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7 hours ago
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Port of LA Imports Drop 19% in May as Tariffs Hit US Businesses
(Bloomberg) -- Import volumes through the busiest trade hub in the US fell 19% from the month before, a fallout from President Donald Trump's tariffs. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space 'It's very slow here seasonally,' Port of Los Angeles Executive Director Gene Seroka told reporters Friday. Seroka warned that US businesses are facing high tariffs and uncertainty during what is typically the start of the peak season, and the consequences are likely to show up on store shelves in a few months. 'We've already blown past summer fashion and looking forward now to back to school and Halloween before the all important year-end holidays,' Seroka said. 'Cargo for those micro seasons needs to be here on the ground right now. I don't necessarily see that in inventory levels.' The drop in port activity came as importers and retailers — especially those with business in China — grappled with the uncertainty of Trump's trade war. Tariffs on goods from China were as high as 145% in April, when many of the goods arriving in Southern California in May would have left Asian ports. In May, cargo handlers at the Port of Los Angeles processed a total of about 717,000 equivalent units, or TEUs. About 356,000 of those were imports, a 19% drop compared to last month and 9% lower than May 2024, Seroka said. Exports through Los Angeles fell to just over 120,000 containers, marking the sixth straight month of year-on-year declines as other countries responded with retaliatory tariffs, particularly for US agricultural goods, Seroka said. While import flows may pick up again as importers rush to bring goods in during a temporary agreement between the US and China to lower the highest of the tariffs, import levies on goods from China remain prohibitively high for many businesses. 'When all is said and done, buying products out of China right now still costs one and a half times more than it did earlier this year, making products of all types extremely expensive,' Seroka said. Despite the canceled and delayed orders, importers still paid a record $23 billion in customs duties in May, US Treasury data released this week showed. That translates to an average effective tariff rate of roughly 7.5% to 8%, up from 2.5% at the beginning of the year, according to Ernie Tedeschi, director of economics at Yale University's Budget Lab and a former Biden administration official. And there's still a ways to go before all of the tariffs announced by the Trump administration are implemented, Tedeschi said at the Port of Los Angeles briefing. 'We estimate that current policy is equivalent to a 15.5% average effective tariff rate, including the new announcements for 2025 and the levels prior to them.' (Updates with Tedeschi analysis of tariff rates in last paragraphs.) American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P.
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8 hours ago
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Oil Market Long Numb to War Risk Confronts Weekend of Worry
(Bloomberg) -- The past two years of escalating tensions in the Middle East have taught oil traders to be sanguine about the risk of disruption to oil supplies. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space The barrage of headlines has revived memories of the political upheavals and prices spikes of the 1970s — and yet even when oil prices have jumped, it inevitably proved short-lived. As Iran and Israel traded volleys of missiles in April last year and again in October, Middle Eastern oil continued to flow to the global market unaffected. Now, the latest assault by Israel is putting oil traders' nonchalance to the test. There's been no impact on supplies so far, but the strikes have shaken a market that for most of this year has been overshadowed by worries about a looming surplus driving down prices, with OPEC+ quickly unwinding production cuts and output rising elsewhere from Brazil to Guyana, while President Donald Trump's trade war threatens demand. Even if many believe that the oil market may ultimately escape unscathed, the widespread uncertainty over how strongly Iran will respond, whether Israel will launch further attacks, and how the US will react is forcing traders to price in a huge range of possible outcomes. With hours left until the end of the trading week, few were brave enough to risk going into the weekend short. Brent futures spiked as much as 13% early on Friday and settled 7% higher at about $74 a barrel. 'When there's a war on you're not going to be short anything over the weekend,' said Andreas Laskaratos, chief executive officer of energy trading house AB Commodities. 