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Irish Independent
6 hours ago
- Business
- Irish Independent
Trump's tariffs plunge global economy into a slowdown
The Paris-based organization slashed its global forecasts for the second time this year, citing the impact of the American president's tariff onslaught. The combination of trade barriers and uncertainty are hitting confidence and holding back investment, it said, while also warning that protectionism is adding to inflationary pressures. The OECD now forecasts global economic growth to slow to 2.9% this year from 3.3% in 2024. It expects the rate of expansion in the US will tumble further, to 1.6% from 2.8% â€' an outlook that is significantly lower than its projection in March. "Weakened economic prospects will be felt around the world, with almost no exception," Chief Economist Alvaro Pereira said. "Lower growth and less trade will hit incomes and slow job growth." The assessment indicates how Trump's policies have become the most pressing problem for the global economy, with no easy solution in sight. The situation could yet be exacerbated by retaliation from US trading partners, a further erosion of confidence, or another bout of repricing on financial markets, the OECD said. The club of 38 rich countries published its forecasts just as its members' ministers convene in Paris for an annual meeting. Top commerce officials are expected there include US trade representative Jamieson Greer and EU trade commissioner Maros Sefcovic. Lin Feng, a representative from China's Ministry of Commerce, is also scheduled to attend. "Agreements to ease trade tensions and lower tariffs and other trade barriers will be instrumental to revive growth and investment and avoid rising prices," the OECD said. "This is by far the most important policy priority." Yet the organization also said that even if Trump reversed course on tariffs, the bonus in terms of growth and reduced inflation would not materialize immediately, due to a persistent drag from heightened uncertainty over policy. For the US, the OECD said curbs on immigration and a sizable reduction in the federal workforce add to the trade-related drag on the economy. It also cautioned that the budget deficit will expand further as the effect of weaker economic activity will more than offset spending cuts and revenues from tariffs. Inflation in the US will also move higher this year, making it likely that the Federal Reserve will not resume easing policy until 2026, according to the OECD. That process may even be derailed if consumer-price expectations get de-anchored, it added. For other central banks, the OECD also urged continued vigilance. While it expects inflation to ease to their targets in 2026, that process will now take longer, and the pace of price increases may even increase before easing again, it said. Besides the fallout from global trade, the organization also warned that fiscal risks are intensifying around the world, with "tremendous" pressures for more spending on defense, climate and aging populations. It called for governments to reduce non-essential spending and raise revenues by broadening tax bases.
The Star
14 hours ago
- Business
- The Star
U.S. stocks close higher despite trade headwinds
NEW YORK, June 2 (Xinhua) -- U.S. stocks ended higher on Monday, as investors appeared to look past renewed global trade tensions. The Dow Jones Industrial Average rose 35.41 points, or 0.08 percent, to 42,305.48. The S&P 500 added 24.25 points, or 0.41 percent, to 5,935.94. The Nasdaq Composite Index increased 128.85 points, or 0.67 percent, to 19,242.61. Ten of the 11 primary S&P 500 sectors ended in green, with energy and technology leading the gainers by adding 1.15 percent and 0.89 percent, respectively. Meanwhile, industrials bucked the trend by losing 0.24 percent. The United States has seriously undermined the consensus reached during the China-U.S. economic and trade talks in Geneva by successively introducing multiple discriminatory restrictive measures against China, China's Ministry of Commerce said Monday. These measures included issuing guidance on AI chip export controls, halting sales of chip design software to China, and announcing the revocation of visas for Chinese students, according to a spokesperson for the ministry. Meanwhile, friction with the European Union intensified after U.S. President Donald Trump announced plans to double tariffs on imported steel to 50 percent. In response, an EU spokesperson warned the move could derail ongoing negotiations, stating "this decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic." "Markets see the latest round of tariff threats and ramped up rhetoric against China, the EU, and steel as nudges to move negotiations towards the finish line," said Jamie Cox, managing partner at Harris Financial Group. U.S. stocks entered June cautiously after a strong May rally, during which the S&P 500 jumped more than 6 percent, marking its best month since November 2023 and the strongest May performance since 1990. Despite fears that new tariffs could trigger inflation, Federal Reserve Governor Christopher Waller said Monday that any price increases are likely to be short-lived. He added that this scenario could give the Fed room to make "positive" rate cuts in 2025. "I support looking through any tariff effects on near term-inflation when setting the policy rate," he said. As earnings season winds down, a few notable companies are still set to report this week, including CrowdStrike, Broadcom, DocuSign, and Lululemon. Looking ahead, markets are closely watching key economic data set for release this week, especially Friday's May nonfarm payrolls report, which could shed light on how ongoing trade disputes and shifting interest rate expectations are affecting the broader U.S. economy. On Monday, new data from the Institute for Supply Management showed continued contraction in the U.S. manufacturing sector, with imports falling to their lowest level since 2009.
