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Tag: tariffs and trade

  • ‘It wasn’t worth the $10 tariff for a $27 purchase’: American shoppers find maybe they just won’t buy that small thing from Canada or England this year | Fortune

    At Fleece & Harmony, a woolen mill and yarn shop in bucolic Belfast, Prince Edward Island, in Canada, owner Kim Doherty used to be able to send yarn skeins to U.S. customers across the border with little fanfare.

    The yarn orders usually met an import tax exemption for packages valued at under $800, meaning it could be imported tariff-free and avoid the customs process.

    But ever since the Trump administration eliminated the exemption as of Aug. 29, the cost to send yarn to U.S. customers has skyrocketed. The bill for a $21 ball of yarn now includes $12 to $15 in brokerage fees that her shipper UPS charges, plus state taxes and a 6.5% tariff, all of which almost doubles her costs.

    “We had orders that have reached the customers and they’re in shock about the fact that they have to pay,” she said. “And it’s amazing how many people really didn’t know what the impact was going to be.”

    Getting rid of the so-called de minimis exemption was meant to curb drug trafficking and stop low-quality goods from discount sellers like Temu and Shein flooding the U.S. market.

    But as the all-important annual holiday shopping season kicks off, it is putting a crimp on small businesses and shoppers now facing higher costs.

    Chad Lundquist in Fort Lauderdale, Florida, ordered fragrance oil from a site called Oil Perfumery in October, but he didn’t realize the business was based in Toronto, Canada. His total was $35.75, which included an $8 standard shipping fee. But when his package arrived, he was hit with a $10.80 tariff bill from FedEx.

    “It wasn’t worth the $10 tariff for a $27 purchase,” Lundquist said. Oil Perfumery did not respond to a request for comment.

    He’s not the only skittish shopper. Three months after the exemption ended, sellers abroad are reporting drastic declines in U.S. sales. Some are paying the duties themselves instead of passing them to consumers. They are also trying to focus on domestic customers to replace U.S. ones and adjusting product lineups to feature best selling items to try to goose sales.

    Martha Keith, founder of British stationery brand Martha Brook, which is based in London with a small office in Melbourne, Australia, said U.S. sales from her Etsy store — her main e-commerce channel in addition to her own website — were up 50% for the year before the exemption ended. But sales fell dramatically when the tariffs hit, and continue to drop even though she’s paying the import taxes and customs fees herself so customers aren’t impacted. Sales are down about 30% year-over-year.

    “The issue seems to be in customer confidence hitting the desire to order from businesses outside of the U.S., because of confusion about how the tariffs will affect them,” Keith said.

    She’s also in a bind because she sold a £109 ($144) stationery advent calendar to about 200 U.S. customers ahead of the tariffs, and now she has to ship them. Shipping and tariffs will cost a combined £25 ($33), meaning Keith will have to find an additional £5,000 ($6,583) to cover shipping the advent calendars already sold.

    “The whole thing has been a bit of a nightmare for businesses like ours, and such a huge shame, as the U.S. market was such a valuable growth area for us, particularly through Etsy,” she said.

    The timing was particularly bad for Sue Bacarro, who along with her sister co-owns Digi Wildflowers, an Etsy shop that sells embroidered baby blankets, gifts and custom quilts for wedding and anniversaries, located across the border from Detroit in Windsor, Ontario.

    Before the announcement of the removal of the de minimis exemption, they placed a large inventory order to prepare for the holiday season and early 2026 demand. But when the de minimis exemption ended, “inventory wasn’t moving as expected, and we suspected customers were hesitant to purchase due to potential duty charges,” Bacarro said.

    Sales — 70% of which come from Americans — finally started to rebound when Digi Wildflowers prominently added a banner on its site that said, “U.S. Import Duties On Us.”

    “Heading into this holiday season, we’re keeping that message front and center through banners, social media, and direct communication,” said Bacarro, who is also expanding their product line.

    But not all businesses can — or want to — pick up the tariff tab.

    Kim Doherty, who runs the woolen mill on Prince Edward Island, doesn’t plan to pay the tariff and fees for her customers.

    “I’m not in a position as a small business owner to do that. The profit margins are already rather thin,” said Doherty, adding that “on principle,” she shouldn’t have to do it.

    Right now, her shipments to U.S. customers are about 10% of what they were. Instead, she’s working on expanding her fiber offerings to Canadian customers at her brick-and-mortar store and fiber festivals.

    “We’ll see what happens,” she said. “I’m pretty sure that my U.S. customers were shopping and not even thinking about it, but now they’ll be evaluating the purchases that they’re making, knowing that they are going to have the extra fees on top of whatever they see.”

    Some Etsy businesses have been stymied by international postal services temporarily halting deliveries to the U.S. because of the confusion around the ending of de minimis.

    Selene Pierangelini’s business, Apricot Rain Creations, based in Brisbane, Australia, which sells crystals, candles, and spiritual wellness products on Etsy, depended on the Australia Post to get deliveries to U.S. customers. More than three-fourths of her customer base comes from the U.S. Australia Post suspended service to the U.S. for about a month, resuming on Sept. 22.

    She temporarily switched to FedEx and UPS — private shippers that are more expensive than Australia Post. Since it resumed, Australia Post is working with Zonos, a provider of cross-border shipping technology, to offer a shipping calculator that lets her prepay duties and fees. They themselves charge a fee of $1.69 plus 10% of the total duty fee.

    So far, the items she ships from Australia have been tariffed at a 10% rate, the baseline tariff for the country. She increased her shipping costs to help cover the expense. It is manageable, but tricky, she said.

    “You don’t really know how much (the cost) is going to be until the package clears custom in the U.S., and you get an invoice which is automatically paid out of your account,” she said.

    And her sales have not recovered. Before the tariffs, her U.S. sales were about 85% of her total sales, and now they’re around 35%. She’s hopeful people are just holding off until Black Friday and Cyber Monday holiday sales.

    In the meantime, she has restarted sales to Europe, which she had paused in 2024 due to increased regulations. And she’s launched a Facebook marketing campaign and is exploring print-on-demand services from U.S.-based providers for production and fulfillment.

    “This situation highlights how fragile small businesses can be when dependent on one market,” Pierangelini said. “While it has been a shock, it’s also pushed me to diversify — something that will hopefully make my business stronger and more resilient in the long run.”

    Mae Anderson, The Associated Press

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  • ‘Dr. Doom’ Nouriel Roubini breaks with the crowd on the AI bubble, saying the U.S. is headed for a ‘growth recession’ and not a market crash | Fortune

    For nearly two decades, esteemed economist Nouriel Roubini has worn the nickname “Dr. Doom” with honor. He earned it in the mid-2000s for warning of a housing crash that Wall Street dismissed, until he was proven catastrophically right. 

    Since then, the NYU Stern School of Business professor emeritus has become one of the most recognizable bears in global finance, regularly sounding alarms about debt spirals, geopolitical shocks, pandemics, AI disruptions, and what he once called “the mother of all crises.”

    So it’s perhaps surprising, even disorienting, that in the midst of investors teetering on the edge of a bear market, Roubini is breaking with his cohort — including fellow 2008-financial-crisis-prophet Michael Burry — to dismiss their pessimism about the U.S. economy as misplaced.

    In a new essay for the Financial Times, the economist argues that the conventional view – that America’s “Liberation Day” tariffs would trigger stagflation, tank the stock market, kneecap the dollar, and end U.S. exceptionalism — is simply wrong. Instead, he sees something close to the opposite: a short period of cooling growth, followed by a powerful rebound led by technology and capital spending that keeps the U.S. firmly in the top spot.

    “The now common view that the U.S. stock market is in a massive bubble and bound to crash is incorrect over the medium term,” he wrote. On the other hand, what he predicted isn’t necessarily the rosiest. The near-term picture looks like a “growth recession,’ he said, meaning slower, below-potential GDP. It’s not the hard landing or 1970s-style stagflation many have predicted, and it isn’t a bubble popping, but it’s a lopsided economy, as many Wall Street analysts have also noticed.

    Tariffs won’t topple the recovery

    Roubini, who once warned of a “mega-threatened age” – the era where AI, aging populations and global instability threatened our prosperity — now argues the most extreme fears about tariffs and policy missteps haven’t materialized. That’s partly because, he says, this administration is responsive to market reactions. When asset prices slumped immediately after the tariff announcement, the administration “blinked,” softening policy and opening the door to more conventional trade negotiations.

    By next year, he says, growth will reaccelerate. The Fed is undergoing a period of monetary easing, fiscal stimulus is still flowing, and—critically—AI-related capital expenditure continues to surge.

    Roubini’s arguments align closely with two of Wall Street’s top analysts: Torsten Slok from Apollo Global Management and Mike Wilson from Morgan Stanley. Slok, known for his “Daily Spark,” combining insightful charts with brevity, argued on November 20 that the economy is “likely to reaccelerate in 2026.” Just days earlier, he had warned of inequality, saying “it is a K-shaped economy for U.S. consumers.” He has also flagged extreme concentration and valuations in the stock market, with the Magnificent 7 running far ahead of the rest of the market. 