'Although the fundamentals haven't changed you can't trade against the headlines over the weekend.' Traders and analysts began to game out scenarios for possible escalation or de-escalation almost as soon as the first Israeli missiles hit Iran in the early hours of Friday morning. Laskaratos says his Europe-based traders were at their desks by about 4:30 or 5:00 a.m. Read Bloomberg's live blog on the latest from the Middle East Analysts at Goldman Sachs Group Inc. raised their oil price forecasts for the coming months $2-$3 a barrel, but laid out possible scenarios ranging from a surge in prices above $100 a barrel in the worst-case scenario, to a drop below $50 next year in their most bearish scenario. 'The potential of further escalation in the Middle East implies that the short-term risks to our price forecast are now skewed to the upside,' the analysts including Daan Struyven wrote. Still, they maintained their call for prices to drop below $60 by the fourth quarter of this year. A surge of trading in out-of-the money call options showed that many were seeking to hedge against the possibility of a price spike. Among the most traded options were call options that would pay out if prices rise above $85 a barrel by Jun. 25; a measure of the price of WTI call options relative to the price of put options surged to the highest since March 2022, when the market was rocked by Russia's full-scale invasion of Ukraine. The most worrying possibility for the oil market is a disruption of shipping through the Strait of Hormuz, through which about one-fifth of global oil supply flows. Most analysts reckon that's unlikely. 'It is our understanding that it would be extremely difficult for Iran to close the strait for an extended period given the presence of the US Fifth Fleet in Bahrain,' said Helima Croft, head of global commodity strategy at RBC Capital Markets LLC, and a former CIA analyst. Still, even if small, any increase in the chance of disruption is enough to drive prices. 'The possibility that the Strait of Hormuz closes is such a huge binary event, it makes forecasting balances challenging,' consultancy FGE NexantECA wrote in a report. 'Most market participants we have spoken to are not expecting the Strait of Hormuz to be closed; the consequences are just too great.' Other possible scenarios worrying oil traders include the possibility of strikes on Iran's oil infrastructure – though Israel has so far avoided that – or the potential for sanctions against Iran to be ramped up if Tehran responds to the strikes by accelerating its nuclear program. For now at least, most traders are viewing current events through the lens of recent history. 'For the past decade, events like this have been sell-the-rip situations. They didn't escalate. Fears were worse than what actually happened,' Dan Pickering, chief investment officer at Pickering Energy Partners LP, an energy-focused investment bank in Houston, wrote on X. The strikes may even turn out to be bearish. Trump on Friday called on Iran to make a deal or face 'even more brutal' attacks. If Tehran were to heed his advice, a nuclear deal would likely involve a relaxation of sanctions, potentially lifting Iran's exports. FGE NexantECA said that market participants were 'looking at the recent price action and starting to consider the events as a 'sell' opportunity.' 'However, they acknowledge that taking a short position right now is hard given the risk/expectation of further escalation in tensions in the weeks ahead.' Even if there is a disruption, OPEC+ members Saudi Arabia and the United Arab Emirates have significant spare capacity that could be brought on to potentially help cool prices. 'It would take a lot of courage for someone to go against it but that said we can't see this rally being sustained in the long term,' said Laskaratos of AB Commodities. 'We don't believe the fundamentals have changed on supply and demand as things stand.' --With assistance from Anthony Di Paola, Nayla Razzouk, Salma El Wardany, Hayley Warren and Demetrios Pogkas. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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12 hours ago
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NY Lawmakers Near Deadline to Pass Bill Targeting Emerging Market ‘Vulture Funds'
(Bloomberg) -- New York state lawmakers are within days of a deadline to pass legislation targeting so-called vulture funds that has languished in the local legislature for the past two years. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? NY Long Island Rail Service Resumes After Grand Central Fire The state Assembly is expected to make a decision on the so-called Champerty bill before adjourning next Tuesday. If it doesn't pass by then, supporters will have to wait until January for the debate to resume. The legislation, which has already passed the local senate, would bar investors from purchasing distressed debt at a deep discount with the intention of suing foreign governments after they've defaulted. It also cuts the 9% interest rate on past-due coupons on defaulted sovereign emerging-market bonds, instead matching the new rate to the going yield on one-year Treasury bills, currently at 4.08%. After repeated failed attempts since it was first introduced in 2023, the proposal has gained momentum