The Trump administration’s new tariffs on imported furniture, kitchen cabinets and other housewares, along with lumber, took effect Tuesday, added costs that economists say could push up prices for consumers.
Mr. Trump announced the trade measures on Sept. 29, saying the levies are intended to prevent such products manufactured abroad from “flooding” the U.S.
“It is a very unfair practice, but we must protect, for National Security and other reasons, our Manufacturing process,” Mr. Trump wrote on social media at the time.
The levies on imported wood products and furniture range from 10% to 50%.
Although Trump administration officials maintain that tariffs are largely paid by overseas exporters, most economists say Americans bear the brunt of the additional costs.
If recently imposed and future tariffs have the same impact on domestic prices as the U.S. levies applied earlier this year, then consumers would eventually absorb about 55% of the added costs, Goldman Sachs estimated in an analysis this week. U.S. businesses would swallow 22% of the extra costs, while foreign exporters would absorb 18% of the expenses, economists with the investment bank said.
President Trump has said higher import duties will restore fairness in global trade, energize American manufacturing and raise federal revenue. White House spokesman Kush Desai told CBS News on Tuesday that stiffer U.S. tariffs are already benefiting the economy by spurring companies to expand in the U.S.
“The president and administration’s position has always been clear: While Americans may face a transition period from tariffs upending a broken status quo that has put America last, the cost of tariffs will ultimately be borne by foreign exporters,” Desai said in a statement. “Companies are already shifting and diversifying their supply chains in response to tariffs, including by onshoring production to the United States.”
The Trump administration’s tariffs have so far proved less disruptive than expected, the International Monetary Fund said Tuesday, though the full impact of those policies may not be felt for some time. While the U.S. and world economies have fared better than expected, it’s too soon to say they are fully in the clear, the organization said.
Economists have warned that the furniture, wood and related houseware levies would likely hike costs for consumers building or remodeling a home. Recent inflation data showed that prices for living room, kitchen and dining room furniture — much of which is imported — rose 9.5% from August 2024 to August 2025, driven by country-based U.S. tariffs, according to economists.
Furniture and bedding prices rose 4.7% over the same period, while the cost of household furnishings and supplies climbed 2.8%.
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.
President Trump catalyzed the worst market sell-off in six months and then reversed it with a single post on Truth Social.
Friday’s $2 trillion rout led some commentators to call out the popping of a bubble, yet it turned out to be a one-day bear market that vanished by the next trading session.
U.S. stocks finished higher Monday, recovering more than half their losses from the sell-off, while bitcoin and other cryptocurrencies also climbed.
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As a recap:
Friday: Trump threatened new tariffs on China, triggering a 2.7 percent drop for the S&P 500
Sunday: He softened his tone, telling investors not to worry about China
Monday: Stocks rebounded, with the S&P 500 gaining 1.6 percent
The series of events echoed April’s “Liberation Day” pullback, when tariff news spooked investors but ultimately punished sellers more than those who stayed in the market.
Yardeni Research founder Ed Yardeni expects the US and China to reach a deal before any lasting economic damage occurs, something markets seem to now recognize.
“The odds favor Teams Trump and Xi stepping back from the brink and avoiding the deep global recession all this would likely cause,” Yardeni wrote in a Monday note.
Strategist Michael Wilson of Morgan Stanley, meanwhile, said the stock market was set up for a correction anyway given valuation concerns and unfavorable seasonality.
The bank sees the S&P 500 resuming its climb, arguing that the broader cycle still looks early-stage despite rising volatility and stretched valuations.
Not only that but recession risks, Wilson noted, are indeed behind us.
That said, he maintains that a second, larger sell-off is likely if the U.S. and China fail to reach an agreement.
“With Friday’s impulsive reversal at a key level of resistance, we believe the first leg up of this new bull market is now complete and we can see a healthy correction,” Wilson said.
“If we don’t see trade de-escalation over the next several weeks, the drawdown is likely to be larger than consensus expects (i.e, 10-15 percent in S&P 500 terms).”
To be clear, if we shelve the geopolitics, the optimistic case for stocks becomes hard to refute.
AI momentum remains not only strong but accelerating
Only one bull run since WWII hit 3 years without reaching its fourth
S&P 500 is up 83 percent this bull market, far less than the average 191 percent of the last 11 bull markets
“Most bull markets go longer than three years,” said LPL Financial’s chief equity strategist Jeff Buchbinder. “They last about five years on average, but the 1990 and 2009 bulls lasted twice that long. So this bull is not old.”
