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USA Today
11 minutes ago
- Business
- USA Today
The economy grew sturdy 3% in the second quarter as tariffs again skewed the numbers
President Donald Trump's global trade war has again distorted the broadest snapshot of the U.S. economy – this time creating a brighter picture. The economy grew solidly in the second quarter but forecasters traced the showing to the reversal of a tariff-related import surge that caused output to shrink early this year. Consumer spending and business investment increased modestly and growth is projected to slow further in the second half of the year as more of Trump's import fees filter into retail prices. The nation's gross domestic product, the value of all goods and services made in the U.S., grew at a seasonally adjusted annual rate of 3% in the April-June period, the Commerce Department said July 30. Economists surveyed by Bloomberg had forecast a 2.4% increase. But the performance was artificially boosted by a sharp drop in imports, just as the 0.5% decline in GDP the first three months of the year – the economy's first contraction in three years – was rooted in a historic spike in shipments from foreign countries. With Trump's double-digit tariffs looming, American retailers and manufacturers raced to order foreign goods early in the year before the levies took effect. That led to an unprecedented flood of imports, which must be subtracted from GDP - the goods that consumers, companies and the public sector bought – because they're made overseas. Since those purchases were pulled forward, companies didn't need to order as many goods from other countries last quarter and imports plunged, reversing the math that dampened output earlier and bolstering U.S. growth. Is the economy doing well right now? The bigger picture: Forecasters expect the economy to slow in coming months as Trump's tariffs reignite inflation and sap consumer purchasing power. Economists project growth of less than 1% in both the third and fourth quarters, according to those surveyed by Wolters Kluwer Blue Chip Economic Indicators. Forecasters predict the Labor Department on Aug. 1 will announce that 109,000 jobs were added in July, according to the median estimate of a Bloomberg survey. That would be down from 147,000 in June and an average of 130,000 so far this year. Although the White House has struck trade deals in recent weeks with countries such as the United Kingdom, the European Union, Indonesia, Vietnam and Japan, the average US tariff rate still has shot up to about 20% from less than 3% early in the year, Nationwide economist Kathy Bostjancic estimates. That likely will push annual inflation from 2.7% to 3% by year's end, she said. Absent the duties, inflation likely was headed back toward the Federal Reserve's 2% goal, economists figure. Additional tariffs that further drive up inflation could take effect by a Aug. 1 deadline if administration officials don't reach deals with dozens of countries. When can we expect the Fed to lower interest rates? Economists don't expect the GDP report to move the needle on a Federal Reserve decision on interest rates slated to be announced at 2 p.m. ET. The Fed is expected to hold rates steady for a fifth straight meeting despite persistent pressure from Trump to decrease rates, though futures markets are betting on a mid-September rate cut. Normally, a sturdy GDP figure might make the Fed even less inclined to lower rates. The Fed shaves rates to support a weak economy and raises rates, or keeps them high longer, to fight inflation. But since the data was again skewed by tariff effects, officials are likely to put less weight on the numbers. For now, Fed officials are more focused on maintaining their wait-and-see approach to rate reductions as they assess how much the import charges push up inflation in coming months - barring a downturn in the labor market.
Bloomberg
12 minutes ago
- Business
- Bloomberg
CATL Earnings Beat Estimates, Defying Falling Batteries Prices
Chinese battery producer Contemporary Amperex Technology Co. Ltd. posted a 34% rise in profit for the second-quarter, with its outlook further buoyed by a blockbuster share sale in Hong Kong that will fund its global expansion. The company posted net income of 16.6 billion yuan ($2.3 billion) in the three months ended June 30, according to Bloomberg News calculations, beating analyst estimates. Profit for the first half increased 33% to 30.5 billion yuan, according to a Hong Kong stock exchange filing Wednesday.
