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Tag: Economic policy

  • Another rally for Alphabet leads the US stock market higher

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    NEW YORK (AP) — The U.S. stock market rallied on Monday, at the start of a week with shortened trading because of the Thanksgiving holiday.

    The S&P 500 climbed 1.5% for one of its best days since the summer and added to its jump from Friday, finding some strength following a shaky few weeks. The Dow Jones Industrial Average rose 202 points, or 0.4%, and the Nasdaq composite jumped 2.7%.

    Stocks got a lift from rising hopes that the Federal Reserve will cut its main interest rate again at its next meeting in December, a move that could boost the economy and investment prices.

    The market also benefited from strength for stocks caught up in the artificial-intelligence frenzy. Alphabet, which has been getting praise for its newest Gemini AI model, rallied 6.3% and was one of the strongest forces lifting the S&P 500. Nvidia rose 2.1%.

    Monday’s gains followed sharp swings in recent weeks, not just day to day but also hour to hour, caused by uncertainty about what the Fed will do with interest rates and whether too much money is pouring into AI and creating a bubble. All the worries are creating the biggest test for investors since an April sell-off, when President Donald Trump shocked the world with his “Liberation Day” tariffs.

    Despite all the recent fear, the S&P 500 remains within 2.7% of its record set last month.

    “It’s reasonable to expect that stocks will experience periods of pressure from time to time, which, historically, is quite healthy for longer-term strength,” Anthony Saglimbene, Ameriprise chief market strategist, wrote in a note to investors.

    Several more tests lie ahead this week for the market, which could create more swings, though none loom quite as large as last week’s profit report from Nvidia or the delayed jobs report from the U.S. government for September.

    One of the biggest tests will arrive Tuesday, when the U.S. government will deliver data showing how bad inflation was at the wholesale level in September.

    Economists expect it to show a 2.6% rise in prices from a year earlier, the same inflation rate as August. A worse-than-expected reading could deter the Fed from cutting its main interest rate in December for a third time this year, because lower rates can worsen inflation. Some Fed officials have already argued against a December cut in part because inflation has stubbornly remained above their 2% target.

    Traders are nevertheless betting on a nearly 85% probability that the Fed will cut rates next month, up from 71% on Friday and from less than a coin flip’s chance seen a week ago, according to data from CME Group.

    U.S. markets will be closed on Thursday for the Thanksgiving holiday. A day later, it’s on to the rush of Black Friday and Cyber Monday.

    On Wall Street, U.S.-listed shares of Danish drugmaker Novo Nordisk fell 5.6% Monday after it reported that its Alzheimer’s drug failed to slow progression of the disease in a trial.

    Grindr dropped 12.1% after saying it’s breaking off talks with a couple of investors who had offered to buy the company, which helps its gay users connect with each other. A special committee of the company’s board of directors said it had questions about the financing for the deal by the investors, who collectively own more than 60% of Grindr’s stock.

    All told, the S&P 500 rose 102.13 points to 6,705.12. The Dow Jones Industrial Average climbed 202.86 to 46,448.27, and the Nasdaq composite jumped 598.92 to 22,872.01.

    Bitcoin, meanwhile, continued it sharp swings. It was sitting around $89,000 after bouncing between $82,000 and $94,000 over the last week. It was near $125,000 last month.

    In stock markets abroad, indexes were mixed in Europe and Asia.

    Hong Kong’s Hang Seng jumped 2% for one of the world’s biggest moves. It got a boost from a 4.7% leap for Alibaba, which has reported strong demand for its updated Qwen AI app. Alibaba is due to report earnings on Tuesday.

    In the bond market, Treasury yields eased a bit. The yield on the 10-year Treasury fell to 4.03% from 4.06% late Friday.

    ___

    AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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  • Stocks climb on hopes for lower interest rates as Dow rallies 660 points

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    NEW YORK (AP) — The U.S. stock market climbed again Tuesday on hopes for a coming cut to interest rates.

    The S&P 500 rose 0.9% after breaking out of a morning lull and is back within 1.8% of its all-time high. The Dow Jones Industrial Average rallied 664 points, or 1.4%, and the Nasdaq composite gained 0.7%.

    Stocks got a boost from easing yields in the bond market. Lower interest rates can cover up many sins in financial markets, including prices going too high, and hopes are strong that the Federal Reserve will cut its main interest rate at its next meeting to juice the economy further.

    A raft of mixed economic data on Tuesday left traders betting on a nearly 83% probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance that they saw just a week ago.

    One of Tuesday’s reports said that shoppers bought less at U.S. retailers in September than economists expected. Another said confidence among U.S. consumers worsened by more in November than expected, a second signal that the economy could potentially use the help of lower interest rates.

    Easier rates can boost the economy by encouraging households and companies to borrow more and investors to pay higher prices for investments than they would otherwise.

    A third report, meanwhile, said inflation at the wholesale level was a touch worse in September than economists expected, but a closely tracked underlying trend was slightly better. That’s important because lower interest rates can make inflation worse, and high inflation is the main deterrent that could keep the Fed from cutting rates.

    After taking all the data together, economists suggested the Fed and its chair, Jerome Powell, could be leaning toward cutting rates on Dec. 10. The Fed has already cut rates twice this year in hopes of shoring up the slowing job market.

    “Taking a pause on rate cuts would probably do more damage to sentiment than a cut would help,” according to Brian Jacobsen, chief economist at Annex Wealth Management, who also said “Powell doesn’t need to be the Grinch that stole Christmas.”

    Easier interest rates can give particularly big boosts to smaller companies, because many of them need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks jumped 2.1% to lead the market.

    Elsewhere on Wall Street, several retailers leaped after delivering stronger profits for the summer than analysts expected.

    Abercrombie & Fitch soared 37.5% after the apparel seller reported a better profit than expected. It also raised the bottom end of its forecasted range for revenue and profit over the full year.

    Kohl’s surged 42.5% after reporting a profit for the latest quarter, when analysts were expecting a loss. Best Buy rose 5.3% after boosting its profit forecast for the full year following a better-than-expected third quarter, citing strength across computing, gaming and mobile phones.

    Dick’s Sporting Goods erased an early drop of 4% to add 0.2%. It raised its forecast for results at its Dick’s stores, though its purchase of Foot Locker is requiring some work. Executive Chairman Ed Stack said the company is “cleaning out the garage” at Foot Locker by clearing inventory, closing poorly performing stores and making other moves.

    Swings also continued in the artificial-intelligence industry, which has battled concerns that too many dollars are pouring into data centers and may not produce the revolution of bigger profits and productivity that proponents are predicting.

    Alphabet rose another 1.5%, continuing a strong run on excitement about its recently released Gemini AI model. Chinese giant Alibaba, meanwhile, saw its stock that trades in the United States fall 2.3% after losing an early gain. It reported stronger revenue than analysts expected for the latest quarter thanks in part to the AI boom, but its overall profit fell short of forecasts.

    Some chip companies dropped sharply following a report from The Information that Meta Platforms is in talks to spend billions of dollars on AI chips from Alphabet instead of them. Nvidia sank 2.6% and Advanced Micro Devices dropped 4.1%.

    All told, the S&P 500 rose 60.76 points to 6,765.88. The Dow Jones Industrial Average rallied 664.18 to 47,112.45, and the Nasdaq composite gained 153.59 to 23,025.59.

    In the bond market, the yield on the 10-year Treasury eased to 4.00% from 4.04% late Monday.

    In stock markets abroad, indexes rose across Europe and Asia. Germany’s DAX returned 1%, and stocks in Shanghai climbed 0.9% for two of the world’s bigger moves.

    ___

    AP Business Writer Elaine Kurtenbach contributed.

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  • World shares are mixed as traders pin hopes on a rate cut by the Fed

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    BANGKOK — World shares and U.S. futures were mixed on Monday after Wall Street was buoyed by revived hopes for an interest rate cut by the Federal Reserve.

    The future for the S&P 500 was up 0.2% while that for the Dow Jones Industrial Average was nearly unchanged.

    Germany’s DAX gained 0.5% to 23,201.85, while the CAC 40 edged less than 0.1% lower to 7,978.77. Britain’s FTSE 100 inched up 0.1% to 9,547.77.

    Markets in Japan were closed for a holiday.

    Hong Kong’s benchmark, the Hang Seng, rose 2% to 25,716.50. It got a boost from a 4.7% gain for e-commerce giant Alibaba, which has reported strong demand for its updated Qwen AI app. Alibaba is due to report earnings on Tuesday.

    The Shanghai Composite index rose less than 0.1% to 3,836.77.

    Australia’s S&P/ASX 200 gained 1.3% to 8,525.10.

    In South Korea, the Kospi reversed early gains, falling 0.2% to 3,846.06 on heavy selling of automakers.

    Taiwan’s Taiex added 0.3% and the Sensex in India shed 0.4%.

    This week, U.S. markets will be closed Thursday for the Thanksgiving holiday, which will be followed by the Black Friday and Cyber Monday retail rushes.

    After last week’s ups and downs over AI and Nvidia, traders will focus more on “the backbone of U.S. growth, the consumer, whose spending still drives two-thirds of GDP,” Stephen Innes of SPI Asset Management said in a commentary.

