Latest news with #PetersonInstituteforInternationalEconomics
CNBC
2 days ago
- Business
- CNBC
How Canadian boycotts are impacting the U.S.
Amid rising trade and political tensions, Canadian consumers are increasingly turning their backs on American products. Giancarlo Trimarchi, owner of Vince's Market, a Canadian grocery chain, has seen the backlash firsthand. "Customers are demanding as much Canadian product as possible and get upset when they see U.S. goods," he said. In a move that could escalate the trade standoff further, President Donald Trump recently announced new tariffs of 35% on Canadian goods starting Aug. 1. "The U.S. tariffs look like they're going to last for the duration of the Trump administration in one form or another. And, that's going to keep other countries in a negative mood towards U.S. goods and services," said Gary Hufbauer, senior fellow at Peterson Institute for International Economics. A "Buy Canada" movement is also intensifying, with 71% of Canadians saying they plan to buy fewer U.S. goods this year, according to retail data consulting firm dunnhumby. That pullback is expected to cause a drop in U.S. exports to Canada, particularly in food and alcohol. In 2024, Canada was the U.S.'s second-largest food export market, valued at $28.4 billion, according to the U.S. Department of Agriculture. Tourism is also feeling the pressure, with foreign tourists canceling their travel plans to America. The loss in revenue from international travelers is expected to cost the U.S. economy $12.5 billion this year, according to the World Travel & Tourism Council. The boycott sentiment isn't limited to Canada. European consumers, sharing the same frustrations with U.S. foreign policy, are also rejecting American products. A European Central Bank survey revealed that 44% of Europeans are turning away from U.S. brands. This has contributed to plummeting sales for U.S. companies, especially Tesla, which saw a nearly 28% drop in European sales amid a litany of other factors. While some hope trade tensions will ease and that things will return to normal, consumer surveys indicate this shift in behavior could have lasting effects on U.S. companies, even after tariffs are resolved. Watch the video to find out more about the Canadian boycott of American goods and what impact it could have on the U.S. economy.
Hindustan Times
2 days ago
- Business
- Hindustan Times
The Global Economy Is Powering Through a Historic Increase in Tariffs
The global economy is sailing through this year's historic increase in tariffs, displaying an unexpected trait: resilience. Faced with extreme uncertainty, businesses and households have surprised economists with their ability to hedge, finding a short-term path through as they await clarity on where tariffs will end up. Global producers brought forward purchases and rerouted goods destined for the U.S. through third-party countries that are subject to lower tariffs. For the most part, households and businesses have continued to spend and invest despite the uncertainty, analysts say. The world economy grew at a 2.4% annual rate in the first half of this year, around its longer-term trend, according to JPMorgan. Trade volumes are buoyant, stock markets on both sides of the Atlantic have rebounded to record highs and growth forecasts from Europe to Asia are being raised. Investment, manufacturing employment, spending and overall activity all held up globally, according to Goldman Sachs. 'What people have gotten wrong is the chaotic behavior [of trade policy] and the hedging that has introduced,' said Marcus Noland, executive vice president at the Peterson Institute for International Economics in Washington, D.C. In part, businesses are benefiting from reflexes learned and changes made during the Covid-19 pandemic, such as bulletproofing their supply chains, which compressed margins at the time, but is now paying off. Governments from the U.S. to Germany are also spending lavishly, helping to support confidence. Some businesses may be building up inventory now in the expectation that tariffs will be higher in the future, said Angel Talavera, an economist at Oxford Economics. 'It seems that the uncertainty is weighing less on economic activity than we thought,' Isabel Schnabel, who sits on the European Central Bank's six-member executive board, said in an interview published in recent days on the central bank's website. The political backlash against globalization that accelerated roughly 10 years ago has also long persuaded many international businesses to rely more on local production to serve their main export markets. Many say the tariffs have underlined the importance of such plans. EBM Papst, a German manufacturer of fans with around €2.5 billion of annual revenue, equivalent to around $2.9 billion, is planning to build a third factory in the U.S. and is considering whether that factory should have an extension, said Chief Executive Officer Klaus Geissdoerfer. The company expects double-digit revenue growth in the U.S. for years to come, partly due to the construction of data centers supporting the artificial-intelligence boom. Some American customers have asked the company to localize more production in the U.S. to replace suppliers from Asia who are facing higher U.S. tariffs, Geissdoerfer said. 