recently, assembly member Jessica Gonzalez-Rojas — the bill's sponsor along with state senator Liz Krueger — said in an interview. She emphasized that the goal is not to disrupt the sovereign debt industry. As of Friday, she's still trying to bring it to the chamber floor for a vote. The bill is part of a broader, multi-year effort by New York lawmakers, nonprofits and charities to overhaul the protracted process of revamping defaulted government debt. Even as emerging economies move past a wave of post-pandemic defaults, Ethiopia and Lebanon are still negotiating on their debt. If passed, the legislation would impact roughly half — over $800 billion — of all hard currency sovereign bonds issued by developing countries. Industry groups representing Wall Street investors have previously raised concerns over proposals focused on sovereign debt. But this year, that criticism has dimmed. The bill 'could contribute to the ongoing international efforts to support orderly and predictable debt restructuring processes by reducing incentives for disruptive vulture fund litigation, which is a laudable goal,' a spokesperson for the International Monetary Fund said in an emailed statement. The Fund's objective is to ensure sovereign debt restructuring to be 'predictable, transparent, and orderly, and that it ultimately restores debt sustainability,' the statement added. Still, organizations including the Securities Industry and Financial Markets Association, Creditor Rights Coalition and LSTA have in recent weeks sent letters to state lawmakers seeking to block the proposal, arguing it would have 'wide-ranging' and 'unintended negative consequences' for global financial markets. 'It will also be tremendously damaging to New York state,' said Elliot Ganz, LSTA's head of advocacy. 'You're just asking for the migration of that business to places like Texas and Florida.' A separate bill known as the Sovereign Debt Stability Act was also reintroduced this year. It would, among other things, ramp up oversight on how defaulted government debt is restructured with creditors and cap the amount private creditors could recoup during a debt revamp. It has failed before and hasn't progressed this year. --With assistance from Zach Williams. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P.
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13 hours ago
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Trump Wants to Make It More Expensive to Sue Over His Policies
(Bloomberg) -- President Donald Trump and his allies are pursuing an alternative strategy to defend against mounting court orders blocking his policies: Raise the financial stakes for those suing the administration. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? NY Long Island Rail Service Resumes After Grand Central Fire Republicans want to force people suing the US to post financial guarantees to cover the government's costs if they win a temporary halt to Trump's policies but ultimately lose the case. A measure in the House's 'big, beautiful' tax-and-spending bill would condition a judges' power to hold US officials in contempt for violating their orders to the payment of that security. A new proposed version of the bill announced by Senate Republicans on Thursday removes the contempt language but would broadly restrict judges' discretion to decide how much of a security payment to order from challengers who win initial pauses to Trump's policies, or to waive it altogether. While the legislation faces hurdles, the push to make suing the government more expensive is gaining steam. Critics say it's part of a broader effort to discourage lawsuits against the Trump administration. In addition to the tax bill provision, Republican lawmakers have introduced a plan to require plaintiffs who lose suits against the administration to cover the government's legal costs. Meanwhile, Trump has directed the Justice Department to demand bonds from court challengers when judges temporarily halt his policies. Trump has also targeted law firms over everything from past work for Democratic rivals to their diversity policies. Courts historically haven't required bonds to be put up in lawsuits against the government. In recent cases, the Trump administration's bond requests included $120,000 in litigation over union bargaining and an unspecified amount 'on the high side'' in a fight over billions of dollars in frozen clean technology grants. Judges in those and other cases have denied hefty requests or set smaller amounts, such as $10 or $100 or even $1. 