    Wilson, chief equity strategist for Morgan Stanley, has been predicting a “rolling recession” for years, arguing that different sectors of the economy shrank at different times, resulting in something that felt like a recession, but unevenly distributed. This changed in April 2022, when a “rolling recovery” set in, he has argued since then, forecasting an economic boom ahead. Wilson has argued for the possibility of a correction in stocks but, like Roubini, does not see a crash as imminent. 

    Tech > tariffs

    The core of Roubini’s argument rests on a simple hierarchy: tariffs and policy noise are temporary, but technological leadership that results in innovation compounding over decades is not.

    “Tech trumps tariffs,” he writes.

    He estimates U.S. potential growth could double from 2% to 4% by the end of the decade, powered by innovation in AI and machine learning, robotics, quantum computing, commercial space, and defense technology. While this agrees with many Wall Street predictions (Goldman Sachs sees real potential growth reaching 2.3% in the early 2030s, for instance), the prediction of 4% blows most others out of the water. 

    However, those industries, Roubini argues, will continue to deliver the “exceptionalism” that has set the U.S. apart for the past 20 years, to the extent to which productivity will boost the economy out double-digits. 

    If potential growth rises, he says, equity returns should, too. When growth averaged only 2% over the last two decades, annual returns still hovered in the double digits. Faster growth means even faster earnings expansion, and valuations that look elevated today may be supported rather than speculative.

    Roubini has been striking a more positive tone for about a year now — in August 2024, while everyone feared a downturn was coming and frustrated that the Fed wouldn’t ease, he calmed market fears again. 

    Debt—and the dollar—look less dangerous than feared

    One of the most persistent fears around AI-driven spending is debt sustainability. But Roubini argues that this math would change if growth rises even modestly.

    The Congressional Budget Office projects debt-to-GDP soaring under 1.6% real growth assumptions. But if growth averages 2.3% or higher, the ratio stabilizes. At 3% or more, it falls, meaning that we could potentially grow ourselves out of debt; an argument President Donald Trump has also used.

    A tech-driven “supply shock”could also push inflation lower over time as production costs drop while productivity booms, meaning higher real rates may not translate into higher nominal yields.Even external liabilities look manageable, he argues, because rising tech investment tends to attract foreign equity inflows, similar to how “emerging-market” economies finance growth during a resource boom.

    Roubini also dismisses the widely discussed decline of the dollar, since he believes that the U.S. will accelerate while Europe stagnates, and thus the dollar will ultimately strengthen. 

    Notably, “Dr. Doom” admitted that the U.S.’s top adversary, China, is at least on par with the U.S. in innovating in the “most important industries of the future,” such as AI and robotics. However, he doesn’t seem too concerned with the AI arms race. 

    “The US economy and markets are best positioned among advanced economies,” Roubini wrote. “They will continue to benefit from the US being the most innovative advanced country.”

    Eva Roytburg, Nick Lichtenberg

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  • Trump promises to send $2,000 tariff dividend checks ‘probably the middle of next year, a little bit later than that’ | Fortune

    President Donald Trump promised on Monday that his administration will begin issuing $2,000 “tariff dividend” checks to Americans around the middle of 2026, the most specific timetable he has offered yet on a proposal that can’t seem to find a home within a campaign-esque promise, economic argument and political provocation.

    “We’re going to be issuing dividends later on, somewhere prior to … probably the middle of next year, a little bit later than that,” Trump told reporters in the Oval Office, according to Axios. The payments, he said, would go to “individuals of moderate income, middle income.”

    The commitment marks an escalation from Trump’s earlier, vaguer assertions that tariffs are generating enough money to fund direct payments to American households. But turning the idea into actual checks is far more complicated than his easy-going rhetoric suggests.

    Treasury Secretary Scott Bessent made that clear over the weekend, saying on Fox News that the administration “needs legislation” to distribute any such dividend. 

    “We will see,” he added. Bessent also implied that the structure could take forms other than a check — for instance, a tax rebate — signaling uncertainty inside the administration about what Trump’s proposal even is.

    The math is another obstacle. A $2,000-per-person dividend, even if limited to Americans with low or middle incomes, would cost well over the $200 billion that Trump’s tariffs have brought in. If the checks resembled the COVID-era stimulus structure — which went to adults and children alike— the Committee for a Responsible Federal Budget estimates the price tag could reach $600 billion. That would mean that Trump’s tariffs would be a net $400 billion negative for the U.S. in 2026, based on current projections. 

    And the future of that revenue is itself uncertain. The Supreme Court is expected to rule within months on whether Trump exceeded his authority when he imposed sweeping tariffs by invoking national emergency powers. So far, both conservative and liberal supreme court justices have seemed skeptical of his arguments. If the Court rules against him, the administration may have to somehow refund billions in collected duties to importers, which would be the opposite of Trump’s promised “dividend.” Trump argues the stakes are existential, claiming a loss could cost the U.S. $3 trillion in refunds and lost investment.

    The White House did not immediately respond to Fortune’s request for comment.

    Still, Trump continues to present tariffs as an all-purpose economic engine: a way to protect U.S. factories, pressure foreign governments, strengthen the federal budget, and now, finance what he has described as a populist windfall. Trump and the Republican party broadly have been focused on winning voters’ favor back on “affordability” ever since Democrats’ swept elections earlier this month. The President even said on Friday that he would roll back tariffs on beef, coffee, tropical fruits and commodities, even as he continues to insist that tariffs don’t raise prices. 

    “Affordability is a lie when used by the Dems. It is a complete CON JOB,” he wrote Friday on Truth Social. 

    Eva Roytburg

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  • ‘The tariffs are a big tax increase’: Top bank crunches the numbers on how much Americans are paying for Trump’s trade regime | Fortune

    “Bust or boom?” That’s the big question at the heart of UBS’ big forecast for the U.S. economy for 2026 through 2028. But the team led by economist Jonathan Pingle also tackles a question that economists have been raising throughout 2025: the fact that tariffs amount to a large tax increase in all but name. Their analysis finds that the tariffs are acting as a substantial drag on growth and are actively contributing to persistent inflation, eroding real income gains for consumers.

    “The tariffs are a big tax increase,” the report states simply. According to UBS, the current tariff policies imply a weighted-average tariff rate of 13.6%, based on 2024 import shares, a fivefold jump from just 2.5% at the beginning of the year. This steep rate effectively translates to a tax on imports representing 1.2% of GDP.

    The most immediate impact of the trade regime is felt in rising prices, which are “keeping things elevated.” UBS estimates that the new trade regime will add 0.8 percentage points to core PCE inflation in 2026, enough to erase a year’s worth of disinflation progress and keep prices climbing at roughly 3.5% even if other pressures like housing or energy ease.

    Over the longer term, UBS expects the tariffs to have a cumulative direct impact of 1.4 percentage points on the level of core PCE through 2028, rising to nearly 1.9 points once knock-on effects like supply chain rerouting and domestic producers raising prices under tariff protection are factored in. Simply: tariffs alone could account for nearly two-thirds of the remaining gap between current inflation and the Fed’s 2% target.

    Inflationary Headwinds Hit Households

    This tariff-related price pass-through is already translating into pressure on American households. With average hourly earnings growth having slowed to roughly 3.5% annualized over the past six months, and aggregate payroll income running at about 3.25% annualized, this inflationary surge is proving costly. Economists expect quarterly annualized PCE inflation to run between 3% and 4% over the next two quarters, effectively wiping out those income gains.

    The report highlights that most households are less able to weather inflation now than they were two years ago. While upper-income households are supported by AI-driven equity market wealth, households below the top 20% of the income distribution suffer from historically low liquid assets. Rising costs, coupled with a slowing labor market, are diminishing consumer perceptions of future prospects.

    This headwind is particularly concerning because the U.S. economic expansion is already characterized as “narrowly driven” and “precarious.” The current economic outlook is essentially described as “a big bet on AI,” where the only obvious areas of growth are investment in software and computers (AI-driven) and consumption supported by upper-income equity market wealth. “A decent chunk of the US economy is in recession,” UBS adds, including real residential investment and non-residential construction, is in recession or declining outright.

    Returning money back to the people?

    As inflation pressures mount, President Donald Trump is touting his tariffs not only as a shield for American industry but also as a new source of household income. He has floated the idea of a “tariff dividend”—a payout of “at least $2,000 a person (not including high-income people!)”—claiming the surge in tariff revenue is big enough to share directly with Americans.

    The headline numbers are certainly striking. The Treasury took in $195 billion in tariff revenue in fiscal 2025, up 153% from $77 billion the year before. The Committee for a Responsible Federal Budget projects that Trump’s broad “reciprocal tariffs” could raise $1.3 trillion through 2029 and $2.8 trillion by 2034. That would lift tariffs from about 2.7% of total federal revenue to nearly 5%, roughly comparable to imposing a new payroll tax or trimming one-fifth of the defense budget.

    But analysts say the math behind Trump’s proposed dividend doesn’t hold up. John Ricco of Yale’s Budget Lab estimates a $2,000 payment for every American would cost around $600 billion, far more than the government’s tariff take.

    “The revenue coming in would not be adequate,” Ricco told the Associated Press. Even Treasury Secretary Scott Bessent appeared caught off guard, telling ABC’s This Week that he hadn’t discussed the idea with Trump and suggesting any “rebate” would more likely appear as a future tax cut.

    Economists also warn that while tariffs generate revenue, they do so by driving up prices. Importers typically pass those costs to consumers, making the policy function more like a regressive tax than a dividend.

