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Epoch Times
a day ago
- Business
- Epoch Times
Tariffs Aim to Boost Military, AI Manufacturing—Not T-Shirts: Trump
President Donald Trump said on May 25 that his tariff policy plans are designed to bolster U.S. military and technology manufacturing, not apparel. Last month, Treasury Secretary Scott Bessent said at a White House press briefing that the administration is focused on 'the jobs of the future, not the jobs of the past.' 'We don't necessarily need to have a booming textile industry,' Bessent told reporters. 'But we do want to have precision manufacturing and bring that back.' Trump echoed these comments over the weekend. Before boarding Air Force One in New Jersey on May 25, the president agreed with Bessent that the U.S. economy does not need to increase production of sneakers and T-shirts. 'We want to make military equipment. We want to make big things,' Trump said. Related Stories 5/26/2025 5/25/2025 'I'm not looking to make T-shirts, to be honest. I'm not looking to make socks. We can do that very well in other locations. We are looking to do chips and computers and lots of other things, and tanks and ships.' In a series of posts on social media platform X, the American Apparel & Footwear Association stated that the United States cannot tariff its way 'to scale up Made in US clothing.' 'In fact, tariffs are hurting U.S. manufacturers by taxing their inputs,' the trade association 'As this is the most highly tariffed industry in the U.S., more tariffs won't bring back more production, they will only make our wardrobe more expensive. It's time to shrink fashion tariffs!' Since returning to the White House, the president has imposed levies on a wide array of products and countries worldwide. The objective has been to boost domestic manufacturing, and scores of U.S. and foreign companies have pledged trillions of dollars in private investment over the past several months. Last week, Trump said he would impose a 25 percent levy on Apple unless the tech titan moved manufacturing of the iPhone back to the United States. 'I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,' the president said in a May 23 Truth Social post. He also extended the warning to other smartphone makers, including Samsung. While the United States does maintain a small smartphone manufacturing presence, it is limited compared to other foreign markets, such as China, India, and Vietnam. Millions of smartphones are shipped to the United States every year, with Apple and Samsung accounting for the vast majority of sales. The president's latest remarks come as he pushed back a June 1 deadline for a 50 percent tariff on European Union goods to July 9. The purpose is to allow for trade negotiations between U.S. and EU officials. European stock markets rose following the delay, led by the German DAX, which rallied about 1.5 percent on May 26. Sneakers Made in America The domestic apparel industry dramatically transformed following the implementation of the North American Free Trade Agreement (NAFTA). In 1991, the United States manufactured 56 percent of domestically purchased apparel, with approximately 900,000 people employed in the industry. Today, less than 3 percent of apparel purchased in the United States is domestically produced, with approximately 84,000 apparel manufacturing jobs remaining. Workers produce garments at a textile factory that supplies clothes to fast fashion e-commerce company Shein in Guangzhou in Guangdong Province, China, on June 11, 2024. Jade Gao/AFP via Getty Images NAFTA helped kick off the trend. The trade deal eliminated tariffs on apparel and textiles traded between the three economies, which bolstered American-made yarn exports. However, many U.S. textile businesses also relocated production to Mexico to take advantage of lower labor costs. Over the past two decades, a sizable share of textile production moved to China after the country joined the World Trade Organization in 2001. Offshoring and outsourcing accelerated, with U.S. businesses taking advantage of cost savings. Beijing then advanced a comprehensive and highly integrated supply chain network that American and European companies utilized to their benefit. Chinese-made goods account for approximately 40 percent of U.S. imports of apparel and accessories. But while Trump and Bessent have not expressed a desire to restore 1991 numbers, the U.S. Trade Representative's Office says reshoring apparel production is not impossible. 'Reviving apparel production in America is not a pipe dream,' the U.S. Trade Representative's Office said in a May 3 X post. ''Made in America' is an economic and national security priority of this administration.' The Epoch Times has reached out to the National Council of Textile Organizations for comment. AI and Tanks The president has been open about his plans to make the United States a world leader in artificial intelligence. In January, Trump signed an Nvidia CEO Jensen Huang recently praised the president's efforts. 'The President would like American technology to win with Nvidia and American companies to sell chips all over the world and to generate revenues, tax revenues, invest and build in the United States,' he said at a May 24 Swedish event. 'Manufacturing in the United States, securing our supply chain, having real resilience, redundancy, and diversity in our manufacturing supply chain—all of that is excellent.' As for military manufacturing, the United States is already the world's largest weapons exporter. According to a State Department Direct military sales by U.S. companies totaled close to $201 billion, and sales arranged by the federal government climbed to nearly $118 billion. Reuters contributed to this report.