Yahoo
16 minutes ago
- Business
- Yahoo
China Prepares to Unseat US in Fight for $4.8 Trillion AI Market
(Bloomberg) -- While humanoid robots faced off in a boxing ring at China's flagship artificial intelligence conference in Shanghai, a fight in the US-China tech war was fought in suits nearby over who gets to set the rules in the AI age. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Boston's Dumpsters Overflow as Trash-Strike Summer Drags On China's answer is a new global organization to convene countries to foster safe and inclusive use of the powerful new technology. At the annual World AI Conference over the weekend, Chinese Premier Li Qiang warned of AI 'monopoly' and instead called on foreign officials in the room — mostly from developing countries — to cooperate on governance. The new group, known as the World AI Cooperation Organization, embodies China's plan to jostle with the US for sway by positioning itself as a champion of AI for all. More favorable rules may give a global boost to Chinese companies competing with US firms to sell hardware and services in a market estimated to hit $4.8 trillion by 2033. For many of the countries represented at the conference, Chinese firms already offer competitive solutions, even if the US dominates the supply of cutting-edge AI chips. 'The Chinese are coming to the table with a very different AI product mix that is going to be extremely appealing to lower-income countries that lack the computing and power infrastructure needed for large-scale implementation of OpenAI-like AI systems,' said Eric Olander of the China-Global South Project. Using technology as both carrot and calling card, Beijing's approach appears to take a page out of its earlier Digital Silk Road initiative, which put Chinese companies at the center of telecommunications networks spanning continents. China for years has strived to define the global parameters for emerging technologies such as 5G, seeking to influence development and set the stage for its companies to win market share abroad. Huawei Technologies Co.'s prominent role in standard-setting groups became the subject of scrutiny of the US government when it cracked down on the use of its equipment. Global AI governance has emerged as a new battleground for the world's leading powers, both seeing the technology as critical not just for their economy but national security. President Donald Trump declared last week that his country will 'do whatever it takes' to lead in AI, with his plan for actions including countering Chinese influence in international governance bodies. While there are no binding global rules for AI development, China's action plan calls for building more digital infrastructure that uses clean power and unifying computing power standards. The country also said it supports the role of businesses in creating technical standards in security, industry and ethics. Details about the Chinese body, to be headquartered in Shanghai, are scarce. In brief public remarks before media were ushered out of the room, a Chinese Foreign Ministry senior official, Ma Zhaoxu, said the organization would work to establish standards and governance frameworks. China would discuss details with those countries that are willing to join, he added. As US and Chinese companies race to develop systems that could match or even surpassed human intelligence, safety concerns have also prompted calls for guardrails. AI pioneer Geoffrey Hinton, who spoke at the Chinese event, expressed support for international bodies to collaborate on safety issues. Part of Beijing's AI strategy appears to come from its diplomatic playbook, which urges support for Global South countries to step up in international affairs. In his address to kick off the Saturday event, Li emphasized helping those nations develop AI. These countries made up most of more than 30 nations that were invited to the high-level governance talks, including Ethiopia, Cuba, Bangladesh, Russia and Pakistan. A handful of European countries including the Netherlands, France and Germany, the EU and several international organizations were also represented. No nameplate for the US was seen by Bloomberg News. The US Embassy in Beijing declined to comment on any official presence. Indonesia's Vice President Gibran Rakabuming Raka, who attended the meeting, told Bloomberg News that China's initiative is 'very appreciated by the Indonesian government.' His country is preparing AI curricula to be rolled out across 400,000 schools and is training 60,000 teachers about the tech, he said. Beijing's emphasis on openness — a word used 15 times in its governance action plan — appears to ride on the success of Deepseek earlier this year. The AI upstart stunned the world not just by releasing AI models that are almost as capable as those of OpenAI but also made them freely available for anyone to download and customize for free. A succession of Chinese companies has done the same, with companies from incumbent giants like Alibaba and newcomers like Moonshot releasing cutting-edge large language models that are similarly open-weight. That accessibility may be especially important to developing countries who may not have the resources to gather vast datasets and train their own AI models from scratch, a process that would involve expensive chips made by companies such as Nvidia Corp. China also emphasizes internet sovereignty, something that may appeal to more autocratic regimes around the world. 