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Tag: US Trade

  • 107% tariffs on Italian pasta no longer set to take effect

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    (CNN) — The United States Commerce Department is poised to significantly reduce the tariffs set to take effect on over a dozen Italian pasta makers’ products later this year.

    Most products from the European Union are already subject to tariffs of at least 15%. The pasta-specific tariffs, initially proposed in October at 92%, would have subject Italian pasta to a total rate of 107%. The newly announced rates would put the levies between 24% and 29%.

    The final rates, set to be announced on March 12 the Commerce Department said in a post-preliminary report published Wednesday, stem from an investigation some producers sold pasta at unfairly low prices. The decision to recommend lower rates before then results from an “evaluation of additional comments received following a preliminary determination,” a Commerce official told CNN.

    “Italian pasta makers have addressed many of Commerce’s concerns raised in the preliminary determination, and reflects Commerce’s commitment to a fair, transparent process,” the official added.

    The potential tariffs, which impact 13 Italian pasta makers, are due to an antidumping complaint two American companies filed with the US Commerce Department last July. In the complaint, two Midwestern companies, 8th Avenue Food & Provisions and Winland Foods, alleged that several Italian companies underpriced pasta that was shipped to the United States.

    The preliminary investigation published by the Commerce Department in September stated that two companies, La Molisana and Pastificio Lucio Garofalo, made sales to the United States “at less than normal value.” It also said both were “uncooperative” during the investigation and provided “incomplete and unreliable” data.

    The two companies accounted for the largest volume of pasta sales to the United States, according to the department. Neither immediately responded to CNN’s request for comment.

    “The redetermination of the tariffs is a sign of the recognition by US authorities of our companies’ willingness to cooperate,” the Italian Ministry of Foreign Affairs said in a statement on Thursday.

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    Elisabeth Buchwald and CNN

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  • Trump lowers tariffs on coffee, beef and fruits, as Americans’ concerns about affordability grow

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    (CNN) — President Donald Trump on Friday signed an executive order that retroactively lowers tariffs on beef, tomatoes, coffee and bananas, among other agricultural imports, backdated to Thursday.

    The order Trump signed excludes the goods from “reciprocal” tariff rates, which start at 10% and go as high as 50%. However, the order doesn’t exempt the goods entirely from tariffs.

    For instance, tomatoes from Mexico, a major supplier to the United States, will continue to be tariffed at 17%. That rate took effect in July after a nearly three-decade-old trade agreement expired. Tomato prices increased almost immediately after those tariffs were put in place.

    Many of the commodities that will no longer face “reciprocal” tariffs have seen some of the biggest price increases since Trump took office, in part because of tariffs he imposed and a lack of sufficient domestic supply.

    For instance, Brazil, the top supplier of coffee to the US, has faced tariffs of 50% since August. Consumers paid nearly 20% more for coffee in September compared to the prior year, according to Consumer Price Index data.

    The move comes after voters expressed frustrations with the state of the economy in exit polls earlier this month, voting for Democrats in off-year elections in several states.

    In previewing Friday’s executive order, Treasury Secretary Scott Bessent said earlier this week the moves targeted goods “we don’t grow here in the United States,” referring to coffee and bananas. (While coffee is grown in some parts of the country, it’s mostly imported.)

    Earlier on Friday the Trump administration and the Swiss government announced a new trade framework that calls for lowering tariffs on goods from Switzerland to 15% from 39%, a rate that was among the highest across all countries the US trades with.

    This story has been updated with additional context and developments.

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    Elisabeth Buchwald and CNN

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  • Trump announces 130% tariffs on China. The global trade war just came roaring back

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    (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 States brought 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.

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    Elisabeth Buchwald and CNN

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  • Trump announces a 25% tariff on trucks and a 30% tariff on furniture

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    (CNN) — President Donald Trump on Thursday announced sweeping tariffs on various household products, including imported kitchen cabinets and certain kinds of furniture – potentially adding even more costs to a category that has surged in price in recent months. Trump also announced heavy truck tariffs and pharmaceutical tariffs Thursday.

    “We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025. Additionally, we will be charging a 30% Tariff on Upholstered Furniture,” Trump wrote in a Truth Social post Thursday evening.

    Various tariffs that Trump has imposed have already boosted furniture prices considerably over the past year. Overall, furniture last month cost 4.7% more than in August 2024, according to the Bureau of Labor Statistics. Living room and dining room furniture in particular has grown more expensive – rising 9.5% over the past 12 months, the BLS reported.

    Furniture prices have surged as Trump hiked tariffs on China and Vietnam, the top two sources of imported furniture. Both countries exported $12 billion worth of furniture and fixtures last year, according to US Commerce Department data.

    Furniture prices had largely fallen for the past two and a half years prior to Trump’s tariffs. But Trump said Thursday that foreign manufacturers have oversupplied the US market, and the tariffs were necessary to regain US manufacturing prowess.

    “The reason for this is the large scale ‘FLOODING’ of these products into the United States by other outside Countries,” Trump said. “It is a very unfair practice, but we must protect, for National Security and other reasons, our Manufacturing process.”

