn't identified any specific imminent threat.
