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Yahoo
08-05-2025
- Business
- Yahoo
Trump and Starmer call trade deal 'historic,' but questions remain
A trade deal with the United Kingdom announced by the White House on Thursday marked the first of its kind since President Trump launched sweeping global tariffs last month, offering a glimpse into the Trump administration's negotiating strategy as it seeks to reset terms with trading partners around the world. The agreement, hailed by Trump and U.K. Prime Minister Keir Starmer as 'historic,' kept the U.S. baseline tariff rate on U.K. imports at 10%, while eliminating duties on British aluminum and steel and significantly lowering tariffs on a limited number of U.K. car exports. In exchange, the White House said that London had agreed to lower barriers on U.S. farmers and ranchers seeking access to the U.K. market for exports such as ethanol and beef, and to increase access for U.S. aerospace companies to crucial British-made components. Although the White House called the agreement a 'milestone' in its trade policy, U.S. officials also described the deal as merely the 'end of the beginning' of talks to come over their trade relationship. And the British media described the agreement as a yearlong, temporary understanding that required further rounds of negotiations if it's going to last. Read more: Mattel considers price hikes in response to tariffs after Trump says kids don't need a lot of dolls Starmer, describing the announcement as the 'basis' of a deal, said he intended to continue negotiating with the administration to bring down its 10% baseline rate. 'We would like to go further,' he said from a manufacturing plant in the West Midlands. 'But please do not underestimate the significance of the tariff reductions today, because these are measured in thousands of good-paying jobs across the country,' Starmer said. Asked by a reporter whether Britain was better off in its trade relationship with America than it was a year ago, Starmer replied, 'The question you should be asking is, is it better than where we were yesterday?' The Dow Jones industrial average jumped 500 points on news of the deal, as Wall Street investors look for signs of progress in trade negotiations more than five weeks since Trump announced tariff increases on global trading partners, 'friend and foe alike.' But economists questioned the value of the announcement. "This looks like a deal that was largely done for show," said Dean Baker, co-founder of the Center for Economic and Policy Research and one of the first economists to identify the 2008 housing bubble. "There already were very few trade barriers to U.S. exports to the U.K., and this really doesn't change that picture in any meaningful way." Baker noted that U.K. exports still would face higher taxes than they had before Trump started imposing tariffs. "It will reduce our demand somewhat, but the ultimate impact on volume will depend on what other tariffs remain in place," he said. "In any case, the higher tax on imports from the U.K. amounts to a tax increase of around $6 billion a year on U.S. businesses and consumers." Of the largest U.S. trading partners, the United Kingdom stands out as having a trade deficit with the United States. The agreement will mean more to the British economy than it will to U.S. households. Although the U.K. accounts for roughly 3% of U.S. trade, the United States is Britain's largest trading partner, followed by the European Union. "It is good news, but it is not clear how much of a precedent it will be for trade deals," said Kenneth Rogoff, a prominent economist and professor at Harvard. Since the United Kingdom left the European Union in "Brexit," he said, "the U.K. was desperate for a trade deal with the U.S." And "the deal looks to be the product of years of negotiations that began long before 'Liberation Day,'" he added, referencing Trump's April 2 global tariffs announcement. Americans buy exponentially more goods from the United States' three biggest trading partners — Canada, Mexico and China — than from Britain, and there are few signs that U.S. talks with those three countries are closing in on trade deals. And with goods from China still facing tariffs of 145%, U.S. importers and retailers are warning that price increases for American consumers will become visible within a matter of days. From the White House, where he phoned Starmer to announce the deal to the media, Trump described the U.S.-U.K. agreement as 'a great deal for both parties.' Read more: Letters to the Editor: Hollywood needs incentives, not tariffs, to bring filmmaking back to the U.S. 'It opens up a tremendous market for us, and it works out very well. Very well,' Trump said. 'The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol, and virtually all of the products produced by our great farmers.' 'It's very conclusive, and it's a great deal, and it's a very big deal, actually,' he added. Trump underscored the potential for the export of up to $250 million in U.S. agricultural products to a market that had long been restricted for U.S. goods. But Starmer said that the U.K. government had drawn 'red lines on standards' with regard to agricultural imports, raising questions over what exact products would be eligible. Starmer said he hoped that the Trump administration would lower barriers on British pharmaceutical products in future talks, and also said the two governments already were discussing Trump's proposed tariffs on foreign film production. 'There aren't any tariffs in place on film at the moment,' Starmer said of the potential film tariffs, 'and of course, we're discussing it with the president's team.' Get the L.A. Times Politics newsletter. Deeply reported insights into legislation, politics and policy from Sacramento, Washington and beyond, in your inbox twice per week. This story originally appeared in Los Angeles Times.