    Shares of Wayfair (W), RH (RH) and Williams-Sonoma (WSM) tumbled in after-hours trading.

    Trucks

    Trump on Thursday also announced a 25% tariff on heavy trucks imported into the United States, a trade levy designed to level the playing field for America’s truck-making industry that has been hit relentlessly by the White House’s compounding tariffs.

    “In order to protect our Great Heavy Truck Manufacturers from unfair outside competition, I will be imposing, as of October 1st, 2025, a 25% Tariff on all ‘Heavy (Big!) Trucks’ made in other parts of the World,” Trump said in a Truth Social post Thursday.

    Previous tariffs that Trump has levied — including 50% tariffs on steel, aluminum and copper — have raised costs considerably for US truck manufacturers. Foreign-built trucks, including those made by Germany’s Daimler Truck and International Motors, are typically manufactured in Mexico and imported tariff-free because of the US-Mexico-Canada free trade agreement — so long as roughly two-thirds of the truck’s parts were made in North America.

    Tariffs were, in part, designed to boost US manufacturing and give American factories a leg up over foreign-made products. But steel and aluminum tariffs have shifted the supply-demand balance, raising the price of all metals — both imported and domestic. That means Trump’s tariffs have made some US-built trucks more costly than trucks made by foreign manufacturers.

    “Our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others, will be protected from the onslaught of outside interruptions,” Trump said in his post on Thursday. “We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!”

    It’s not clear, however, whether the 25% tariff would apply to all heavy-duty trucks or only those that do not comply with the US-Mexico-Canada Agreement.

    If there is no such exemption for Mexico, then it will be the country most severely affected by these tariffs, as 78% of imported heavy trucks come into the US from Mexico, Neil Shearing, chief economist at consultancy Capital Economics, wrote in a note Friday.

    Thursday’s announcement follows an investigation that Trump ordered the Commerce Department to begin in April to determine whether medium-duty and heavy-duty trucks imports pose a national security threat.

    Trump has also threatened several other tariffs, including on lumber, semiconductors and other products.

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    David Goldman and CNN

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  • Americans are feeling a lot worse about the state of the economy

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    (CNN) — American consumers are downbeat about the economy, according to preliminary results of a monthly survey conducted by the University of Michigan.

    The index measuring consumer sentiment fell unexpectedly this month to 55.4 from 58.2 in August as inflation is on the rise and job prospects are worsening. September’s reading also represents a 21% decline compared to a year ago, well before President Donald Trump took office and raised tariffs on practically everything the country imports.

    In addition to inflation and the labor market, tariffs also remain a concern for consumers, Joanne Hsu, the survey’s director, noted.

    “Trade policy remains highly salient to consumers, with about 60% of consumers providing unprompted comments about tariffs during interviews,” Hsu, said in a statement, noting that the same thing happened in the previous month.

    Economists polled by FactSet had been anticipating a minor improvement in consumer sentiment from August. Despite sentiment that’s near historic lows in a survey that goes back to the early 1950s, consumers are still feeling slightly better about the economy now compared to April and May during Trump’s initial rollout of so-called “reciprocal” tariffs, according to prior readings.

    The survey also spotlights what appears to be an increasingly bifurcated economy between income classes, where higher-income Americans continue to spend relatively freely and are feeling more optimistic about the state of the economy, while lower and middle-income Americans are cutting back and are more worried.

    Whiffs of stagflation

    While the economy is nowhere close to where it was in the 1970s and 1980s, when the nation’s annual inflation rate and unemployment rate both hit double-digit levels, recent employment and inflation data have led to mounting concerns of stagflation – when the economy slows significantly while inflation accelerates.

    Consumer prices rose 0.4% last month, bringing the annual inflation rate to 2.9%, according to Consumer Price Index data released Thursday. Meanwhile, there’s a laundry list of recent data pointing to a weakening labor market.

    For example, first-time applications for unemployment benefits surged last week to their highest level in four years. Also for the first time in four years, there are more people looking for work than there are jobs available for them.

    To top it off, the August employment report showed employers hired just 22,000 new workers and the unemployment rate rose to 4.3%, the highest level since 2021. The labor force snapshot also revealed that the US economy lost 13,000 workers in June, marking the first month since 2020 when employers laid off more workers than they hired.

    “Economic sentiment declined more than expected in September largely because Americans are fearful of losing their jobs,” Heather Long, chief economist at Navy Federal Credit Union, said in a statement on Friday.

    This string of data has essentially guaranteed the Federal Reserve will cut interest rates at its monetary policy meeting next week after having held rates steady for close to a year. Traders are also now betting on cuts at the subsequent two meetings this year, which has helped push stocks to record highs.

    This story has been updated with additional developments and context.

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    Elisabeth Buchwald and CNN

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  • Small businesses are scrambling as US tariff exemption comes to an end

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    (CNN) — International postal services are suspending shipments to the United States after an exemption on tariff duties for small packages is set to expire. It’s the latest example of how President Donald Trump’s sweeping trade policy is impacting US consumers and businesses.

    Beginning Friday, the “de minimis” exemption, which allowed shipments of goods worth $800 or less to enter the United States duty free, will be eliminated.