Mint
a day ago
- Business
- Mint
US economy will grow ‘north of 3%' by this time next year, predicts Treasury Secretary Scott Bessent
The US administration led by President Donald Trump expects America's growth to bounce back in the next 12 months, after the country recorded a muted growth in the first quarter, Treasury Secretary Scott Bessent said. In an interview with Bloomberg TV, Bessent said that the contraction of growth in the first quarter of the current financial year will reverse this time next year as the economic agenda of the US takes root. The top official predicted that Donald Trump's pro-growth trade policies, tax cut agenda and deregulation will together result in a pickup in activity soon. 'I expect certainly by this time next year we will be north of 3 [per cent growth], and that we will be turning the corner toward the end of the year,' Bessent told Bloomberg TV. During his campaign in 2024, Donald Trump had promised to make the lives of lower and middle income voters better. The US Tresury Secretary, however, flagged one issue that may hinder growth. He said the only concern he had was that Democrats and courts might derail the works, growth. During the first three months of the current fiscal, the US economy at an annualised rate of 0.3 per cent as businesses stocked up on imports in advance, in anticipation of the tariffs announced by Donald Trump. Bessent also spoke about the number of projects and key economic packages that the government is currently pushing, including the tax reform that Trump has labelled as 'one big, beautiful bill'. Scott Bessent said there could be 'several large' trade deals announced in the next couple of weeks, adding that he expects Trump administration officials will meet with their Chinese counterparts again in-person to negotiate those tariffs. 'My sense is, over the next couple of weeks we're going to have several large deals announced,' Bessent said during the interview. 'I expect that we will be negotiating in-person with them again.' Bessent said that most US trading partners have been negotiating 'in very good faith,' and that the European Union is an 'exception.' Trump had on Friday threatened to impose a 50 per cent tariff on EU imports. 'I think this is in response just to the EU's pace. I would hope that this would light a fire under the EU,' Bessent said regarding Trump's tariff threat. The US is 'far along' in striking a deal with India, he added. Bessent declined to specify which nations the US is likely to announce deals with in the coming weeks. He did say in a Fox interview that 'we're far along with India.'
Time of India
2 days ago
- Business
- Time of India
Trump's new tariff threats show trade uncertainty here to stay
New York: Investors were growing optimistic that Donald Trump's trade wars had started to calm down. His latest tariff broadsides quickly disabused them of that notion. Initial agreements with the UK and China buoyed hopes on Wall Street and in corporate boardrooms that the US president was starting to peel back the highest US tariffs in nearly a century. But Friday delivered a harsh reminder of Trump's volatile policymaking and penchant for brinkmanship, when he threatened a 50% tariff on the European Union and a 25% levy on smart phones if companies including Apple Inc. and Samsung Electronics Co. failed to move production to the US. Equities dropped across the globe, the dollar slumped to its lowest level since 2023 and business leaders were left to grapple with the notion that Trump-generated uncertainty is here to stay. "Today's news that Trump is threatening enormous tariffs on the EU and is singling out Apple as a firm are examples of what we we should expect for the next two months if not for the rest of the year," said Marcus Noland, executive vice president of the Peterson Institute for International Economics. "Peace has not broken out." Trump made that clear when from the Oval Office Friday afternoon, he dug in, declaring he is "not looking for a deal" with the EU. "I just said it's time that we play the game the way I know how to play the game," he told reporters. His ire was notable given that he notched a major economic win this week, with the House passing his massive tax and spending legislation after Trump led a furious, last-minute lobbying effort that won over enough Republican hold-outs. A White House official said this week that the president was hoping to ink more trade agreements with some major economies and then fast-track deals with others during a 90-day pause on his tariffs announced April 2. Some arrangements are said to be close, including one with India, Treasury Secretary Scott Bessent told Fox News on Friday. Business leaders and consumers will be watching carefully for next steps. The president's Friday directive on the EU offered a preview of what he said his administration might do with dozens of trading partners seeking lower duties: simply dictate tariff levels. As he did last month after Trump's initial tariff announcement shook markets, Bessent sought to project a sense of order onto the president's pronouncements. Bessent said in the same interview that many deals are nearing conclusion and labeled the EU as an "exception." That echoed comments from Commerce Secretary Howard Lutnick, who said at an Axios event earlier this week that the EU has been "very difficult."