Boston Globe
17 hours ago
- Automotive
- Boston Globe
US dependence on China for rare earth magnets is causing shortages
Now, American and European companies are running out of the magnets. American automakers are the hardest hit, with executives warning that production at factories across the Midwest and South could be cut back in the coming days and weeks. Carmakers need the magnets for the electric motors that run brakes, steering, and fuel injectors. The motors in a single luxury car seat, for example, use as many as 12 magnets. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Factory robots depend on rare earth magnets, too. Advertisement 'This is America's, and the world's, Achilles' heel, which China continuously exploits,' said Nazak Nikakhtar, who was assistant secretary of commerce overseeing export controls during Trump's first term. The Chinese government has said little lately about its rare earth export restrictions. Kevin Hassett, director of the White House National Economic Council, said on ABC's 'This Week' on Sunday that Trump and China's leader, Xi Jinping, could speak about trade as soon as this week, though no date had been set. Advertisement After China stopped all exports, it said that future shipments would require separate export licenses. China's Ministry of Commerce has struggled since then to issue licenses. It gave a handful to European companies in mid-April and a few more for American companies last week, but world supplies are dwindling fast. China produces 90 percent of the world's nearly 200,000 tons a year of high-performance rare earth magnets. Japanese companies produce most of the rest in Japan and Vietnam, mainly for Japanese manufacturers. The United States produces practically none, although small factories will start full production this year in South Carolina and Texas. A succession of administrations has tried to restart the industry ever since China drew attention to its dominance by imposing a two-month embargo on shipments of rare earths to Japan during a territorial dispute in 2010. But little has happened because of a gritty reality: Making rare earth magnets requires considerable investments at every stage of production. Yet the sales and profits are tiny. Worldwide sales of mined rare earths total only $5 billion a year. That is minuscule compared with $300 billion industries such as copper mining or iron ore mining. China has a formidable competitive advantage. The state-owned industry has few environmental compliance costs for its mines and an almost unlimited government budget for building huge processing refineries and magnet factories. Processing rare earths is technically demanding, but China has developed new processes. Rare earth chemistry programs are offered in 39 universities across the country, while the United States has no similar programs. China refines more than 99 percent of the world's supply of so-called heavy rare earths, which are the least common kinds of rare earths. Heavy rare earths are essential for making magnets that can resist the high temperatures and electrical fields found in cars, semiconductors, and many other technologies. Advertisement The sole US rare earths mine, located in Mountain Pass, Calif., stopped producing in 1998 after traces of heavy metals and faintly radioactive material leaked from a desert pipeline. Chinese state-controlled companies tried three times without success to buy the defunct mine before it was acquired by US investors in 2008. A $1 billion Pentagon-backed investment program followed in 2010 to improve environmental compliance and expand the mine and its adjacent refinery. But the costly complex was unable to compete when it briefly reopened in 2014, and closed again the next year. MP Materials, a Chicago investor group that included a minority partner company partly owned by the Chinese government, bought the mine in 2017. The mine reopened the next year, but shipped its ore to China for the difficult task of separating the various kinds of rare earths. Only in recent months has the mine become able to chemically separate the rare earths in more than half its output. But this loses money because processing in China is so inexpensive. MP Materials built the new factory in Texas that will turn separated rare earths into magnets. A considerable bottleneck lies in transforming separated rare earths into chemically pure metal ingots that can be fed into the furnaces of magnet-making machines. A New England startup, Phoenix Tailings, is addressing that shortcoming, but its small scale underlines the challenge. Phoenix Tailings has taken over much of the staff and equipment of Infinium, a startup that had tried to do the same thing. Infinium ran out of money in 2020, when American policy makers were more focused on the COVID-19 pandemic than rare earths. Advertisement With Chinese rare earth minerals hard to get, Phoenix makes the metal from mine tailings: leftover material at mines that has been processed once to remove another material, like iron. Phoenix Tailings has four machines each the size of a small cottage at its factory in Burlington. Each one produces a 6.6-pound ingot every three hours around the clock. The operation's overall capacity is 40 tons a year, said Nick Myers, Phoenix's CEO. He declined to identify the buyer but said it was an automotive company. Phoenix is installing equipment at a larger site in Exeter, N.H., to produce metal at a rate of 200 tons a year — still tiny compared with Chinese factories that produce more than that in a month. Thomas Villalón Jr., Phoenix's chief technical officer, said that ramping up production quickly was important during a trade war: 'It's a race right now.' This article originally appeared in .