    It’s another blow to the exemption that provided a loophole for e-commerce giants: In May, the Trump administration suspended the rule on packages coming from China and Hong Kong. Those high duties, which were reduced from 120% to 54%, especially hurt low-cost sellers like Shein and Temu.

    European and Asian postal services have taken matters into their own hands by announcing plans to halt shipments as early as Monday. Singapore’s SingPost and India’s Department of Posts said they will also temporarily suspend some shipments to the United States.

    International postal service DHL said August 25 will be the last day it accepts shipments to the United States, joining European peers in halting shipments, including the Austrian Post, which will stop accepting shipments to the United States on August 26.

    “There is currently insufficient information available on the customs clearance procedures that will be required in the future. This tightening of regulations poses major challenges for all postal companies worldwide when shipping goods to the USA,” the Austrian Post said.

    The change is expected to affect discount sellers, like Amazon Haul and TikTok Shop, as well as online marketplaces Etsy and Shopify, all of which have connected US consumers to businesses worldwide.

    Reshaping business models

    US Customs and Border Protection estimated that more than 1.36 billion de minimis shipments entered the country last fiscal year. The agency processes more than 4 million de minimis shipments each day.

    According to the latest executive order, businesses may face an $80 per item charge for a country with a tariff rate less than 16%, or costs as high as $160 per item for a country with a tariff rate of between 16% and 25%, and $200 per item for a country with a tariff rate above 25%. On August 7, the US imposed new tariff rates on many trading partners, with Brazil facing the highest tariff rate, at 50%.

    Abbott Atelier Jewelry, a Vancouver, Canada-based business, warned customers in an Instagram post that it would “pause shopping for a little while as we look for a solution” and August 25 would be the “cut off date to bring orders across the border.”

    Some businesses are passing the additional tariff costs on to shoppers.

    Korean cosmetics brand Olive Young said that once the de minimis exemption ends, 15% duties will be applied to all orders, “regardless of the purchase amount,” beginning August 27. The duty and taxes will be shown at checkout, so “there will be no additional charges upon delivery.”

    Wool Warehouse, a United Kingdom-based yarn and crafting company, estimated extra charges on its exports to the United States may average 50% more. But the company doubts customers would eat the additional costs and decided to suspend shipping on August 21.

    “Clearly this is not something we want to do. The US is a significant part of our business. This decision is based on our current understanding of the rules,” the company wrote on its website.

    Britain’s Royal Mail will also halt services for US shipments beginning Tuesday. It would last roughly two days, until a system is prepared for the new shipping requirements.

    Etsy recommended sellers pay duties and other fees when purchasing shipping labels. That option allows tariff-inclusive prices to be present and calculated on Etsy for a “seamless shopping experience.”

    But some Etsy sellers plan to halt sales to US customers anyway.

    Shed Maid, a UK-based jewelry maker, said its shop would close to US customers from August 29 — a customer base that accounts for 50% of its orders, according to a post on TikTok.

    “It is going to have a huge impact on my business … I’m not sure what I’m going to do,” they said, adding, “I hope to be able to send to (American customers) again soon.”

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    Auzinea Bacon and CNN

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  • Home Depot says it will raise some prices because of tariffs

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    (CNN) — Home Depot said Tuesday that some of its prices could be going up because of the cost of tariffs.

    Until now, America’s largest home improvement retailer has limited what it has said about the impact of tariffs on its prices. But after reporting quarterly results Tuesday, CFO Richard McPhail said Home Depot would have to implement some price increases as a result of the Trump administration’s taxes on imports.

    “For some imported goods, tariff rates are significantly higher today than they were at this time last quarter,” he said in an interview with the Wall Street Journal that was confirmed by the company to CNN. “So as you would expect, there will be modest price movement in some categories, but it won’t be broad based.”

    Three months ago, when asked about the impact of tariffs on pricing, the company said it would not speculate on its price plans, but that tariffs might lead it to no longer offer some items.

    Home Depot said that a little less than half of its inventory comes from suppliers outside the United States. The company has previously said it was looking to diversify its supply base so that no foreign country supplied more than 10% of its goods.

    Despite sales in the quarter jumping 5% from last year, Home Depot’s net income slipped 0.2% over the same time period due to higher operating costs. The company believes its full-year earnings per share will fall 2% as economic uncertainty and high interest rates are keeping many consumers from moving forward with major home renovation plans.

    “Certainly some relief on mortgage rates in particular could help,” CEO Ted Decker said on the earnings call. Mortgage rates have spent most of the year stuck just under 7%.

    “When we talk to our customers… both consumers and pros, the number one reason for deferring the large project is general economic uncertainty. That is larger than prices of projects, of labor availability. By a wide margin, economic uncertainty is number one,” he added.

    But company executives said Home Depot is confident it will see those large projects appear at some point in the future, driving better results.

    “Our customers tell us the rate environment is giving them pause on larger remodeling projects,” McPhail said. “Our pros… say that their customers tell them they’re deferring projects. They’re not canceling projects. Home improvement demand persists. And so our job is to position ourselves to be ready for that.”

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    Chris Isidore and CNN

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