'That would help us to grow 20-30% on top in the U.S.,' he said. World merchandise trade volumes beat expectations in the first three months of this year, rising by 5.3% from a year earlier, powered by a surge in imports to North America, the World Trade Organization said in a recent report. The WTO increased its forecast for trade in goods this year to 0.1% growth, having previously forecast a 0.2% decline. In Europe, the manufacturing industry has continued to improve in recent months, with forward-looking indicators for new orders, new export orders and future output all rising to three-year highs. 'This suggests that we're seeing more than just frontloading,' said the ECB's Schnabel. Production in the continent's critical auto sector seems to be holding up well even though it is subject to a 25% tariff and exports to the U.S. have softened, said Adrian Prettejohn, an economist at Capital Economics. 'We expect that the previous stockpiling of goods and the impact of tariffs [will] weigh on eurozone exports, but it is not clear that there will be as dramatic a fall as may have been expected,' Prettejohn said. Even in China, President Trump's chief antagonist on trade, the tariff tumult of the past few months hasn't been as damaging as feared. Chinese exports to the U.S. were about 10% lower in the first five months of the year than the same period a year earlier as tariffs bit into direct trade between the two economic superpowers. But, over the same period, overall exports grew 6%, Chinese customs data show, helped by rising shipments to Asia, Europe and Africa. Chinese exports to countries including Vietnam, Thailand and Mexico have been especially strong. Economists say that likely reflects some degree of rerouting of Chinese exports through those countries and on to the U.S. In the first four months of 2025, U.S. imports from Southeast Asia were up 28% year over year, Census Bureau figures show. U.S. imports from Asia overall increased by 10% in the first five months of the year from a year earlier, to $582 billion, despite declining trade with China. In the U.S. itself, households' net worth remains high by historical standards as a share of disposable income, potentially allowing consumers to continue spending despite higher prices, Susan Collins, president of the Federal Reserve Bank of Boston, said in a speech Tuesday. This resilience has allowed some exporters to the U.S. to pass part of the costs of tariffs on to their customers. Retailers of Parmigiano-Reggiano, the Parmesan cheese produced in a designated area of northern Italy, increased prices in the U.S. to around $43 to $45 per kilogram from $42 this year, partly offsetting an additional 10% tariff applied since April. Sales have continued to surge in the U.S., rising by 9% in the first four months of this year, in line with previous months. 'Tariffs may eventually reduce the number of people that are able to afford [the cheese], but we haven't seen that yet,' said Nicola Bertinelli, president of the Parmigiano Reggiano Consortium. Cheese importers managed to offset part of the impact by importing more inventory before the tariffs kicked in. Sales of Parmesan have continued to surge in the U.S. despite higher prices following President Trump's tariffs. The cheese's producers recently stepped up their sales efforts in the U.S., sponsoring this year's Miami Open tennis tournament and unveiling a partnership with the New York Jets football team. U.S. imports from Europe surged by 37% in the first five months of the year from a year earlier, to $421 billion, with moderate growth continuing in April and May, according to Census Bureau data. Elevated profit margins at U.S. businesses suggest that they are able to bear some of the increased costs from tariffs, the Boston Fed's Collins said. 'As a result, the adverse impact of tariffs on labor market conditions and economic growth may be more limited,' she said. To be sure, some of the strength in trade could unwind as firms slow their purchases in the coming months as payback for earlier hefty orders to beat the U.S. tariffs, economists say. The global economic shrug also seems to have emboldened the Trump administration to press for even higher tariffs. And some economists say it is possible the shock will come with a delay. 'Probably, people did expect more immediate effects,' said the Peterson Institute's Noland. Brexit, which didn't cause the British economy to seize up when it happened but had a negative cumulative effect over time, could be a good analogy, Noland said. The level of tariffs also matters. A 10% uniform levy on all U.S. imports might have a negligible economic effect, whereas rates of 30% or 50% could be much more problematic, Noland said. European Commission President Ursula von der Leyen warned recently that such levels could cause trade between the European Union and the U.S. to freeze. Write to Tom Fairless at