    Economists find that what’s emerging is a feedback loop: tariffs designed to revive industrial strength are now helping to sustain inflation, which in turn weakens real income growth and constrains the very consumers meant to benefit from the policy. UBS calls it a “narrow expansion,” but it may be narrower still: an economy whose growth depends on circular AI investments and government revenue creation schemes as opposed to the broad spending power of its citizens.

    Nick Lichtenberg, Eva Roytburg

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  • China will make ‘substantial’ purchases of U.S. soybeans and should avoid an extra 100% tariff, says Bessent—who reveals he’s also a farmer | Fortune

    Treasury Secretary Scott Bessent signaled on Sunday that the U.S. and China will significantly de-escalate their trade war under a framework he negotiated.

    In an interview on CBS News’ Face the Nation with Margaret Brennan, Bessent said an additional 100% tariff that President Donald Trump threatened earlier this month is “effectively off the table,” along with China’s rare earth restrictions.

    “So I would expect that the threat of the 100% has gone away, as has the threat of the immediate imposition of the Chinese initiating a worldwide export control regime,” he said.

    Trump and Chinese President Xi Jinping are scheduled to meet Thursday on the sidelines of a regional economic conference in South Korea, where they will determine the final details of a deal.

    Bessent said Trump’s 100% tariff threat, which would have boosted the overall rate above 150%, created significant leverage during the talks in Malaysia with Vice Premier He Lifeng over the weekend.

    The two sides also discussed American agricultural exports to China and Beijing’s role in helping curb the fentanyl trade. 

    Farmers have been warning of an economic crisis in rural America as crop prices fall and costs remain high, while China has held off on buying any U.S. soybeans this harvest season, despite traditionally being their top export market.

    In a separate appearance on ABC’s This Week, Bessent revealed that he is also a soybean farmer: “So, I have felt this pain, too.”

    On CBS, Bessent declined to give specific details but said soybean farmers will be “extremely happy with this deal for this year and for the coming years.”

    He added that a recent Chinese purchase of soybeans from Argentina had been planned before the U.S. extended a currency lifeline to Buenos Aires but was timed to take advantage of a drop in export duties.

    “Those soybeans were always going to be on the market. It’s a global market. The three leading suppliers are Brazil, Argentina and the U.S.,” Bessent said. “And I believe that we have brought the market back into equilibrium, and I believe that the Chinese will be making substantial purchases again.”

    While he indicated China will ease its export controls on rare earths, Bessent suggested U.S. restrictions will remain.

    When asked about limits on chip exports and curbs on Chinese investments in the U.S., he replied, “There have been no changes in our export controls.”

    Jason Ma

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  • Trump adds 10% tariff on Canada due to a TV ad, even though key economic powers law doesn’t allow its use against ‘informational materials’ | Fortune

    President Donald Trump’s extra 10% duty on Canada added fuel to the debate over his legal authority on trade, just as the Supreme Court is about to consider a challenge to his global tariffs.

    In a Truth Social post on Saturday, he blasted the Ontario provincial government for not immediately taking down a TV ad that features remarks from former President Ronald Reagan criticizing tariffs.

    “Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now,” Trump wrote.

    He didn’t cite a specific law for the extra levy, and the White House didn’t immediately respond to a request for comment.

    But because he is adding it to his existing Canada tariffs, the 10% presumably invokes the International Emergency Economic Powers Act (IEEPA).

    Trump also claimed the TV ad was meant to influence the Supreme Court, which will hear arguments on Nov. 5 in a case disputing his ability to invoke IEEPA to justify tariffs.

    Peter Harrell, a visiting scholar at Georgetown’s Institute of International Economic Law, pointed out that IEEPA explicitly prohibits its use against information.

    “Potential tariffs over a policy TV ad are potentially *even more* illegal than the other tariffs, given that the statute Trump is using, IEEPA, specifically provides that it cannot be used to ‘regulate’ ‘directly or indirectly’ any ‘information or informational materials,’” he posted on X.

    The administration has used IEEPA to impose his so-called reciprocal tariffs on countries around the world as well as separate tariffs on Canada, Mexico and China over the fentanyl trade.

    Canada currently faces a 35% base tariff rate, but it doesn’t apply to goods that comply with the US-Mexico-Canada Agreement that Trump negotiated in his first term.

    Trump’s lack of specifics on his new 10% Canada tariff raised key questions for Erica York, vice president of federal tax policy at the Tax Foundation.

    “Is the new 10% tariff on imports from Canada related to the fentanyl emergency or the reciprocal trade emergency or are hurt feelings also now a national emergency?” she asked on X.

    Jason Ma

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  • China’s rare earth limits may have ‘gone too far this time’ as trade talks start while U.S. gathers support amid global backlash | Fortune

    Top U.S. and Chinese officials met in Malaysia on Saturday to lay the groundwork for a summit between Donald Trump and Xi Jinping, with some on Wall Street saying Beijing overplayed its hand by imposing draconian restrictions on rare earth exports.

    Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held negotiations that the U.S. characterized as constructive. But sources told the Financial Times China was reluctant to ease the export controls.

    If Beijing refuses to budge and talks between Trump and Xi on Thursday don’t result in a deal to roll back export controls, U.S. tariffs on China would soar to 157%. In addition, other countries may increasingly side with Washington, overcoming earlier backlash against the U.S. over Trump’s global tariffs.

    “As China’s leader Xi Jinping stands firm on implementing sweeping export controls on rare-earths and other critical minerals, signs are mounting that Asia’s biggest economy has gone too far this time,” Yardeni Research said in a note on Tuesday.

    For example, officials in Europe and Japan joined the U.S. in denouncing China’s export controls, which could curb the supply materials that are critical to a wide range of industries.

    The negative response to Beijing’s tactics also prompted the G7 to vow a united front against the export controls, Yardeni pointed out.

    The often unilateral Trump administration has spotted an opportunity to flip the script and even discovered a taste for multilateralism, with Bessent saying recently he will huddle with Australia, Canada, India and Asian democracies to formulate a collective response.

    For its part, China has blasted U.S. efforts to limit software and chip exports, while also shifting trade toward other countries to offset the plunge in exports to America.

    “Yet Xi’s latest trade war tactic may be tipping the geostrategic balance back toward the US as companies around the world think better of doing business in China generally,” Yardeni said.

    Meanwhile, the U.S. is scrambling to develop alternative sources of rare earths and turning to allies like Australia, though new supplies could take years to reach the market.

    Trump also has formidable trade weapons of his own to deploy against China in the event he seeks to ratchet up U.S. retaliation.

    But he has signaled he’d rather reach a deal and softened his tone recently, saying last week that he is “not looking to destroy China” after previously warning he could.

    And while speaking to reporters aboard Air Force One en route to Malaysia, Trump was open to a compromise.

    “Sure they’ll have to make concessions. I guess we will too,” he said. “We’re at 157% tariff for them. I don’t think that’s sustainable for them. They want to get that down, and we want certain things from them.”

    Jason Ma

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  • America’s cattle chief rips into Trump’s Argentine beef bailout, saying it ‘does nothing to lower grocery store prices’ | Fortune

    President Donald Trump’s tightening ties with Argentina have continued to vex rural American farmers, who have warned increased aid to the South American country will jeopardize the domestic agricultural economy. First, there was news of a $20 billion swap line arranged by Treasury Secretary Scott Bessent. Then there was revelation that Argentina was selling soybeans to China, which had cut U.S. imports to zero. Now, the Argentine cattle question is in open play.

    Trump proposed on Sunday that the U.S. could purchase beef from Argentina as a way to bring down prices for American consumers. Beef costs have ballooned as much as 12% in the past year. The suggestion was met with exasperation from U.S. cattle ranchers, who argued the move would disrupt the free market and introduce unnecessary risk factors to domestic beef supply.

    “This plan only creates chaos at a critical time of the year for American cattle producers, while doing nothing to lower grocery store prices,” National Cattlemen’s Beef Association CEO Colin Woodall said in a statement on Monday. 

    Woodall added that Argentina has a “deeply unbalanced trade relationship” with the U.S., selling more than $800 million of the product compared to the U.S., compared to the U.S. selling just over $7 million of American beef to Argentina. He also expressed concern over Argentina’s history with foot-and-mouth disease, a highly contagious virus impacting cloven-hooved animals, which he warned could “decimate” U.S. livestock production.

    Trump’s proposal is part of a recent effort to strengthen relations with Argentina and longtime political ally and Argentinian President Javier Milei, a chainsaw-wielding leader known for both taming the country’s hyperinflation, but also navigating several corruption scandals. Argentina’s central bank confirmed on Monday a currency stabilization agreement with the U.S., which will see a $20 billion transfusion from the U.S. Treasury Department to the Argentine central bank.

    “Argentina is fighting for its life,” Trump said on Sunday. “Nothing is benefiting Argentina.”

    The U.S. Treasury Department did not respond to Fortune’s request for comment.

    Rural America’s grievances

    A potential intervention with Argentina would come just as the U.S. cattle industry was beginning to recover from a dismal 2024, in which it saw its smallest flock since 1951, a result of severe droughts withering pastures and hiking up livestock feed costs. U.S. beef imports have also shrunk due to a ban on Mexican beef in an effort to prevent the spread of screwworm, a flesh-eating parasite found in cattle across the border.