    Data on the U.S. economy was scarce during the 6-week U.S. government shutdown, leaving investors struggling to parse trends in the economy.

    “This makes any sniff of holiday activity — foot traffic, discount depth, card authorizations — disproportionately important. In a data desert, even a puddle looks like a lake,” he said.

    On Friday, the S&P 500 gained 1% and the Dow climbed 1.1%. The Nasdaq composite rose 0.9%. Nearly 90% of stocks in the S&P 500 advanced.

    It was a fitting finish for a week that left the S&P 500 just 4.2% below its record but also forced investors to stomach the sharpest hour-to-hour swings since a sell-off in April. The jarring moves are testing investors following a monthslong and remarkably smooth surge for stocks, and they come down to two basic as-yet unanswered questions.

    Have prices for Nvidia, bitcoin and other stars of Wall Street shot too high? And is the Federal Reserve done with its cuts to interest rates, which would boost the economy and prices for investments?

    Markets took heart from a speech by the president of the Federal Reserve Bank of New York, John Williams, who told a conference in Chile that he sees “room for a further adjustment” to interest rates.

    Other Fed officials have argued against a December cut, saying inflation is still too high.

    In the bond market, Treasury yields eased Friday on hopes for cuts from the Fed. Traders are now betting on a nearly 72% probability of a December cut, up sharply from 39% a day before, according to data from CME Group. That helped send the yield on the 10-year Treasury to 4.06% from 4.10% late Thursday.

    In other dealings early Monday, U.S. benchmark crude oil lost 43 cents to $57.63 a barrel. Brent crude, the international standard, gave up 38 cents to $61.56 a barrel.

    The U.S. dollar rose to 156.75 Japanese yen from 156.47 yen. The euro climbed to $1.1537 from $1.1516.

    Bitcoin was up 1.6%, near $86,000. On Friday, it briefly plunged below $81,000 before pulling back toward $85,000. That’s down from nearly $125,000 last month and brought it back to where it was in April, when markets were shaking because of President Donald Trump’s higher tariffs.

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  • Tea tariffs once sparked a revolution. Now they are creating angst

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    NEW YORK — A tax on tea once sparked rebellion. This time, it’s just causing headaches.

    Importers of the prized leaves have watched costs climb, orders stall and margins shrink under the weight of President Donald Trump’s tariffs. Now, even after Trump has given them a reprieve, tea traders say it won’t immediately undo the damage.

    “It took a while to work its way through the system, these tariffs, and it will take a while for it to work its way out of the system,” says Bruce Richardson, a celebrated tea master, tea historian and purveyor of teas at his shop, Elmwood Inn Fine Teas, in Danville, Kentucky. “That tariffed tea is still working its way out of our warehouses.”

    While a handful of bigger firms are behind the biggest supermarket brands, the premium tea market is largely the work of smaller businesses, from family farms to specialty importers to a web of little tea shops, tea rooms and tea cafes across the U.S. Amid an onslaught of tariffs, they have become showcases for the levies’ effects.

    On their shelves, selection has narrowed, with some teas now missing because they’re no longer viable products to stock with steep levies on top. In their warehouses, managers are consumed with uncertainty and operational headaches, including calculating what a blend really costs, with ingredients from multiple countries on a roller coaster of tariffs. And in backrooms where the wafting scent of fresh tea permeates, owners have been forced to put off job postings, raises, advertising and other investments so they can have cash available to pay duties when their containers arrive at U.S. ports.

    “If I were to add up all the money I’ve spent on tariffs that weren’t there a year ago, it could equal a new employee,” says Hartley Johnson, who owns the Mark T. Wendell Tea Company in Acton, Massachusetts.

    Johnson’s prices used to stay static for a year or longer. He ate the tariff costs before being forced to respond. His most popular tea, a smoky Taiwanese one called Hu-Kwa, has steadily risen from $26 to $46 a pound.

    He knows some customers are reconsidering.

    “Where is that tipping point?” Johnson asks. “I’m kind of finding that tipping point is happening now.”

    Though Trump backed off some tariffs on agricultural products last week, many in the tea trade are wary of celebrating too soon and caution tea drinkers shouldn’t either. Much of next year’s supply has already been imported and tariffed and the full impact of those duties may not have fully spilled downhill.

    Meantime, other tariff-driven price hikes persist. All sorts of other products tea businesses import, from teapots to infusers, remain subject to levies, and costs for some American-made items, like tins for packaging, have spiked because they rely on foreign materials.

    “The canisters, the bamboo boxes, the matcha whisks, everything that we import, everything that we sell has been affected by tariffs,” says Gilbert Tsang, owner of MEM Tea Imports in Wakefield, Massachusetts.

    Though globally, tea reigns supreme, imbibed more than anything but water, it has long been overshadowed by coffee in the U.S. Still, tea is entwined in American history from the very beginning, even before colonists angry with tariffs dumped tons of it in Boston Harbor.

    Boston may run on Dunkin’ today, but it was born on tea.

    The 1773 revolt that became known as the Boston Tea Party rose out of the British Parliament’s implementation of tea tariffs on colonists, who rejected taxation without representation in government. After an independent United States was born, one of the new government’s first major acts, the Tariff Act of 1789, ironically set in law import taxes on a range of products including tea. In time, though, trade policy came to include carve-outs for many products Americans rely on but don’t produce.

    For more than 150 years, most tea has passed through U.S. ports with little to no duties.

    That began to change in Trump’s first term with his hardline approach to China. But nothing compared to what came with his return to the White House.

    In July, the most recent month for which the U.S. International Trade Commission has tallied tariff numbers, tea was taxed at an average rate of over 12%, a huge increase from a year earlier when it was just under one-tenth of a percent. In that single month, American businesses and consumers paid more than $6 million in tea import taxes, amassing in just 31 days more tariffs than any previous full year on record.

    “All over again, taxation without representation,” says Richardson, an adviser to the Boston Tea Party Ships & Museum. “Our wants and needs and our voices are not being represented because Congress is avoiding the issue by simply allowing the president to act like George III.”

    All told, tea importers paid about $19.6 million in tariffs in the first seven months of 2025, nearly seven times as much as the same period last year.

    It’s all been confounding to those steeped in the world of tea, on which the U.S. depends on foreign countries for nearly all of the billions of pounds Americans brew each year. Though a number of small tea farms exist in the U.S., they can’t fill Americans’ cups for more than a few hours of the year.

    “We don’t have an industry and we can’t produce one overnight,” says Angela McDonald, president of the United States League of Tea Growers.

    Trump’s suspension of tea tariffs came too late for some businesses, including Los Angeles-based International Tea Importers Inc., for which tariffs created an untenable cash-flow crunch.

    “We just became over-leveraged financing not just the inventory, but also the tariffs,” says the company’s CEO, Brendan Shah.

    Tariffs weren’t the only thing the 35-year-old business was facing, but without them, Shah says it may have survived.

    “Unpredictable tariff policies,” he wrote to customers in announcing the company’s closure, “have created the final, insurmountable barrier.”

    ___

    Matt Sedensky can be reached at msedensky@ap.org and https://x.com/sedensky

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  • Sharp disagreements over economy threaten Federal Reserve interest rate cut

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    WASHINGTON (AP) — What was once seen as a near-certain cut in interest rates next month now looks more like a coin flip as Federal Reserve officials sharply disagree over the economy’s health and whether stubborn inflation or weak hiring represent a bigger threat.

    In several speeches in the past week, some policymakers have registered greater concern over persistent inflation in an echo of the “affordability” concerns that played a large role in elections earlier this month.

    At the same time, another camp is much more concerned about meager hiring and the threat that the “low-hire, low-fire“ job market could worsen into one where layoffs become more widespread.

    The turmoil on the Fed’s 19-member interest-rate setting committee reflects a deeply uncertain economic outlook brought about by multiple factors, including tariffs, artificial intelligence, and changes in immigration and tax policies.

    “It’s reflective of a ton of uncertainty,” said Luke Tilley, chief economist at M&T Bank. “It’s not surprising at all that there’s a wide divergence of opinions.”

    Fewer rate cuts by the Fed could leave borrowing costs for homes and cars elevated. More expensive mortgages and auto loans contribute to the widespread view, according to polls, that the cost of living is too high.

    Some Fed watchers say that an unusually high number of dissents are possible at the December 9-10 meeting, regardless of whether the central bank reduces rates or not. Krishna Guha, an analyst at Evercore ISI, said a decision to cut could lead to as many as four or five dissents, while a decision to keep rates unchanged could produce three.

    Four dissenting votes would be highly unusual, given the Fed’s history of seeking consensus. The last time four officials dissented was in 1992, under then-Chair Alan Greenspan.

    Fed governor Christopher Waller on Monday noted that critics of the Fed often accuse it of “group think,” since many of its decisions are made unanimously.

    “People who are accusing us of this, get ready,” Waller said Monday in remarks in London. “You might see the least group think you’ve seen … in a long time.”

    The differences have been exacerbated by the government shutdown’s interruption of economic data, a particular challenge for a Fed that Chair Jerome Powell has often described as “data dependent.” The government’s last jobs report was for August, and inflation for September.

    September jobs data will finally be published Thursday, and are expected to show a small gain of 50,000 jobs that month and an unchanged unemployment rate at a still-low 4.3%.