New York Times
02-05-2025
- Politics
- New York Times
Trump Labels Haiti's Powerful Gangs as Terrorists
A powerful alliance of armed gangs in Haiti that has plunged the country into violence and launched attacks against state institutions was designated on Friday by the Trump administration as a terrorist group. The move is likely to worsen an already dire humanitarian crisis in Haiti, where gangs control much of the country's economy, including key access and distribution points, including the main ports and major roads. The coalition of gangs, called Viv Ansanm — which means Living Together, in Haitian Creole — emerged last year under a pledge to protect civilians, but then immediately banded together to attack communities, prisons, hospitals and police forces. President Trump's designation gives his administration broad power to impose economic penalties on the criminal group, and potentially even take military action. But it also allows sanctions to be imposed on anyone whom the United States accuses of doing business with the gang coalition. If enforced, the move could end all trade with Haiti, experts say, since virtually no goods can move in or out of the capital, Port-au-Prince, without the payment of fees to the gangs. 'Humanitarian access programs would also likely cease,' Jake Johnston, a senior research associate at the Center for Economic and Policy Research, said in a post on social media. 'Can't enter a community to disperse aid without negotiations' with the gangs.
Yahoo
01-05-2025
- Business
- Yahoo
America's travel industry is in sharp decline
The travel and tourism industry, which accounts for about 3% of the U.S. GDP, has long been one of the economy's most robust sectors, particularly when it comes to trade: The U.S. had posted a trade surplus in travel every year this century. Until this year. A drop in foreign visitors to the U.S. caused the real value of exports of travel services to fall at a 7.8% annual rate in the first quarter, according to the GDP report released Wednesday. The U.S. Travel Association says the United States is now running an annual travel trade deficit of $50 billion, compared with a $3.5 billion surplus in 2022. 'This presumably reflects increased hostility by many foreigners to the U.S., as well as fear of harassment by ICE officers,' Dean Baker, senior economist for the Center for Economic and Policy Research, wrote in his note reviewing the first quarter GDP numbers. 'We will likely see further declines in future quarters, especially among students coming to study in the United States.' There has already been an 11% year-over-year decline in enrollment of foreign students between this March and last, according to the Institute of Educational Enrollment. The organization expects the drop to result in a loss of up to $4 billion in spending. Other data bears out the dour outlook for travel. The International Trade Association reported earlier this month that arrivals of non-citizens to the United States by plane declined by more than 11% since March 2024. Tourism Economics, a firm that tracks the hospitality industry, recently changed its forecast for foreign visitors to the U.S. to a 9.4% decline for the year, after projecting a 9% increase back in December. The firm estimates that international visitor spending in the United States will slide 5% as a result, a loss of $9 billion this year. 'Trump's policies and pronouncements have produced a negative sentiment shift toward the U.S. among international travelers,' the firm said. U.S. airlines are feeling the pain. Several recently changed their projections for the full year as tariffs, inflation, and shaky consumer demand forced a re-evaluation of 2025 expectations. The Dow Jones Airlines Index is off 30.17% year to date and the DJ Hotels Index has declined 14.12%, with both hitting 52-week lows on April 8. Not all the travel news is bad. Year-on-year comparisons of airline travel likely suffered this year because Easter fell in April, versus March in 2024, shifting holiday travel. An analysis by the New York Times (NYT) found that international arrivals at U.S. airports are down only 1.5% so far this year, and airlines say bookings to Europe from the U.S. are up. Booking Holdings (BKNG), the parent company of and Priceline, reported robust first quarter earnings on Tuesday, with bookings up 7% and revenue rising 8%. Still, CEO Glenn Fogel acknowledged in the firm's earnings statement that 'there is uncertainty in the market around the near-term geopolitical and macroeconomic environment.' The outlook for international travel does not look poised to improve, given that the first quarter GDP numbers did not take into effect President Donald Trump's April 2 announcement of steep tariffs on virtually every country. Tourism International, which attributed much of its lowered forecast for foreign travel to the U.S. to global fallout from Trump's 'America First' rhetoric, noted that 'the March data reflect foreign visitor patterns before the April 2 'Liberation Day' tariff announcement, which may draw further backlash.' It has clearly drawn backlash from Canada, where citizens have recoiled from Trump's talk of making it the 51st state. In March, the number of Canadians taking road trips across the U.S. border were 32% lower than March 2024, and there was a 13.5% decline in air travelers from Canada, according to Statistics Canada. Advance bookings for flights from the U.S. to Canada for the April to September period were off more than 70% from the prior year. For the latest news, Facebook, Twitter and Instagram.