Yahoo
19 hours ago
- Business
- Yahoo
China: US severely violated trade truce
China on Monday accused the United States of violating their recent trade deal and vowed to take measures to defend its national interests. The Chinese Ministry of Commerce pushed back on President Trump's recent claim that Beijing had violated the agreement reached last month in Geneva, saying it's the U.S. that has taken 'multiple discriminatory restrictive measures against China,' state-run media outlet Xinhua reported, citing a statement from the ministry's spokesperson. The spokesperson said the U.S. violations include recent guidance on artificial intelligence (AI) chip export controls, the halting of sales of chip design software to China and the revocation of visas for Chinese students. 'These practices seriously violate the consensus reached by the two heads of state on January 17, seriously undermine the existing consensus of the Geneva economic and trade talks, and seriously damage China's legitimate rights and interests,' the spokesperson said, according to Google's translation of the statement on the ministry's site. Trump and Chinese President Xi Jinping held a call before Trump was officially sworn into office that laid the groundwork for the deal reached during negotiations in Geneva last month. 'Instead of reflecting on its own actions, the United States has groundlessly accused China of violating the consensus, a claim that grossly distorts the facts. China firmly rejects these unjustified accusations,' the spokesperson, who is not named, said in the statement, according to Xinhua's translation. The spokesperson warned of repercussions if the U.S. doesn't change course. 'If the U.S. insists on its own way and continues to damage China's interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,' the ministry spokesperson said. The statement comes after Trump on Friday accused China of violating a trade agreement with the U.S. amid ongoing tensions between the countries. 'Two weeks ago, China was in grave economic danger! The very high Tariffs I set made it virtually impossible for China to TRADE into the United States marketplace which is, by far, number one in the World. We went, in effect, COLD TURKEY with China, and it was devastating for them. Many factories closed and there was, to put it mildly, 'civil unrest.' I saw what was happening and didn't like it, for them, not for us. I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn't want to see that happen,' Trump wrote on Truth Social on Friday. 'Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!!' he added. 'The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!' U.S. Trade Representative Jamieson Greer elaborated in a subsequent interview on CNBC, saying China violated the agreement by slowing approval of exports of key rare-earth materials. Under the agreement the Trump administration hashed out with China last month, the U.S. lowered its tariff rate on Chinese imports from 145 percent to 30 percent, and Beijing lowered its rate on U.S. goods from 125 percent to 10 percent. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
a day ago
- Business
- Yahoo
Trump tariffs live updates: China hits back as tensions simmer; EU 'strongly' regrets steel, aluminum hikes
China responded to President Trump on Monday, accusing the US of violating their trade agreement and vowing to protect its interests. 'If the US insists on its own way and continues to damage China's interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,' the Chinese Ministry of Commerce said. Beijing accused the US of introducing discriminatory restrictions, which include new guidelines on AI chip export controls and the withdrawal of Chinese student visas. China's salvo came days after Trump lashed out at China on Truth Social, saying China had "violated" its trade deal with the US. "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!" Trump wrote. Later in the Oval Office, he hinted he planned to speak with Chinese leader Xi Jinping. The escalation comes as the US-China detente — reached earlier this month, when each country eased sky-high tariffs on the other — looks more fragile amid both trade-related and other tensions. Meanwhile, US trade talks with the EU have come back into focus as an early-July deadline looms for Trump's 50% tariffs on imports from the bloc. The EU on Monday said it "strongly" regrets Trump's hike on steel and aluminum imports to 50%, a move he announced Friday, saying it undermines planned trade talks. Trump's most sweeping tariffs face legal uncertainty after a federal appeals court allowed the tariffs to temporarily stay in effect, a day after the US Court of International Trade blocked their implementation, deeming the method used to enact them "unlawful." That means Trump's tariff agenda remains intact, if in flux, in the latest twist in the unfolding legal saga that Trump said Friday he was confident he would "win." The White House has vowed to take its appeal