    For now, Wall Street investors put the odds of a December rate cut at 50-50, according to CME Fedwatch, down sharply from nearly 94% a month ago. The decline has contributed to the stock market’s drops this week.

    After cutting their key rate in September for the first time this year, Fed policymakers signaled they expected to cut twice more, in October and December.

    But after implementing a second reduction Oct. 29, Powell poured cold water on the prospects of another cut, describing it as “not a foregone conclusion — far from it.”

    And speeches last week by a raft of regional Fed officials pushed the market odds of a December cut even lower. Susan Collins, president of the Federal Reserve Bank of Boston, said, “in all of my conversations with contacts across New England, I hear concerns about elevated prices.”

    Collins said that keeping the Fed’s key rate at its current level of about 3.9% would help bring inflation down. The economy “has been holding up quite well” even with interest rates where they are, she added.

    Several other regional presidents voiced similar concerns, including Raphael Bostic of the Atlanta Fed, Alberto Musalem of the St. Louis Fed, and Jeffrey Schmid at the Kansas City Fed. Musalem, Collins, and Schmid are among the 12 officials who vote on policy this year. Schmid dissented in October in favor of keeping rates unchanged.

    “When I talk to contacts in my district, I hear continued concern over the pace of price increases,” Schmid said Friday. “Some of this has to do with the effect of tariffs on input prices, but it is not just tariffs — or even primarily tariffs — that has people worried. I hear concerns about rising health care costs and insurance premiums, and I hear a lot about electricity.”

    On Monday, however, Waller argued that sluggish hiring is a bigger concern, and renewed his call for a rate cut next month.

    “The labor market is still weak and near stall speed,” he said. “Inflation through September continued to show relatively small effects from tariffs and support the hypothesis that tariffs … are not a persistent source of inflation.”

    Waller also dismissed the concern — voiced by Schmid and others — that the Fed should keep rates elevated because inflation has topped the Fed’s 2% target for five years. So far that hasn’t led the public to worry that inflation will stay elevated for an extended period, Waller noted.

    “You can’t just sort of say it’s been above target for five years, so I’m not going to cut,” he added. “You got to give us better answers than that.”

    There could be consensus for an interest rate cut if, say, new data for October and November show the economy shedding jobs, according to Esther George, the former president of the Kansas City Fed.

    It’s also worth noting that many economists had expected multiple dissents in September, but instead only Stephen Miran, a governor appointed that month by President Donald Trump, voted against the rate cut decision, in favor of an even bigger reduction.

    “Registering a dissent is a hard decision, and I think you’re going to find people that are speaking today that wouldn’t follow through with a vote in that direction,” she said. “I think you’re going to find enough consensus, whichever way they go.”

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  • Asian shares sink, tracking a tech-led sell-off on Wall Street

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    BANGKOK (AP) — Asian shares tumbled on Tuesday, with benchmarks in Tokyo and Seoul sinking more than 3%, after Nvidia and other artificial-intelligence -related shares pulled U.S. stocks lower.

    U.S. futures dropped, with the contract for the S&P 500 down 0.6% while the future for the Dow Jones Industrial Average was down 0.4%.

    Computer chip giant Nvidia, at the center of the craze over AI, is due to report its earnings on Wednesday. Worries that stock prices of such companies have shot too high have roiled world markets recently, with big swings in places that rely heavily on trade in computer chips such as South Korea and Taiwan.

    Also hanging over the markets is the release due Thursday of U.S. employment data that was delayed by the prolonged government shutdown.

    Regional markets felt a chill after the yield on 30-year Japanese government bonds surged to 3.31%, reflecting rising risks as Prime Minister Sanae Takaichi prepares to boost government spending and push back the timetable for bringing down Japan’s huge national debt.

    The yen was trading above 155 to the U.S. dollar, near its highest level since February. On Monday, the yen fell to its lowest level against the euro since 1999, when the unified European currency was launched.

    Tokyo’s Nikkei 225 was down 3% at 48,835.20 by midday, with selling of tech shares leading the decline. Chip maker Tokyo Electron shed 5.4%, while equipment maker Advantest dropped 4.6%.

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    In Seoul, the Kospi fell 3.1% to 3,960.82. Samsung Electronics dropped 2.9%, while chip maker SK Hynix shed 5.7%.

    In Taiwan, the Taiex fell 2.3% as TSMC, the world’s largest contract chip manufacturer, declined 2.4%.

    Chinese markets were not immune from heavy selling.

    Hong Kong’s Hang Seng declined 1.5% to 25,997.20, while the Shanghai Composite index slipped 0.6% to 3,949.83.

    In Australia, the S&P/ASX 200 gave up 2.1% to 8,452.50.

    On Monday, the S&P 500 fell 0.9% to 6,672.41, pulling further from its all-time high set late last month. The Dow industrials dropped 1.2% to 46,590.24, while the Nasdaq composite sank 0.8% to 22,708.07.

    Nvidia dropped 1.8%, though it is still up nearly 40% this year. Losses for other AI winners included a 6.4% slide for Super Micro Computer.

    Other areas of the market that had been high-momentum winners also sank. Bitcoin extended its decline, dragging down Coinbase Global by 7.1% and Robinhood Markets by 5.3%. Early Tuesday, it was down 2% at $90,110.

    Critics have been warning that the U.S. stock market could be primed for a drop because of how high prices have shot since April, leaving them looking too expensive.

    However, Alphabet gained 3.1% after Berkshire Hathaway said it has built a $4.34 billion ownership stake in Google’s parent company. Berkshire Hathaway, run by famed investor Warren Buffett, is notorious for trying to buy stocks only when they look like good values while avoiding anything that looks too expensive.

    Another source of potential disappointment for Wall Street is what the Federal Reserve does with interest rates. The expectation had been that the Fed would keep cutting interest rates in hopes of shoring up the slowing job market.

    But the downside of lower interest rates is that they can make inflation worse, and inflation has stubbornly remained above the Fed’s 2% target.

    Fed officials have also pointed to the U.S. government’s shutdown, which delayed the release of updates on the job market and other signals about the economy. With less information and less certainty about how things are going, some Fed officials have suggested it may be better to wait in December to get more clarity.

    A strong jobs report on Thursday would likely stay the Fed’s hand on rate cuts, while figures that are very weak would raise worries about the economy.

    In other dealings early Tuesday, U.S. benchmark crude oil lost 42 cents to $59.49 per barrel. Brent crude, the international standard, gave up 43 cents to $63.77 per barrel.

    The dollar fell to 155.08 Japanese yen from 155.26 yen. The euro rose to $1.1600 from $1.1593.

    ___

    AP Business Writers Stan Choe and Matt Ott contributed.

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  • Japan’s economy contracts as exports get hit by US tariffs

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    TOKYO (AP) — Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as President Donald Trump’s tariffs sent the nation’s exports spiraling.

    On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.

    The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.

    A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.

    Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.

    On an annualized basis, exports dropped 4.5% in the three months through September.

    Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.

    Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.

    The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.

    Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.

    ___

    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Japan’s economy contracts as exports get hit by US tariffs

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    TOKYO — Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as President Donald Trump’s tariffs sent the nation’s exports spiraling.

    On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.

    The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.

    A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.

    Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.

    On an annualized basis, exports dropped 4.5% in the three months through September.

    Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.

    Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.

    The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.

    Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.

    ___

    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Democrats mocked for ‘out of touch’ comments dismissing no tax on tips: ‘Peak elitism’

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    NEWYou can now listen to Fox News articles!

    Nevada Democratic representatives Dina Titus, Susie Lee and Steven Horsford are being mocked as “out of touch” for keeping silent after a national Democratic Party spokesperson dismissed no tax on tips as mere “crumbs.”

    In a Politico article about the importance of the no tax on tips policy in congressional races in Nevada, Democratic Congressional Campaign Committee spokesperson Lindsay Reilly appeared to dismiss the policy, saying, “D.C. Republicans are giving temporary crumbs to working families.”

    Reilly added, “Meanwhile, millions of families are at risk of losing their health care, hundreds of hospitals could close, and countless Americans could lose their jobs — all to pay for permanent tax cuts for billionaires.”

    The no-tax-on-tips provision in the big, beautiful bill establishes an income tax deduction of up to $25,000 on qualified tipped income through 2028.

    WATCH: DEM LAWMAKERS ATTEMPT TO EXPLAIN WHY STOCK MARKET IS BOOMING DESPITE TRUMP TARIFFS

    Left to right: Nevada Democratic Reps. Susie Lee, Steven Horsford and Dina Titus (Bill Clark/CQ-Roll Call, Inc via Getty Images); Mandel NGAN / AFP; Rep. Susie Lee official House of Representatives official website)

    With Nevada being the state with the highest share of tipped workers in the country, these comments ignited a firestorm of criticisms from Republican voices online.

    “Marvel at just how out of touch Democrats are with reality. The DCCC thinks no taxes on tips is ‘crumbs,’” wrote conservative commentator Steve Guest.

    “What makes this so bad, is that this is ACTUALLY what the Democrat party thinks,” wrote White House spokeswoman Abigail Jackson.

    National Republican Senatorial Committee advisor Nathan Brand added, “Nancy Pelosi peddled this same elitist ‘crumbs’ message in 2017 after Trump and Republicans cut taxes for nearly all working families.”