Miami Herald
2 days ago
- Business
- Miami Herald
CEO Jaime Dimon's words on stocks, economy raises eyebrows
There has been a lot of chaos this year, which has meant eye-popping volatility for the markets, including stocks, bonds, and currencies. The past two years were relatively tame compared to this year. The S&P 500 delivered back-to-back gains above 20% in 2023 and 2024, including a robust 24% return last year. This year, sticky inflation, job woes, and an ongoing tussle over tariffs have created uncertainty that's taken the stock market on a roller coaster ride. To be sure, worries were growing coming into 2025. The jobs market had already weakened enough to cause the Federal Reserve to cut interest rates into the end of 2024, and inflation progress was slowing, providing little help to cash-strapped consumers. This Memorial Day, get $100 off TheStreet Pro - our best deal of the summer won't last long! Your portfolio will thank you Further, optimism over seemingly never-ending artificial intelligence spending growth had begun to wane, leading many to worry whether the massive run in stocks over the past two years had inflated valuations to unsustainable levels. In short, the backdrop was already concerning before President Donald Trump took a sledgehammer to global trade, unveiling a series of harsher-than-expected tariffs on key trading partners, including China. Related: Secretary Bessent sends message on Walmart price increases due to tariffs The result so far from all this chaos has led to a whipsawing of markets. The S&P 500 collapsed from mid-February through early April, falling nearly 20%, just shy of bear market territory. Then, a tariff reprieve in the form of President Trump pausing most reciprocal tariffs on April 9 kicked off a major rally that's erased a lot of the S&P 500's losses. Now, however, worry is returning following Moody's decision to downgrade the United States' credit rating amid a new spending and tax cuts bill making its way through Congress that would cause the deficit to swell. The bond market has seen yields rise, and signs could suggest that investors are still too complacent. This point isn't lost on JP Morgan's CEO Jamie Dimon. Dimon is among the most influential CEOs in America. He commands the largest bank in the U.S. and the fifth largest globally, a role that puts his finger directly on the economy's pulse. Bloomberg/Getty Images In so-called 'normal' times, a stalled economy can be jump-started by the Federal Reserve's monetary policy. The Fed is tasked with a dual mandate to ensure low unemployment and inflation. When the economy stutters, it can drop interest rates, increasing economic activity and boosting jobs. When it overheats, it can raise interest rates, decreasing economic activity and reducing inflation. Related: Veteran fund manager sends hard-nosed message on Fed interest rate policy It sounds simpler than it is. Especially this year. The Fed is currently caught in a pickle between its goals. While unemployment has increased to 4.2% from 3.4% in 2023, suggesting rates should be cut, inflation has proven sticky and could re-exert in the wake of tariffs, suggesting rates should be raised. In March, there were 901,000 fewer unfilled jobs in the U.S., according to the Job Openings and Labor Turnover Survey, or JOLTS. Meanwhile, over 600,000 workers have been laid off this year through April, up 87% year-over-year, according to Challenger, Gray, & Christmas. The Personal Consumption Expenditures index showed inflation was 2.3% in March, above the 2.1% recorded last September. The core index, which excludes volatile energy and food, was 2.6% in March, solidly above the Fed's 2% inflation target. If the Fed cuts rates, it risks skyrocketing inflation like in 2022, and if it raises rates, it could send the U.S. economy spiraling into recession. The dynamic has increased the odds of stagflation, a period of elevated inflation and economic weakness. Hope is that calmer heads prevail during trade talks, resulting in more manageable tariffs that won't pressure inflation as much. That optimism got a boost when the trade war with China seemingly de-escalated last month, with the U.S. reducing tariffs from an eye-watering 145% to 30%. Related: Stock market tumbles after uncommon event However, even if tariffs eventually fall, they appear to be here to stay, and even at lower tariff rates, they will represent the largest new tax on consumers in decades. That point was strengthened this week when Donald Trump renewed his commitment to tariffs, suggesting the U.S. slap a 50% tariff on the European Union because of a lack of progress on trade talks. The ongoing trade battle stresses financial markets, given how interdependent businesses have become across countries. For instance, most retailers source a large proportion of their goods from low-cost production countries in Asia, and, according to the White House, only 25% of vehicle content on cars bought by Americans can be called "Made in America." There's also the reality that the U.S. appetite for spending has been partly supported by trade imbalances, with nations like China and Japan owning much of our growing debt pile. The inability to control spending is behind Moody's downgrade of US debt, evidenced in the "Big Beautiful Bill" being debated in Washington this month. The bill, which lowers tax revenue, could add $3.3 trillion to the deficit over 10 years, according to the Tax Foundation. Dimon worries that people are far too complacent about the risk facing the US economy. More Economic Analysis: Fed inflation gauge sets up