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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Markets rebound after Trump appears to soften tone on China tariffs – CBS News
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The U.S. stock market rebounded on Monday after President Trump appeared to walk back imposing new tariffs on Chinese goods. CBS News senior business and technology correspondent Jo Ling Kent has more.
WASHINGTON (Reuters) -Countries around the world lack the regulatory and ethical foundation to deal with the rapid advent of artificial intelligence, IMF chief Kristalina Georgieva said on Monday, urging civil society groups to “ring the alarm bells.”
Georgieva said the rapidly advancing technological revolution unleashed by AI was dominated by advanced economies, with the U.S. having the lion’s share. Some emerging markets also had capability in the sector, including China, but developing countries were lagging far behind and less able to tap into the potential of the technological revolution.
Speaking with civil society groups on the first day of the annual IMF and World Bank meetings, Georgieva said the IMF was “quite worried” that the gap between advanced economies and low-income countries on readiness for AI was growing and making it harder and harder for developing countries to catch up.
Georgieva’s comments came days after she warned that financial market valuations were heading toward levels last seen during the internet-related bullishness 25 years ago, based on AI hopes, but an abrupt shift in sentiment could drag down world growth, making life especially tough for developing countries.
She said the IMF was urging developing countries and emerging markets to focus on the first prerequisite for success, which was expanding digital infrastructure and skills.
She said the IMF had developed an AI preparedness index that assessed countries’ readiness for the new technology in four areas – infrastructure, labor and skills, innovation, and regulation and ethics.
“Where the world is falling shortest is on regulation and ethics,” she said. “The regulatory ethical foundation for AI for our future is still to come into place.”
She urged civil society groups to “ring the alarm bells in your countries that staying still is falling behind.”
(Reporting by Andrea Shalal; Editing by Mark Porter and Andrea Ricci)
U.S. stock markets rebound after sharp dip Friday over potential tariff increase on China – CBS News
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U.S. stock markets are up Monday after President Trump walked back tariff threats against China that sent stocks sliding Friday afternoon. CBS News MoneyWatch correspondent Kelly O’Grady reports.
Analysts predict holiday job gains may fall to the lowest level since 2009.
Major chains like Bath & Body Works and Radial are scaling back seasonal hires.
Experts forecast smaller holiday spending growth compared to last year.
Uncertainty over the economy and tariffs is forcing retailers to pull back or delay plans to hire seasonal workers who pack orders at distribution centers, serve shoppers at stores and build holiday displays during the most important selling season of the year.
American Christmas LLC, which creates elaborate holiday installations for commercial properties such as New York’s Rockefeller Center and Radio City Music Hall, plans to hire 220 temporary workers and is ramping up recruitment nearly two months later than usual, CEO Dan Casterella said. Last year, it took on 300 people during its busy period.
The main reason? The company wants to offset its tariff bill, which Casterella expects to be as big as $1.5 million this year, more than double last year’s $600,000.
“The issue is if you overstaff and then you underperform, it’s too late,” Casterella said. ”I think everyone’s more mindful now than ever. ”
Online behemoth Amazon Inc. said Monday it intends to hire 250,000 full-, part-time and seasonal workers for the crucial shopping period, the same level as a year ago.
But job placement firm Challenger, Gray & Christmas forecasts overall holiday hiring for the last three months of the year will likely fall under 500,000 positions. That’s fewer than last year’s 543,000 level and also marks the smallest seasonal gain in 16 years when retailers hired 495,800 temporary workers, the firm said.
Among other companies cutting holiday payrolls: Radial, an e-commerce company that powers deliveries for roughly 120 companies like Lands’ End and Cole Haan and operates 20 fulfillment sites. It plans to hire 6,500 workers, fewer than last year’s 7,000, and is waiting to the last minute to ramp up hiring for some of its clients, chief human resources officer Sabrina Wnorowski, said.
Bath & Body Works, based in Reynoldsburg, Ohio, said it plans to hire 32,000 workers, below the 32,700 a year ago.
“We saw real strong signals that there’s been a cooling in the labor market, even beyond what our expectations were in the first nine months of the year,” Challenger’s senior vice president Andy Challenger said.