Mint
2 days ago
- Business
- Mint
The global economy is powering through a historic increase in tariffs
The global economy is sailing through this year's historic increase in tariffs, displaying an unexpected trait: resilience. Faced with extreme uncertainty, businesses and households have surprised economists with their ability to hedge, finding a short-term path through as they await clarity on where tariffs will end up. Global producers brought forward purchases and rerouted goods destined for the U.S. through third-party countries that are subject to lower tariffs. For the most part, households and businesses have continued to spend and invest despite the uncertainty, analysts say. The world economy grew at a 2.4% annual rate in the first half of this year, around its longer-term trend, according to JPMorgan. Trade volumes are buoyant, stock markets on both sides of the Atlantic have rebounded to record highs and growth forecasts from Europe to Asia are being raised. Investment, manufacturing employment, spending and overall activity all held up globally, according to Goldman Sachs. 'What people have gotten wrong is the chaotic behavior [of trade policy] and the hedging that has introduced," said Marcus Noland, executive vice president at the Peterson Institute for International Economics in Washington, D.C. In part, businesses are benefiting from reflexes learned and changes made during the Covid-19 pandemic, such as bulletproofing their supply chains, which compressed margins at the time, but is now paying off. Governments from the U.S. to Germany are also spending lavishly, helping to support confidence. Some businesses may be building up inventory now in the expectation that tariffs will be higher in the future, said Angel Talavera, an economist at Oxford Economics. 'It seems that the uncertainty is weighing less on economic activity than we thought," Isabel Schnabel, who sits on the European Central Bank's six-member executive board, said in an interview published in recent days on the central bank's website. The political backlash against globalization that accelerated roughly 10 years ago has also long persuaded many international businesses to rely more on local production to serve their main export markets. Many say the tariffs have underlined the importance of such plans. EBM Papst, a German manufacturer of fans with around €2.5 billion of annual revenue, equivalent to around $2.9 billion, is planning to build a third factory in the U.S. and is considering whether that factory should have an extension, said Chief Executive Officer Klaus Geissdoerfer. The company expects double-digit revenue growth in the U.S. for years to come, partly due to the construction of data centers supporting the artificial-intelligence boom. Some American customers have asked the company to localize more production in the U.S. to replace suppliers from Asia who are facing higher U.S. tariffs, Geissdoerfer said. 'That would help us to grow 20-30% on top in the U.S.," he said. World merchandise trade volumes beat expectations in the first three months of this year, rising by 5.3% from a year earlier, powered by a surge in imports to North America, the World Trade Organization said in a recent report. The WTO increased its forecast for trade in goods this year to 0.1% growth, having previously forecast a 0.2% decline. In Europe, the manufacturing industry has continued to improve in recent months, with forward-looking indicators for new orders, new export orders and future output all rising to three-year highs. 'This suggests that we're seeing more than just frontloading," said the ECB's Schnabel. Production in the continent's critical auto sector seems to be holding up well even though it is subject to a 25% tariff and exports to the U.S. have softened, said Adrian Prettejohn, an economist at Capital Economics. 'We expect that the previous stockpiling of goods and the impact of tariffs [will] weigh on eurozone exports, but it is not clear that there will be as dramatic a fall as may have been expected," Prettejohn said. Even in China, President Trump's chief antagonist on trade, the tariff tumult of the past few months hasn't been as damaging as feared. Chinese exports to the U.S. were about 10% lower in the first five months of the year than the same period a year earlier as tariffs bit into direct trade between the two economic superpowers. But, over the same period, overall exports grew 6%, Chinese customs data show, helped by rising shipments to Asia, Europe and Africa. Chinese exports to countries including Vietnam, Thailand and Mexico have been especially strong. Economists say that likely reflects some degree of rerouting of Chinese exports through those countries and on to the U.S. In the first four months of 2025, U.S. imports from Southeast Asia were up 28% year over year, Census Bureau figures show. U.S. imports from Asia overall increased by 10% in the first five months of the year