'We should respect other countries' national sovereignty and strictly abide by their laws when providing them with AI products and services,' according to the country's Global AI Governance Initiative issued in 2023. In contrast, Trump's AI plan vows that the US government will only work with engineers who 'ensure that their systems are objective and free from top-down ideological bias.' The US-China rivalry presents a familiar dilemma for countries that may feel pressured to choose a side, but Solly Malatsi, minister of communications and digital technologies of South Africa, rejects the binary choice. 'It's not a case of one model over the other,' Malatsi said from the conference. 'It's about an integration of the best of both worlds.' --With assistance from Zheping Huang. It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Burning Man Is Burning Through Cash Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Russia Builds a New Web Around Kremlin's Handpicked Super App ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
19 minutes ago
- Automotive
- Yahoo
BYD's Shenzhen Share Split Could Boost Stock After Retreat
(Bloomberg) -- A three-for-one stock split for BYD Co.'s mainland-traded shares could be a positive catalyst for the carmaker after a weeks-long slump. Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy Its Shenzhen-listed stock trades ex-dividend on Tuesday, taking into account a bonus issue and capitalization issue announced in April. This will lower the price for one lot of 100 shares to around 11,000 yuan ($1,532), down from roughly 34,000 yuan per lot on Monday, a potential boon onshore where retail investors are more active. They're also highly sensitive to the minimum amount required to own shares of the company. 'The stock split is likely to bring in new retail interest as each share drops to a third of the price before trading ex-dividend,' according to He Wenping, managing director at Beijing Youhe Private Equity Management. 'However, these levels may still be too expensive for the bulk of mom-and-pop traders.' While BYD's Hong Kong-listed stock rose in the lead up to its ex-dividend date last month, there was no apparent boost afterward. This may have been because a lot size of 500 shares on the exchange meant at least HK$70,000 was needed to buy the stock after the split, which may have deterred smaller investors. Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Elon Musk's Empire Is Creaking Under the Strain of Elon Musk ©2025 Bloomberg L.P.
News18
20 minutes ago
- Business
- News18
'Will Study, Then Respond': Govt Sources On Trump's 25% Levies On India
Last Updated: US President Donald Trump has announced that a 25% tariff will be imposed on Indian imports starting August 1. After US President Donald Trump announced 25% tariffs on Indian products, government sources told CNN-News18 that the tariffs were not too high, but the government is studying Trump's announcement and will respond accordingly. Trump on Wednesday announced that a 25% tariff will be imposed on Indian imports starting August 1, along with an additional unspecified penalty, as negotiations for a bilateral trade deal are still underway. Taking to his Truth Social platform, Trump cited India's high tariffs, stringent non-monetary trade barriers, and continued military and energy ties with Russia as the key reasons behind the move. 'While India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high… and they have the most strenuous and obnoxious non-monetary trade barriers of any country," he said. No India-US Trade Deal Yet Trump's announcement came as India and the US are still negotiating a trade deal. Indian officials have been shuttling back and forth between New Delhi and Washington for months. Commerce Minister Piyush Goyal said on Thursday that the negotiators were making 'fantastic progress", and US Trade Representative Jamieson Greer had indicated that a deal was imminent. Indian officials were reportedly less optimistic about securing an interim deal with the Trump administration before the August 1 deadline. If India is slapped with higher duties on its imports this week, this is likely to be a temporary measure until talks on a broader bilateral deal are concluded in the fall, officials told Bloomberg. Trump has long referred to India as a 'tariff king". However, India has proposed to remove all tariffs on imports of steel, auto components and pharmaceuticals from the US on a reciprocal basis, a major shift in its policy to protect domestic producers. Until recently, the United States was India's largest trading partner, with bilateral trade reaching $190 billion in 2024. However, the US continues to run a $45 billion trade deficit with New Delhi, which a persistent sticking point that Trump has frequently highlighted. view comments Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
