Latest news with #U.S.CommerceDepartment
Time of India
5 days ago
- Business
- Time of India
Fed policymakers meet as new data raises growth concerns, geopolitical risks rise
Federal Reserve officials met on Tuesday armed with new economic data that could give more weight to their concerns that Trump administration policies, or at least the intense uncertainty around them, will slow growth in the coming months. Shortly before the start of the two-day policy meeting, the U.S. Commerce Department reported that U.S. retail sales fell 0.9% in May, exceeding the expected 0.7% decline in a Reuters poll of economists and marking the biggest drop in four months. The U.S. central bank itself then released a report showing a surprise contraction in industrial production last month. The data, however, was hardly clear-cut. The retail sales report, with revisions also showing a small drop in April, was heavily influenced by slower auto sales after a surge earlier in the year driven by consumers hoping to avoid 25% levies on imported vehicles. Bad weather may have also been an influence, said Bradley Saunders, a North America economist at Capital Economics, with sales of an underlying group of goods more closely related to broader economic conditions suggesting "overall consumption continues to look healthy." The 0.2% drop in industrial production, however, pushed overall capacity utilization down 77.4%, its lowest level since January. A separate survey showed sentiment among homebuilders slid to the lowest point in two and a half years amid weak demand among buyers and high financing costs, a factor tied to monetary policy and the Fed's reluctance to reduce interest rates any further until it is clear that President Donald Trump's tariff policies won't lead to a persistent increase in inflation. Recent inflation data has been tame despite rising tariffs, but the Fed is still trying to reduce the pace of price increases to 2% after it surged in the years following the COVID-19 pandemic - with tariff-driven price hikes still seen as on the way. The risk of rising prices remains a dominant concern for the central bank despite signs the economy overall may be slowing. Trump's final tariff plans remain unclear, with trade deals promised but still not done with dozens of nations he has threatened to tax, and one-off proposals to levy specific goods like appliances that may or may not be implemented. Ongoing hostilities between Iran and Israel, meanwhile, have boosted the price of oil, another risk the Fed must contend as it prepares to release on Wednesday a new policy statement and updated policymakers' economic and interest rate projections. James Knightley, chief international economist at ING, noted that the retail sales data is not adjusted for inflation, and the drop, once accounting for price rises, "paints a weak picture that reflects subdued consumer confidence readings. Households are nervous that tariff-induced price hikes will squeeze spending power while respondents have become much more cautious on job prospects, and this suggests that consumer spending will continue to cool through this year." How to balance the risk of slowing growth against the risk of anticipated higher inflation will be at the center of Fed policymakers' debate on Tuesday and Wednesday, along with likely discussion of the implications of the crisis in the Middle East. FED FORECASTS The U.S. central bank is widely anticipated to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, and repeat that it can't give much guidance until it is clearer whether Trump's import tariffs and fiscal policies push inflation higher, undercut growth, or - as his administration contends will happen - keep growth on track while prices ease. Trump has demanded immediate rate cuts. Days of intense missile exchanges between Israel and Iran, however, have presented the Fed with even more reason for caution after oil prices jumped again on Tuesday and presented a possible new source of inflation. The conflict highlights the uncertainty Fed officials say has gripped their policy debate since Trump returned to power in January and unveiled a far more aggressive effort than expected to raise import taxes and rewrite global trade rules. Fed officials and many economists have largely expected that Trump's trade policies will have a stagflationary effect on the U.S. economy, simultaneously slowing growth and raising prices, with the monetary policy path - whether rate cuts or an extended hold of borrowing costs at the current level - dependent on which problem seems to be more serious. The Fed will issue a new policy statement as well as updated projections for the economy and the benchmark interest rate at 2 p.m. EDT (1800 GMT) on Wednesday, with Fed Chair Jerome Powell scheduled to hold a press conference half an hour later. The central bank's Summary of Economic Projections may draw more attention than the policy decision itself, as analysts and investors look for evidence of how Fed officials' views of the outlook have changed since their last set of projections in March, before the scope of Trump's tariff plans became clear but also before he delayed some of the stiffest levies in the face of largely negative market reaction. Live Events Fed officials in March marked down their expectations for economic growth this year and raised their level of expected inflation, but left unchanged the median outlook for two quarter-percentage-point rate cuts this year. Though that rate outlook matched the one in December, the spread of views in the Fed's "dot plot" chart narrowed, and some analysts anticipate a further hawkish shift in light of the central bank's emphasis on keeping inflation controlled and expectations that Trump's new tariffs still will lead to price increases. "Trade policy developments have likely led to a significant change in Fed forecasts," towards even slower growth and higher inflation this year than expected as of March, Michael Feroli, chief U.S. economist at JP Morgan, wrote on Friday.