to the Supreme Court if necessary. Administration officials also hinted that court rulings would not be the final say. Yahoo Finance's Ben Werschkul has an overview of the other maneuvers Trump could pursue. Here are the latest updates as the policy reverberates around the world. China has hit back at President Trump, accusing the US of violating their recent trade agreement, making it less likely that Trump will get the leadership call he wants to restart trade talks between the two sides. On Monday, the Chinese Ministry of Commerce said in a statement that the US had introduced discriminatory restrictions, including new guidelines on AI chip export controls, curbs on chip design software sales to China, and the withdrawal of Chinese student visas. Beijing also rebuked the US president's claim that China had breached the agreement reached in Geneva last month. 'If the US insists on its own way and continues to damage China's interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,' the ministry said. China's response to the US follows Trump's claims on Friday that China had violated the trade truce. "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!" Trump wrote. But is Trump's tough talk just that — talk? As Yahoo Finance's senior reporter Alexandra Canal points out, amid all the US-China tensions, many investors believe the president talks tough on tariffs but always backs down. In the midst of the chaos, one phrase kept surfacing across Wall Street: the "TACO" trade. An acronym for "Trump Always Chickens Out," That assumption has fueled a market tailwind in recent months as traders bet on policy pivots, buoyed by an initial US-China tariff deescalation earlier this month. Yahoo Finance senior columnist Rick Newman said: "The only problem with the TACO trade is that the premise isn't true. Trump doesn't always chicken out. His threats are often worse than his actions, but five months into Trump's term, it is abundantly clear that taxes on imports will be considerably higher for as long as Trump is in charge." Yahoo Finance's Ben Werschkul reports: Read more here. AP reports: Read more here. Aluminium (ALI=F) prices for US buyers jumped on Monday after President Trump said he planned to increase tariffs on imported steel and aluminium from 25% to 50%. Reuters reports: Read more here. President Trump's tariffs have brought more twists and turns over the last week for small businesses, with many having to cut staff hours and angry at how the government has treated them. CNN reports: Read more here. Prime Minister Mark Carney wants Canadian provinces to trade more freely with each other in a bid to help reduce the economic harm from Trump's tariffs. Bloomberg News reports: Read more here. Reuters reports: Read more here. Between tariff pauses and court rulings, President Trump's trade agenda remains in limbo. But there are some key dates and events arriving in the coming months that may offer more clarity on the path of tariff rates. Here's a timeline compiled by Reuters of dates to pay attention to: June 5: The date by which the plaintiffs in the tariffs case are required to respond to the US federal appeals court, which reinstated most of Trump's tariffs on May 30. June 9: The deadline for the Trump administration to respond to the appeals court. June 15-17: Trump will attend the annual G7 Leaders' Summit in Alberta, Canada. Tariffs are expected to be a major topic of discussion. July 8: "Liberation Day" tariffs are scheduled to resume following the 90-day pause, potentially affecting imports from multiple countries. July 9: The deadline for the US and the EU to negotiate a trade agreement. If no deal is reached, the US will impose an across-the-board 50% tariff on EU imports. July 14: The EU's 90-day pause on its own retaliatory tariffs to end. Read more here. President Donald Trump's doubling of tariffs on foreign steel and aluminum could hit Americans in an unexpected place: grocery aisles. The announcement Friday of a staggering 50% levy on those imports stoked fear that big-ticket purchases from cars to washing machines to houses could see major price increases. But those metals are so ubiquitous in packaging, they're likely to pack a punch across consumer products from soup to nuts. 