    Still, the industry is vital to domestic farming. In 2024, cattle production made up about 22% of the $515 billion in agricultural commodity cash receipts in the U.S., according to the U.S. Department of Agriculture.

    Cattle ranchers join the chorus of soybean farmers, who have been outspoken about the impact Trump’s ties with Argentina have on the soybean industry.  Amid proposals to offer financial assistance to Argentina last month, the South American country also dropped several export taxes as an effort to stabilize its economy—including its soybean tax. As a result, China, which previously purchased about a quarter U.S.’s soybean exports, ordered several cargoes of the crop. China has not ordered U.S. soybeans since May.

    “The frustration is overwhelming,” the American Soybean Association (ASA) President Caleb Ragland said in a statement last month. “The farm economy is suffering while our competitors supplant the United States in the biggest soybean import market in the world.”

    The cattle industry’s unique needs

    While soybean farmers have advocated for a trade deal with China to regain strength in the global market, cattle ranchers have a simpler demand.

    “They’re not asking for anything,” Derrell Peel, a professor of agribusiness specializing in livestock at Oklahoma State University, told Fortune. “Basically, they just want everybody to get out of the market and let it do what it does.”

    Cattle farmers are well-equipped to deal with dwindling flock sizes, which are a part of about a decade-long cycle of a natural swelling and contracting of livestock populations as result of cattles’ biological life cycle, Peel said. While severe droughts have made this period of liquidation more acute than previous cycles, the industry is used to having free trade to move through the supply contraction.

    The industry is already relying on an influx of beef imports, with the USDA projecting import volumes to peak in 2025 at 4.4 billion pounds, while production hits a projected low in 2027 of 24.8 pounds. Disruptions to this well-documented and long-navigated cycle is tantamount to market manipulation, according to Peel.

    “Anything that would jeopardize the opportunity here to replenish financially, recover from the last adversities, as well as plan ahead for the next turn to this thing, is naturally going to cause a negative reaction on the part of producers,” he said.

    Moreover, Peel said, Argentina represents only about 2% of U.S. beef imports, meaning leaning on the country for imports would do very little to increase U.S. beef supply, particularly compared to big importers like Australia and Brazil. 

    While high beef prices have helped cattle farmers stay afloat in this liquidation period, U.S. beef supply has also been impacted by Trump’s tariff policy, particularly his 40% tax on Brazilian exports that have further tightened U.S. import supplies, pushing beef prices up. Beyond snubbing U.S. soybean farmers, China has also stopped purchasing beef from U.S. cattle ranchers because of steep levies, Peel said. China is the industry’s third-largest export market.

    “We’re effectively out of that market now, largely,” Peel said. “So that’s an impact. It’s been kind of massive.”

    Sasha Rogelberg

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  • Dow futures rally as Trump softens tone on trade war again while first tech earnings and inflation report loom | Fortune

    U.S. stock futures pointed higher on Sunday evening as Wall Street looks ahead to a big week for the U.S.-China trade war, corporate earnings, and economic data.

    President Donald Trump again set the tone for the market after he further softened his rhetoric on China in an interview with Fox News’ Sunday Morning Futures.

    “I’m not looking to destroy China,” he said, contrasting with his remarks in August when he said he holds “incredible cards” that “would destroy China,” if he chose to use them.

    Earlier this month, he announced an additional 100% tariff and software restrictions on China, which has a stranglehold on the world’s supply of rare earths and imposed tighter export controls that threaten a wide range of industries.

    Last week, stocks rebounded sharply after Trump said “Don’t worry about China” and vowed that everything will be fine. A similar pattern is playing out again this weekend.

    Futures tied to the Dow Jones industrial average rose 54 points, or 0.12%. S&P 500 futures were up 0.15%, and Nasdaq futures added 0.20%.

    The yield on the 10-year Treasury was flat at 4.011%. The U.S. dollar was down 0.06% against the euro and up 0.14% against the yen.

    Gold climbed 1% to $4,253.10 per ounce. U.S. oil futures were steady at $57.55 a barrel, and Brent crude was virtually unchanged at $61.27.

    Investors will get another update on the trade war as Treasury Secretary Scott Bessent is due to meet Chinese Vice Premier He Lifeng this week to continue talks ahead of a meeting between Trump and Xi Jinping at the end of this month on the sidelines of a regional economic summit in South Korea.

    Meanwhile, the third-quarter earnings season ramps up after big banks reported blowout results, with top tech companies on tap.

    On Tuesday, Netflix and Texas Instruments are due. On Wednesday, Tesla and IBM will report, while Intel is scheduled for Thursday.

    And despite the government shutdown, the consumer price index report for September will be issued by the Labor Department on Friday after key personnel were recalled. The report will allow for Social Security to make cost of living adjustments.

    Economists expect a 0.4% monthly uptick, matching August’s pace, and a 3.1% annual increase, accelerating from 2.9% in August.

    Jason Ma

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  • DBS CEO Tan Su Shan’s one big lesson for getting through Trump’s tariffs: ‘Diversify’ | Fortune

    DBS CEO Tan Su Shan took on the top job just before an economic storm struck. The veteran of the Singapore-based bank, Southeast Asia’s largest, assumed the role in March, just a few days before U.S. President Donald Trump slapped steep tariffs on much of the world economy. That posed a challenge for DBS, which serves clients across China, Southeast Asia, and India. 

    Her response to an uncertain economy? Diversify. “If you only sell to the U.S., you have to diversify,” Tan said at the Fortune Most Powerful Women Summit on Tuesday.

    Last week, Trump threatened to impose 100% tariffs on Chinese goods by Nov. 1 in retaliation for Beijing’s expanded export controls on rare earth minerals. The U.S. president has also slapped 50% tariffs on Brazil and India, two other major non-Western economies. 

    On Tuesday, Tan suggested that Trump’s broad-based tariffs could be forging new links between these different economies. “China and India, historically, are not that close,” Tan said. “This might actually create more opportunities for Chinese and Indian companies to do more together, certainly on the supply chain.”

    Earlier this year, China and India agreed to resume direct flights, which had been suspended since the COVID pandemic. Relations between the two economies had been cool since deadly border clashes in 2020. 

    “It will take time to build trust [between India and China],” Tan said Tuesday. “But the opportunities are there.”

    CEO: ‘Chief energy officer‘

    Tan is DBS’s first-ever female CEO. She’s also No. 1 on Fortune’s Most Powerful Women Asia ranking and No. 6 on its global MPW ranking.

    Yet Tan downplayed that accolade on Tuesday. “I don’t know how I feel about the word ‘powerful,’” she noted. “It really is the team that gets stuff done.”

    “It’s my job as a CEO to be the chief energy officer, to give energy to the team and make sure that everyone is headed in the right direction,” she said. 

    Learning from an airline

    On stage, Tan also recalled her early years at DBS. The institution is now Southeast Asia’s most valuable company and winner of countless awards for good digital products and customer service, but when Tan joined DBS in 2010, the bank had a decidedly different reputation. 

    “We were the worst bank,” Tan recalled. “Worst bank for customer service, worst bank for the longest queues, worst bank for product.”

    The bank, led by then-CEO Piyush Gupta, found inspiration in Singapore’s flagship carrier, Singapore Airlines. (Both companies boast Temasek, Singapore’s state investment company, as a major shareholder.)

    “We were all marshaled to Singapore Airlines’s headquarters by the airport and taught how to offer good ‘service quality,’” Tan explained. “Our first learning was: How do you give good service, and how are you respectful, easy to deal with, and dependable?”

    DBS has now grown from a staid government-linked bank to a leader in the country’s banking sector. When Tan joined in 2010, DBS generated 7.1 billion Singapore dollars ($5.5 billion in current exchange rates) in total income. That figure had grown to 22.3 billion Singapore dollars ($17.2 billion) last year. 

    DBS shares are up by almost 35% over the past 12 months; Singapore’s other “Big Three” banks, OCBC and UOB, are up by 11% and 7% respectively. 

    This story was originally featured on Fortune.com

    Nicholas Gordon

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  • Why the Supreme Court may choose to uphold Trump’s tariffs: ‘It would be incredibly disruptive to unscramble those eggs’ | Fortune

    When the Supreme Court hears arguments on November 5 in President Donald Trump’s tariff case, the justices won’t just be weighing a constitutional question—they’ll be deciding the fate of billions of dollars in global commerce. 

    The case, which challenges Trump’s sweeping tariffs imposed under emergency powers, has become a defining moment for business leaders navigating a volatile trade landscape already reshaped by uncertainty, inflation, and geopolitical rivalry. 

    As former Solicitor General Elizabeth Prelogar noted at Fortune’s Most Powerful Women conference, the Supreme Court now faces a “hard question” about whether to disrupt a sitting president’s signature economic policy after it has already reshaped the global trade landscape. 

    “Even if the tariffs had never been able to take effect, now that they have come in and changed the status quo, the court might ultimately really have pause and concern before disrupting the President’s economic policy in this way,” she told Fortune’s Michal Lev-Ram.

    The potential economic fallout from reversing Trump’s tariff policy may ultimately guide the Court’s hand. “The government is coming to court and saying, ‘We would have to unwind billions or trillions of dollars. It could bankrupt our nation,’” Prelogar added. “It would be incredibly disruptive to try to scramble those eggs,” referring to the billions of dollars already collected and distributed under the policy.