'Having to put that money up is going to prevent people from being able to enforce their rights,' said Eve Hill, a civil rights lawyer who is involved in litigation against the administration over the treatment of transgender people in US prisons and Social Security Administration operations. The Trump administration has faced more than 400 lawsuits over his policies on immigration, government spending and the federal workforce, among other topics, since his inauguration. A Bloomberg analysis in May found that Trump was losing more cases than he was winning. White House spokesperson Taylor Rogers said in a statement that 'activist organizations are abusing litigation to derail the president's agenda' and that it is 'entirely reasonable to demand that irresponsible organizations provide collateral to cover the costs and damages if their litigation wrongly impeded executive action.' Dan Huff, a White House lawyer during Trump's first term, defended the idea but said the language needed fixes, such as clarifying that it only applies to preliminary orders and not all injunctions. Huff, whose op-eds in support of stiffer injunction bonds have circulated among Republicans this year, said that Congress wanted litigants 'to have skin in the game.' Some judges have already found in certain cases that the administration was failing to fully comply with orders. Alexander Reinert, a law professor at Cardozo School of Law, said the timing of Congress taking up such a proposal was 'troubling and perverse.' 'Defy Logic' Some efforts by the Trump administration to curb lawsuits have already paid off. By threatening probes of law firms' hiring practices, the White House struck deals with several firms that effectively ruled out their involvement in cases challenging Trump's policies. Other aspects of the effort have been less successful. Judges have overwhelmingly rebuffed the Justice Department's efforts that plaintiffs put up hefty bonds. A judge who refused to impose a bond in a funding fight wrote that 'it would defy logic' to hold nonprofit organizations 'hostage' for the administration's refusal to pay them. Several judges entered bonds as low as $1 when they stopped the administration from sending Venezuelan migrants out of the country. In a challenge to federal worker layoffs, a judge rejected the government's push for a bond covering salaries and benefits, instead ordering the unions that sued to post $10. The clause in the House tax bill tying contempt power of judges to injunction bonds was the work of Trump loyalists. Representative Andy Biggs, a Republican member of the House Judiciary Committee, pushed to include the provision, Representative Jim Jordan told Bloomberg News. Jordan, who chairs the committee, said Biggs and Representative Harriet Hageman, another Republican, were 'very instrumental in bringing this to the committee's attention.' Biggs' office did not respond to requests for comment. Hageman said in a statement that the measure will 'go a long way in curbing this overreach whereby judges are using their gavels to block policies with which they disagree, regardless of what the law may say.' Liberals have slammed the proposed clause in the tax-and-spending bill as an attack on the judiciary, but it may not be the controversy that dooms it in the Senate. Reconciliation, the process lawmakers are using to pass the bill with only Republican support, requires the entire bill to relate directly to the budget. 'Make It Happen' Several Republicans have expressed skepticism the measure can survive under that process. But, Jordan, the House judiciary chair, said Republican lawmakers will seek an alternative path to pass the measure if it's ruled out in the Senate. 'I'm sure we'll look at other ways to make it happen,' Jordan said. The bond fight stems from an existing federal rule that says judges can enter temporary restraining orders and preliminary injunctions 'only if' the winning side posts a security that the court 'considers proper.' The bond is to cover 'costs and damages' if they ultimately lose. University of Notre Dame Law School professor Samuel Bray, a proponent of injunction bonds, said courts should account for whether litigants have the ability to pay. Still, he said, defendants should be able to recover some money if a judge's early injunction — a 'prediction' about who will win, he said – isn't borne out. 'If courts routinely grant zero dollars, what they are doing is pricing the effect of a wrongly granted injunction on the government's operations at zero,' Bray said. Courts have interpreted the rule as giving judges discretion to decide what's appropriate, including waiving it, said Cornell Law School Professor Alexandra Lahav. The bond issue usually comes up in business disputes with 'clear monetary costs,' she said, and not in cases against the federal government. 'It's not clear to me what kind of injunction bond would make sense in the context of lawsuits around whether immigrants should have a hearing before they're deported,' Lahav said. 'I'm not really sure how you would price that.' (Updates with Senate proposal in the third paragraph.) American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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14 hours ago
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Tariffs Create Most Patriotic Earnings Season Yet as US Firms Pander to Trump