    The Republican Congressional Leadership Fund challenged Titus, Lee and Horsford, saying, “Will you denounce the @dccc’s statement that cutting taxes on tips amounts to ‘crumbs?’ Many of your constituents rely on tips to support their families.”

    National Republican Congressional Campaign Committee spokesman Christian Gonzalez wrote, “The @dccc sneering that No Tax on Tips is ‘crumbs’ is peak Democrat elitism.”

    KAMALA HARRIS-ENDORSED CANDIDATE IN HOT SEAT FOR MILLION-DOLLAR DC HOME HUNDREDS OF MILES OUTSIDE DISTRICT

    Nancy Pelosi speaks in New York City

    Nancy Pelosi speaks onstage during the 2025 Concordia Annual Summit at Sheraton New York Times Square on Sept. 23, 2025 in New York City.  (Riccardo Savi/Getty Images for Concordia Annual Summit)

    Though all three Democrats have advocated for the no tax on tips policy, they voted against the big, beautiful bill in which the policy was included.

    Gonzalez said that the Nevada Democrats’ “voting record says it all” and that “Out of touch Democrats Dina Titus, Susie Lee, and Steven Horsford are too scared of their radical, latte-sipping bosses in D.C. to stand with the workers who keep Nevada running.”

    “Only a party run by latte-liberals who refuse to go into the office thinks hard-earned tip money is pocket lint,” he said.

    The NRCC itself also asked: “Will Titus, Lee, and Horsford stand with workers?”

    “National Democrats just mocked Nevada’s servers, bartenders, cooks, housekeepers, dealers, and hospitality workers, sneering that their right to keep their own hard-earned tip money amounts to nothing more than ‘crumbs,’” the NRCC said in a statement.

    “This is the shameless party of Dina Titus, Susie Lee, and Steven Horsford. They can’t hide from their vote AGAINST No Tax on Tips for hardworking Nevadans. If Titus, Lee, and Horsford actually stood with workers, they’d condemn these comments and stand up for workers keeping more of their hard-earned money,” the NRCC went on.

    ‘SQUAD’ DEM SPENDS EYE-POPPING AMOUNT ON LUXURY LIMO SERVICES IN ONE YEAR

    Susie Lee

    Rep. Susie Lee, D-Nev., walks down the House steps at the Capitol after the last votes of the week on Friday, April 1, 2022.  (Bill Clark/CQ-Roll Call, Inc via Getty Images)

    After its passage, Lee wrote in the Las Vegas Sun that she “rushed back to Washington to vote against the One Big Beautiful Bill,” calling it “one of the least popular pieces of legislation in modern American history, giving massive, permanent tax breaks to the wealthiest Americans and temporary crumbs for working families in Southern Nevada.”

    In August, the three sent a letter to U.S. Treasury Secretary Scott Bessent “to ensure the successful implementation” of the no-tax-on-tips policy. In a statement, Lee’s office said the letter highlighted that “the version of ‘No Tax on Tips’ passed by Republicans in Washington does not fully meet the needs of Nevadans.”

    In a statement to Fox News Digital, Lee said, “I believe that no one should lose out on tips they earned. That’s why I support the TIPS Act to PERMANENTLY end taxes on tips.”

    She said that earlier this year, she “called on Speaker [Mike] Johnson to bring the permanent fix ‘No Tax on Tips Act’ — which unanimously passed the Senate — to the House floor for a vote.”

    PROGRESSIVE DEMOCRATS TURN ON PARTY LEADERSHIP AFTER GOVERNMENT SHUTDOWN ENDS WITHOUT HEALTHCARE GUARANTEES

    A man's hand holds five $1 bills to give to a waitress holding a carrying tray at a restaurant.

    The no-tax-on-tips provision in the big, beautiful bill establishes an income tax deduction of up to $25,000 on qualified tipped income through 2028. (iStock)

    “Instead, Republican leaders held it hostage so they could provide cover for themselves as they voted to pass the largest transfer of wealth in American history,” she said, adding, “The Republican ‘no tax on tips’ provision is a raw deal for tipped earners — it’s temporary, capped, and so much smaller than the tax breaks the wealthiest Americans got out of the Big Bulls**t Bill.”

    “Let me be clear — our service workers can’t benefit from no tax on tips if they aren’t receiving tips thanks to our tourism slump or if they’ve lost their jobs,” she said.

    CLICK HERE TO DOWNLOAD THE FOX NEWS APP

    DCCC spokeswoman Lindsay Reilly also responded to the backlash, telling Fox News Digital “it’s sad that the out-of-touch operatives at the NRCC are having a meltdown when confronted with the facts.”

    “Everyone knows the Big, Ugly Bill is a massive tax giveaway for the wealthiest few that sticks working families with the bill. That is fact, and it’s why everyone hates it,” she said, adding, “Voters can see through Republicans’ cheap spin and people know their bill fails to deliver meaningful relief to everyday Americans, while the billionaires cash out.”

    In response to the knock on her 2017 “crumbs” comment, Pelosi’s office shared a statement from 2018, which accused President Donald Trump’s first-term tax breaks of being a scam and “a monumental theft from the middle class to enrich the wealthiest 1 percent.”

    Fox News Digital also reached out to Titus and Horsford, but did not immediately receive a response.

    Peter Pinedo is a politics writer for Fox News Digital.

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  • Government will release September jobs report next week

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    WASHINGTON — The Labor Department will release its numbers on September hiring and unemployment next Thursday, a month and a half late, marking the beginning of the end of a data drought caused by the 43-day federal government shutdown.

    The statistical blackout meant that the Federal Reserve, businesses, policymakers and investors have largely been in the dark about inflation, job creation, GDP growth and other measures of the U.S. economic health since late summer.

    Thomas Simons and Michael Bacolas at Jefferies, a financial firm, wrote in a commentary Friday that over 30 reports from the Labor Department’s Bureau of Labor Statistics and the Commerce Department’s Bureau of Economic Analysis and Census Bureau were delayed by the political standoff.

    The Labor Department did not release its weekly report on the number of Americans signing up for unemployment benefits for seven straight weeks. That jobless claims report is seen as a potential early indicator of where the labor market is headed.

    The Labor Department did release its consumer price index for September — the most popular measurement of inflation — nine days late on Oct. 24. The government made an exception for that report because of its urgency: It is used to calculate the annual cost of living adjustment for tens of millions of Americans receiving Social Security and other federal benefits.

    The interruption of federal economic statistics came at an awkward time. President Donald Trump’s policies — sweeping, ever-changing import taxes and massive deportations of people working in the United States illegally — are creating uncertainty about the economic outlook.

    And the economy has sent conflicting signals: Economic growth looked solid at midyear and unemployment has been low. But job growth has lost momentum, and inflation has remained stubbornly above the Federal Reserve’s 2% target, partly because of the impact of Trump’s tariffs.

    Jefferies’ Simons expects the September employment report to show that employers added 65,000 jobs that month — unimpressive, but up from a meager 22,000 in August. He figures that unemployment remained at a low 4.3%.

    The data cutoff has caused consternation on Wall Street and deepened divisions among Fed officials over whether to cut interest rates for a third straight time at their next meeting in December.

    This week, some Fed policymakers have suggested that a lack of data is one reason they may support holding off on another rate cut.

    As a result, fresh reports on jobs and inflation in the coming weeks and months will carry huge weight at the Fed because new numbers could help resolve disagreements between those who support another interest rate reduction and those who are opposed.

    Even with the government reopened, however, it could take a few more weeks for the data to fully recover. Earlier this week, Kevin Hassett, a top White House economist, said only a part of October’s jobs report — originally scheduled to be released Nov. 7 — will eventually be released.

    The Bureau of Labor Statistics will likely have enough data from businesses to calculate how many jobs were gained or lost last month. Much of that is submitted electronically. But a separate survey of households, which is used to calculate the unemployment rate, didn’t take place during the shutdown.

    As a result, for the first time in 77 years, the BLS may not calculate an unemployment rate for the month of October.

    Other White House officials have previously said there also won’t be an October inflation report, because the data couldn’t be gathered due to the government shutdown. That will pose a challenge for the Fed, which is seeking to determine whether inflation is headed back to 2%.

    The data interruption occurred just a couple of months after Trump fired the director of the BLS, Erika McEntarfer, after it produced employment figures Aug. 1 that he didn’t like. They showed only modest job gains in July and sharply smaller increases in May and June than previously estimated.

    Still, economists said the upcoming reports should be free from bias. Currently, there are no political appointees at the agency, after Trump withdrew his nominee to head the BLS Sept. 30.

    “The data are being produced by roughly the same set of people as in the past,” Aaron Sojourner, senior economist at the W.E. Upjohn Institute, said.

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  • Walmart CEO Doug McMillon announces his surprise retirement at age 59

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    NEW YORK — Walmart CEO Doug McMillon, who turned America’s largest retailer into a tech-powered giant and spearheaded a period of robust sales growth since becoming chief executive in 2014, plans to retire early next year, the company said Friday in a surprise announcement.

    John Furner, 51, the head of Walmart’s U.S. operations, will take over on Feb. 1, the day after McMillon’s retirement becomes effective, the company said. Although McMillon is set to spend a year advising his successor, Walmart shares fell 3% immediately in premarket trading after the news of the unexpected leadership change.