    Tariff controversy

    Trump’s move to impose 10% reciprocal tariffs on all imports—rising to as high as 50% for major trading partners—under the International Emergency Economic Powers Act (IEEPA) marked one of the most aggressive uses of executive trade authority in U.S. history. His administration has since reportedly collected $158 billion in tariffs, arguing that striking them down would “impossible to ever recover” and destabilize ongoing trade negotiations. Treasury Secretary Scott Bessent estimated that if the top court goes against the administration, the U.S. “would have to give a refund on about half the tariffs, which would be terrible for the Treasury,” in an interview with NBC.

    Lower courts have disagreed, ruling that Trump overstepped his statutory and constitutional bounds. In three separate opinions, federal judges concluded that IEEPA does not authorize the president to unilaterally impose what amounts to a massive tax on imports. The Federal Circuit Court of Appeals, in a 7–4 decision, said plainly that “absent a valid delegation by Congress, the President has no authority to impose taxes,” emphasizing that tariffs—long considered a congressional power—require clear legislative authorization.

    If the Court strikes down the tariffs, companies could see immediate relief in import costs—but the economic ripple effects would be complex. The Committee for a Responsible Federal Budget estimates that overturning the tariffs would wipe out $2.8 trillion in projected government revenue through 2035, potentially forcing cuts or higher borrowing costs that could squeeze businesses elsewhere. 

    ‘Almost a coin toss’

    Currently, U.S. consumers and businesses are feeling the weight of tariffs most, according to a report by Goldman Sachs. The analysis estimated U.S. consumers are shouldering up to 55% of the costs stemming from Trump’s tariffs, even though the president has repeatedly claimed that the tariffs on imports exclusively tax foreign enterprises. Goldman’s research also found that U.S. businesses pay 22% of the cost of the tariffs, while foreign exporters contribute only 18% of the cost. 

    While Wall Street might initially celebrate tariff relief especially in heavily impacted sectors, broader uncertainty around U.S. trade policy could linger, especially as Trump has signaled he would pivot to other legal authorities, like Section 232 of the Trade Expansion Act, to reimpose tariffs on specific industries should the Court not rule in his favor.

    Even if the law is on the challengers’ side, the pragmatic economic and executive power concerns, according to Prelogar, make the case’s outcome “almost a coin toss.” Trade and legal experts previously predicted between a 70-80% chance the high court would rule against the Trump administration and expect a decision by the end of the year. According to them, the justices may not follow traditional ideological divides.

    Whether Trump’s tariffs survive or fall, one outcome is certain: the decision will redefine how executives plan in an era where law and economics collide. The Court’s ruling, expected by year’s end, will either restore Congress’s trade prerogatives, or confirm that the president’s emergency powers can reach deep into the heart of global commerce. 

    Lily Mae Lazarus

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  • IMF chief Kristalina Georgieva dismisses impact of Trump trade war: ‘Trade is like water, you put in an obstacle, it goes around it’ | Fortune

    The escalating trade clash between the U.S. and China has investors on edge, fearing it could mark the beginning of the end for global cooperation as we know it. On Friday, President Donald Trump called China’s new export controls “extraordinarily aggressive” and “hostile”; he threatened a retaliatory 100% tariff. (He later sought to deescalate the situation, calming U.S. markets.)

    For Kristalina Georgieva, head of the International Monetary Fund, it’s just another day in the office. Speaking at Fortune’s Most Powerful Women 2025 summit in Washington, D.C., she downplayed any fears of a trade war.

    “Frankly, this thing that trade is dead is completely overstated,” Georgieva told Fortune’s Diane Brady. “Trade is like water. You put [up an] obstacle, it goes around it.”

    And while Georgieva recognizes the world is becoming “foggier” and full of uncertainty, one of the biggest challenges comes from getting buy-in that cooperation is better than division: “We are in this one big boat. It is a rough sea. We better row together.”

    Luckily, many countries already subscribe to this philosophy. She pointed out that following the onset of U.S. tariffs earlier this year, 188 out of the IMF’s 191 member states did not choose to retaliate. Instead, they’ve turned to regional partners for trade. Southeast Asia and the Gulf region are two examples she cited.

    Even China has benefited from diversifying its trade portfolio: overall exports rose 8.3% in September—the highest total this year—thanks to strong trade growth with the European Union. Chinese shipments to the U.S. fell 27% in September, marking half a year of double-digit trade declines, according to data released by the General Administration of Customs. 

    But for business leaders, there’s a growing opportunity to be a grounding voice as long as they are willing to “buckle up,” Georgieva added.

    “Good news for the world. The private sector is more agile, more adaptable,” she said. “Over the last years, we have seen in many countries where there was [a] big state presence in the economy—including because of IMF urging them to pull back—more private sector initiative. And in this time of strong winds, [business leaders] are an anchor of stability because you adapt, you just keep doing it.”

    For female business leaders, in particular, she reiterated the need to always be thinking about worst case scenarios—and be ready to adapt to them.

    “Think of the unthinkable so you’re ready when the unthinkable comes,” Georgieva said. “Because we know from COVID, we know from the war in Europe, it will come, and we women are so strong and resilient, and we can face it.”

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    Preston Fore

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  • Trump bet China would face ‘tremendous difficulties’ without U.S. consumers—Beijing just focused on the rest of the world instead | Fortune

    At the beginning of his tariff standoff with Beijing, President Trump was confident in his strong hand. China’s economy was reliant on U.S. consumers, he said, and so it would have to make some compromises or risk losing them.

    “China has been hit much harder than the USA, not even close,” Trump wrote on Truth Social, the social media site he owns, in April. Later that month, he admitted that while American shoppers may have to cut back on Chinese-produced consumption, the White House’s tariff plan meant the Chinese government was “having tremendous difficulty because their factories are not doing business.”

    Six months later and it seems Beijing has simply circumnavigated the U.S. by focusing on increasing its exports to the rest of the world. The diversification has been so successful that China’s export market is actually tracking significant growth despite the trade war.

    According to data released by the General Administration of Customs, China’s shipments to the U.S. fell 27% in September, the sixth month of double-digit declines to its once most valuable customer. Meanwhile it charted strong growth to areas like the European Union (currently operating under a 15% tariff rate from the White House), leading to export growth to non-U.S. countries of 14.8%.

    The shift away from the U.S. means exports are actually up 8.3% in September compared to a year ago, raking in  $328.6 billion—its highest total for 2025 so far.

    China’s economy is fairing better than expectations outlined back in April, when President Trump first made his tariff plans known. Earlier in the year World Bank speculated China’s economy would grow 4% in 2025, but last week revised this up to 4.8%. Likewise, it upped its expectations for 2026 from 4% to 4.2%.

    Conversely, in June the World Bank cut its expectations for U.S. growth by 0.9 percentage points to 1.4% for 2025.

    This backdrop means Trump’s threat last week to impose 100% tariffs on China may not have held the potency it once did. Having been relatively successful in side-stepping Trump’s tariffs so far, Beijing responded forcefully to the Oval Office’s threat, blasting it as a “double standard.”

    A spokesman for the Ministry of Commerce said: “Frequently threatening high tariffs is not the right approach to engaging with China. China’s position on a tariff war is consistent: we do not want one, but we are not afraid of one.”

    Room for compromise

    Having issued the warning—and with both sides still operating under a pause on reciprocal tariffs until November 10—President Trump did then seek to strike a more reasoned tone, and sent futures climbing as a result.

    “I think we’re going to be fine with China,” Trump told reporters on board Air Force One yesterday afternoon. “I have a great relationship with President Xi, he’s a very tough man, a very smart man, he’s a great leader for their country and I have a great relationship with him.

    “I think we’ll get it set. I know what happened, I really understand what happened, and I’m not even saying he’s wrong. But then we met him with something much tougher than what he did to us.”

    The back-and-forth may simply boil down to showmanship, wrote Deutsche Bank’s Jim Reid in a note to clients the morning: “There’s still plenty of time for negotiations, and I suspect the market will begin to price in a reasonable probability of a deal once the initial shock fades.

    “For what its worth, Polymarket has the probabilities of the two Presidents meeting by October 31st at 62% this morning, down from a peak of 88% last week but up from around 35% at the lows on Friday night. So there is a belief emerging that this is mostly negotiating tactics on both sides.”

    UBS’s Paul Donovan also noted the Oval Office’s appetite for negotiation, telling clients this morning: “Both Trump and U.S. Vice President Vance have made conciliatory noises which suggests that there may be some kind of retreat from the original threat.”

    “While the U.S. is obviously not able to publish data at the moment, the trend recently has the two countries’ data showing China selling U.S. more than the U.S. was buying from China,” he added. “That anomaly hints very strongly at rerouting by China to enable U.S. importers to avoid some of the tariffs.”

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    Eleanor Pringle

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  • Dow futures jump nearly 400 points as markets eye another serving of the TACO trade after Trump says ‘Don’t worry about China’ | Fortune

    Investors are eyeing a stock market rebound after Friday’s trade war flare-up sent the S&P 500 to its worst loss since April.

    On Sunday, President Donald Trump sought to calm nerves in a post on Truth Social, following his announcement on Friday that he will impose an additional 100% tariff on China and limit U.S. exports of software. 