Al Jazeera
29-04-2025
- Business
- Al Jazeera
Consumers, businesses less upbeat about US economy despite Trump's hype
Since taking office in January, United States President Donald Trump has been hyping about the performance of the US economy. 'In the first four years, we had the greatest economy in the history of our country,' Trump (falsely) said on April 17 while meeting with Italian Prime Minister Giorgia Meloni. 'I think we're going to do even better this time,' he added, referring to his first term between 2016 and 2020. At a March 24 Cabinet meeting, he said, 'We have numbers, and we have job generation, that I don't think we've ever seen before. See how it works out, but I think the economy is going to go through the roof.' Trump hasn't been in office long enough to accumulate much economic data. The data that's available, on jobs and inflation, is favourable. Other measurables, though – consumer confidence, business expectations, inflation forecasts and the stock market – show widespread concern about where the US economy is headed under his policies, especially his sharp tariff increases. And the stock market's April performance was its worst since 1932, when the US suffered the Great Depression. Since January, the number of jobs has risen by 345,000, in line with the rate of increase over the previous year. The unemployment rate is 4.2 percent, a low level by historical standards, and initial unemployment claims are holding steady. And for one of the key 2024 campaign themes for Trump – inflation – the year-over-year rate has ticked down to nearly normal levels, from 3.0 percent in January to 2.4 percent in March. In a range of long-running surveys, consumers and businesses expressed worry that Trump's tariffs will raise prices, cause a recession, or both. Economists consider these metrics as barometers of how well the economy will perform in the near and medium term. 'All the 'soft' data is bad, even though it hasn't bled through to the hard data yet,' said Douglas Holtz-Eakin, president of the centre-right American Action Forum. Business owners say they're already feeling the pinch. David Dennison, director of the Original Pancake House restaurant chain in suburban Washington, DC, said costs have increased by more than 20 percent on food items such as oranges, peppers, avocados and tomatoes. 'We also anticipate that equipment failures, parts, and new equipment will experience substantial price increases,' Dennison said. 'However, the most concerning aspect is the anticipated difficulty in sourcing parts for our equipment.' Worried consumers and skittish businesses could produce a slowdown in spending, investment, sales and employment growth, meaning bad vibes could become a self-fulfilling prophecy, said Dean Baker, co-founder of the liberal Center for Economic and Policy Research. For decades, two surveys have measured consumer confidence, and neither looks good for Trump's first 100 days. The University of Michigan Consumer Sentiment survey, which measures consumer optimism about the economy, has dropped every month since December 2024. Its 52.2 mark for April represents a 29 percent decline since December 2024. The April figure was lower than for all but two months of Joe Biden's presidency, a period that included a 40-year-high inflation rate in mid-2022. The other long-running survey is published by the Conference Board, a business research group. This metric has also fallen every month on Trump's watch, with a measurement now 15 percent lower than it was in December 2024. This tracks with other polls. For the first time since at least 2001, the pollster Gallup found that more than half of Americans say their financial situation is getting worse. The April figure of 53 percent is higher than it was during the Great Recession of 2008 to 2009, when it maxed out at 49 percent. Small businesses – historically an antitax and antiregulatory constituency that had high hopes for Trump's agenda – also show declining confidence under Trump. The National Federation of Independent Business survey of small business optimism has dropped every month since December 2024 and decreased more than 7 percent since then. One of the main factors driving down consumer confidence is