    Unlike Amazon’s Jeff Bezos or Tesla’s Elon Musk, McMillon isn’t a household name, but he played a key role in the U.S. economy. Walmart’s performance serves as a barometer of consumer spending given its size and vast customer base. The company maintains that 90% of U.S. households rely on Walmart for a range of products, and more than 150 million customers shop on its website or in its stores every week.

    Walmart also is the nation’s largest private employer, with 1.6 million workers.

    The pending CEO switch comes at a challenging time for retail companies and other employers that have spent almost 11 months navigating an uncertain economic environment as President Donald Trump’s administration adopted volatile policies on tariffs and initiated an immigration crackdown that threatened to shrink the supply of workers.

    McMillon started with Walmart in 1984 and became chief executive three decades later. During his tenure as CEO, he invested heavily in employees by increasing wages, expanding parental leave and launching a program for employees seeking advancement and education opportunities to earn certificates and degrees.

    Under his leadership, Walmart has been laser-focused on maintaining low prices while embracing new technology like artificial intelligence and robotics.

    “Over more than a decade as CEO, Doug led a comprehensive transformation by investing in our associates, advancing our digital and e-commerce capabilities, and modernizing our supply chain,” Walmart Chairman Greg Penner, the son-in-law of the late Walmart founder Sam Walton, said. “He leaves Walmart stronger, more innovative, and better aligned with our purpose to help people save money and live better.”

    Furner started at Walmart in 1993, working as an hourly store associate in Bentonville, Arkansas, where the company is based. He served as president and CEO of the U.S. division of Sam’s Club, the membership warehouse-store chain that Walmart owns, before taking the same roles at Walmart U.S.

    Under McMillon, Walmart’s annual revenue has grown from $485.7 billion to $681 billion in its latest fiscal year. Its stock was hovering around $25 per share when he came to the helm; now, it is over $102.

    When he became CEO, stores were messy and worker morale was low. McMillon thought the company needed to increase pay and create pathways for hourly workers to advance in their careers. In 2015, Walmart announced a three-year, $2.7 billion investment to increase wages and create new education and training opportunities.

    But when McMillon briefed investors that year and cut the annual sales forecast, investors weren’t happy, sending Walmart shares down and destroying $21.5 billion in market value in hours. The company gradually regained investors’ confidence with higher sales, new customers and greatly improved employee retention rates.

    Walmart also invested heavily in e-commerce and faster deliveries. The company said in August that roughly one-third of recent deliveries from its U.S. stores involved orders asking for goods to arrive in three hours or less, and 20% of those orders made it to customers in a half-hour or under.

    Walmart has also looked for new sources of revenue like advertising and launched a membership program called Walmart + to compete with Amazon Prime, its rival’s free shipping program.

    During the coronavirus pandemic, Walmart powered through worldwide supply chain kinks and saw a sales surge as homebound consumers stocked up. Walmart used its clout with suppliers again to maintain low prices and attract more customers during the period of inflation that followed the pandemic.

    The company has said it is absorbing some of the extra import costs from Trump’s tariffs on foreign goods but that customers would see some price increases.

    “We’re doing what we said we would do,” McMillon told stock analysts in August. “We’re keeping our prices as low as we can for as long as we can. Our merchants have been creative and acted with urgency to avoid what would have been additional pressure for our customers and members.”

    ___

    AP Business Writer Michelle Chapman in New York contributed to this report.

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  • Trump is ramping up a new effort to convince a skeptical public he can fix affordability worries

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    WASHINGTON (AP) — President Donald Trump is adjusting his messaging strategy to win over voters who are worried about the cost of living with plans to emphasize new tax breaks and show progress on fighting inflation.

    The messaging is centered around affordability, and the push comes after inflation emerged as a major vulnerability for Trump and Republicans in Tuesday’s elections, in which voters overwhelmingly said the economy was their biggest concern.

    Democrats took advantage of concerns about affordability to run up huge margins in the New Jersey and Virginia governor races, flipping what had been a strength for Trump in the 2024 presidential election into a vulnerability going into next year’s midterm elections.

    White House officials and others familiar with their thinking requested anonymity to speak for this article in order to not get ahead of the president’s actions. They stressed that affordability has always been a priority for Trump, but the president plans to talk about it more, as he did Thursday when he announced that Eli Lilly and Novo Nordisk would reduce the price of their anti-obesity drugs.

    “We are the ones that have done a great job on affordability, not the Democrats,” Trump said at an event in the Oval Office to announce the deal. “We just lost an election, they said, based on affordability. It’s a con job by the Democrats.”

    The White House is keeping up a steady drumbeat of posts on social media about prices and deals for Thanksgiving dinner staples at retailers such as Walmart, Lidl, Aldi and Target.

    “I don’t want to hear about the affordability, because right now, we’re much less,” Trump told reporters Thursday, arguing that things are much better for Americans with his party in charge.

    “The only problem is the Republicans don’t talk about it,” he said.

    The outlook for inflation is unclear

    As of now, the inflation outlook has worsened under Trump. Consumer prices in September increased at an annual rate of 3%, up from 2.3% in April, when the president first began to roll out substantial tariff hikes that suddenly burdened the economy with uncertainty. The AP Voter Poll showed the economy was the leading issue in Tuesday’s elections in New Jersey, Virginia, New York City and California.

    Grocery prices continue to climb, and recently, electricity bills have emerged as a new worry. At the same time, the pace of job gains has slowed, plunging 23% from the pace a year ago.

    The White House maintains a list of talking points about the economy, noting that the stock market has hit record highs multiple times and that the president is attracting foreign investment. Trump has emphasized that gasoline prices are coming down, and maintained that gasoline is averaging $2 a gallon, but AAA reported Thursday that the national average was $3.08, about two cents lower than a year ago.

    “Americans are paying less for essentials like gas and eggs, and today the Administration inked yet another drug pricing deal to deliver unprecedented health care savings for everyday Americans,” said White House spokesman Kush Desai.

    Trump gets briefed about the economy by Treasury Secretary Scott Bessent and other officials at least once a week and there are often daily discussions on tariffs, a senior White House official said, noting Trump is expected to do more domestic travel next year to make his case that he’s fixing affordability.

    But critics say it will be hard for Trump to turn around public perceptions on affordability.

    “He’s in real trouble and I think it’s bigger than just cost of living,” said Lindsay Owens, executive director of Groundwork Collaborative, a liberal economic advocacy group.

    Owens noted that Trump has “lost his strength” as voters are increasingly doubtful about Trump’s economic leadership compared to Democrats, adding that the president doesn’t have the time to turn around public perceptions of him as he continues to pursue broad tariffs.

    New hype about income tax cuts ahead of April

    There will be new policies rolled out on affordability, a person familiar with the White House thinking said, declining to comment on what those would be. Trump on Thursday indicated there will be more deals coming on drug prices. Two other White House officials said messaging would change — but not policy.

    A big part of the administration’s response on affordability will be educating people ahead of tax season about the role of Trump’s income tax cuts in any refunds they receive in April, the person familiar with planning said. Those cuts were part of the sprawling bill Republicans muscled through Congress in July.

    This individual stressed that the key challenge is bringing prices down while simultaneously having wages increase, so that people can feel and see any progress.

    There’s also a bet that the economy will be in a healthier place in six months. With Federal Reserve Chair Jerome Powell’s term ending in May, the White House anticipates the start of consistent cuts to the Fed’s benchmark interest rate. They expect inflation rates to cool and declines in the federal budget deficit to boost sentiment in the financial markets.

    But the U.S. economy seldom cooperates with a president’s intentions, a lesson learned most recently by Trump’s predecessor, Democrat Joe Biden, who saw his popularity slump after inflation spiked to a four-decade high in June 2022.

    The Trump administration maintains it’s simply working through an inflation challenge inherited from Biden, but new economic research indicates Trump has created his own inflation challenge through tariffs.

    Since April, Harvard University economist Alberto Cavallo and his colleagues, Northwestern University’s Paola Llamas and Universidad de San Andres’ Franco Vazquez, have been tracking the impact of the import taxes on consumer prices.

    In an October paper, the economists found that the inflation rate would have been drastically lower at 2.2%, had it not been for Trump’s tariffs.

    The administration maintains that tariffs have not contributed to inflation. They plan to make the case that the import taxes are helping the economy and dismiss criticisms of the import taxes as contributing to inflation as Democratic talking points.

    The fate of Trump’s country-by-country tariffs is currently being decided by the Supreme Court, where justices at a Wednesday hearing seemed dubious over the administration’s claims that tariffs were essentially regulations and could be levied by a president without congressional approval. Trump has maintained at times that foreign countries pay the tariffs and not U.S. citizens, a claim he backed away from slightly Thursday.

    “They might be paying something,” he said. “But when you take the overall impact, the Americans are gaining tremendously.”

    _____

    Associated Press writers Will Weissert and Michelle L. Price contributed to this report.

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  • 2 Federal Reserve officials oppose an interest rate cut in December

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    WASHINGTON — Two Federal Reserve officials expressed opposition Wednesday to another interest rate cut at the central bank’s next meeting in December, further muddying the outlook for the Fed’s next steps.