    “Don’t worry about China, it will all be fine!” he wrote. “Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

    Meanwhile, Vice President JD Vance told Fox News’s Sunday Morning Futures that the U.S. is willing to be reasonable if China is too, though he insisted Trump has the upper hand with “far more cards” than Beijing holds.

    The shift in tone contrasts with Trump’s fiery rhetoric on Friday as he lashed out at China for its new export controls on rare earths, which are critical inputs across a range of industries.

    “Market participants appear to be leaning into the TACO trade once more, fueled not only by what we’ve seen in the recent past, but also by conciliatory remarks over the weekend from both President Trump and Vice President Vance, suggesting that Friday’s announcement of additional 100% tariffs on Chinese imports are likely to be little more than a negotiating tactic,” Michael Brown, senior research strategist at Pepperstone, said in a note on Sunday.

    Futures tied to the Dow Jones Industrial Average surged 382 points, or 0.84%. S&P 500 futures were up 1.27%, and Nasdaq futures jumped 1.79%.

    The yield on the 10-year Treasury tumbled 8.9 basis points to 4.059%. The U.S. dollar was up 0.04% against the euro and up 0.48% against the yen. Gold climbed 1.43% to a new high of $4,057.50 per ounce. U.S. oil futures rose 1.29% to $59.66 a barrel, and Brent crude gained 1.32% to $63.56.

    Trump had previously imposed 145% tariffs on China, then put them on hold to allow negotiations to play out. A similar pattern played out with other trade partners like the European Union, causing Wall Street to dismiss maximalist threats with the TACO (Trump always chickens out) trade.

    Brown said Trump’s new China tariff, which would go into effect Nov. 1 and bring the overall level to 130%, appears to be another example of his “escalate to de-escalate” strategy.

    “Assuming that this is another ‘TACO’ situation, and some clarity on that front is obtained before too long, then this is likely to prove another dip in equities that should be viewed as a buying opportunity, with the path of least resistance continuing to lead higher, if in somewhat choppy fashion,” he added.

    At the same time, the Federal Reserve’s shift back to rate cuts amid still-solid economic growth should continue to boost to the dollar, which will likely shrug off tariff threats, Brown predicted.

    Similarly, market veteran Ed Yardeni, president of Yardeni Research, also sees the U.S. and China pulling back from the precipice.

    “If neither side were to blink, the US and Chinese economies would lead the global economy into a deep recession, if not a depression,” he wrote in a note on Sunday. “But we expect that both sides will blink very soon given the extremely adverse consequences of a trade war between the world’s two biggest economies.”

    For its part, Beijing remained defiant, with the commerce ministry saying Sunday that China doesn’t want a tariff war but is also not afraid of one. It also said the export controls are not a ban on rare earth shipments but are a sovereign right.

    But China’s new rare earth export policy ups the ante well beyond another tit-for-tat exchange in the trade war against the U.S.

    Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday that the policy gives Beijing the power to “forbid any country on Earth from participating in the modern economy.”

    Dali Yang, a political science professor at the University of Chicago, sounded a similar alarm in a post on Sunday, saying the move marks a decisive moment that reveals what a China-led order might look like.

    Looking beyond rare earths, it’s one that leverages control over strategic materials and technologies to prop up global influence.

    “China is effectively saying: ‘We control the arteries of high-tech civilization.’ The rest of the world now sees that message clearly—and is scrambling to build new circulatory systems,” Yang wrote.

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    Jason Ma

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  • Stocks’ worst swoon since fallout from Liberation Day: Trump Truth Social post on ‘massive increase of tariffs’ shatters calm | Fortune

    The S&P 500 sank 2.7% in its worst day since April 10. The Dow Jones Industrial Average dropped 878 points, or 1.9%, and the Nasdaq composite fell 3.6%.

    Stocks had been heading for a slight gain in the morning, until Trump took to his social media platform and said he’s considering “a massive increase of tariffs” on Chinese imports. He’s upset at restrictions China has placed on exports of its rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines.

    “We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” Trump wrote on Truth Social. He also said “now there seems to be no reason” to meet with China’s leader, Xi Jinping, after earlier agreeing to do so as part of an upcoming trip to South Korea.

    Trump’s sudden announcement of new tariffs recalled April’s big swoon in stock markets, when the president announced “Liberation Day” with a list of “reciprocal tariffs” for a large number of countries worldwide, sending global markets plunging. Within just four days, the S&P 500 fell about 12% and the Dow Jones Industrial Average lost nearly 4,600 points, but the U.S. indexes regained all the lost ground within a month or so as the tariffs played out very differently from Trump’s announcement.

    Still, as of October, Federal Reserve Governor Chris Waller, who confirmed to CNBC that he had a “great interview” as a potential replacement for Chairman Jerome Powell, revealed how the tariffs had played out so far: price increases for higher-income consumers as tariffs were passed through, and companies swallowing the cost for any lower-income and price-sensitive shopper. Moody’s Analytics found that nearly 50% of consumer spending in the economy came from the top 10% of wealthiest Americans, meanwhile, and the tariff revenue is “very significant,” according to Apollo Global Management chief economist Torsten Slok.

    The ratchet higher in tensions between the world’s largest economies led to widespread drops across Wall Street, with roughly six out of every seven stocks within the S&P 500 falling. Nearly everything weakened, from Big Tech companies like Nvidia and Apple to stocks of smaller companies looking to get past uncertainty about tariffs and trade.

    The market may have been primed for a slide. U.S. stocks were already facing criticism that their prices had shot too high following the S&P 500’s nearly relentless 35% run from a low in April. The index, which dictates the movements for many 401(k) accounts, is still near its all-time high set earlier in the week.

    Critics say the market looks too expensive after prices rose much faster than corporate profits. Worries are particularly high about companies in the artificial-intelligence industry, where pessimists see echoes of the 2000 dot-com bubble that imploded. For stocks to look less expensive, either their prices need to fall, or companies’ profits need to rise.

    Levi Strauss dropped 12.6% for one of the market’s larger losses, even though it reported a stronger profit for the latest quarter than analysts expected.

    Its forecast for profit over the full year was also within range of Wall Street’s estimates, but the jeans and clothing company could simply be facing the challenge of heightened expectations after a big run. Its stock price came into the day with a surge of nearly 42% for the year so far.

    All told, the S&P 500 fell 182.60 points to 6,552.51. The Dow Jones Industrial Average dropped 878.82 to 45,479.60, and the Nasdaq composite sank 820.20 to 22,204.43.

    Some of Friday’s strongest action was in the oil market, where the price of a barrel of benchmark U.S. crude sank 4.2% to $58.90.

    It fell as a ceasefire between Israel and Hamas came into effect in Gaza. An end to the war could remove worries about disruptions to oil supplies, which had kept crude’s price higher than it otherwise would have been.

    Losses accelerated following Trump’s tariff threat, which could gum up global trade and lead the economy to burn less fuel. Brent crude, the international standard, dropped 3.8% to $62.73 per barrel.

    In the bond market, the yield on the 10-year Treasury sank to 4.05% from 4.14% late Thursday.

    It had already been lower before Trump made his threats, as a report from the University of Michigan suggested that sentiment among U.S. consumers remains in the doldrums.

    “Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds,” according to Joanne Hsu, director of the Surveys of Consumers. “At this time, consumers do not expect meaningful improvement in these factors.”

    The job market has slowed so much that the Federal Reserve cut its main interest rate last month for the first time this year. Fed officials have penciled in more cuts through next year to give the economy additional breathing room. But Chair Jerome Powell has also said they may change course if inflation stays high. That’s because lower interest rates can push inflation even higher.

    One potentially encouraging signal from the University of Michigan’s preliminary survey said consumers’ expectations for inflation in the coming year edged down to 4.6% from 4.7% the month before. While that’s still high, the direction of change could help the Fed and limit upward pressure on inflation.

    In stock markets abroad, indexes fell across much of Europe and Asia.

    Hong Kong’s Hang Seng fell 1.7%, and France’s CAC 40 dropped 1.5% for two of the bigger moves. But South Korea’s Kospi leaped 1.7% after trading reopened following a holiday.

    ___

    AP Writer Teresa Cerojano contributed.

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    Stan Choe, Nick Lichtenberg, The Associated Press

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  • Trump to hike China tariffs to 130% and impose software export controls next month, as trade war reignites to nearly ‘Liberation Day’ levels | Fortune

    President Donald Trump said Friday that he will impose an additional 100% tariff on China and limit U.S. exports of software, escalating the trade war after months of it appearing to ease toward a resolution.

    The latest salvo came after China restricted its exports of rare earths, which are critical minerals used across industries, from the tech sector to automakers and defense contractors.

    Late in the afternoon, Trump took to Truth Social to decry Beijing’s “large scale Export Controls on virtually every product they make.”

    “Based on the fact that China has taken this unprecedented position, and speaking only for the U.S.A., and not other Nations who were similarly threatened, starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying,” he added. “Also on November 1st, we will impose Export Controls on any and all critical software.”

    That would bring U.S. tariffs on China to 130%, nearing the 145% rate Trump imposed in April on “Liberation Day” and the immediate aftermath—before the U.S. agreed to put its highest levies on hold while China paused its retaliatory duties as negotiations unfolded.