'Rising grocery prices would be part of the ripple effects,' says Usha Haley, an expert on trade and professor at Wichita State University, who added that the tariffs could raise costs across industries and further strain ties with allies 'without aiding a long-term U.S. manufacturing revival.' Read more here U.S. Commerce Secretary Howard Lutnick downplayed the impact of legal uncertainty around U.S. tariffs on negotiations with the European Union during an interview with Fox News Sunday, saying talks were ongoing. Lutnick was asked about a Reuters report quoting an unnamed EU official close to negotiations who said the legal uncertainty of the tariffs in the U.S. gave the E.U. "extra leverage." "You can't listen to silly people making silly comments," Lutnick said. "All of the countries that are negotiating with us understand the power of Donald Trump and his ability to protect the American worker." Read more here Affordable cosmetics company e.l.f. Beauty (ELF) has long relied on China to keep its prices low and create value-oriented "dupes" of higher-end products. Now, President Trump's economic agenda is putting that model to the test. E.l.f. sources 75% of its products from China, making it highly exposed to higher costs from Trump's tariffs (though less so than in 2019, when the company sourced 100% of its products from the country). In addition to the broad-based tariffs Trump has levied in his second term, e.l.f. faces a 25% tariff on its China-sourced products that Trump levied in 2019. With the most recent 30% tariffs that Trump imposed on Chinese goods, which are undergoing legal scrutiny, e.l.f.'s product imports to the US were subject to tariffs at the 55% level. Unlike other companies that have vocally pivoted to American onshoring to avoid being singled out by the president, CEO Tarang Amin said on the company's earnings call that e.l.f. remains committed to its Chinese suppliers. "We believe our unique China-based supply chain is an area of competitive advantage we've been honing for the past 21 years," Amin said. "It underpins our value proposition, delivering the best combination of quality, cost, and speed in our industry. We're ... committed to our China team and suppliers." Read more here A legal argument that the US Supreme Court used to foil Joe Biden on climate change and student debt now looms as a threat to President Donald Trump's sweeping tariffs. During Biden's presidency, the court's conservative majority ruled that federal agencies can't decide sweeping political and economic matters without clear congressional authorization. That blocked the Environmental Protection Agency from setting deep limits on power-plant pollution and the Education Department from slashing student loans for 40 million people. The concept — known as the 'major questions doctrine' — is now playing a central role in the case against Trump's unilateral imposition of worldwide import taxes. With Supreme Court review all but inevitable, the justices' willingness to employ the doctrine against Trump may determine the fate of his signature economic initiative. Read more here The Financial Times reports that the strain of President Donald Trump's tariffs has taken its toll on the friendly cross-border relationship between Windsor, Ontario and Detroit, Michigan: Read more here (premium) Gap (GAP) CEO Richard Dickson told Yahoo Finance's Brian Sozzi that Trump's trade war has not derailed the company's turnaround plans. "Like any business, we're constantly navigating complexity," Dickson added. "There's a lot of complexities in running a business. And in this case, tariffs is a focus. But it's our responsibility to do so without ever compromising the long-term integrity of our strategy." Gap stock plunged about 20% on Friday after the apparel company reported first quarter results. While the company beat estimates on the top and bottom lines, it warned tariff-related expenses could add up to $300 million this year. Some analysts estimated those costs could translate to an earnings hit of about $0.25 a share. Gap said it's continuing to shift away from China and diversify its supply chain more broadly. By the end of 2026, the company said no single country would represent more than 25% of its sourcing. Read more here. President Trump is looking to former President Nixon as proof that his global tariffs should be allowed to stand in court. Roughly five decades ago, 10% duties unilaterally imposed by the 37th president as part of a set of economic measures dubbed the "Nixon shock" were challenged in court in much the same way as Trump's 2025 tariffs have been. The US Court of International Trade struck down many of Trump's tariffs Wednesday, just as Nixon's duties suffered an initial defeat. An appeals court on Thursday allowed Trump's duties to temporarily stay in place while legal arguments continue. What has emboldened the Trump administration is that the Nixon-era Justice Department eventually won its case on appeal, an outcome the Trump administration cited in court documents this week, predicting that its legal saga would likely turn out the same way. It told the US Court of Appeals for the Federal Circuit that "the Federal Circuit's predecessor concluded that the very same language that today exists" in a law used by Trump to justify his tariffs "gave President Nixon the power to impose an import duty surcharge." Read the full story here. President Trump said that although he gave US automakers "some leeway" with tariffs, he expects automakers to fully bring back domestic auto manufacturing in the next year. "All of the manufacturers will build their parts here too," Trump told reporters in the Oval Office in response to a question about