(Bloomberg) -- President Donald Trump's tariff regime may not be having the desired effect of bringing manufacturing back to the US yet, but it's making companies sound a lot more patriotic. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? NY Long Island Rail Service Resumes After Grand Central Fire At least that's what executives are projecting during earnings calls. During first-quarter conferences, they touted their 'Made in America' credentials or domestic production capabilities at a record rate, with firms in the S&P 500 Index calling out their domestic production over 200 times, compared to 25-year average of around 50 mentions per earnings season, according to data compiled by Bloomberg News. Talk is cheap though, much cheaper than actually investing in the US. Despite the patriotic enthusiasm, there's little evidence corporate America has broken ground on new domestic facilities. 'There have been anecdotal announcements from drug companies, or otherwise, talking about investments here in the US,' Brent Thielman, who covers the construction and engineering industries for DA Davidson & Co., said in an interview. 'But when that comes to fruition remains to be seen.' Altogether, companies ranging from Apple Inc. and International Business Machines Corp. to Eli Lilly & Co. and Bristol-Myers Squibb Co. have pledged hundreds of billions of dollars of spending in the US since Trump's election. Many of those commitments weren't new or were in line with previous spending patterns. Touting new projects in response to tariffs could appear reactive, while highlighting projects already underway is a savvy way to calm investors in uncertain times, said Emily Borders, chief client officer at Highwire, a public relations agency. 'It's very difficult to set up a 'Made in the USA' program overnight. In fact, you can't do that,' Borders said. 'However, many organizations have been doing really interesting things in that regard or have had initiatives in that regard for a while and those may not have been top of mind with some of their constituencies.' Like some of those investment announcements, touting your domestic production bona fides could have the added benefit of keeping the heat from the White House at bay, though that's not a certainty. Trump has showered ire on firms who he sees flouting the 'America First' mindset he's seeking to impose by taking production abroad, and Apple's $500 billion investment pledge wasn't sufficient to keep Trump from threatening a 25% levy on all imported iPhones sold in the US. The threat of retaliation from the White House has some companies seeking advice on how to stay out of trouble. 'Sometimes we're as much trying to remain less of a focus as we are, as PR professionals, trying to make sure our companies are in the spotlight,' said Lori Ruggiero, managing partner at PR firm 5WPR. 'Why become part of the story if you don't have to be, right?' After targeting Apple, Trump became even more menacing with Barbie-maker Mattel Inc., threatening a 100% levy on its toys if the company continued overseas production. El Segundo, California-based Mattel had only days earlier pulled its outlook, citing the impact of tariffs on toy demand and production. During its call, Chief Executive Officer Ynon Kreiz took time to detail the company's plans to decrease its exposure to Chinese suppliers by shifting more production to India. Around 76% of Mattel's suppliers are outside of the US, where it generates about half of its revenue. Talk the Talk In uncertain times, management commentary on where the business is heading is critical, especially as specific financial outlooks become less reliable. Executives should 'think beyond the traditional revenue and earnings guidance because we see that most investors find operational guidance is more reliable in times of uncertainty,' Laura Kiernan, senior vice president with Rivel Inc., an investor relations consultancy, said in an emailed statement. In a volatile economy, information on mitigation efforts, capital allocation and general strategic direction for companies is considered more reliable than financial guidance for 51% of buy-side investors, according to a Rivel survey. Only a third of respondents found specific fiscal targets more dependable. This quarter, at least 50 major US companies have withdrawn or suspended their outlooks as economic conditions made forecasting too difficult. Snap-on Inc., which doesn't typically offer profit projections, remained vague in its first-quarter press release announcing results. CEO Nick Pinchuk used the earnings call, instead, to expound on the company's domestic capabilities. 'We're positioned well with American products,' Pinchuk said during the call. 'Our major product lines are already made in America, using American steel, and our US plants already produce some version of almost all our product lines.' Deere & Co. was similarly patriotic during its latest earnings call. 'We're proud of our storied US history,' CEO John May said in opening remarks. 'With nearly 80% of our US sales, and 25% of our international sales, built right here in US manufacturing locations, we stand by and continue to embrace our American manufacturing heritage.' American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P.