Challenger also noted companies are using artificial intelligence bots to replace some workers, particularly those working in call centers. And he’s also seeing companies hiring workers closer to when they need them.
Meanwhile, the list of companies staying mum about their specific holiday hiring goals keeps growing. Target Corp., UPS and Macy’s are declining to offer figures, a departure from years past.
Holiday hiring: the first clues to what’s in store for spending
Retailers’ hiring plans mark the first clues to what’s in store for the U.S. holiday shopping season and come as the U.S. job market has lost momentum this year, partly because Trump’s trade wars have created uncertainty that’s paralyzing managers trying to make hiring decisions.
The Labor Department reported in early September that U.S. employers — companies, government agencies and nonprofits — added just 22,000 jobs in August, down from 79,000 in July and well below the 80,000 that economists had expected.
The government shutdown, which started Oct. 1 and has delayed the release of economic reports, could worsen the job picture.
In an attempt to exert more pressure on Democratic lawmakers as the government shutdown continues, the White House budget office said Friday mass firings of federal workers have started.
Analysts will be closely monitoring the shutdown’s impact on spending. For now, many retailers say that consumers, while resilient, are selective. Analysts will also be watching how shoppers will react to price increases as a result of high tariff costs in the next few months, experts said.
Given an economic slowdown, holiday spending growth is expected to be smaller than a year ago, according to several forecasts.
Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.
Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31. That’s compares with 4.2% last year.
And Adobe expects U.S. online sales to hit $253.4 billion from Nov. 1 to Dec. 31, representing a 5.3% growth. That’s smaller than last year’s 8.7% growth.
A more flexible approach
Companies are increasingly wanting to hire workers closer to when they need them, experts said.
“In today’s environment, brands are really looking for us to be agile,” Radial’s Wnorowski said.
So for some of its clients, Radial will now be hiring two weeks before Thanksgiving weekend, the traditional start for the season, instead of four weeks before the kickoff. Radial is also training holiday hires faster with new technology that’s simplifying their tasks. It used to take a couple of days to train a worker, but now it only takes a couple of hours, she said.
Meanwhile, Target will offer current workers additional hours and then will tap into a separate pool of workers— 43,000— who pick up shifts. The Minneapolis-based company also hires seasonal workers across its nearly 2,000 stores and more than 60 distribution facilities to meet demand, it said.
For the past few years, Walmart, the largest private employer, has been offering its workers extra hours available during the holidays, a Walmart spokesperson said, noting it’s worked well and the feedback from customers and workers has been “overwhelmingly positive.”
The Bentonville, Arkansas-based retailer said there may be some seasonal hiring on a store-by-store basis, but most locations will dole out those hours to current workers.
Economic data blackout could create challenges
Waiting until the last minute to hire could mean a mad scramble to find talent, but companies say that with the slowing economy, they don’t anticipate having a hard time.
Meanwhile, the temporary halt of the release of economic reports leaves retailers in the dark about sales forecasts and the workers they may need.
“Certainly, for our customers not having access to data will put more of a challenge on their ability to forecast,” Wnorowski of Radial said. “But we’ll stay very close to them as we go into peak and we’ll adjust as soon we see things changing.”
China has hit U.S.-owned vessels docking in the country with tit-for-tat port fees, in response to the American government’s planned port fees on Chinese ships, expanding a string of retaliatory measures before trade talks between U.S. President Donald Trump and Chinese leader Xi Jinping.
Vessels owned or operated by American companies or individuals, and ships built in the U.S. or flying the American flag, would be subjected to a 400 yuan ($56) per net ton fee per voyage if they dock in China, China’s Ministry of Transport said on Friday.
The fees would be applied on the same ship for a maximum of five voyages each year, and would rise every year until 2028, when it would hike to 1,120 yuan ($157) per net ton, the ministry said. They would take effect on Oct. 14, the same day when the United States is due to start imposing port fees on Chinese vessels.
China’s Ministry of Transport said on Friday in a statement that its special fees on American vessels are “countermeasures” in response to “wrongful” U.S. practices, referring to the planned U.S. port fees on Chinese vessels. The ministry also slammed the United States’ port fees as “discriminatory” that would “severely damage the legitimate interests of China’s shipping industry” and “seriously undermine” international economic and trade order.