tariffs affecting companies like Tesla (TSLA). Of note, Tesla is considered to have the highest percentage of "Made in America" parts, though no car is 100% made in the US. Tesla's long-range Model Y and Model 3 vehicles contain 87.5% "total domestic content," according to a 2024 study by Kelley Blue Book. "It used to bother me, [automakers] make a part in Canada, a part in Mexico, a part in Europe, and sent all over the place, and nobody knew what the hell was happening," Trump continued. "I think you build a car, make it in America. ... over the next year, they've got to have the whole thing built in America." The US imposed auto tariffs of 25% on May 3, but the Trump administration carved out an exemption for some auto parts tariffs, stating that they would not be stacked on top of other tariffs. The auto industry has lobbied hard for tariff exemptions since Trump took office. While many of Trump's most extreme tariffs are being challenged in court, those cases do not affect auto tariffs, which were implemented using a separate law. In a press conference with Tesla (TSLA) CEO Elon Musk on Friday afternoon, President Trump repeated his claim that China "violated a big part of the agreement we made." Trump also stated that he expects to have a call with Chinese President Xi Jinping, though he didn't offer any definite details about when such a call would take place. "I'm sure that I'll speak to President Xi, and hopefully we'll work that out," the president said. Trump has not yet spoken with his Chinese counterpart during his second term. He previously said he expected to speak with Xi in mid-May after the US and China announced a temporary tariff pause, but that call never occurred. Trump's comments come as trade tensions between the US and China ratchet up again. On Friday, Trump escalated his rhetoric against China, and Bloomberg reported that the Trump administration plans to expand tech restrictions on the country. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped approximately 1.6% while the benchmark S&P 500 (^GSPC) fell 1%, and the Dow (^DJI) slipped 0.6%. Reuters reports: Read more here. The temporary trade deal that led to the US and China pausing steep tariffs is showing signs of fraying. In a post on Truth Social on Friday, President Trump made it clear who he thinks is to blame. "I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn't want to see that happen," Trump said. "Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! "The bad news," he continued, "is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US." "So much for being Mr. NICE GUY!" China has hit back at President Trump, accusing the US of violating their recent trade agreement, making it less likely that Trump will get the leadership call he wants to restart trade talks between the two sides. On Monday, the Chinese Ministry of Commerce said in a statement that the US had introduced discriminatory restrictions, including new guidelines on AI chip export controls, curbs on chip design software sales to China, and the withdrawal of Chinese student visas. Beijing also rebuked the US president's claim that China had breached the agreement reached in Geneva last month. 'If the US insists on its own way and continues to damage China's interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,' the ministry said. China's response to the US follows Trump's claims on Friday that China had violated the trade truce. "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!" Trump wrote. But is Trump's tough talk just that — talk? As Yahoo Finance's senior reporter Alexandra Canal points out, amid all the US-China tensions, many investors believe the president talks tough on tariffs but always backs down. In the midst of the chaos, one phrase kept surfacing across Wall Street: the "TACO" trade. An acronym for "Trump Always Chickens Out," That assumption has fueled a market tailwind in recent months as traders bet on policy pivots, buoyed by an initial US-China tariff deescalation earlier this month. Yahoo Finance senior columnist Rick Newman said: "The only problem with the TACO trade is that the premise isn't true. Trump doesn't always chicken out. His threats are often worse than his actions, but five months into Trump's term, it is abundantly clear that taxes on imports will be considerably higher for as long as Trump is in charge." Yahoo Finance's Ben Werschkul reports: Read more here. AP reports: Read more here. Aluminium (ALI=F) prices for US buyers jumped on Monday after President Trump said he planned to increase tariffs on imported steel and aluminium from 25% to 50%. Reuters reports: Read more here. President Trump's tariffs have brought more twists and turns over the last week for small businesses, with many having to cut staff hours and angry at how the government has treated them. CNN reports: Read more here. Prime Minister Mark Carney wants Canadian provinces to trade more freely with each other in a bid to help reduce the