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Yahoo
3 days ago
- Business
- Yahoo
Opinion - Business leaders are reshaping Washington and delivering for taxpayers
President Trump's historic comeback victory included a mandate from the American people to reform the federal government. The inefficiencies of our broken bureaucracy are all too apparent to everyday Americans, and it was a big reason why they hired a new administration that specifically ran on fixing the system. Americans know the problems our government faces today are urgent and require immediate action. They have watched as the federal bureaucracy has exploded in size and as their tax dollars are wasted on frivolous spending. All of us realize that maintaining our current course is no longer sustainable. We are trillions of dollars in debt, and steadily approaching a point of no return. As Americans cut costs and work tirelessly to balance their own budgets after four years of economic uncertainty, they are now rightly demanding that the federal government do the same. But like the old cliche about the definition of insanity, there is no reason to think that the same processes and personnel who have spent decades in government bureaucracies will be able to reform themselves without some outside help. The status quo won't shake up the status quo. We need an infusion of new ideas, personnel and leadership in our capital city. Specifically, we need to lean on one of America's great strengths and resources: our incredibly successful, world-leading private sector. American businesses are second to none. We need to tap into the insights, methods and expertise of our business leaders and technical experts to turn the government around. Thankfully, President Trump and his administration are doing just that. A number of the president's cabinet secretaries are Washington outsiders who bring heavyweight private sector resumes to their new roles. The same goes for key subcabinet posts. For example, President Trump's nominee to run the federal Office of Personnel Management is a venture capitalist and tech executive with a quarter century of high-stakes business leadership under his belt. The most notable place where the president has brought in fresh energy and ideas from the private sector is the Department of Government Efficiency. Everybody knows about its leader, the hugely successful and outspoken entrepreneur Elon Musk. But a wealth of other top tech talent is working away behind the scenes, helping to find new efficiencies, examples of waste to cut and opportunities to update and upgrade how our government works. The team includes the sharp, young engineers who have attracted political and press attention, but it also includes veteran executives and marquee leaders who have answered the call to serve. Tom Krause, CEO of Cloud Software Group, is helping reform the Treasury Department's ancient payment processes. Joe Gebbia, co-founder of Airbnb, is helping to digitize the tangled processes around federal retirements. All of us are lucky that such well-respected minds in business and management are helping refocus our government around stewarding funds wisely and getting results. This is a turnaround project like no other, and it needs all hands on deck. I had the privilege of serving on the U.S. House Energy and Commerce Committee during my tenure representing the Commonwealth of Pennsylvania. I saw firsthand the misuse of federal funds, the inefficiency of the bureaucracy and the blatant waste of taxpayer dollars. But making meaningful cuts in a smart, targeted way can be tricky business. We want to crack down on waste, fraud and overreach but preserve genuinely important programs that support hardworking families, encourage innovation in key fields like energy, national security and AI, and give taxpayers a strong return for their money. Separating the wheat from the chaff takes skilled analysis and strong, outcome-driven leadership. These are not virtues for which Washington is famous. Luckily, the business world has them in spades. Despite consternation from some in the media about bringing private-sector expertise into government, this is absolutely nothing new. High-profile businesspeople have served and advised presidential administrations of both parties, bringing their fresh perspectives to bear on problems that have stumped the permanent class inside Washington. President Obama brought General Electric CEO Jeff Immelt to lead an economic advisory board, along with entrusting the executive chairman of Alphabet, Eric Schmidt, to lead a major Pentagon innovation board. President Biden staffed his Council of Advisors on Science and Technology with a whole list of private sector leaders, including from tech giants Google, Microsoft and Nvidia. President Trump and DOGE are working to fix the broken systems our government relies on. They are absolutely right to call upon our country's deep well of human capital in the form of our top business leaders to do it. The American people have spoken, and they want significant and meaningful reform. A majority of Americans support DOGE's mission to increase accountability and enact long-lasting federal reforms. Already, thanks to DOGE's efforts, billions of dollars worth of savings have been found. But if we're actually going to redirect the slow-moving shipwreck of federal waste and budget deficits, these early efforts must only be the beginning. We need to keep drawing on outside perspectives and the business world's results-driven mindset to cut through the jungle of red tape and deliver meaningful results for Americans everywhere. Ryan Costello is an attorney and a former Republican member of Congress representing Pennsylvania. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