Yahoo
13-06-2025
- Business
- Yahoo
50% tariff hike imposed on freezers, other appliances
This story was originally published on Facilities Dive. To receive daily news and insights, subscribe to our free daily Facilities Dive newsletter. Facilities managers planning to buy appliances in the near term could face higher prices after a 50% tariff on aluminum and steel derivative products takes effect June 23. The U.S. Commerce Department on June 12 issued a notice applying the tariff on the steel and aluminum content in a handful of imported appliances: freezers, refrigerator-freezers, dryers, stoves, ranges and ovens, food-waste disposals and some wire racks. The tariff isn't on the appliance itself but on the steel or aluminum content contained in it. 'The tariff imposed … will be assessed on these derivative products for the value of the steel content in each product,' the notice says. The tariffs come after the Trump administration in an earlier action doubled the tariffs on steel and aluminum. 'The increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market and thereby undercut the competitiveness of the United States steel and aluminum industries,' Trump said last month in the proclamation imposing the tariff increase. In response to that earlier increase on steel and aluminum costs, at least one U.S. manufacturer said it would raise the prices of its appliances to offset its higher material costs. 'Due to extraordinary upward cost pressures affecting our business, GE Appliances will implement targeted price increases,' GE Appliances told retailers in an email last month. The email was reported on by 10 News in San Diego. The goal of this latest round of tariffs on targeted appliances is to raise the cost of foreign-made appliances not subject to the higher material costs so U.S. manufacturers can be more price competitive, according to reports. 'The new tariffs are meant to shield American-made appliances that are made with steel from cheaper foreign-made products,' a New York Times report says. Recommended Reading Tariffs' impact on commercial real estate 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
Yahoo
05-06-2025
- Business
- Yahoo
US Trade Deficit Contracted in April Amid Tariff-Driven Import Paralysis
The U.S. trade deficit took a significant plunge in April after President Donald Trump announced aggressive, sweeping tariffs on countries across the globe. U.S. Commerce Department data showed that the trade gap between America and its trading partners narrowed drastically as imports into the U.S. fell by 16 percent. The trade deficit rang in at $61 billion in April—less than half of the $140 billion seen just one month earlier. More from Sourcing Journal LA, Long Beach Ports Brace for Potential Record-Breaking Summer Surge Old Dominion Blames 'Economic Softness' for Revenue, Volume Slips Trump Doubles Duties on Metals, Judge Dismisses California's Tariff Lawsuit At the same time, America's exports grew. April saw the U.S. export $289.4 billion in products and services, $8.3 billion more than the volume seen in March. Meanwhile, April imports amounted to $351 billion, $68.4 billion less than the previous month, when many businesses frontloaded inventory in an effort to beat the tariff deadline. Imports of consumer goods decreased $33 billion in April after the shipping boom in March. Apparel bookings in particular took a precipitous, 60-percent tumble in anticipation of the tariff fallout. Not surprisingly, American imports from Canada and China took particularly hard hits amid massive trade tensions spurred by Trump's tariff threats. Canadian imports fell 15.7 percent to their lowest levels since 2021, compounding a drop of over 9 percent in March. Meanwhile, goods coming into the country from China fell 21 percent to their lowest levels since 2020. According to the Bureau of Economic analysis, the average goods and services deficit decreased $22.9 billion to $107.3 billion for the three months ending in April—basically, Trump's first 90 days in office. Average exports increased $5.6 billion to $283 billion in April, while average imports decreased $17.2 billion to $390.4 billion. But while the deficit has contracted significantly in 2025, it's actually grown quite a bit from the same period the year prior. Year-to-date, the deficit in goods and services grew $179.3 billion—a whopping 65.7 percent—from the same period in 2024. Over the course of the past year, exports ticked up 5.5 percent, or $58.4 billion, but imports also increased 17.8 percent, or $237.8 billion. Trump's trade policy, which has hinged on the broad application of double-to-triple-digit duties, was conceived as a means of dealing with the trade deficit and rebalancing trade with partners across the world. On April 2, which the president termed 'Liberation Day,' Trump announced reciprocal duties on about 90 nations, including the country's biggest trading partners and allies. Soon after, those duties were deferred for a period of three months, and they're slated to resume on July 9 barring changes that could result from ongoing negotiations with foreign trade officials. The White House has said in recent weeks that it has dozens of talks in process with nations eager to reach deals with the U.S. through the mutual lowering of trade barriers, though only a single provisional agreement with the United Kingdom has been formally signed. Last week, a New York Court of International Trade (CIT) ruled that many of the president's duties, levied under the International Emergency Economic Powers Act (IEEPA), were invalid, and it gave the administration 10 days to unwind the tariff actions. However, a Washington, D.C. appeals court put a stay on that ruling with the intention of reviewing the case, which was brought by several U.S. businesses and more than a dozen state attorneys general. Therefore, the tariff regime will be allowed to proceed as planned. On Thursday, Trump indicated that he had spoken to Chinese President Xi Jinping following claims last week that the country had violated its temporary trade truce with the U.S. He wrote on Truth Social that the two discussed the 'intricacies of our recently made, and agreed to, Trade Deal,' saying that the discussion resulted in a 'very positive conclusion' regarding the future of rare earth mineral trade. Trump said further negotiations would be completed 'shortly' by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Ambassador Jamieson Greer.