economic harm from Trump's tariffs. Bloomberg News reports: Read more here. Reuters reports: Read more here. Between tariff pauses and court rulings, President Trump's trade agenda remains in limbo. But there are some key dates and events arriving in the coming months that may offer more clarity on the path of tariff rates. Here's a timeline compiled by Reuters of dates to pay attention to: June 5: The date by which the plaintiffs in the tariffs case are required to respond to the US federal appeals court, which reinstated most of Trump's tariffs on May 30. June 9: The deadline for the Trump administration to respond to the appeals court. June 15-17: Trump will attend the annual G7 Leaders' Summit in Alberta, Canada. Tariffs are expected to be a major topic of discussion. July 8: "Liberation Day" tariffs are scheduled to resume following the 90-day pause, potentially affecting imports from multiple countries. July 9: The deadline for the US and the EU to negotiate a trade agreement. If no deal is reached, the US will impose an across-the-board 50% tariff on EU imports. July 14: The EU's 90-day pause on its own retaliatory tariffs to end. Read more here. President Donald Trump's doubling of tariffs on foreign steel and aluminum could hit Americans in an unexpected place: grocery aisles. The announcement Friday of a staggering 50% levy on those imports stoked fear that big-ticket purchases from cars to washing machines to houses could see major price increases. But those metals are so ubiquitous in packaging, they're likely to pack a punch across consumer products from soup to nuts. 'Rising grocery prices would be part of the ripple effects,' says Usha Haley, an expert on trade and professor at Wichita State University, who added that the tariffs could raise costs across industries and further strain ties with allies 'without aiding a long-term U.S. manufacturing revival.' Read more here U.S. Commerce Secretary Howard Lutnick downplayed the impact of legal uncertainty around U.S. tariffs on negotiations with the European Union during an interview with Fox News Sunday, saying talks were ongoing. Lutnick was asked about a Reuters report quoting an unnamed EU official close to negotiations who said the legal uncertainty of the tariffs in the U.S. gave the E.U. "extra leverage." "You can't listen to silly people making silly comments," Lutnick said. "All of the countries that are negotiating with us understand the power of Donald Trump and his ability to protect the American worker." Read more here Affordable cosmetics company e.l.f. Beauty (ELF) has long relied on China to keep its prices low and create value-oriented "dupes" of higher-end products. Now, President Trump's economic agenda is putting that model to the test. E.l.f. sources 75% of its products from China, making it highly exposed to higher costs from Trump's tariffs (though less so than in 2019, when the company sourced 100% of its products from the country). In addition to the broad-based tariffs Trump has levied in his second term, e.l.f. faces a 25% tariff on its China-sourced products that Trump levied in 2019. With the most recent 30% tariffs that Trump imposed on Chinese goods, which are undergoing legal scrutiny, e.l.f.'s product imports to the US were subject to tariffs at the 55% level. Unlike other companies that have vocally pivoted to American onshoring to avoid being singled out by the president, CEO Tarang Amin said on the company's earnings call that e.l.f. remains committed to its Chinese suppliers. "We believe our unique China-based supply chain is an area of competitive advantage we've been honing for the past 21 years," Amin said. "It underpins our value proposition, delivering the best combination of quality, cost, and speed in our industry. We're ... committed to our China team and suppliers." Read more here A legal argument that the US Supreme Court used to foil Joe Biden on climate change and student debt now looms as a threat to President Donald Trump's sweeping tariffs. During Biden's presidency, the court's conservative majority ruled that federal agencies can't decide sweeping political and economic matters without clear congressional authorization. That blocked the Environmental Protection Agency from setting deep limits on power-plant pollution and the Education Department from slashing student loans for 40 million people. The concept — known as the 'major questions doctrine' — is now playing a central role in the case against Trump's unilateral imposition of worldwide import taxes. With Supreme Court review all but inevitable, the justices' willingness to employ the doctrine against Trump may determine the fate of his signature economic initiative. Read more here The Financial Times reports that the strain of President Donald Trump's tariffs has taken its toll on the friendly cross-border relationship between Windsor, Ontario and Detroit, Michigan: Read more here (premium) Gap (GAP) CEO Richard Dickson told Yahoo Finance's Brian Sozzi