US Economy Has Been 'Relying on Kindness of Strangers' For 3 Years
Jayati Bharadwaj, FX and macro strategist at TD Securities, breaks down why the US Dollar has remained weak, even as other economic indicators are strong amid Trump's trade war. (Source: Bloomberg)
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Hamilton Spectator
25 minutes ago
- Hamilton Spectator
Rejecting Trump's rhetoric, Maine's governor heads to Maritimes to build ties
HALIFAX - Maine's governor is heading to the Maritimes next week with hopes a charm offensive will slow the rapid drop in Canadian tourist visits to her state. In a release issued Friday, Janet Mills says she's aware the historically close relationship between New England and its northern neighbours has been challenged by U.S. president Donald Trump's tariffs and his rhetoric about Canada becoming the 51st state. According to U.S. federal border crossing data released Friday, 85,000 fewer Canadians entered Maine in May than in the same month a year ago, a drop of about 27 per cent. The governor says she will spend three days meeting with premiers, appearing in local media and visiting businesses in hope of sending a message that Maritimers remain 'welcome in Maine' despite Trump's trade policies. On Monday, the governor will stop in Saint John, N.B., where she intends to visit businesses with links to Maine and she then will travel to Fredericton to hold talks with New Brunswick Premier Susan Holt. On Wednesday, Mills will meet with Nova Scotia Premier Tim Houston in Halifax and tour a marine technology centre. Last month, the governor unveiled new, bilingual signs welcoming Canadian visitors, which are being placed in windows around the state. On June 13, in her weekly radio address, Mills said she wants to ensure the 'historic friendship and deeply intertwined economies last for generations to come.' 'It's not just our economies – we are connected so deeply by mutual economic advantages and on centuries-old familial, cuisine, language, and cultural bonds that far supersede politics,' she told her listeners, reminding them that Canada is the United States' closest and most important trading partner. The Democratic Party member said Trump's 'roller coaster tariffs' are unsettling business in her state and 'making our Canadian neighbors feel unwelcome in the United States.' In 2024, nearly 800,000 Canadian visitors spent approximately US$498 million in Maine, according to the state's Office of Tourism. Overall, the data showed Maine welcomed 14.8 million visitors, who spent more than US$9.2 billion, supporting 115,900 jobs and generating US$5.4 billion in wages. This report by The Canadian Press was first published June 21, 2025. Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy . This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Want more of the latest from us? Sign up for more at our newsletter page .
Chicago Tribune
an hour ago
- Chicago Tribune
How Senate Republicans want to change the tax breaks in Trump's big bill
WASHINGTON — House and Senate Republicans are taking slightly different approaches when it comes to the tax cuts that lawmakers are looking to include in their massive tax and spending cuts bill. Republicans in the two chambers don't agree on the size of a deduction for state and local taxes. And they are at odds on such things as allowing people to use their health savings accounts to help pay for their gym membership, or whether electric vehicle and hybrid owners should have to pay an annual fee. The House passed its version shortly before Memorial Day. Now the Senate is looking to pass its version. While the two bills are similar on the major tax provisions, how they work out their differences in the coming weeks will determine how quickly they can get a final product over the finish line. President Donald Trump is pushing to have the legislation on his desk by July 4th. Here's a look at some of the key differences between the two bills: The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees.
Boston Globe
an hour ago
- Boston Globe
This is ground zero in Trump's trade war
The Port of Los Angeles, along with a nearby facility in Long Beach, makes up a shipping complex that stretches across nearly 75 miles of Southern California shoreline. The ports are a bellwether for trade and the U.S. economy. Together, they move an astonishing 40% of the goods that come into the United States via containers. They also account for 30% of what the country exports. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up As Trump's chaotic and aggressive tariff strategy has seesawed this year, activity here has, too. That has threatened the livelihood of the roughly 100,000 workers at the port complex and complicated life for the hundreds of thousands of companies that bring goods through the port each year. The trends at the port hint at the pain that will ripple through the broader economy in the coming months as fewer and higher-priced goods travel from ports and warehouses to U.S. stores and consumers. Advertisement The ports experienced a surge of activity this year when shippers rushed to bring in goods before tariffs that reached their highest levels in a century. That rush has faded, and trade has become more sluggish. With higher tariffs set to snap back within weeks, importers and port workers remain cautious, unsure of what their futures will hold. Advertisement Most arrivals to the Southern California ports come from China. After Trump ratcheted up tariffs on Chinese goods to at least 145% in April, many shipments between the world's two largest economies came to a halt. From March to April, U.S. imports and the trade deficit plummeted by the biggest volume on record. In the roughly four weeks that the 145% tariffs were in effect, future bookings to send shipping containers from China to the United States plunged by half from a year earlier, according to data from Vizion and Dun & Bradstreet, which track global shipping activity. In May, Chinese exports to the United States were down roughly 35% from a year earlier, the biggest drop in decades apart from the pandemic. For the Port of Los Angeles in particular, May was the slowest month in more than two years. Now the port is preparing for another uptick in traffic, a delayed reaction after the president paused some levies in April so he could negotiate new trade deals. Bookings have since rebounded modestly, especially after an agreement in early May between the United States and China to reduce some of the tariffs they specifically targeted against each other. The surges and crashes are lowering