    The remarks by Susan Collins, president of the Federal Reserve Bank of Boston, and Raphael Bostic, president of the Atlanta Fed, suggest that the central bank’s rate-setting committee could be tilting against what had been an expected third straight cut next month.

    The officials cited several reasons for keeping rates unchanged, after a reduction in September and in October. They argued that inflation is stubbornly elevated and has been above the Fed’s 2% target for nearly five years, while the economy is resilient and doesn’t appear to need more rate cuts. The job market is stumbling, with hiring nearly at a standstill, but layoffs still seem muted, they said.

    Another factor has been the government shutdown, which has cut off the economic data the Fed relies on to discern the economy’s path. On Wednesday White House spokeswoman Karoline Leavitt said that the jobs and inflation reports for October would likely never be released.

    “Formulating an economic outlook is challenging — and the limited data compounds the difficulty,” Collins said in a speech in Boston.

    “It will likely be appropriate to keep policy rates at the current level for some time … in this highly uncertain environment,” she added.

    That is a shift from her previous speech in October, when she expressed support for at least one more rate cut.

    Earlier Wednesday, Bostic said he remains concerned inflation is too high, and added that, “I … favor keeping the funds rate steady until we see clear evidence that inflation is again moving meaningfully toward its 2% target.” Bostic said earlier Wednesday that he will retire when his current term ends on Feb. 28, 2026.

    Their remarks come at an unusually challenging time for the Fed, with the economy facing both weak hiring and elevated inflation. Typically, the Fed would reduce its rate to encourage borrowing, spending and job gains, while it would keep it unchanged — or even raise it — to combat inflation.

    The 19 officials on the Fed’s rate-setting committee narrowly supported three rate cuts this year at their September meeting, but Chair Jerome Powell said at a news conference late last month that the committee remains divided and another cut in December was not a “foregone conclusion.”

    David Seif, chief economist for developed markets at Nomura Securities, expects the Fed will skip a rate cut in December and won’t reduce borrowing costs again until March.

    “There is a large segment of the Fed that is uncomfortable with a December cut,” Seif said.

    Collins also said that additional reductions to the Fed’s rate could, by boosting the economy, accelerate inflation.

    “Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” she said.

    Bostic, meanwhile, said the Atlanta Fed’s surveys of businesses show that many companies intend to raise prices next year, a sign that inflation may not cool anytime soon.

    “We cannot breezily assume inflationary pressures will quickly dissipate after a one-time bump in prices from new import duties,” Bostic said, referring to President Donald Trump’s tariffs. “Across all our information sources, I see little to no evidence that we should be sanguine about the forward trajectory of inflation.”

    Some Fed officials, such as Fed governor Stephen Miran, have argued that the tariffs will only temporarily lift prices and outside those one-time increases, inflation is cooling.

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  • What to know about Trump’s plan to give Americans a $2,000 tariff dividend

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    WASHINGTON (AP) — President Donald Trump boasts that his tariffs protect American industries, lure factories to the United States, raise money for the federal government and give him diplomatic leverage.

    Now, he’s claiming they can finance a windfall for American families, too: He’s promising a generous tariff dividend.

    The president proposed the idea on his Truth Social media platform Sunday, five days after his Republican Party lost elections in Virginia, New Jersey and elsewhere largely because of voter discontent with his economic stewardship — specifically, the high cost of living.

    The tariffs are bringing in so much money, the president posted, that “a dividend of at least $2000 a person (not including high income people!) will be paid to everyone.’’

    Budget experts scoffed at the idea, which conjured memories of the Trump administration’s short-lived plan for DOGE dividend checks financed by billionaire Elon Musk’s federal budget cuts.

    “The numbers just don’t check out,″ said Erica York, vice president of federal tax policy at the nonpartisan Tax Foundation.

    Details are scarce, including what the income limits would be and whether payments would go to children.

    Even Trump’s treasury secretary, Scott Bessent, sounded a bit blindsided by the audacious dividend plan. Appearing Sunday on ABC’s “This Week,’’ Bessent said he hadn’t discussed the dividend with the president and suggested that it might not mean that Americans would get a check from the government. Instead, Bessent said, the rebate might take the form of tax cuts.

    The tariffs are certainly raising money — $195 billion in the budget year that ended Sept. 30, up 153% from $77 billion in fiscal 2024. But they still account for less than 4% of federal revenue and have done little to dent the federal budget deficit — a staggering $1.8 trillion in fiscal 2025.

    Budget wonks say Trump’s dividend math doesn’t work.

    President Donald Trump speaks during an event to mark Veterans Day at Arlington National Cemetery, Tuesday, Nov. 11, 2025, in Arlington, Va. (AP Photo/Evan Vucci)

    John Ricco, an analyst with the Budget Lab at Yale University, reckons that Trump’s tariffs will bring in $200 billion to $300 billion a year in revenue. But a $2,000 dividend — if it went to all Americans, including children — would cost $600 billion. “It’s clear that the revenue coming in would not be adequate,’’ he said.

    Ricco also noted that Trump couldn’t just pay the dividends on his own. They would require legislation from Congress.

    Moreover, the centerpiece of Trump’s protectionist trade policies — double-digit taxes on imports from almost every country in the world — may not survive a legal challenge that has reached the U.S. Supreme Court.

    In a hearing last week, the justices sounded skeptical about the Trump administration’s assertion of sweeping power to declare national emergencies to justify the tariffs. Trump has bypassed Congress, which has authority under the Constitution to levy taxes, including tariffs.

    If the court strikes down the tariffs, the Trump administration may be refunding money to the importers who paid them, not sending dividend checks to American families. (Trump could find other ways to impose tariffs, even if he loses at the Supreme Court; but it could be cumbersome and time-consuming.)

    Mainstream economists and budget analysts note that tariffs are paid by U.S. importers who then generally try to pass along the cost to their customers through higher prices.

    The dividend plan “misses the mark,’’ the Tax Foundation’s York said. ”If the goal is relief for Americans, just get rid of the tariffs.’’

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  • National Retail Federation predicts first $1 trillion holiday shopping season

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    NEW YORK — American shoppers are expected to spend more during this holiday shopping season than last year despite economic uncertainty and rising prices.

    The 2025 forecast from the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared with last year.

    Retailers rung up $976 billion in holiday sales last year, the group said.

    “We’re seeing really positive behavior and engagement from consumers, ” NRF President and CEO Matthew Shay told reporters on a call Thursday. “In fairness, that’s been somewhat of a surprise.”

    But Shay said more Americans are growing selective and they’re focused on discounts. And while spending is expected to be up again, the growth of that spending may be in decline.

    That is still greater than the average increase of 3.6% between 2010 to 2019. Americans ramped up spending after that during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and soared 12.5% in 2021, according to the NRF.

    The group’s holiday forecast is based on economic modeling using various key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail.

    Holiday spending accounts for 19% of annual sales for the retail industry, though for some retailers the number is a lot higher, according to the NRF. And consumer spending in the U.S. is monitored closely because it drives about 70% of the nation’s gross domestic product.

    The forecast this year, however, arrives during the longest government shutdown in U.S. history. There has been no government data released on the jobs market or retail sales since the shutdown began 37 days ago.

    “Forecasting is increasingly challenging in this environment,” Shay acknowledged.

    The NRF forecast is in line with other estimates, however, which point to slowing growth.

    Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.

    Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31, compared with last year’s 4.2%.

    Adobe expects U.S. online sales to hit $253.4 billion this holiday season, representing 5.3% growth. That’s smaller than last year’s 8.7% growth.

    Consumer spending in the U.S. has remained resilient even as consumer confidence has eroded.

    Mark Matthews, NRF’s chief economist and executive director of research, said consumer behavior is changing with a sharper focus on finding deals. And the frequency of family nights out at a restaurant is on the decline, NRF executives said.

    The timing of the government shutdown is “absolutely problematic,” Matthews said, noting that it’s led to a loss in private sector income, which erodes consumer demand.

    Spending should recover once the shutdown ends, Matthews said, yet there are broader issues of concern that will not be solved when the government shutdown ends.

    The gap between wealthy and lower-income households is widening, according to analysts.

    Based on spending from its credit card and bank customers, Bank of America found that spending growth among lower income households rose 0.6% in September compared with the same period last year. Among higher income brackets, spending rose at more than four times that speed, or 2.6%, in September. And wages are growing faster for higher income households.

    That is making it more difficult for lower income households to keep up when tariffs and other economic factors are pushing prices higher.

    In a separate report this week, Bank of America estimated that U.S. consumers are bearing 50% to 70% of the U.S. tariff costs, and it expects that load to grow.

    “We think there is overwhelming evidence that tariffs have pushed inflation higher for consumers,’’ Bank of America economists Stephen Juneau and Aditya Bhave wrote.

    At the same time, U.S. companies have announced tens of thousands of job cuts. Some companies have cited rising operational costs from new tariffs under the Trump administration, as well as shifting consumer spending, corporate restructuring, or increased spending on artificial intelligence.

    That has led retailers to pull back on the hiring of seasonal workers.

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  • Supreme Court weighs Trump tariffs in a trillion-dollar test of executive power

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    WASHINGTON — President Donald Trump’s power to unilaterally impose far-reaching tariffs is coming before the Supreme Court on Wednesday in a pivotal test of executive power with trillion-dollar implications for the global economy.