China has announced a string of trade measures and restrictions before an expected meeting between Trump and Xi on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea that begins at the end of October. On Thursday, Beijing unveiled new curbs on exports of rare earths and related technologies, as well as new restrictions on the export of some lithium battery and related production equipment.
The port fees announced by Beijing on Friday mirrors many aspects of the U.S. port fees on Chinese ships docking in American ports. Under Washington’s plans, Chinese-owned or -operated ships will be charged $50 per net ton for each voyage to the U.S., which would then rise by $30 per net ton each year until 2028. Each vessel would be charged no more than five times per year.
China’s new port fee is “not just a symbolic move,” said Kun Cao, deputy chief executive at consulting firm Reddal. “It explicitly targets any ship with meaningful U.S. links — ownership, operation, flag, or build — and scales steeply with ship size.”
The “real bite is on U.S.-owned and operated vessels,” he said, adding that North America accounts for roughly 5% of the world fleet by beneficial ownership, which is still a meaningful figure although not as huge as compared to Greek, Chinese and Japanese ship owners.
However, the United States has only about 0.1% of global commercial shipbuilding market share in recent years and built fewer than 10 commercial ships last year, Reddal added.
While shipping analysts have said that the U.S. port fees on Chinese vessels would likely have limited impact on trade and freight rates as some shipping companies have been redeploying their fleets to avoid the extra charge, shipping data provider Alphaliner warned last month in a report that the U.S. port fees could still cost up to $3.2 billion next year for the world’s top 10 carriers.
The U.S. economy could be on the upswing even if tariffs and stubborn inflation continue to weigh on growth, according to a new analysis.
The National Association for Business Economics (NABE) said Monday it expects the nation’s gross domestic product — a measure of the total value of goods and services — to rise 1.8% in 2025, up from the group’s previous estimate in June of 1.3%.
The survey, which was conducted from Sept. 17-25, consulted 40 economists on their forecasts for labor growth, inflation and other key metrics for the remainder of the year and into 2026. NABE also expects the economy to expand at a faster pace in 2026, at 1.7%, higher than its June forecast of 1.4%.
The report is the latest signal that economic growth continues to hold up despite rising inflation and a recent slowdown in the labor market. After economic activity shrank in the first three months of 2025, growth has accelerated over the rest of the year, EY-Parthenon chief economist Gregory Daco, vice president of NABE, told CBS News. The outlook for business investment in particular has improved, he noted.
The economy could get a further boost this year from the Federal Reserve. NABE expects Fed officials, who trimmed their benchmark rate in September for the first time since 2024, to lower borrowing costs by another quarter of a percentage point by year-end and by a total of three-quarters of percentage point in 2026.
Pain points remain
While the economy has performed better than many experts predicted earlier this year, there are still signs of weakness. Government data indicates that job growth has deteriorated since the first half of the year.
As hiring cools, meanwhile, the percentage of long-term job seekers — people unemployed for 27 weeks or longer — has risen to 26% of the total unemployed population, the highest in more than three years, labor data shows.
Layoffs are also climbing. Through September, employers this year have cut nearly 950,000 jobs, the largest number of layoffs since 2020, according to outplacement firm Challenger, Gray & Christmas.
Looking ahead, NABE expects the job market to remain fragile. Economists predict average monthly payroll gains of 60,000 for the rest the year, down from the 87,000 the group forecasted in June. From January to August, employers added an average of around 75,000 jobs per month, according to government data.
NABE projects that the nation’s unemployment rate, 4.3 % as of August, will rise to 4.5% in 2026.
Another lingering pain point for the economy is inflation, which remains above the Fed’s 2% annual target. NABE expects inflation as measured by the Personal Consumption Expenditure index — the Fed’s preferred measure of inflation — to rise at an annualized rate of 3% over the rest of 2025.
Nearly all of those surveyed — 95% — expect U.S. tariffs to drive up consumer prices over the rest of the year, according to NABE, although the group now expects stepped-up duties on imports to have less of an inflationary impact than it previously predicted. As a result, inflation is projected to cool to 2.5% by the end of 2026, according to the panel of economists.
A recession is unlikely, according to NABE. Most of the economists polled by the group put the odds of a slump in the next 12 months at between 20% and less than 40%.
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%.
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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Coffee prices are spiking as new tariffs take hold and consumers turn more cautious. Kelly O’Grady sat down with the founder of Gregorys Coffee, a New York-based roastery, as coffee chains across the country confront the true price of your daily brew.
Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.
Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”
And at a high-profile speech in August, just before the Fed cut its key interest rate for the first time this year, Federal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”
Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2 percent poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.
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The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong — if inflation gets worse or remains elevated for longer than expected — the Fed’s inflation-fighting credibility could take a hit.
That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps — such as demanding sharply higher pay when prices rise — that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.
But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.
“If that proves to be the case, in hindsight it will be that the Fed cuts — and I do expect several more — are going to be seen as a mistake,” Dynan said.
So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1 percent peak three years ago. Still, consumer prices increased 2.9 percent in August from a year earlier, up from 2.6 percent at the same time last year and above the Fed’s 2 percent target.
The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.
Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2 percent in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.
The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7 percent in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21 percent in the past year, partly because Trump has slapped 50 percent import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests.
Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.
But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.
“It is a big gamble after what we’ve been going through … to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3 percent inflation) would have been considered really high.”
Just two weeks ago, Trump slapped new tariffs on a range of products, including 100 percent on pharmaceuticals, 50 percent on kitchen cabinets and bathroom vanities, and 25 percent on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.
Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”
Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10 percent this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45 percent of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.
Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145 percent earlier this year. Production resumed after Trump reduced the duties to 30 percent but at a slower pace.
Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.
“At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”
Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.
“The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”
Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.
“I’m more sanguine about the inflation outlook than a lot of other people are,” he said.
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(CNN) — President Donald Trump’s threat to impose an additional 100% tariff on imports from China sparked a massive cryptocurrency sell-off late Friday that exposed risky leverage in the space.
Digital currencies bitcoin, ether and solana were among the most affected cryptocurrencies, bringing total liquidations to $18.28 billion as of 3:47 p.m. ET, according to data analysis platform CoinGlass. The losses for cryptocurrencies come amid a broad sell-off, as the Nasdaq and S&P 500 on Friday saw their steepest declines in six months.
In the past 24 hours, roughly $5 billion of bitcoin has been liquidated, along with about $4 billion of ether and about $2 billion of solana, according to CoinGlass.
It’s the “largest liquidation event in crypto history,” CoinGlass said in a post on X.
Bitcoin is down almost 10% in the last five days and was trading at $111.616.20 as of 3:45 p.m. ET, a jump from when it dropped to $103,000 at 5:15 p.m. ET on Friday.
On Friday, ether was priced at $4,365.63 and then sunk to $3,742.88 — a 14.2% decline.
Solana was priced at $223.10 on Friday and has fallen to $178.72, as of 3:45 p.m. ET — a nearly 20% plunge.
Crypto has made major gains since Trump took office this year, in large part because of the president’s turnaround from dismissing bitcoin as “based on thin air” to addressing crypto fans at conventions, launching his own meme coin and promising a strategic crypto reserve.
And Trump recently issued an executive order allowing digital assets like crypto to be included in 401(k) plans, causing bitcoin to soar to a record high of $124,000 last week.
Despite ongoing trade talks between Washington and Beijing, trade tensions re-escalated Thursday after China ramped up export restrictions on critical rare earth minerals.
U.S. President Donald Trump revived the trade war against Beijing on Friday, ending an uneasy truce between the two largest economies with promises to sharply hike tariffs in a reprisal against China curbing its critical mineral exports.
The president unveiled additional levies of 100 percent on China’s U.S.-bound exports, along with new export controls on “any and all critical software” by November 1, nine days before existing tariff relief is set to expire.
Trump also called into question the prospects for a previously announced meeting set for three weeks from now with Chinese President Xi Jinping in South Korea, saying on Truth Social that “now there seems to be no reason to do so.”
“I haven’t canceled,” Trump later told reporters at the White House. “I would assume we might have it.” Beijing has never confirmed the meeting.
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The new trade steps were Trump’s reaction to China dramatically expanding its rare earth element export controls. China dominates the market for such elements, which are essential to tech manufacturing.
“It was shocking,” Trump said of China’s steps, which did not specifically target Washington. “I thought it was very, very bad.”
The actions signaled the biggest rupture in relations in six months between Beijing and Washington—the world’s biggest factory and its biggest consumer. Many questioned whether an uneasy economic detente reached over the summer can survive.
It was a swift and dramatic response by Trump, a Republican who has wielded tariffs paid by U.S. importers against friends and foes. It could escalate a trade war that Washington and Beijing paused earlier this year after painstaking diplomacy.
