Latest news with #Trumpflation
Yahoo
02-06-2025
- Business
- Yahoo
Commentary: Why businesses want to blame Trump for price hikes
If prices go up, do you care why? Businesses certainly think so, which is why they're calling out the Trump tariffs, even at the risk of provoking a combative president. Trump's new taxes on imported goods haven't reignited inflation yet, but many economists think they're about to. Overall, Trump has raised the average tariff on some $3 trillion of imported goods from 2.5% to about 18%. Most goods on shelves now come from pre-tariff inventories. But those supplies will soon start to run out, and many goods — including clothing, medicine, appliances, toys, cars, and car parts — will bear the higher cost of tariffs that in most cases add 10% to 30% to the cost of imported goods. The battle is fully underway over who should get the blame when higher prices hit consumers. Companies such as Walmart (WMT), Mattel (MAT), Microsoft (MSFT), and Ford (F) have said openly that tariffs will lead to higher costs for consumers. Trump has fired back, saying American businesses should 'eat' the tariffs by fully absorbing the higher costs without charging consumers more. Read more: What Trump's tariffs mean for the economy and your wallet Trump's bully megaphone works, to some extent. Amazon (AMZN) considered, then abandoned, a plan to highlight the added cost of tariffs in a line item on its website, then backed down when Trump complained to executive chair Jeff Bezos. Some companies hope to avoid Trump's ire by using elliptical language to explain price hikes. Subaru (7270.T), for instance, recently said it's raising the price of several models because of 'current market conditions,' with no mention of tariffs. But there's thorough evidence that consumers will end up bearing the cost of Trump's tariffs, and the blame game will intensify as consumers start to notice higher prices and get angry at… somebody. Businesses see it coming, and they have good reasons for trying to head off another hit to their reputation. Many consumers already blame corporate America for the elevated inflation that began in 2021 and peaked at a punishing 9% in 2022. President Joe Biden and Vice President Kamala Harris, the Democratic presidential nominee in 2024, both hammered corporations for 'price gouging,' even though research has shown they were mostly passing along their own higher are already blaming big companies for Trumpflation, even if it's premature. New polling by Morning Consult finds that 57% of Americans blame US companies for tariff-related inflation, up from 34% when the research firm asked a similar question in January about tariffs that were then hypothetical. In the same poll, 80% of respondents said they blame Trump. But that may not cheer many companies raising prices, since consumers can perceive more than one villain and still punish companies, even if they're playing a supporting role. Big companies such as Walmart may seem like monolithic profit machines that don't care if their customers hate them, no matter how much lip service they pay to branding and their so-called 'stakeholders.' But they do care, because brand strength can provide an edge against competitors, especially in cyclical, lower-margin businesses such as retail. Consumer-facing businesses spend bajillions to establish brand loyalty and keep customers for as long as possible, a task that rising prices makes a lot harder. A 2024 study by the Boston Consulting Group found that with inflation top of mind, 30% of shoppers would buy from a different source if they could save money. Price, not quality, was the top factor driving consumers to switch purveyors. A 2024 Gartner study found a strong correlation between price stability and brand loyalty, with 80% of survey respondents saying brands that offer consistent pricing are more trustworthy. Those findings suggest that what really irks shoppers is unexpected or abrupt price changes rather than any given price level. The Trump tariffs are unexpected and abrupt by nature, since businesses can't anticipate them and there's no public playbook. Trump may even relish the shock his tariff threats cause, since it keeps attention on him and his power to move markets. Read more: How to protect your savings against inflation That leaves businesses with the awkward choice of either blaming price hikes on Trump and risking his wrath or leaving their customers guessing about why they're raising prices. Publicly owned companies have some cover because they're obligated to be transparent with shareholders about factors affecting costs, pricing, revenue, and profitability. Trump would have to change corporate disclosure laws to relieve CEOs of that burden, and that's not in the cards. Smaller companies, wholesalers, and generic suppliers can be frank with their customers about Trumpflation because Trump isn't likely to see them on the evening news bashing his import taxes. In fact, the more that companies connect the Trump tariffs with price hikes throughout the supply chain, the more this will become a mainstream narrative that Trump can't refute. It's already happening. Though tariff price hikes aren't here yet, the University of Michigan's monthly surveys show that consumers are broadly bracing for another spurt of inflation during the next 12 months, caused specifically by Trump's tariffs. The message businesses are trying to send is already getting through. It will be clearer yet when shoppers begin to see the tariff-related price hikes with their own eyes, especially if the sellers are telling them why. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. 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
Economic Times
12-05-2025
- Business
- Economic Times
Why are US natural gas prices rising, and what does it mean for American families?