the supply of certain goods. They are also pushing up the costs for companies to import goods. The cost of shipping a container to Southern California from China has doubled since the start of March, according to data from Freightos, a shipping marketplace, as importers try to find space on vessels in case tariffs increase. Advertisement For some economists, these compounding forces hold ominous implications. While inflation this year has stayed relatively steady so far, economists say the higher cost for imports could filter more noticeably into prices in stores later this year. Consumer demand could also weaken, a reaction in part to rash purchasing in the early months of 2025 before tariffs took effect. Companies and people rushed to buy machinery and cars, furniture and computers, meaning they could most likely spend less later this year. Mark Zandi, the chief economist of Moody's Analytics, said the tariffs posed a 'very significant threat to the economy' that would become visible in the next few months. 'The hit to the economy is dead ahead,' he said. 'We haven't dodged that bullet.' The ports are an illustration of the effects of globalization that Trump criticizes. As factories moved abroad over decades, particularly to China, the ports formed one end of a busy ocean superhighway. Most of that traffic flows in one direction. For every four containers that arrive stuffed with foreign cars, textiles and toys, only one is sent out filled with corn, soybeans and other U.S. exports. The other three containers often return empty -- evidence of the trade deficit that the president rails against. Trump has used tariffs to try to force Americans to buy more domestically made goods instead. The problem, critics say, is that this strategy threatens many jobs that Americans hold now, which are dependent on trade, without much indication that manufacturing could thrive again in the United States. Advertisement Only 8% of Americans work in manufacturing, down from 22% in 1980. Since Trump has returned to office and adopted protectionist policies, the number of manufacturing jobs is still roughly flat, according to the Labor Department. In fact, spending on the construction of new factories has slumped in recent months. 'Maybe it's a worthwhile goal to incentivize manufacturing jobs, but the way that we're going about it is putting a lot of other jobs at risk,' said Mario Cordero, the CEO of the Port of Long Beach. The days of U.S. manufacturing dominance, he added, are 'long gone.' Today, the ports are an economic engine in their own right, supporting the communities that blanket the rolling coastal hills leading down to San Pedro Bay. Across Southern California, port officials estimate, 1 million jobs are tied to the port, including truckers, warehouse workers, manufacturers and freight forwarders. Their jobs now hinge on the terms of trade set by the president. On the recent Thursday, the effects of the tariffs were evident in the union hiring hall across the channel from the Port of Los Angeles where dockworkers go each morning to claim new assignments. The screens displaying jobs for daily workers showed about 40% fewer positions than normal. Some truckers say tariffs have already hammered their business. Erick Gordon, the vice president of Redefined Transportation, a trucking business based in Long Beach, said he was moving roughly half the number of containers that he did last year. In response, his company had lowered its rates, pushed harder to get new business and let half its drivers go. He has had to sink money into his business just to hang on for now. Advertisement 'They're almost killing the industry,' he said. 'It's survival mode.' The last time the United States raised tariffs so high was nearly a century ago, when Congress passed the Smoot-Hawley Tariff Act in 1930. The move was meant to protect U.S. businesses during the Great Depression. It instead instigated a global trade war and deepened the economic crisis. Within two years, imports fell 40%. It took years for trade to recover. The Port of Los Angeles was founded two decades before, in 1907, and it blossomed because of its connection to major railroads. In the 1960s, the advent of the shipping container and the growth of factories in Asia began to transform the port. By the end of the 1980s, the Port of Los Angeles had eclipsed the ports of New York and New Jersey as the country's largest. After China's entry into the World Trade Organization in 2001, Chinese factories and the port grew in tandem. Now 45% of the port's business is connected to China, followed by Japan, Vietnam, South Korea and Taiwan. It receives some of the world's largest container ships, stretching the length of four football fields and holding tens of thousands of steel containers. Over the last decade, the ports have undergone a crash course in dealing with disruption. They say it has helped them in the current moment. Trump's trade war against China during his first term hit the ports hard. Shipments from China dropped sharply, though traffic from some other countries, like Vietnam, grew double digits. Advertisement With the onset of the pandemic, factories shuttered in China, and imports plunged again. Then the ports experienced an uptick as Americans stuck at home began mass ordering exercise equipment, office furniture, toys and video games. Jon Poelma, the managing director of APM Terminals, which is part of the Port of Los Angeles, said the pandemic had taught the port lessons about handling the shortages and surges it was seeing now, including how to maximize space when the port is overcrowded and better share information to speed up the flow of cargo. 'We got used to it,' he said. 'We tested our ability to handle pain.' Last month, dozens of semi trucks and self-driving straddle carriers were buzzing around the terminal, stacking pink, white, blue and gray containers. Hulking blue container ships stained with rust rose up behind the stacks. The part of the port that Poelma runs -- the biggest container terminal in the Western Hemisphere -- was emptier than in previous weeks. But it was still performing well compared with last year, in part because of its partnership with a major shipping alliance used by big retailers that have continued to bring in shipments when smaller companies have not. Poelma admitted that most importers were having trouble trying to figure out how to forecast demand. And he did not see those challenges abating anytime soon. 'The one thing that is certain is that it continues to be very uncertain,' he said. This article originally appeared in