the expectation that Trump's tariffs will raise consumer prices. Every month, the University of Michigan survey asks consumers about their inflation expectations for the coming 12 months. Consumer expectations for the inflation rate in the coming year have risen dramatically, from an expectation of 2.8 percent year-over-year inflation in December 2024 to 6.5 percent in April. Businesses feel similarly, according to a monthly Federal Reserve Bank of Atlanta analysis. In December 2024, the study found that 32 percent of businesses said they expected 'significant' or 'very significant' price increases over the next 12 months. By April, that figure had risen to 46 percent. And a Federal Reserve Bank of Philadelphia survey asked manufacturers whether they are already paying more for recent transactions. The survey found a growing number of businesses that say they are paying more and a declining number saying they're paying less. The gap has widened from 26.6 percent in December to 51 percent in April. Every quarter, the Atlanta Fed releases GDPNow, a forecast of how much growth is expected in the nation's gross domestic product (GDP) – the sum of all economic activity within the country – by looking at the upward and downward movement of key economic inputs. GDPNow has turned negative, with a projected annualised GDP shrinkage of about 2.5 percent in the first quarter of 2025, the first projected shrinkage the model has produced since the second quarter of 2022. This aligns with independent estimations of the likelihood of a recession. JP Morgan Research says there's a 60 percent chance of a recession during the next year; Goldman Sachs puts it at 45 percent; and the International Monetary Fund pegs the likelihood at 37 percent. Stocks have been sliding; the S&P 500, a broad stock market gauge, dropped 18.9 percent between its February 19 peak and its April 8 low, before partly bouncing back in the succeeding two weeks. Compared with the day after Trump's November 2024 election win, the S&P 500 is now down 4.5 percent. Since Trump's January inauguration, it is down 8.7 percent, and from its February 19 peak, it is down by 10.1 percent. A recession is not a certainty after a stock market slide, but there's a high correlation. A stock market tumble can cause consumers to hunker down and cut spending. If that happens, companies see sales decrease, leading them to cut their workforces and slow new investments. This makes consumers even warier about spending, perpetuating the cycle. Since 1950, a National Bureau of Economic Research committee has declared 10 official US recessions. Declines in the Standard & Poor's 500 accompanied seven of those. The last time a recession didn't produce a notable S&P decline was almost a half-century ago, during the 1980 and 1982 double-dip recessions. Of the seven recessions that accompanied stock market declines, the S&P 500 declines ranged from 18 percent to 55 percent, with the 55 percent drop occurring during the Great Recession of 2008 to 2009. A weekly American Association of Individual Investors survey shows growing pessimism about the stock market's ability for a short-term rebound. In late November, 39 percent of survey respondents said they were 'bearish' – Wall Street jargon for 'pessimistic' – about the stock market. By late April, that share had risen to 56 percent. Beyond the numbers, we found several businesses whose leaders said Trump's tariffs have already caused issues. Dennison, of the Original Pancake House, said in addition to Trump's tariffs, he's concerned that mass deportation efforts could produce a shortage of agricultural workers, further raising ingredient prices. Jax Ward, owner of the Crazy Squirrel Game Store in Fresno, California, said she's experiencing not only the effect of tariffs but also the 'chaotic way it's been handled', which 'has customers hesitant to spend money'. Ward said she's heard similar reports from her peers in the Game Manufacturers Association, an industry group. A few publishers of tabletop games she sells have told Ward 'they won't be publishing this year, or they're laying off employees, and that they've left manufactured products in China because it's now far too expensive to import them.' Everything from games to dice is made overseas, she said. 'I'd be hard-pressed to come up with a handful of products that are both resource-sourced and manufactured in the US.' For now, Ward said she is shifting some of her business to used games, including a large Lego section, and in-person events at her store. She's also trying to pre-stock items before tariffs kick in, but she said not every business can do that because it requires a strong cash flow and sufficient storage space. Ward said she knows a few store owners who are seriously considering closing their businesses. 'Boardgame sales used to be considered recession-proof,' Ward said. 'We'll see if they still are.'