CBS News
5 days ago
- Business
- CBS News
Here's what to know about Trump's tariffs after a U.S. trade court rules them illegal
President Trump's sweeping tariffs on goods imported from almost every foreign nation have been ruled illegal by the U.S. Court of International Trade, marking a setback for the president's trade agenda — and adding another level of uncertainty for U.S. consumers and businesses. The Wednesday ruling from the court halted the tariffs Mr. Trump assessed on virtually every other country on April 2, a day he termed "Liberation Day." Some trading partners faced substantially higher import duties, with the president hiking tariffs on China-produced goods to as high as 145% before easing them temporarily earlier this month. The ruling raises a host of questions about what happens next, given that Mr. Trump's trade agenda hinges on wide-ranging tariffs that he has promised will help bring back U.S. manufacturing jobs while also raising trillions in new revenue for federal coffers. Meanwhile, the court decision will likely provide a measure of relief to American businesses and consumers, given that they're typically on the hook for paying the tariffs when imports reach U.S. soil. But the ruling also introduces new layer of uncertainty. For one, the Trump administration said it intends to appeal the ruling to the Federal Circuit Court of Appeals. Secondly, Mr. Trump could seek alternate routes to deploy additional tariffs, experts say. "At the moment, it is anyone's guess as to whether these very unpopular tariffs will be reinstated on appeal or by the Supreme Court," said Carl Weinberg, chief economist at High Frequency Economics, in a May 29 research note. "So, uncertainty is now poised to escalate." Here's what to know about Mr. Trump's tariffs following the ruling. Are any of Mr. Trump's tariffs still in effect? Yes, the U.S. Court of International Trade's ruling applies to the Trump administration's tariffs that were issued under the International Emergency Economic Powers Act, or IEEPA. But the Trump administration has also levied additional import duties by tapping other trade rules, and those remain in effect. "The tariffs that remain in place are the Section 232 tariffs of 25% on automotive, steel and aluminum imports and the Section 301 tariffs on China that were imposed during President Trump's first term and expanded under the Biden administration," analysts at research company Capital Economics noted in a May 29 note. The president cited the IEEPA to announce the so-called reciprocal tariffs on April 2. At the time of the announcement, Mr. Trump said that trade deficits with other nations represented "a national emergency." But the court on Wednesday ruled that Mr. Trump's global tariffs aren't authorized by the IEEPA, and said it would be unconstitutional for any law passed by Congress to give the president blanket authority to set tariffs. "The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder," the judges wrote Wednesday. Could Mr. Trump reinstate the tariffs? Mr. Trump could reinstate the tariffs if he wins on appeal, but his administration could also seek other routes to reimpose the import duties, according to Goldman Sachs economists. For instance, the president could use Section 122 of the Trade Act of 1974 to impose tariffs of up to 15%, but they would be limited to 150 days, according to Goldman Sachs. A section of the Trade Act of 1930 would allow the president to impose tariffs of up to 50% on imports from nations that discriminate against the U.S., they added. "Section 232 tariffs, which President Trump has already used for steel, aluminum and autos, could be broadened to cover other sectors," they noted. What does this mean for U.S. businesses and consumers? Until the appeal is resolved, there will be some added level of uncertainty for U.S. businesses, which are on the hook for paying the tariffs when imported goods reach U.S. ports, some economists said on Thursday. Most or all of the tariffs are passed on to consumers in the form of higher prices, economists say, which has prompted them to forecast higher inflation in 2025. But given that some of Mr. Trump's other tariffs remain in place, U.S. businesses are still on the hook for those additional import duties. That means that while the effective tariff rate is now lower, it's still significantly higher than it was prior to the current Trump administration. "We calculate that the effective tariff rate is now 6.5%, up from 2.5% at the start of the year but far lower than the 15% rate based on our assumption of the IEEPA-related tariffs remaining in place," noted Capital Economics. Even so, U.S. investors cheered the ruling, signaling relief from Wall Street that the overhang from the tariffs has been removed, albeit perhaps temporarily. The tariffs had raised the risks of a recession and were expected to boost inflation this year, economists had forecast.