    The Republican administration is trying to defend the tariffs central to Trump’s economic agenda after lower courts ruled the emergency law he invoked doesn’t give him near-limitless power to set and change duties on imports.

    The Constitution says Congress has the power to levy tariffs. But the Trump administration argues that in emergency situations the president can regulate importation taxes like tariffs. Trump has called the case one of the most important in the country’s history and said a ruling against him would be catastrophic for the economy.

    The challengers argue the 1977 emergency powers law Trump used doesn’t even mention tariffs, and no president before has used it to impose them. A collection of small businesses say the uncertainty is driving them to the brink of bankruptcy.

    The case centers on two sets of tariffs. The first came in February on imports from Canada, China and Mexico after Trump declared a national emergency over drug trafficking. The second involves the sweeping “reciprocal” tariffs on most countries that Trump announced in April.

    Multiple lawsuits have been filed over the tariffs, and the court will hear suits filed by Democratic-leaning states and small businesses focused on everything from plumbing supplies to women’s cycling apparel.

    Lower courts have struck down the bulk of his tariffs as an illegal use of emergency power, but the nation’s highest court may see it differently.

    Trump helped shape the conservative majority court, naming three of the justices in his first term. The justices have so far been reluctant to check his extraordinary flex of executive power, handing him a series of wins on its emergency docket.

    Still, those have been short-term orders — little of Trump’s wide-ranging conservative agenda has been fully argued before the nation’s highest court. That means the outcome could set the tone for wider legal pushback against his policies.

    The justices have been skeptical of executive power claims before, such as when then-President Joe Biden tried to forgive $400 billion in student loans under a different law dealing with national emergencies. The Supreme Court found the law didn’t clearly give him the power to enact a program with such a big economic impact, a legal principle known as the major questions doctrine.

    The challengers say Trump’s tariffs should get the same treatment, since they’ll have a much greater economic effect, raising some $3 trillion over the next decade. The government, on the other hand, says the tariffs are different because they’re a major part of his approach to foreign affairs, an area where the courts should not be second-guessing the president.

    The challengers are also trying to channel the conservative justices’ skepticism about whether the Constitution allows other parts of the government to use powers reserved for Congress, a concept known as the nondelegation doctrine. Trump’s interpretation of the law could mean anyone who can “regulate” can also impose taxes, they say.

    The Justice Department counters that legal principle is for governmental agencies, not for the president.

    If he eventually loses at the high court, Trump could impose tariffs under other laws, but those have more limitations on the speed and severity with which he could act. The aftermath of a ruling against him also could be complicated, if the government must issue refunds for the tariffs that had collected $195 billion in revenue as of September.

    The Trump administration did win over four appeals court judges who found the 1977 International Emergency Economic Powers Act, or IEEPA, gives the president authority to regulate importation during emergencies without explicit limitations. In recent decades, Congress has ceded some tariff authority to the president, and Trump has made the most of the power vacuum.

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  • Japan’s Toyota, hurt by President Trump’s tariffs, reports a drop in profit

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    TOKYO — Toyota reported a 7% year-on-year drop in its profit for April-September on Wednesday, as President Donald Trump’s tariffs slammed Japanese automakers, but it raised its forecast for the full fiscal year.

    Net profit for the April-September period at Toyota Motor Corp. totaled 1.77 trillion yen ($11.5 billion), down from 1.9 trillion yen a year earlier.

    But the maker of the Camry sedan and Lexus luxury models lifted its profit forecast for the full fiscal year ending in March 2026 to 2.93 trillion yen ($19 billion), citing better vehicle sales and cost-cutting efforts.

    The forecast would represent a 38.5% drop from the 4.77 trillion yen profit Toyota reported for the last fiscal year. It had earlier forecast 2.66 trillion yen ($17 billion) in profit for this year.

    Although tariffs are hurting its business, Toyota said its sales grew in the U.S. and its home market of Japan.

    U.S. tariffs on Japanese automobiles and auto parts fell to 15% in September from the 27.5% rate Trump initially orderd after returning to the White House. That’s much higher than the original 2.5%.

    Japan’s exports to the U.S., including vehicles, have plunged recently.

    But Toyota said its efforts, such as bigger sales, better model mix, cost cuts and smoother value chains, will add more than 900 billion yen ($5.8 billion) to the company’s bottom line in this fiscal year.

    “Despite the impact of U.S. tariffs, we have continued to build upon our improvement efforts such as increasing sales volume, improving costs and expanding value chain profits,” it said in a statement.

    During the six months through September, it sold more than 1.5 million vehicles in North America and 970,000 vehicles in Japan.

    First half sales grew 5.8% to 24.6 trillion yen ($160 billion). For the latest quarter through September, Toyota reported a 62% rise in profit to 932 billion yen ($6 billion) on 12.38 trillion yen ($80 billion ) in sales, up 8% on year.

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    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Federal Reserve likely to cut key rate Wednesday and may signal another cut to follow

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    WASHINGTON (AP) — The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring.

    A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%, providing a boost to the otherwise-sluggish housing market.

    Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case. Hiring has ground nearly to a halt, yet inflation remains elevated, and the economy’s mostly solid growth is heavily dependent on massive investment by leading tech companies in artificial intelligence infrastructure.

    The central bank is assessing these trends without most of the government data it uses to gauge the economy’s health. The release of September’s jobs report has been postponed because of the government shutdown. The White House said last week October’s inflation figure may not even be compiled.

    The shutdown itself may also crimp the economy in the coming months, depending on how long it lasts. Roughly 750,000 federal workers are nearing a month without pay, which could soon start weakening consumer spending, a critical driver of the economy.

    Federal workers laid off by the Trump administration’s Department of Government Efficiency efforts earlier this year may formally show up in jobs data if it is reported next month, which could make the monthly hiring data look even worse.

    Powell has said that the risk of weaker hiring is rising, which makes it as much of a concern as still-elevated inflation. As a result, the central bank needs to move its key rate closer to a level that would neither slow nor stimulate the economy.

    Most Fed officials view the current level of its key rate — 4.1% — as high enough to slow growth and cool inflation, which has been their main goal since price increases spiked to a four-decade high three years ago. The Fed is widely expected to reduce it to about 3.9% Wednesday. WIth job gains at risk, the goal is to move rates to a less-restrictive level.

    Kris Dawsey, head of economic research at D.E. Shaw, an investment bank, said that the lack of data during the shutdown means the Fed will likely stay on the path it sketched out in September, when it forecast cuts this month and in December.

    “Imagine you’re driving in a winter storm and suddenly lose visibility in whiteout conditions,” Dawsey said. “While you slow the car down, you’re going to continue going in the direction you were going versus making an abrupt change once you lose that visibility.”

    In recent remarks, the Fed chair has made clear that the sluggish job market has become a signficant concern.

    “The labor market has actually softened pretty considerably,” Powell said. “The downside risks to employment appear to have risen.”

    Before the government shutdown cut off the flow of data Oct. 1, monthly hiring gains had weakened to an average of just 29,000 a month for the previous three months. The unemployment rate ticked up to a still-low 4.3% in August from 4.2% in July.

    Layoffs also remain low, however, leading Powell and other officials to refer to the “low-hire, low-fire” job market.

    At the same time, last week’s inflation report — released more than a week late because of the shutdown — showed that inflation remain elevated but isn’t accelerating and may not need higher rates to tame it.

    Yet a key question is how long the job market can remain in what Powell has described as a “curious kind of balance.”

    “There have been some worrisome data points in the last few months,” said Stephen Stanley, chief U.S. economist at Santander, an investment bank. “Is that a weakening trend or are we just hitting an air pocket?”

    The uncertainty has prompted some top Fed officials to suggest that they may not necessarily support a cut at its next meeting in December. At its September meeting, the Fed signaled it would cut three times this year, though its policymaking committee is divided. Nine of 19 officials supported two or fewer reductions.

    Christopher Waller, a member of the Fed’s governing board and one of five people being considered by the Trump administration to replace Powell as Fed chair next year, said in a recent speech that while hiring data is weak, other figures suggest the economy is growing at a healthy pace.

    “So, something’s gotta give,” Waller said. “Either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth.”

    Since it’s unclear how the contradiction will play out, Waller added, “we need to move with care when adjusting the policy rate.”

    Waller said he supported a quarter-point cut this month, “but beyond that point” it will depend on what the economic data says, assuming the shutdown ends.

    Financial markets have put the odds of another cut in December at above 90%, according to CME Fedwatch — and Fed officials have so far said little to defuse that expectation.

    Jonathan Pingle, chief U.S. economist at UBS, said that he will look to see if Powell, at a news conference Wednesday, repeats his assertion that the risks of a weaker job market remain high.

    “If I hear that, I think they’re on track to lowering rates again in December,” he said.

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  • A major question for the Supreme Court: Will it treat Trump as it did Biden?

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    WASHINGTON — A major question hangs over the Supreme Court’s closely watched case on President Donald Trump’s far-reaching tariffs: Will the conservative majority hold the Republican president to the same exacting standards it used to limit his Democratic predecessor, Joe Biden?

    Key legal principles at the heart of conservative challenges to major initiatives in the Biden years are driving the arguments in the fight against Trump’s tariffs, which is set for arguments at the high court on Wednesday.

