$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More
WELLINGTON (Reuters) -People leaving New Zealand hit record levels in the year to November 2024, in another sign of the weakness in the country’s economy that moved to a technical recession in the third quarter.Data released by Statistics New Zealand on Thursday showed that 127,800 people left the Pacific nation in the year to November, up 28% on the prior 12 month period. This was provisionally the highest number of people leaving in an annual period ever, according to the statistics bureau.Of those leaving, more than 50% were New Zealand citizens, according to the data.New Zealand, which has a population of just 5.3 million, has seen its economy struggle over the last couple of years as the central bank increased the official cash rate to dampen historically high inflation.Michael Gordon, senior economist at Westpac said that a lot of people come to New Zealand for work opportunities and when these dry up people leave. “It’s about work opportunities, especially here (New Zealand) versus Australia. Australia’s economy is still running reasonably strongly,” Gordon said. “There are more opportunities over there now so we are seeing quite high outflows of Kiwis.”However, people leaving does continue to be offset by inward migration. Statistics New Zealand said net migration – the number of people moving to New Zealand permanently minus those leaving New Zealand – was at 30,600 in the year to November 2024. Net migration peaked in the year ended October 2023 at 135,700. Gordon added that net migration was now back at historic averages and that over the longer term net migration would support the country’s economy. “It’s something to keep in mind, that for a big chunk of the world, New Zealand is an attractive place to live, but also for us (New Zealanders) there are also places look more attractive Australia, or going to the U.S. or the UK,” Gordon said. More
TOKYO (Reuters) – Japan’s exports rose for a third straight month in December, data showed on Thursday, suggesting that companies front-loaded shipments ahead of potentially hefty tariffs promised by new U.S. President Donald Trump.Trump has signalled plans to deploy tariffs on imports from major trading partners China, Canada and Mexico, raising fears that increasingly protectionist U.S. trade policies could dampen and disrupt global shipments.Japan’s exports rose 2.8% in December from a year earlier, data showed, more than a median market forecast for a 2.3% increase and following a 3.8% rise in the previous month.Exports to China, Japan’s biggest trading partner, fell 3% in December from a year earlier, while those to the United States were down 2.1%.Imports rose 1.8% in December on-year, compared with market forecasts for a 2.6% increase and a decline of 3.8% in November.As a result, Japan ran a trade a surplus of 130.9 billion yen ($836.80 million) in December, compared with the forecast of a deficit of 53 billion yen.For the whole of 2024, Japan logged a trade deficit of 5.3 trillion yen, marking four consecutive years of deficits but shrinking from the previous year’s 9.52 trillion yen.Emerging signs of sustained wage growth and expectations it would boost consumption are seen supporting the case for the Bank of Japan to raise interest rates this week.But the outlook for external demand is increasingly uncertain, as Trump’s tariff plans could upend international trade and hold back China’s economic recovery.A recent survey by the Japan External Trade Organization showed that most Japanese companies with operations in the United States are preparing for possible additional tariffs.Those efforts include strengthening manufacturing and procurement in the U.S. and considering product price hikes, according to the survey.($1 = 156.4300 yen) More
In a phone call between the two leaders, the crown prince said the Trump administration’s expected reforms could create “unprecedented economic prosperity”, the state news agency reported.The report said Saudi Arabia wants its investments to capitalize on these conditions. It did not detail the source of the $600 billion, whether it would be public or private spending nor how the money would be deployed. The investment “could increase further if additional opportunities arise”, the agency quoted Bin Salman as telling Trump.Trump fostered close ties with Gulf states including Saudi Arabia during his first term. The country invested $2 billion in a firm formed by Jared Kushner, Trump’s son-in-law and former aide, after Trump left office.Trump said following his inauguration on Monday that he would consider making Saudi Arabia his first destination for a foreign visit if Riyadh agreed to buy $500 billion worth of American products, similar to what he did in his first term. “I did it with Saudi Arabia last time because they agreed to buy $450 billion worth of our product. I said I’ll do it but you have to buy American product, and they agreed to do that,” Trump said, referring to his 2017 visit to the Gulf kingdom. More