from a year earlier, to $582 billion, despite declining trade with China. In the U.S. itself, households' net worth remains high by historical standards as a share of disposable income, potentially allowing consumers to continue spending despite higher prices, Susan Collins, president of the Federal Reserve Bank of Boston, said in a speech Tuesday. This resilience has allowed some exporters to the U.S. to pass part of the costs of tariffs on to their customers. Retailers of Parmigiano-Reggiano, the Parmesan cheese produced in a designated area of northern Italy, increased prices in the U.S. to around $43 to $45 per kilogram from $42 this year, partly offsetting an additional 10% tariff applied since April. Sales have continued to surge in the U.S., rising by 9% in the first four months of this year, in line with previous months. 'Tariffs may eventually reduce the number of people that are able to afford [the cheese], but we haven't seen that yet," said Nicola Bertinelli, president of the Parmigiano Reggiano Consortium. Cheese importers managed to offset part of the impact by importing more inventory before the tariffs kicked in. Sales of Parmesan have continued to surge in the U.S. despite higher prices following President Trump's tariffs. The cheese's producers recently stepped up their sales efforts in the U.S., sponsoring this year's Miami Open tennis tournament and unveiling a partnership with the New York Jets football team. U.S. imports from Europe surged by 37% in the first five months of the year from a year earlier, to $421 billion, with moderate growth continuing in April and May, according to Census Bureau data. Elevated profit margins at U.S. businesses suggest that they are able to bear some of the increased costs from tariffs, the Boston Fed's Collins said. 'As a result, the adverse impact of tariffs on labor market conditions and economic growth may be more limited," she said. To be sure, some of the strength in trade could unwind as firms slow their purchases in the coming months as payback for earlier hefty orders to beat the U.S. tariffs, economists say. The global economic shrug also seems to have emboldened the Trump administration to press for even higher tariffs. And some economists say it is possible the shock will come with a delay. 'Probably, people did expect more immediate effects," said the Peterson Institute's Noland. Brexit, which didn't cause the British economy to seize up when it happened but had a negative cumulative effect over time, could be a good analogy, Noland said. The level of tariffs also matters. A 10% uniform levy on all U.S. imports might have a negligible economic effect, whereas rates of 30% or 50% could be much more problematic, Noland said. European Commission President Ursula von der Leyen warned recently that such levels could cause trade between the European Union and the U.S. to freeze. Write to Tom Fairless at
Korea Herald
2 days ago
- Business
- Korea Herald
US expert warns tariffs against allies and foes alike will make America 'less well-off,' 'less secure'
A US expert on Monday stressed the need for President Donald Trump's administration to exercise restraint in imposing tariffs on allies, warning that using them against allies and adversaries alike will make America "less well-off" and "less secure." Cullen Hendrix, senior fellow at the Washington-based Peterson Institute for International Economics, made the call in an article released on the day, noting that Trump's approach to trade policy does little to distinguish between allies, rivals, enemies and the truly unaligned. The Trump administration has rolled out or threatened to impose new tariffs on its trading partners, fanning concerns that the levies could affect cohesion in the United States' alliance network at a time of a deepening Sino-US rivalry. "Wielding (tariffs) against allies and adversaries alike will make the United States less well-off — and less secure. US security and prosperity are best served by robust alliances and predictable, rules-based trade with security partners," Hendrix said. "This moment — with more active armed conflicts than at any point since the end of the Cold War and an uncertain global economic outlook — is exactly the wrong time to erode trust further through blanket tariffs. This is a time for clear strategic signals and tariff restraint — especially vis-a-vis US allies," he added. The scholar underscored the benefits that the US enjoys from cooperation with its alliances, including augmented deterrence, enhanced defense capabilities and forward-basing opportunities not to mention markets for US weapons that Washington does not sell on the open market. Despite those benefits, Hendrix pointed out that allies have not been spared from the Trump administration's tariffs and tariff threats. "While not all US allies are equally aligned ... tariffs that ignore even our most reliable partners undermine alliance cohesion," he said. Moreover, he noted that asking alliance partners to sustain a high level of defense expenditures while "damaging their economies with higher tariffs" will be "challenging" given budget constraints and commitments to social spending. "Threatening and imposing tariffs on trading partners, including free trade agreement partners, already erodes trust in US commitments," he said. "Treating alliance partners like trade adversaries will further increase intra-alliance frictions, weaken collective deterrence and invite potential adversaries — none better positioned than China — to exploit these divisions." He proposed an approach under which the US would promote free trade with established security partners, using tariffs "sparingly" and only in a "targeted" fashion. (Yonhap)