Experts said restrictions on U.S. software shipments to China could be a massive blow to the country’s tech industry, including cloud computing and artificial intelligence.
Trump also threatened new export controls on airplanes and airplane parts, and a person familiar with the matter said the administration was sketching out other possible targets.
Beijing has long called for Washington to abandon unilateral trade restrictions it says undermine global commerce.
Markets Dive on Threat of New Tariffs
Trump’s trade threats, delivered in a series of social media posts and a public back-and-forth with reporters, sent markets and relations between the world’s largest economies into a spiral.
China produces over 90 percent of the world’s processed rare earths and rare earth magnets. Many are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
Trump’s unexpected broadside shook global financial markets, sending the benchmark S&P 500 Index sliding by more than 2%, its biggest one-day drop since April when a steady barrage of tariff announcements by Trump stoked market volatility.
Investors fled into the safe haven of gold and U.S. Treasury securities, and the U.S. dollar weakened against a basket of foreign currencies.
Tech stocks piled on losses in after-market trading after Trump detailed the tariff and export control measures.
“Trump’s post could mark the beginning of the end of the tariff truce,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies. Singleton said Washington viewed China’s export control steps as a betrayal. “Beijing appears to have overplayed its hand.”
In his first social media post on Friday, Trump said China has been sending letters to countries worldwide saying it planned to impose export controls on every element of production related to rare earths. The reference to letters was an apparent reference to Beijing’s policy papers.
Trump said he had been contacted by unnamed countries incensed over Beijing’s steps and said he was surprised because of the “very good” recent relationship with China.
Trump Condemns Beijing’s “Hostile Order”
Terming China’s actions a “hostile order,” Trump said he had been forced “to financially counter their move.”
“For every Element that they have been able to monopolize, we have two,” Trump said.
The White House and the Chinese embassy in Washington did not respond to a request for comment.
A spokesperson for the U.S. Trade Representative declined comment on what countermeasures Trump was contemplating while a spokesperson for the U.S. Treasury did not respond to a request for comment. The two offices have led talks with Beijing on trade.
Economic tensions had been rising in recent days. On Thursday, the Trump administration proposed banning Chinese airlines from flying over Russia on routes to and from the U.S. On Friday, the U.S. Federal Communications Commission said on major U.S. online retail websites have removed millions of listings for prohibited Chinese electronics.
China’s move on Thursday included adding five new elements as well as dozens of pieces of refining technology to its export-restricting control list. It also required foreign rare earth producers that use Chinese materials to comply with its rules.
Analysts said the stakes had risen for a positive outcome from a Trump-Xi summit, if it still happens, on the sidelines of the Asia-Pacific Economic Cooperation forum starting October 31 in South Korea.
“Things are going to get interesting,” said Scott Kennedy, a China business and economics expert at Washington’s Center for Strategic and International Studies think tank.
“They both are hoping that amping up pressure will lead the other to make concessions in advance of APEC, or they are now re-escalating assuming a deal at APEC is impossible and are gaining leverage for the next round of the fight.”
Reporting by Trevor Hunnicutt; additional reporting by David Brunnstrom, Jarrett Renshaw, Steve Holland, David Lawder and Maiya Keidan; Editing by Dan Burns, Deepa Babington and David Gregorio.
Trump announces additional 100% tariff on China starting next month – CBS News
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President Trump says the U.S. is imposing an additional 100% tariff on imports from China starting Nov. 1. Today’s announcement follows heavy losses on the stock market. CBS News MoneyWatch correspondent Kelly O’Grady reports.
President Trump said Friday he will impose an additional 100% tariff on imports from China starting next month — marking a significant escalation in the U.S.-China trade war.
The 100% tariffs will add on to any existing import taxes on Chinese goods, the president wrote in a Truth Social post. Tariffs on Chinese imports currently stand at 30%.
(CNN) — President Donald Trump announced he will impose an additional 100% tariff on goods from China, on top of the 30% tariffs already in effect, starting November 1 or sooner. The threat is a massive escalation after months of a trade truce between the two nations.
“The United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying,” Trump said in a post on Truth Social Friday afternoon. “Also on November 1st, we will impose Export Controls on any and all critical software.”