stagflation risks as tariff policies biteU.S. recession risk leaps as GDP shrinksLike it or not, the bond market rules all "The market came down 10%, it's back up 10%; I think that's an extraordinary amount of complacency," said Dimon during JP Morgan's annual shareholder event. Dimon thinks the credit market is far riskier than people realize, saying, "I am not a buyer of credit today... Credit today is a bad risk... people who haven't been through a major downturn are missing the point about what can happen in credit." He also thinks there could be a major reset in corporate earnings this year because of tariffs, bad news for stocks, given that profit growth is a cornerstone of stock market valuation. He called the tariffs still in place "pretty extreme" and warned that "the chance of inflation going up and stagflation is a little higher than other people think." Dimon wasn't completely downbeat, though. He pointed out that downturns create opportunities for companies that are ready to take advantage of them, ostensibly including JP Morgan. "The good companies benefit from the downturn," said Dimon. "You earn your stripes with your clients in a downturn. Dimon's candid take is simple: the current situation has "created a lot of risk out there. I don't think we can predict the outcome." That's not very reassuring. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
3 days ago
- Business
- Miami Herald
Trump delivers another huge tariff surprise
Visions of deregulation and tax reform initially caused a stock market surge in November 2024 upon news of President Donald Trump's re-election, with the Dow Jones, S&P 500, and Nasdaq Composite all posting substantial gains. However, since the president took office, the market has been on a bumpy ride. And there's one big reason why: Tariffs. Don't miss the move: Subscribe to TheStreet's free daily newsletter Trump has followed through on his campaign promise to try to bring manufacturing back to America by threatening, and in some cases, imposing, steep tariffs on foreign imports. The markets have, on the whole, not reacted positively to these new taxes on imported goods, but things had been looking up as the President touted preliminary trade deals with the UK and China while also appearing to backtrack on some unpopular proposals, including a threatened 100% tariff on films produced outside the U.S. Related: Walmart quietly working on genius solution to tariffs Now, however, threats of steep new tariffs on EU imports on Friday, May 23, 2025, have sent EU and European stock prices tumbling, and the value of the dollar falling. Image source:Trump made the startling new tariff threat in a post on Truth Social. His post said, in part, "The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with…Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025." In his post, the president cited a "trade deficit" of more than $250 million per year as justification for his actions, "a number which is totally unacceptable." He also went on to state that no tariffs would apply to products built or manufactured within the United States. With just days before Trump's new proposed tariff would go into effect, reports indicated there is uncertainty among White House officials and EU leaders regarding whether the Truth Social post is an official policy proposal. The post may be part of a broader negotiation strategy as trade talks continue, especially as the president and U.S. Treasury Secretary Scott Bessent have expressed dissatisfaction with the EU during the ongoing negotiations. In fact, in a Fox News interview on Friday (May 23) morning, Bessent hinted that the goal was to encourage better proposals from EU officials, stating, "I would hope that this would light a fire under the EU." Trump, however, sent mixed messages on his willingness to continue negotiations when answering questions during an executive order signing on Friday afternoon. Related: Secretary Bessent sends message on Walmart price increases due to tariffs When asked if he was interested in reaching a deal in the nine days before the 50% tariff would take hold, the president made clear, "I'm not looking for a deal… "I mean, we've set the deal. It's at 50%." Yet, he also said that "If somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay." For their part, leaders of EU countries appeared disstressed by the president's announcement Friday, with Irish Prime Minister Micheál Martin posting a message on X that he found the threat "enormously disappointing." French Trade Minister Laurent Saint-Martin stated that the President's comments "do not help at all during the negotiation period between the European Union and the United States." The stakes are high, as the EU already threatened a $108 billion reciprocal tariff on the U.S. earlier this month if trade negotiations are unsuccessful. Since the Office of the U.S. Trade Representative reports that the European Union is the second-largest purchaser of U.S. goods, the economic consequences could be catastrophic if the 50% tariff or reciprocal taxes go into effect. More Stock Market News: Nvidia CEO shares blunt message on China chip sales banFund manager has shocking Elon Musk and Tesla predictionApple CEO's business plan provokes US president Regardless of whether that happens or not, the markets are reacting badly to the uncertainty, especially as President Trump's announcement of a 50% tariff came less than 30 minutes after threatening Apple with a 25% tariff if it did not move the manufacturing of the iPhone to the U.S. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