CNA
14-05-2025
- Business
- CNA
Commentary: US and China struck a tariff truce – it's far from a trade deal
HONG KONG: A trade war yields no winners. This notion has become widely accepted, since United States President Donald Trump sparked an escalating trade conflict with China last month, effectively bringing trade between the two largest economies to a near standstill. The irony was palpable this week when both the US and China claimed victories after announcing a temporary tariff truce on Monday (May 12). This agreement drastically reduces tariffs on each other's goods for 90 days to ease tensions. Mr Trump, in his characteristically grandiose manner, declared a victory, touting "a total reset" with China and hinting, without specifics, that China had agreed to fully open its markets to American businesses. The White House release hailed it a 'historic trade win'. Chinese state media and social media influencers hailed the agreement as "a great victory" for China. However, beneath the spin and hyperbole lies the reality that this so-called "reset" will be far from straightforward. LIMITED VICTORIES Finalising a comprehensive deal could take months of challenging negotiations, considering trade and tariff discussions are likely part of broader negotiations involving issues such as fentanyl, semiconductors, rare earth elements, TikTok, Panama Canal ports, and possibly Taiwan. And this assumes there are no further reversals due to Mr Trump's unpredictable nature or if talks go badly. Signs suggest that Mr Trump's victory claim is hollow and disingenuous. After swiftly raising tariffs to 145 per cent, he expected Beijing to capitulate first. But he grossly underestimated Beijing's political strategy, as well as its readiness and resolve to endure short-term economic hardship. In a strategic twist, Beijing effectively adopted Mr Trump's own tactic of maximum pressure, coupled with strong rhetoric about "fighting to the end'. This hard-nosed approach has paid off, ultimately forcing Mr Trump to yield. And make no mistake, Mr Trump blinked first – even if the US appears to impose a larger tariff on Chinese imports than the other way around for now. Yet, China's "great victory" carries more political and geopolitical implications than economic benefits. From a Chinese perspective, being the first and only country to stand up to Mr Trump's bullying tactics and win positions China as an undisputed equal to the US in the great power game – a status Chinese President Xi Jinping once described as "viewing the world as equals". This victory could bolster China's standing and improve its credentials as a leader of the Global South. Economically, however, China faces mounting costs from the trade war, especially as its economy struggles with deflation and weak consumer confidence. That explains why Beijing is willing to sit down to talk with Washington. After all, a prolonged trade war could complicate or even derail China's efforts to boost its economy. More importantly, Beijing still follows the strategy formulated after Mr Trump's first trade war against China in 2018: fighting but not breaking off. TARIFFS REMAIN SUBSTANTIAL The revised 'Liberation Day' tariffs now stand at 30 per cent, down from 145 per cent. This comprises the 10 per cent baseline on all trading partners and 20 per cent fentanyl-related levy. Sector-specific tariffs like those on steel and cars remain. If this rate persists, it could lead to a 36 per cent decline in China's exports to the US and a 5 per cent decrease in China's total exports, shaving 1 percentage point off this year's GDP growth, according to Larry Hu, chief China economist at Macquarie Group in a research note this week. But don't forget there were pre-existing tariffs before Mr Trump started his second term. Taken together, the overall US tariff rate on Chinese goods is closer to 50 per cent. Similarly, China's reciprocal tariff has fallen to 10 per cent from 125 per cent. However, after factoring in the pre-existing tariffs, China's overall tariff rate on US products stands around 30 per cent. WHAT HAPPENS NEXT? For trade talks to advance, Mr Trump and Mr Xi will need to be actively involved in defining the parameters of a final deal. Mr Trump has suggested he may soon speak with Mr Xi by phone, which could lend credence to the best-case scenario of both sides working towards a comprehensive trade agreement. Questions arise about how China is prepared to open up to American businesses, as Mr Trump claimed, and how the US is prepared to reciprocate. From China's perspective, there are several steps it can take to reduce trade imbalances, a major source of tension between the two countries. First, Beijing is ready to significantly increase purchases of American agricultural products and energy to reduce the trade deficit. Second, it can take measures to limit exports to the US, a trend already emerging as exporters diversify into other markets. Third, Beijing can continue to increase its holdings of US Treasury securities – China is the second-largest holder, with US$784 billion, after Japan. Fourth, Beijing can encourage more Chinese companies to invest in the US. However, many questions remain. What concessions can the US offer China in return? Can the US relax controls over high-tech products, including semiconductors? Even if Chinese companies wish to invest in the US, will they be welcomed at a time when even Chinese-produced garlic is deemed a national security threat? Finding answers to these questions will not be easy.
New York Times
12-05-2025
- Business
- New York Times
Tariff Truce With China Demonstrates the Limits of Trump's Aggression
President Trump's decision to impose, and then walk back, triple-digit tariffs on Chinese products over the past month demonstrated the power and global reach of U.S. trade policy. But it was also another illustration of the limitations of Mr. Trump's aggressive approach. The tariffs on Chinese goods, which the United States ratcheted up to a minimum of 145 percent in early April, brought much trade between the countries to a standstill. They caused companies to reroute business globally, importing less from China and more from other countries like Vietnam and Mexico. They forced Chinese factories to shutter, and brought some American importers to the verge of bankruptcy. The tariffs ultimately proved too painful to American businesses for Mr. Trump to sustain. Within weeks, Trump officials were saying that the tariffs the president had chosen to impose on one of America's largest trading partners were unsustainable, and they were angling to reduce them. Trade talks between the world's largest economies in Geneva this weekend concluded with an agreement to reduce stiff levies on each other's products by more than many analysts had anticipated. Chinese imports will face a minimum tax of 30 percent, down from 145 percent. China will lower its import duty on American goods to 10 percent from 125 percent. The two countries also agreed to hold talks to stabilize the relationship. It remains to be seen what agreements can be reached in future negotiations. But the talks this weekend, and the tariff chaos of the past month, did not appear to generate any other immediate concessions from the Chinese other than a commitment to keep talking. That has called into question whether the trade disruptions of the past month — which resulted in many American businesses canceling orders for Chinese imports, freezing expansion plans and warning of higher prices — were worth it. 'The Geneva agreement represents an almost complete U.S. retreat that vindicates Xi's decision to forcefully retaliate,' said Scott Kennedy, a China expert at the Center for Strategic and International Studies, referring to Xi Jinping, the Chinese leader. Want all of The Times? Subscribe.