Washington Post
13-04-2025
- Business
- Washington Post
Tariffs on chips, phones, laptops still coming, commerce secretary warns
U.S. levies on semiconductor chips — which the White House exempted late Friday from a slew of 'reciprocal' tariffs — are in fact still the works, Commerce Secretary Howard Lutnick and other top Trump administration officials asserted Sunday. Lutnick said tariffs on semiconductors will be decided through an industry-specific tariff model and imposed via Section 232, which governs national security-related tariffs and requires a lengthy process for study and comment. The Trump administration has previously cited 232 as a potential avenue for semiconductor tariffs. But the latest messaging twist could cause further whiplash for the tech sector, which had breathed a sigh of relief after the tech exemption was announced, hoping that semiconductors might remain somewhat unscathed from Trump's trade war. 'This is really mind-boggling. If this was serious industrial policy, the main thing you want is certainty: 'Here's the tariff, it will be in place for the indefinite future, and you should plan accordingly,'' said Dean Baker, an economist at the Center for Economic and Policy Research, a left-leaning think tank. 'Here, it's basically: 'Come back next week and see what we've got.' That's no way to run an economy.' Speaking on ABC News's 'This Week,' Lutnick stated that tariffs for electronics such as phones and laptops will also be paused only temporarily, then resume in the coming months as part of the semiconductor tariff review. 'They're exempt from the reciprocal tariffs, but they're included in the semiconductor tariffs, which are coming in probably a month or two,' Lutnick said. The Trump administration will establish an industry-specific tariff model for goods such as semiconductors and pharmaceuticals to encourage companies to re-shore manufacturing for these products in the United States, he explained. President Donald Trump 'called them sector tariffs, and those are not available for negotiation,' Lutnick said. 'They are just going to be part of making sure we re-shore the core national security items that need to be made in this country.' Lutnik also noted, 'Virtually all semiconductors are made now in Taiwan, and they're finished in China. It's important that we re-shore them.' Meanwhile, other officials pushed back on the idea that the White House has been inconsistent in its messaging around trade. On CBS News's 'Face the Nation,' U.S. Trade Representative Jamieson Greer argued that the White House has to take a more deliberate approach to semiconductors than 'reciprocal' tariffs — which are meant to only address trade deficits — because the administration's goals cover the entire supply chain. 'We don't even import semiconductors as such that much,' Greer said. 'They go into downstream products. So we have to be very careful. We want the whole supply chain here, not just one product.' National Economic Council Director Kevin Hassett, speaking on CNN's 'State of the Union,' said the tariff investigation into semiconductors has to do with broader concerns about whether U.S. dependence on Chinese-made imports could become a problem in a war between the two nations. 'The influence of China into every little corner of our country has just gotten bigger and bigger and bigger,' he said. 'It actually is the case that there is a very uncomfortable amount of Chinese input in our actual weapons systems.' But compared to typical Section 232 investigations into critical materials, the process on China is 'very, very nascent, if at all,' Hassett said. For the tech industry, Sunday's clarification marked a return to the uncertainty that has roiled markets — just one day after it celebrated the White House announcement that the chip sector would be spared. 'The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand,' Dan Ives, a senior analyst for Wedbush, wrote in a note to investors.