Mint
08-07-2025
- Business
- Mint
China warns US of retaliation if tariffs return, as Trump targets 14 nations with new duties: ‘Will respond resolutely'
China warned the Trump administration on Tuesday (July 8) against reigniting trade tensions by reinstating tariffs on Chinese goods starting next month. The warning came in response to President Donald Trump's move to notify trade partners of sharply higher tariffs set to begin August 1, unless new agreements are reached. In a strongly worded commentary published by the People's Daily, the ruling Communist Party's official mouthpiece, Beijing said, 'One conclusion is abundantly clear: dialogue and cooperation are the only correct path.' The article was signed under the pseudonym 'Zhong Sheng', a term used by the publication to signal official views on foreign policy. Trump's plan to restore tariffs—initially delayed in April—could unravel the fragile truce both sides reached in June. China now has until August 12 to strike a deal with the US to avoid the reimposition of duties that were paused following earlier tit-for-tat exchanges. The People's Daily commentary dismissed the looming tariff deadline as a 'so-called 'final deadline'', and hinted at renewed retaliation if Washington moves forward unilaterally. According to the Peterson Institute for International Economics, the current average US tariff on Chinese goods stands at 51.1%, while China imposes an average 32.6% duty on US products—both sides now covering the entirety of bilateral trade. China continues to reject Washington's approach, reiterating its stance that the tariffs amount to economic coercion. The People's Daily stated: 'Practice has proven that only by firmly upholding principled positions can one truly safeguard one's legitimate rights and interests.' The editorial also criticised regional economies—without naming specific countries—for considering deals with the US that reroute supply chains away from China. The move was seen as a threat to Beijing's central role in global trade networks. In a veiled reference to Vietnam, which recently secured a tariff reduction on US exports, the paper warned: 'China firmly opposes any side striking a deal that sacrifices Chinese interests in exchange for tariff concessions.' 'If such a situation arises, China will not accept it and will respond resolutely to protect its legitimate interests.' Vietnam reportedly agreed to a tariff cut from 46% to 20%, with goods transshipped from China to be levied at 40%, prompting strong objections from Beijing. US President Donald Trump on Monday (July 7) sent formal letters to 14 countries, including Japan and South Korea, announcing new tariffs ranging from 25% to 40% on imports, effective August 1. The move marks a renewed push to force new trade deals before an earlier-imposed July 9 deadline. The letters cited 'significant trade deficits' and warned of penalties for any retaliatory tariff hikes, stating such moves would be matched 'on top of the 25%' rate. However, the letters also left room for negotiation, with Trump saying the US would 'perhaps consider an adjustment' if trade barriers are removed. Trump offered these countries a chance to avoid tariffs if their firms build or manufacture products in the US. And, if these nations impose retaliatory tariffs, the US would add that amount to the declared base tariff. Goods transshipped to evade tariffs will be subject to the higher rate. The United States has extended the suspension of its reciprocal tariffs, initially announced on April 2, until August 1, offering temporary relief to Indian exporters and allowing more time for trade negotiations between New Delhi and Washington. The suspension, which was set to expire on July 9, has been extended through an executive order issued by the White House. The order cited 'additional information and recommendations from senior officials,' including updates on the progress of discussions with trading partners, as the basis for the extension. 'In light of this information, it is necessary and appropriate to extend the suspension effectuated by Executive Order 14266 until 12:01 a.m. EDT on August 1, 2025,' the White House said. On April 2, President Trump had announced reciprocal tariffs on several countries, including a 26% duty on Indian goods, but implementation was paused for 90 days to give partners time to negotiate trade deals with the US.