    Stocks and bond yields tumbled as Wall Street braced a potential new round of tit-for-tat retaliation. The S&P 500 plunged 2.7%, suffering its worst selloff since the height of the trade war chaos in April.

    China has a stranglehold on rare earths, producing more than 90% of the world’s processed rare earths and rare earth magnets. That has served as a key source of leverage over the U.S.

    Meanwhile, grain prices fell after Trump suggested earlier on Friday that he would not meet Chinese President Xi Jinping later this month at an economic summit in South Korea.

    That dashed hopes that the two leaders could reach a trade deal that includes Chinese purchases of U.S. soybeans, which historically have been a top export but have failed to draw any orders from China this harvest season.

    “Don’t think China’s soybean purchases are going to restart anytime soon … and they now certainly aren’t the biggest item on the bilateral economic agenda,” Brad Setser, a senior fellow at the Council on Foreign Relations and a deputy assistant secretary at the Treasury Department during the Obama administration, posted on X.

    Before the flare-up, U.S.-China trade talks had been progressing after Trump reached deals with the European Union, Japan, South Korea and other top trading partners.

    But tensions remained, including on the issue of rare earths while the U.S. had moved to restrict other countries’ exports of semiconductor-related products to China.

    Also this week, the U.S. announced port fees on Chinese ships, prompting Beijing to impose a similar fee on U.S. ships docking at Chinese ports. China also launched an antitrust investigation into U.S. chipmaker Qualcomm.

    Then on Thursday, China’s commerce ministry said that starting on Dec. 1 a license will be required for foreign companies to export products with more than 0.1% of rare earths from China or that are made with Chinese production technology.

    “Our relationship with China over the past six months has been a very good one, thereby making this move on Trade an even more surprising one,” Trump said in an earlier Truth Social post. “I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right!”

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    Jason Ma

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  • KPMG chief on CEOs’ uncertainty on tariffs, the emerging AI ‘hourglass’ org shape and the thing ‘that honestly keeps me up at night’ | Fortune

    KPMG’s CEO Outlook survey offers an annual look behind the curtain at the issues keeping the top business leaders up at night. Every year, hundreds of leaders answer the call from the Big 4 accounting firm to speak frankly and anonymously about key issues that need to solved, and 400 participated in the 2025 edition. CEOs have a message for America: they just aren’t sure of, well, anything.

    Business leaders told KPMG—and its recently anointed chair and CEO, Timothy Walsh—that they’re wrestling with uncertainty across several different areas of their work. This is well documented and is to be expected, Walsh told Fortune in an interview. “There’s this general, as you would expect, general conversation around business uncertainty,” Walsh said, adding that he was encouraged at least to see the “alignment” in terms of topics coming up in C-suite conversations.

    Peeling back the survey data, Walsh revealed that an unsurprisingly sizable majority (89%) say tariffs will “significantly impact” their business’ performance and operations over the coming three years. And nearly as many, 86%, said their firm will increase prices as needed. They are working hard to get around this, with 85% saying their company will strive to shift its sourcing strategies to minimize the impact as much as possible. The landscape is so uncertain that nearly every CEO says they need to make some kind of change: 79% said they’ve adapted their growth plans.

    Walsh talked to Fortune about uncertainty on tariffs and AI, and the importance of trust in a climate of such uncertainty. CEOs are concerned with another advancing technology with terrifying capabilities, Walsh said: cyber and quantum. “That honestly keeps me up at night.”

    Cybersecurity’s quantum challenge

    Cybersecurity risks remain elevated, especially as quantum computing approaches. As for advances in quantum computing, Walsh said it could one day soon be capable of breaking all encryption, and companies tell him that they’re doing full assessments. It’s a “massive effort” to ensure that they’re not exposed when that quantum computing capability arrives, Walsh warned.

    Adding into the mix the capabilities of AI agents and, Walsh said, “in many cases, a nation-state-type investment,” he’s very concerned about malware and deepfake-type technologies escalating in danger. Over the next three years, 82% of CEOs polled said cybercrime and cyber insecurity was a top trend that could hurt their organization. Cyber risk was overall the second-highest cited pressure behind CEOs’ short-term decisions. CEOs are most concerned about fraud detection and prevention (65%) and identity theft (52%), but they also said they have plans in place to mitigate.

    All that being said, Walsh said CEOs are “feeling optimistic because they see so many growth opportunities.” The economy has been surprisingly strong despite all the uncertainty, the tech sector is driving a very strong stock market, and he even noted some “large deals and transactions” are coming through when it comes to M&A. “Capital flows are starting to move and [be] a bit more liquid.”

    Tariffs and the AI element

    Walsh told Fortune that tariffs are obviously the number-one thing on every CEO’s mind. And it’s not only the fact of tariffs but potential changes to tariffs, and “the uncertainty around whether those tariffs will continue to change.” There’s an overwhelming need for businesses to not only consider what will change but to get agile enough to work on their supply chains to be prepared for future, still uncertain, changes to come. To that end, 34% of CEOs said in the survey that supply chain resilience is the top pressure driving short-term decisions, followed by cyber security risks (29%) and global economic uncertainty (25%).

    Walsh emphasized that tariffs are introducing a multi-dimensional challenge for CEOs. “The CEOs I speak with are addressing tariff impacts in three areas: cost take-out, supply chain optimization including reshoring, onshoring considerations, and ultimately pricing.” He said KPMG is actively working with clients in all of those areas and yes, AI is part of this transformation, too. The prominence of AI is another layer of uncertainty being added to the picture, but Walsh said it’s helping a lot of CEOs: “AI is not just an efficiency play, CEOs are focused on innovating their business models and introducing new revenue streams and products.”

    The AI hourglass to come?

    Walsh said AI capabilities are changing quickly, and he acknowledged that companies are starting to restructure in response. The survey found that CEOs “mostly see an hourglass shape” to their organizations in next three years, Walsh said, noting that’s typical with every new technology deployment. He added that “no one knows exactly where [workforce shape] is headed … It’s a challenge to forecast as AI advances rapidly.” In the survey, 35% said they are planning for workforce reductions in some areas over the next two to five years due to AI, and 69% see an hourglass with higher numbers of senior leaders and early-career workers and fewer in the middle (another 16% said a vertical triangle, 13% a triangle and 2% an inverted pyramid).

    Managers are facing new responsibilities, managing teams with integrated AI agents, for instance. Walsh said some CEOs describe teams with both people and AI agents on them, “and managers of those teams have to ensure [that] agents complete steps in the workflow process, that agents have good data inputs so that their outputs can be relied upon, and continuously review those outputs.” CEOs surveyed said 86% of them see AI agents becoming embedded team members next year, and half think managers will be primarily responsible for managing AI agents’ performance as opposed to, say, HR or IT.

    Walsh agreed with Fortune‘s reporting that “human skills” still matter as AI implementation shows the necessity of reviewing AI outputs. “Human skills are critically important,” Walsh said. Even though KPMG invests in and spends time upskilling its workers on AI and providing them with tools and licenses, he said he continues to remind leaders that “human-to-human relationships are critical … both internally and externally. Trust is more important than ever. Building trust with our teams, clients and ensuring we can trust outputs of technology like AI.” Given the uncertain climate, he added, trust is at a premium. The top change that CEOs see coming is retaining and re-training high-potential talent (75%), followed by redesigning roles to reflect AI collaboration (65%) and hiring AI-capable talent (64%).

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    Nick Lichtenberg

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  • All bark, no bite: Trump’s latest trade war turns into another TACO salad for Wall Street | Fortune

    When President Donald Trump made his “Liberation Day” speech on April 2, announcing sweeping tariffs across a range of sectors, markets reacted sharply. Investors feared a replay of the disruptive trade battles of his first term, and stocks dropped as they tried to assess how new levies might ripple through global supply chains.

    But six months on, the story looks different. Much of the initial panic has faded, replaced by recognition that the real economic impact of Trump’s tariffs has been softened by carve-outs, negotiated deals, and exemptions. In fact, stocks snapped out of a multi-day losing streak on Friday, reacting almost with disregard to the latest surprise from Trump’s social media account.

    Now, as Trump tries to reignite the trade war with an overnight announcement of a slew of tariffs, including a 100% tariff on branded and patented pharmaceuticals and a 50% tariffs on furniture imports, markets are barely reacting. 

    Michael Browne, global investment strategist at Franklin Templeton, said that the markets regard tariffs as “over.”

    “The real level of tariffs is much lower, which is one of the reasons the impact has been muted,” Browne told The Financial Times.

    The other reason could be that consumers have proven far more resilient to higher prices than economists once expected.

    Pharma scare eases quickly

    At first, the news rattled European and Asian drugmakers. Zealand Pharma dropped nearly 3%, Novo Nordisk lost 1.6%, and India’s Sun Pharmaceutical and Divi’s Laboratories fell more than 3% in early trading. The Stoxx 600 Healthcare index swung between gains and losses before closing flat.

    Yet European equities as a whole closed higher, underscoring how investors now discount Trump’s tariff announcements. 

    The pan-European Stoxx 600 finished the day up 0.8%, with the CAC 40 in Paris up 0.97%, the DAX in Frankfurt up 0.87%, and Madrid’s IBEX 35 leading gains with a 1.3% rise.