Market Technicals and Supply Constraints Live Events Weather-Driven Demand 'Trumpflation' and Tariffs on Energy Imports Impact on American Families What Comes Next? FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel With US natural gas prices up more than 14 percent over the past month, many American families are poised to see their utility bills rise by up to $30 a month as higher fuel and power‐sector costs get passed through to gas prices have risen from around $3.47 to nearly $3.80 per million British thermal units (MMBtu) in the last few days, driven by tighter supplies, technical buying, a brief outage at a key LNG export plant, and forecasts for hotter-than-normal summer and economic policies of the Trump administration, particularly new tariffs on energy imports under his first 100 days, are adding an extra layer of cost pressure and translating into higher heating and electricity bills for families and small businesses across the natural gas futures broke above the 50-day exponential moving average (about $3.47/MMBtu), many traders jumped back in, betting on further gains above resistance at $3.72/ major US producers like Diamondback and Coterra announced cuts to rig counts and capital spending in the Permian Basin, setting the stage for slower output growth later this National Weather Service and private forecasters predict above-normal cooling degree days across the Lower 48 through mid-May, signaling an earlier start to air-conditioning season. That additional power-sector demand tightens balances and lifts natural gas his first 100 days, President Trump has imposed a 10 percent tariff on Canadian energy exports, including natural gas, intended to 'minimize disruptive effects,' but adding cost to U.S. imports. Goldman Sachs warns these tariffs could push core inflation up to 3.8 percent by year-end, reversing recent gains toward the Fed's 2 percent note grocery and energy prices are already outpacing wage growth for many a middle-class family in Cleveland that relies on natural gas for both heating and cooking, a $0.30 rise per MMBtu can translate into an extra $20–$30 on next month's bill. Small manufacturers in the Midwest, who use gas-fired furnaces, report tightening margins and are already planning modest price increases for their EIA(Energy Information Administration) now projects the Henry Hub spot price to average $4.19/MMBtu in 2025, up nearly 90 percent over last year, before climbing further to $4.47/MMBtu in 2026 as LNG exports and seasonal power demand grow. If the summer heat wave deepens, or if geopolitical tensions flare further, we could see another leg up in consumers, that means keeping an eye on usage, exploring efficiency upgrades, and budgeting for potentially higher energy bills in the months as technical traders fuel short-term rallies, real-world factors outages at major export terminals, summer cooling demand, and new tariffs, are the main drivers tightening the US natural gas market.: Be mindful of your natural gas consumption, especially during peak demand periods.: Consider investing in energy-efficient appliances and insulation to reduce heating and cooling costs.: Plan your monthly expenses to accommodate potential increases in utility solutions include diversifying energy sources, investing in renewable energy, and improving energy efficiency across sectors. Policy decisions at the federal and state levels will play a crucial role in shaping the future of energy prices.