Trump’s announcement is tied to Beijing ramping up export controls on its critical rare earths, which are needed to produce many electronics. As a result, Trump appeared to call off a meeting with Chinese President Xi Jinping that was scheduled for later this month in South Korea.
Trump’s initial message Friday, delivered via a Truth Social post, in which he threatened “massive” new tariffs, was ill received by investors on Friday as fears of a spring déjà vu, when tariffs on Chinese goods soared to a stunning 145%, set in. Markets closed sharply lower on Friday after Trump’s initial comments, with the Dow falling by 878 points, or 1.9%. The S&P 500 was down 2.7%, and the tech-heavy Nasdaq tumbled 3.5%.
While Trump doesn’t always act on his threats, investors, consumers and businesses still have reason to worry.
President Donald Trump is threatening to raise tariffs on Chinese goods shipped to the United States. Credit: Jessica Koscielniak / Reuters via CNN Newsource
The two largest economies depend on each other
The United States and China are the world’s two largest economies. Although Mexico has recently replaced China as the top source of foreign goods shipped to the United States, America depends on China for hundreds of billions of dollars’ worth of goods. Meanwhile, China is one of the top export markets for America.
In particular, electronics, apparel and furniture are among the top goods the United States receives from China. Trump has pushed CEOs, especially in tech, to move production to the United States, but he’s softened his approach in recent months as business leaders have satisfied the president with announcements of hundreds of billions of dollars in investments in US manufacturing — even if they continue to make the bulk of their products overseas.
Shortly after imposing minimum 145% tariffs on Chinese goods — an effective embargo on trade, Trump issued an exemption for electronics, making them subject to 20% tariffs instead. The move was, in many ways, an acknowledgment that the Trump administration understood the pain he was inflicting on the US economy through his sky-high tariffs.
Then, in May, US and Chinese officials further established the interdependence of trade by agreeing to lower tariffs on one another. China brought levies on American exports down to 10% from 125%, and the United Statesbrought rates down to 30% from 145%.
Both countries’ stock markets rallied as a result.
It was only a matter of time
Trump on Friday claimed trade hostility from China “came out of nowhere.” But in reality, it’s been bubbling up for months.
For the United States, a critical part of trade agreements has been to ensure China will increase its supply of rare earth magnets. Yet despite several apparent breakthroughs, Trump has in recent months repeatedly accused China of violating the terms.
Trump first responded by putting restrictions on sales of American technologies to China, including a key Nvidia AI chip. Many of these restrictions were later lifted.
Then came the Trump administration’s announcement that it would soon impose fees on goods transported on Chinese-owned or -operated ships. China countered with a similar plan on American ships that took effect Friday.
In short: Trump has already demonstrated there’s no limit to how high he’ll go with tariffs on China, and Xi has shown no mercy in how he chooses to retaliate.
But Trump’s ability to continue to impose tariffs on a whim could soon end, pending the verdict in a landmark case kicking off in the Supreme Court next month. Xi, however, faces no such constraints.
President Trump on Friday threatened to raise U.S. tariffs on China over its new restrictions on rare-earth elements.
“They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China,” Mr. Trump wrote in a social media post on Truth Social.
Mr. Trump’s threat follows a move by China this week to implement tighter restrictions on the country’s exports of rare earths, critical minerals used to manufacture products including semiconductors, electric car batteries, jet engines and defense weapons.
China produces as much as 95% of the world’s rare earth magnets, according to energy research company Wood Mackenzie. Access to such materials has been a key sticking point in trade talks between Washington and Beijing.
The new export controls outlined by the country’s Ministry of Commerce, which took effect on Thursday, requires companies to get special approval to export products containing even trace amounts of rare earths sourced from China, including if those products were manufactured abroad by non-Chinese companies. The new rules do not specify potential penalties if exporters fail to comply the controls.
Mr. Trump expressed surprise at the the new trade measures, describing the move by China’s government as “very hostile” and vowing to retaliate if Beijing follows through in applying the rare-earth controls.
“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” Mr. Trump said in his post. “There are many other countermeasures that are, likewise, under serious consideration.”
Mr. Trump also threatened to call off a planned meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later this month.
In June, the U.S. and China announced they had agreed on a framework deal aimed at defusing tensions over tariffs, rare earths and other issues.
As more U.S. homeowners struggle to keep up with mortgage payments and maintenance costs, new data shows the number of property foreclosures is steadily rising. CBS News contributor Javier David has more.