    JPMorgan strategists quickly told clients the pharma tariff was “largely avoidable” for companies that expand U.S. manufacturing. 

    “We continue to see a very manageable overall impact from tariffs to our large-cap coverage,” the note said, according to CNBC.

    The resilience reflects the numerous carveouts from the pharma tariffs. Generics — which account for nine out of ten U.S. prescriptions — are excluded from the new levies. A U.S.–EU trade agreement limits duties on most European drug exports to 15%. And companies actively investing in U.S. manufacturing, such as Eli Lilly, AstraZeneca, Roche, GSK, and Amgen, are exempt as soon as they break ground on new facilities.

    Analysts were quick to highlight those caveats.

    “Many large-cap biopharmaceutical companies should not be exposed because they are engaged in some sort of U.S. facility construction activity,” Leerink Partners’ David Risinger told BioPharma Dive.

    The White House pushed back on the “carve-out” framing, saying these are Section 232 national-security tariffs aimed at reshoring critical manufacturing.

    The exemptions for companies “building” U.S. plants are temporary, intended to give firms runway to relocate production without immediately hiking prices, spokesperson Kush Desai told Fortune. He added that the 15% caps on many European (and Japanese) pharma exports reflect broader trade agreements that included “significant concessions that favor the U.S.,” not a softening of the tariff stance.

    Resilient consumers 

    For investors, the reaction was familiar. Initial volatility gave way to a recognition that tariffs rarely land as broadly as advertised. 

    Imports account for only around 10% of the U.S. economy, giving businesses and consumers room to adjust. Many companies stocked up on goods ahead of deadlines, while others shifted to alternative suppliers.

    “It may be that inflation comes through, but there is no sign of that yet,” Browne told Financial Times.

    The muted market response also reflects a larger truth: consumers have been much more resilient than most economists expected. Commerce Department data released Thursday showed the U.S. economy grew at a 3.8% annual pace last quarter, its strongest stretch since 2023, powered by robust household spending and business investment.

    Economists note that Americans’ willingness to keep shopping, even amid high borrowing costs, has repeatedly surprised forecasters.

    As Boston wealth manager Gina Bolvin put it, the real lesson may be that “don’t fight the Fed” has become “don’t fight the U.S. consumer.”

    TACO

    Markets’ calm also reflects a trade they’ve come to rely on — what analysts call the TACO trade (Trump Always Chickens Out). After April’s “Liberation Day” shock, investors assumed Trump would follow his familiar pattern: issue sweeping tariff threats, then pull back once markets started to wobble. That confidence helped stocks rebound to record highs.

    Exemptions have reinforced that bet. The effective average tariff rate has stayed well below headline figures, thanks to carve-outs fand exemptions for companies breaking ground on U.S. plants.

    Economists caution that tariffs often take months to ripple through supply chains, so some price pressure could still emerge later this year. But so far, inflation data has remained stable, undercutting predictions that trade policy would deliver a consumer shock.

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    Eva Roytburg

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  • Trump’s billionaire backers will now ‘actually control’ Tiktok’s algorithm, JD Vance says | Fortune

    President Donald Trump on Thursday afternoon signed an executive order clearing the way for a deal to put TikTok in U.S. hands, with some of his closest billionaire allies poised to take the reins.

    “This is going to be American-operated all the way,” Trump said during the signing, adding that the agreement had been greenlit by Chinese President Xi Jinping. “I have great respect for President Xi, and I very much appreciate that he approved the deal, because to get it done properly, we really needed the support of China and the approval of China.”

    Who’s in the deal

    The ownership structure is still being finalized, but Trump revealed that Oracle, and its co-founder Larry Ellison would play a “big” role in managing the app, given that they had already stored much of Tiktok’s U.S.-based data in their servers. Ellison has been an ally  of the President, raising millions for the president’s campaign and advising him during the COVID-19 pandemic.

    He also added that conservative media mogul Rupert Murdoch, the owner of Fox corporation – which runs Fox News – would be an investor, and computer billionaire Michael Dell would also sit on the board. He hinted that three more “blue chip” backers were also part of the group, but did not announce who they were.

    For Rupert and Lachlan Murdoch, a stake in TikTok could provide a way to reach younger audiences beyond traditional TV and print, where the family’s News Corp empire dominates — and perhaps redeem their disastrous MySpace purchase nearly 20 years ago. The terms of Fox’s role remain unclear, but a TikTok tie-in would join minority stakes the Murdochs already hold in betting companies Flutter and FanDuel, and further cement Lachlan’s control of the empire after a recent family trust restructuring ensured his succession as Rupert’s heir.

    Vice President JD Vance asserted that the agreement gives Americans authority over TikTok’s prized algorithm; the system that dictates what over 170 million U.S. users see on their feeds. Speaking as the president signed the executive order in the Oval Office, Vance pegged Tiktok’s worth at $14 billion —  significantly below earlier estimates that placed TikTok’s U.S. assets as high as $100 billion depending on algorithm access.

    “This deal will allow for the U.S. to control the app’s algorithm,” he said. “It’s actually going to be American-operated all the way.”

    For Trump, the signing was about more than national security – he linked it to his broader trade agenda, boasting about tariffs and their windfall.

    Still, concerns are surfacing about what it means for Trump allies to control a platform with such influence over American political discourse.

    Trump himself joked about algorithmic favoritism: “I always like MAGA-related. If I could make it 100% MAGA, I would, but it’s not going to work out that way, unfortunately. No, everyone’s going to be treated fairly. Every group, every philosophy, every policy will be treated very fairly.”

    Vance also stressed that business would drive the app’s content decisions: “We want the business to make decisions about content based on the interest of the business and based on the interest of the users, and that’s what we think will happen.”

    The signing also lays the groundwork for Trump’s first in-person meeting with Xi since returning to office. The two leaders are expected to discuss the deal further at the upcoming APEC Summit in South Korea.

    Tiktok did not immediately respond to a request for comment.

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    Eva Roytburg

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  • What oil CEOs really think about Trump’s management of the oil sector: ‘Those who can are running for the exits’ | Fortune

    Oil companies may have President Donald Trump cheering them on from the bully pulpit. But in the oil patch, the mood is anything but celebratory.

    New data on Wednesday from the Dallas Fed Energy Survey,  which polled oil and gas executives at 139 firms across Texas, northern Louisiana and southern New Mexico in mid-September, shows oil and gas activity slipped again in the third quarter of 2025, weighed down by soaring costs, policy uncertainty, and the chaos of new tariffs.

    The survey’s broadest measure of business conditions, the business activity index, came in at –6.5, marking the second consecutive quarter of contraction.

    The outlook was even gloomier. The company outlook index plunged to –17.6 from –6.4, while more than 44% of firms said uncertainty remains elevated. Production of both oil and natural gas ticked lower, while costs for everything from drilling to equipment leasing surged.

    ‘The noise and chaos is deafening‘

    Executives were blunt in the anonymous comments that come out with the survey each quarter.

    “The uncertainty from the administration’s policies has put a damper on all investment in the oilpatch,” one wrote. “Those who can are running for the exits.”

    Another added that “the administration’s tariffs, particularly on steel and aluminum at fifty percent, are increasing our cost of business.”

    For exploration and production firms, finding and development costs doubled this quarter, while lease operating expenses also jumped sharply.

    Oilfield services firms reported their margins are still deeply negative, with one describing the sector as “bleeding.”

    The tariffs are cutting deep: operators said higher costs for tubular steel, heavy material, and imported components are making wells uneconomic.

    “Tariffs continue to increase the cost of production. We are suffering from a combination of increased cost due to tariffs and downward pricing pressure from end users,” one services executive said.

    A grim investment climate

    That mix of weak prices and high costs has throttled capital spending. The survey found capital expenditures are falling sharply, with the index dropping to –11.6 from –3.0.

    One operator emphasized that the uncertainty from regulatory policy was putting a damper on the spending.

    “Day-to-day changes to energy policy is no way for us to win as a country,” the operator said. “Investors avoid investing in energy because of the volatility … and the ‘stroke of pen’ risk that the federal government wields.”

    The gloom is reflected in price expectations. Respondents now see West Texas Intermediate crude ending 2025 at just $63 a barrel,  barely above where it traded during the survey period. Two years out, the consensus rises modestly to $69, and to $77 five years from now, levels many independents say are too low to justify new drilling.

    The shale dream frays

    A decade ago, U.S. shale was hailed as the world’s most dynamic energy engine. Now, industry insiders describe it as broken, even as Trump removes tax credits for renewables.

    “The collapse of capital availability has fueled consolidation by the majors, pushing out independents and entrepreneurs who once defined the shale revolution,” one respondent said. “In their place, a handful of giants now dominate but at the cost of enormous job loss and the destruction of the innovative, risk-taking culture that made the U.S. shale industry great.”

    Others warned that the sector is being whipsawed by politics from both parties.

    “The sword being wielded against the renewables industry right now will likely boomerang back in 3.5 years against traditional energy,” one said, pointing to methane penalties and permitting fights that could return with a vengeance.

    While Trump insists domestic drilling will fuel an American energy renaissance, the very policies his administration is pushing are raising costs, curbing investment, and leaving many operators sitting on their hands.

    “The oil industry is once again going to lose valuable employees,” one executive lamented. “Drilling is going to disappear.”

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

    Eva Roytburg

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