1News
30-04-2025
- Business
- 1News
Major bank forecasts Reserve Bank may need to cut OCR deeper
The Reserve Bank may have to cut its benchmark cash rate even further to support the economy after the Government said it would slash the amount available for new policies to $1.3 billion, according to an economist. Finance Minister Nicola Willis in a pre-budget speech said the May 22 Budget would be no "lolly scramble" with any increase in spending going to targeted priorities in health, education, and defence, with some modest support for business growth. ASB Bank senior economist Mark Smith said the Government had a clear intention of getting its house in order, and in doing so would reduce its stimulus for the economy. "Really, what it's doing, is to put more onus on the Reserve Bank to try and provide more support to the economy. Trimming operational spending increases will result in a more contractionary impulse. "As a result, the official cash rate (OCR) will be lower than it would otherwise be." The RBNZ has previously signalled the OCR to fall to a neutral rate around 3% by the end of the year, but noted in its April decision that there was much uncertainty and future cuts would be influenced by medium-term inflation expectations continuing to fall. Smith said the Government's Budget cut would cut about 0.3% off the value of the economy, which would be a dampener on an already struggling economy. That would help ease possible inflation pressures, but raised the prospect the RBNZ might need to support the economy with interest rate cuts and cheaper borrowing costs. But too much stimulation can cause inflation, while inflation risks are raised by tariffs and trade wars, justifying a high OCR. BNZ head of research Stephen Toplis said "Trumpflation" — a simultaneous mix of rising inflation and poor growth caused by higher tariffs — was causing leading central banks around the world headaches in forecasting and pointing to their interest rate strategies. The RBNZ might find itself following the lead of the Bank of Canada and the European Central Bank in not issuing guidance on interest rates in the May 28 monetary policy statement, he said. Slowing growth and rising inflation — stagflation — is not in the playbook, and will have the RBNZ dusting of one of its favourite soundbites: "Least worse choice." By Jeffrey Halley of
NZ Herald
29-04-2025
- Business
- NZ Herald
ASB forecasts Reserve Bank may need to make deeper OCR cuts
'Really, what it's doing, is to put more onus on the Reserve Bank to try to provide more support to the economy. Trimming operational spending increases will result in a more contractionary impulse. 'As a result, the Official Cash Rate (OCR) will be lower than it would otherwise be.' The RBNZ has previously signalled the OCR to fall to a neutral rate about 3% by the end of the year, but noted in its April decision there was much uncertainty and future cuts would be influenced by medium-term inflation expectations continuing to fall. Smith said the Government's Budget cut would trim about 0.3% off the value of the economy, which would be a dampener on an already struggling economy. That would help ease possible inflation pressures, but raised the prospect the RBNZ might need to support the economy with interest rate cuts and cheaper borrowing costs. But too much stimulation can cause inflation, while inflation risks are raised by tariffs and trade wars, justifying a high OCR. BNZ head of research Stephen Toplis said 'Trumpflation' — a simultaneous mix of rising inflation and poor growth caused by higher tariffs — was causing leading central banks around the world headaches in forecasting and pointing to their interest rate strategies. The RBNZ might find itself following the lead of the Bank of Canada and the European Central Bank in not issuing guidance on interest rates in the May 28 monetary policy statement, he said. Slowing growth and rising inflation — stagflation — is not in the playbook, and will have the RBNZ dusting off one of its favourite soundbites — 'least worse choice'.
RNZ News
29-04-2025
- Business
- RNZ News
ASB forecasts Reserve Bank may need to make deeper OCR cuts
Inflation risks are raised by tariffs and trade wars, justifying a high OCR. Photo: RNZ The Reserve Bank may have to cut its benchmark cash rate even further to support the economy after the government said it would slash the amount available for new policies to $1.3 billion, according to an economist. Finance Minister Nicola Willis in a pre-budget speech said the 22 May Budget would be no "lolly scramble" with any increase in spending going to targeted priorities in health, education, and defence, with some modest support for business growth. ASB senior economist Mark Smith the government had a clear intention of getting its house in order, and in doing so would reduce its stimulus for the economy. "Really, what it's doing, is to put more onus on the Reserve Bank to try and provide more support to the economy. Trimming operational spending increases will result in a more contractionary impulse. "As a result, the official cash rate (OCR) will be lower than it would otherwise be." The RBNZ has previously signalled the OCR to fall to a neutral rate around 3.0 percent by the end of the year, but noted in its April decision that there was much uncertainty and future cuts would be influenced by medium-term inflation expectations continuing to fall. Smith said the government's Budget cut would cut about 0.3 percent off the value of the economy, which would be a dampener on an already struggling economy. That would help ease possible inflation pressures, but raised the prospect the RBNZ might need to support the economy with interest rate cuts and cheaper borrowing costs. But too much stimulation can cause inflation, while inflation risks are raised by tariffs and trade wars, justifying a high OCR. BNZ head of research Stephen Toplis said "Trumpflation" - a simultaneous mix of rising inflation and poor growth caused by higher tariffs - was causing leading central banks around the world headaches in forecasting and pointing to their interest rate strategies. The RBNZ might find itself following the lead of the Bank of Canada and the European Central Bank in not issuing guidance on interest rates in the May 28 monetary policy statement, he said. Slowing growth and rising inflation - stagflation - is not in the playbook, and will have the RBNZ dusting of one of its favourite soundbites - "least worse choice". Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