    The businesses and states that sued over the tariffs are even name-checking the three Trump-appointed conservative justices whose votes they hope to attract to stop a centerpiece of Trump’s economic agenda in a key test of presidential power.

    Trump imposed two sets of tariffs, determining that sustained trade deficits had brought the United States to “the precipice of an economic and national-security crisis” and that hundreds of thousands of deaths from imported fentanyl had created a crisis of its own, the administration told the justices.

    Until this year, no president had used the International Emergency Economic Powers Act to impose tariffs since its enactment in 1977.

    The law makes no mention of tariffs, taxes, duties or other similar words, although it does allow the president, after he declares an emergency, to regulate the importation of “any property in which any foreign country or a national thereof has any interest.”

    That authorization, the administration argued, is enough to support the tariffs, and the absence of any “magic words” is irrelevant.

    During Biden’s presidency, conservative majorities made it harder to fight climate change under existing law and blocked several actions related to the coronavirus pandemic.

    The court ended a pause on evictions, prohibited a vaccine mandate for large businesses and rejected Biden’s $500 billion student loan forgiveness program.

    In each case, the court held that Congress had not clearly authorized an action of economic and political significance, a legal principle known as the major questions doctrine.

    The Washington-based U.S. Court of Appeals for the Federal Circuit had little trouble applying those precedents to the tariffs case.

    Referring to the eviction pause and the student debt cases, a seven-judge majority wrote, “Indeed, the economic impact of the tariffs is predicted to be many magnitudes greater than the two programs that the Supreme Court has previously held to implicate major questions.”

    The tariff challengers are defending the appellate decision at the Supreme Court by leaning into the opinions from the earlier cases.

    “Absent vigilance under the major questions doctrine, ‘legislation would risk becoming nothing more than the will of the current President,’” lawyers for a Chicago-area toy company, Learning Resources Inc., wrote, quoting an opinion by Justice Neil Gorsuch in the climate change case.

    A separate group of small businesses cited Justice Amy Coney Barrett’s opinion in the student loan case to make the point that in relying on IEEPA for the tariffs, Trump “asserts ‘highly consequential power … beyond what Congress could reasonably be understood to have granted.’”

    The businesses also invoked a dissenting opinion by Justice Brett Kavanaugh in another pandemic case about the dangers of easily accepting emergency declarations. “This Court’s history is littered with unfortunate examples of overly broad judicial deference to’ assertions of ‘emergency powers,’” lawyers for the businesses wrote.

    The Trump administration argues that the doctrine does not apply to the tariffs case, and it cites a lengthy dissenting appellate opinion, as well as Kavanaugh.

    Presidents have wide latitude when it comes to foreign affairs and national security, and it would be odd for the emergency powers law to be as limited as the challengers say it is, Judge Richard Taranto wrote in his dissent, which was joined by three other judges.

    “Such a limitation would be especially out of place in an emergency statute like IEEPA,” Taranto wrote, explaining that it was intended to give presidents flexibility to cope with crises.

    Congress, he concluded, made “an eyes-open” choice to give the president broad authority. The major questions doctrine does not apply, Taranto wrote.

    Kavanaugh expressed a similarly expansive view of presidential power in an opinion in June about congressional authority.

    The major questions doctrine has never been invoked in a case about foreign policy or national security, Kavanaugh wrote. “On the contrary, the usual understanding is that Congress intends to give the President substantial authority and flexibility to protect America and the American people,” he wrote.

    Taranto’s opinion drew from a 1981 Supreme Court decision in a case relating to the Iranian hostage crisis that upheld President Jimmy Carter’s invocation of the emergency powers law to unfreeze Iranian assets.

    Justice William Rehnquist, five years before becoming chief justice, wrote the court’s opinion. One of his clerks that term was the current chief justice, John Roberts.

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  • Deal between the US and China is undoing damage from a self-inflicted trade war

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    BUSAN, South Korea (AP) — Three-digit tariffs are off the table, but import duties on each other are higher than in January.

    Rare earth materials will flow more smoothly, but China has put in place an export permitting regime that it can tighten or loosen as needed.

    Port fees will go away, but only for one year.

    And Beijing is again buying U.S. soybeans after it had abruptly cut off American farmers.

    After months of posturing, arguing and threatening, U.S. President Donald Trump and Chinese leader Xi Jinping have essentially turned back the clock. While the meeting between the two leaders was hailed by Trump as a “roaring success,” the agreement that came out of it may only serve to undo some of the damages Trump inflicted with his trade war upon his return to the White House.

    “It is hard to see what major gains the U.S. has made in the bilateral relationship relative to where things stood before Trump took office,” said Eswar Prasad, an economist at Cornell University.

    On the Senate floor, Minority Leader Chuck Schumer on Thursday denounced the deal out of South Korea as leaving the U.S. as “no better off.”

    “If anything, things are worse: Prices have gone up and China has agreed to nothing of substance that will improve trade between our nations,” the Democrat senator said, adding that Trump “started a trade war, created a giant mess for businesses, consumers, and soybean farmers, and then he celebrates for trying to clean up the very mess he created in the first place.”

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    Nevertheless, the deal has injected a degree of stability, giving the world’s two largest economies — as well as the rest of the world — time and room to readjust.

    Washington and Beijing still need to finalize their agreements, a process that always has the potential for fresh disputes. But for now, Xi appears interested in moving past the latest tensions.

    In an official statement, Xi referred to “recent twists and turns” that “offered some lessons for both sides.” He said they should be “focusing on the benefits of cooperation rather than falling into a vicious cycle of mutual retaliation.”

    Both sides reduce tariffs, resume soybean sales to China

    Trump fired the first shot in the trade war in February when he imposed an additional 10% tariff on Chinese goods over the allegation that Beijing failed to stem the flow of chemicals used to make fentanyl. That soared to as much as 145% after China retaliated, but Trump walked it back following market meltdowns.

    The two sides in May slashed their massive tariffs to 10% on each other, while Washington retained the 20% fentanyl-related tariff, and China its retaliatory tariffs of 10% or 15% on U.S. farm goods.

    Now, Trump said he has removed one 10% fentanyl tariff in exchange for Beijing’s cooperation in fighting the illicit drug.

    U.S. Secretary of Agriculture Brooke Rollins said China would also withdraw the retaliatory tariffs on U.S. agricultural products. A spokesperson for the Chinese Ministry of Commerce said Beijing would “adjust accordingly” its countermeasures without giving details.

    In addition, China has agreed to buy 12 million metric tons of U.S. beans through January, and will buy at least 25 million metric tons annually for next three years, Rollins said on Thursday.

    That compares to China buying 17 million metric tons of U.S. soybeans in the first eight months of this year but importing zero in September. In 2024, China bought 22 million metric tons of U.S. soybeans, according to state media.

    Although China did not confirm the details of the latest soybean deal, the spokesperson for the Chinese commerce ministry said the two sides have reached “consensus” to expand agricultural trade.

    One-year truce on export controls and port fees

    In April, China used its monopoly power in the processing of critical minerals to institute a permitting requirement for the export of several rare earth elements. On October 9, Beijing expanded the export rules, apparently in response to the U.S. decision to extend export controls to businesses affiliated with already-blacklisted foreign companies.

    Furious, Trump threatened to impose a new 100% tariff on China, but the two sides managed to cool down in time for Trump to meet Xi in South Korea.

    Beijing on Thursday said it would pause for a year the rare earth export rules from October to “conduct research to refine specific plans,” while the U.S. will suspend its affiliate rule for one year.

    The delay by Beijing “provides just enough time for the United States to accelerate investment in capabilities and innovation for rare earths and permanent magnets,” said Wade Senti, president of the U.S. permanent magnet company AML. “This needs to be on warp speed and at a scale never seen before since the COVID-19 response,” he said.

    Another fresh thorn was the U.S. introduction of port fees in October targeting China-linked vessels, as part of a plan to restore America’s shipbuilding capabilitie s. Beijing answered with countermeasures against the U.S.

    The port fees on each other are not removed but will be suspended for one year, the Chinese commerce ministry said.

    The future is still uncertain

    Whether Trump accepts a return to the status quo or pushes to address fundamental issues that have persisted for years between the U.S. and China remains unclear. Nothing about Thursday’s meeting — the first between Trump and Xi in six years — affects Chinese manufacturing dominance that Trump has blamed for the loss of American blue collar jobs.

    Sean Stein, president of the U.S.-China Business Council, called the latest developments “very encouraging” and added: “We hope that future negotiations will address long-standing market access barriers, help level the playing field for U.S. companies, and bring long-term predictability to the bilateral trade relationship.”

    There are more opportunities on the horizon to keep working on these challenges. Trump said he will go to China in April and Xi will visit the U.S. after that.

    If Trump isn’t successful, this period could be remembered for a lot of sound and fury but no change in the basic trajectory of China’s ascendant economy.

    “Generally, Trump grows impatient with anything beyond the immediate, and it is the Chinese that play for longer term advantage,” said Kurt Campbell, a former deputy secretary of state in the Biden administration and now chairman of The Asia Group.

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    Tang and Wiseman reported from Washington. AP writer Josh Funk in Omaha, Neb., contributed to the report

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