that Trump's trade war has not derailed the company's turnaround plans. "Like any business, we're constantly navigating complexity," Dickson added. "There's a lot of complexities in running a business. And in this case, tariffs is a focus. But it's our responsibility to do so without ever compromising the long-term integrity of our strategy." Gap stock plunged about 20% on Friday after the apparel company reported first quarter results. While the company beat estimates on the top and bottom lines, it warned tariff-related expenses could add up to $300 million this year. Some analysts estimated those costs could translate to an earnings hit of about $0.25 a share. Gap said it's continuing to shift away from China and diversify its supply chain more broadly. By the end of 2026, the company said no single country would represent more than 25% of its sourcing. Read more here. President Trump is looking to former President Nixon as proof that his global tariffs should be allowed to stand in court. Roughly five decades ago, 10% duties unilaterally imposed by the 37th president as part of a set of economic measures dubbed the "Nixon shock" were challenged in court in much the same way as Trump's 2025 tariffs have been. The US Court of International Trade struck down many of Trump's tariffs Wednesday, just as Nixon's duties suffered an initial defeat. An appeals court on Thursday allowed Trump's duties to temporarily stay in place while legal arguments continue. What has emboldened the Trump administration is that the Nixon-era Justice Department eventually won its case on appeal, an outcome the Trump administration cited in court documents this week, predicting that its legal saga would likely turn out the same way. It told the US Court of Appeals for the Federal Circuit that "the Federal Circuit's predecessor concluded that the very same language that today exists" in a law used by Trump to justify his tariffs "gave President Nixon the power to impose an import duty surcharge." Read the full story here. President Trump said that although he gave US automakers "some leeway" with tariffs, he expects automakers to fully bring back domestic auto manufacturing in the next year. "All of the manufacturers will build their parts here too," Trump told reporters in the Oval Office in response to a question about tariffs affecting companies like Tesla (TSLA). Of note, Tesla is considered to have the highest percentage of "Made in America" parts, though no car is 100% made in the US. Tesla's long-range Model Y and Model 3 vehicles contain 87.5% "total domestic content," according to a 2024 study by Kelley Blue Book. "It used to bother me, [automakers] make a part in Canada, a part in Mexico, a part in Europe, and sent all over the place, and nobody knew what the hell was happening," Trump continued. "I think you build a car, make it in America. ... over the next year, they've got to have the whole thing built in America." The US imposed auto tariffs of 25% on May 3, but the Trump administration carved out an exemption for some auto parts tariffs, stating that they would not be stacked on top of other tariffs. The auto industry has lobbied hard for tariff exemptions since Trump took office. While many of Trump's most extreme tariffs are being challenged in court, those cases do not affect auto tariffs, which were implemented using a separate law. In a press conference with Tesla (TSLA) CEO Elon Musk on Friday afternoon, President Trump repeated his claim that China "violated a big part of the agreement we made." Trump also stated that he expects to have a call with Chinese President Xi Jinping, though he didn't offer any definite details about when such a call would take place. "I'm sure that I'll speak to President Xi, and hopefully we'll work that out," the president said. Trump has not yet spoken with his Chinese counterpart during his second term. He previously said he expected to speak with Xi in mid-May after the US and China announced a temporary tariff pause, but that call never occurred. Trump's comments come as trade tensions between the US and China ratchet up again. On Friday, Trump escalated his rhetoric against China, and Bloomberg reported that the Trump administration plans to expand tech restrictions on the country. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped approximately 1.6% while the benchmark S&P 500 (^GSPC) fell 1%, and the Dow (^DJI) slipped 0.6%. Reuters reports: Read more here. The temporary trade deal that led to the US and China pausing steep tariffs is showing signs of fraying. In a post on Truth Social on Friday, President Trump made it clear who he thinks is to blame. "I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn't want to see that happen," Trump said. "Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! "The bad news," he continued, "is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US." "So much for being Mr. NICE GUY!" 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