Yahoo
05-06-2025
- Business
- Yahoo
Trump and Xi agree to new in-person meeting after phone call amid trade tensions
President Donald Trump and Chinese President Xi Jinping held a phone call Thursday amid ongoing tensions between the two superpowers — with a new in-person meeting planned soon. Chinese state media and the Chinese foreign ministry said the call happened at the White House's request. The Chinese foreign ministry said Thursday morning that the call was ongoing as of 9 a.m. ET. In a Truth Social post just before 11 a.m., Trump said the call lasted about 90 minutes, but provided few details about it other than that it focused on trade. He said a meeting will now be held "shortly" between representatives from the two nations at a location to be determined. It's the first known call between the two leaders in Trump's second term, though the two spoke in January before Trump's inauguration. Trump had posted to social media early Wednesday to air his frustrations with how the conversations between the U.S. and China have been going. 'I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!' Trump wrote at 2:17 a.m. The U.S. and China have been locked in a heated trade war since the early days of Trump's second administration, with volleys of tariffs and retaliatory tariffs ratcheting up duties on billions of dollars' worth of goods. The White House and the Chinese Embassy did not immediately return requests for comment. The current tariff level on Chinese imports brought into the U.S. is at least 30%. That's down from the 145% punitive level Trump had imposed until a handshake agreement in Geneva last month led to a mutual stand-down that also saw China reduce its duties on U.S. imports down to 10% from 125%. But tensions heated up again Friday after Trump accused China of violating the Geneva understanding, though without adding many specifics. That prompted China to level a similar accusation against Trump on Monday. Trump remains fixated on closing America's trade deficit with China, which is the difference between how much the U.S. imports from China versus how much it exports. On Thursday, fresh data showed the gap dropped sharply in April. It's an indication that the new tariffs have begun to hit hard. Data from the U.S. Commerce Department showed the largest-ever drop in total imports. The deficit with China declined to $19.7 billion, the lowest level since March 2020. "The sharp narrowing in the April U.S. international trade deficit tells us the temporary first-quarter splurge by businesses pulling-forward demand to get ahead of tariffs has run its course," Wells Fargo economists wrote in a note after the data was released. Trump has pledged that his unprecedented tariffs gambit will lead to trade deals — but despite a flurry of promises and pronouncements that they are near, no firm deals have materialized. Even the agreement with the U.K. announced last month from the Oval Office has been described as merely a "political pact" rather than a formalized, mutually beneficial trade agreement. It's led to growing critiques that Trump's tariffs strategy has little to show so far besides scrambling the investment and hiring plans of businesses the world over. Trump faces a particularly complex set of issues with China. Alongside trade, he is also attempting to wrestle TikTok away from Chinese ownership, while seeking to stem the flow of illicit fentanyl that authorities say largely originates from Chinese manufacturers. While there are signs of slowing fentanyl seizures at the U.S. -Mexico border, there has been no sign of progress on the TikTok talks. A deadline that would force TikTok's Chinese parent company ByteDance to sell the popular social media app or face a U.S. ban is set to expire June 19. Trump now faces the prospect of having to extend the deadline for a third time. This article was originally published on
Mint
04-06-2025
- Business
- Mint
Donald Trump's 25% tariff hike on steel and aluminium comes into effect. Here's how it will impact industries
U.S. President Donald Trump's move to increase steel and aluminum tariffs by up to 50 percent will take effect on Wednesday and is anticipated to affect various sectors, including automakers and consumer goods. The tariffs on steel and aluminium imports, initially set at 25 percent, were increased to 50 percent following an executive order signed by Trump late Tuesday. These duties had stayed at 25 percent since Trump's March 12 directive to eliminate exemptions on steel and raise the aluminum tariff. 'We are going to be imposing a 25% increase. We're going to bring it from 25% to 50% – the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States," Trump was quoted as saying at a rally in Pennsylvania. In a social media post, Trump said, 'It is my great honor to raise the Tariffs on steel and aluminum from 25% to 50%, effective Wednesday, June 4th. Our steel and aluminum industries are coming back like never before. This will be another BIG jolt of great news for our wonderful steel and aluminium workers." According to the Associated Press, although tariffs on imports from other countries have been doubled, steel and aluminium imports from the United Kingdom will remain subject to a 25 percent tax following the UK's recent trade agreement with the US. The increase in steel and aluminum tariffs doubles the stakes in Trump's global trade conflict and occurred shortly after he accused China of breaching a deal with the US to jointly reduce tariffs and trade barriers on essential minerals. According to AP report, the tariff increase is anticipated to affect various sectors, including the automotive industry and household goods. This change will lead to higher prices for consumers since steel and aluminum imported into the US are essential materials for producing items such as soup cans, paper clips, refrigerators, and vehicles. The increase in tariffs may affect grocery items in the US, along with companies involved in construction and transportation. Steel and aluminum, commonly used in packaging for many household goods—especially canned products—could see an impact. The tariffs on aluminium and metals have broader effects on the construction and transportation industries overall, since numerous essential building components and materials are manufactured using these metals. Steel prices have risen by 16% since Donald Trump took office in mid-January, based on the government's Producer Price Index. By March 2025, the cost of steel in the U.S. reached $984 per metric ton, which is substantially higher compared to prices in Europe ($690) and China ($392), according to the U.S. Commerce Department. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