(Reuters) – U.S. President Donald Trump’s rollback of electric vehicle targets may temporarily slow demand for lithium and other critical minerals, but is unlikely to hamper the mining industry amid surging global EV demand, analysts and industry leaders said. Trump on Tuesday revoked predecessor Joe Biden’s 2021 executive order that sought to ensure half of all new vehicles sold in the U.S. by 2030 are electric. Automakers had been positioning for a jump in EV demand due largely to that Biden move.Trump’s order caused shares of Japanese automakers, South Korean battery makers and Australian, U.S. and Chinese lithium miners to slip. But even if EV demand cools in the world’s second-biggest auto market, analysts and industry experts expect traction elsewhere to more than compensate.Trump has planned other regulatory changes to cut off support for EVs and charging stations. He also aims to strengthen measures blocking imports of automobiles and battery materials from China.”Every time people take away subsidies or benefits … it’s a dent to the demand scenario,” said analyst Glyn Lawcock at Barrenjoey, an Australian investment bank. “(But) ultimately demand will still grow even if the U.S. is a bit slower under Trump.”Australian lithium producer Liontown Resources (ASX:LTR) said the global transition to EVs was underway, with or without the United States. “Longer term, I just don’t think it will be an issue on demand,” Antonino Ottaviano, Liontown’s CEO, said on a Tuesday analyst call. Much of the EV industry’s growth happens in China, accounting for 11 million sales or 65% of the market, compared with North America, which accounts for 10% of the market, Liontown executives said on the call.Meanwhile, the rest of the world already accounts for 1.3 million EV sales and is growing at 27% year on year, a trajectory that will see it become more meaningful than the entire North American market in less than two years, the Liontown executives added. That growth potential is something Chinese EV manufacturers are chasing given they are locked out of the U.S. market due to 100% EV tariffs imposed by Biden.Grid-scale batteries that store days’ worth of electricity are rising in popularity across the world, for example. Critical metals are also used to build many consumer electronics as well as computer servers needed to power the artificial intelligence industry. Albemarle (NYSE:ALB), the world’s largest lithium company, declined to comment on Trump’s order. Arcadium, a lithium producer about to be bought by Rio Tinto (NYSE:RIO) and the International Lithium Association trade group, was not immediately available for comment. Rio Tinto also declined to comment on Trump’s order, but its CEO Jakob Stausholm told the World Economic Forum on Tuesday that he is bullish on the white metal.”Lithium demand will probably go up another five times over the next 15 years, so a lot more lithium projects will have to be built,” Stausholm told the forum in Davos, Switzerland, adding that he has owned an EV for more than nine years. “It’s just a better car” than an internal combustion engine, Stausholm added. David Klanecky, CEO of privately held battery recycler Cirba Solutions, expects U.S. demand for critical minerals to jump by 2030 due to the demand not just for EVs, but for myriad electronics.Beyond any target rollbacks, miners said they believe measures to wean Western manufacturers off Chinese supplies will underpin support for their metals. “We expect measures taken to build supply chain independence from China … to have a much greater impact than the rollback of a formal target for EV sales,” said Darryl Cuzzubbo, CEO of Australian rare earths developer Arafura. “There is a tipping point looming for electric vehicles at which targets and incentives won’t be required to encourage take-up.” (This story has been corrected to fix North America’s share of the global EV market to 10% from 20% in paragraph 8) More
(Reuters) – Senate Finance Committee Chairman Mike Crapo on Wednesday said he is hoping a full Senate confirmation vote for U.S. President Donald Trump’s pick as Treasury secretary, Scott Bessent, could occur next week.Bessent cleared Crapo’s committee by a 16-11 vote on Tuesday, including backing from two Democrats. But Crapo told Reuters Democrats were employing “a lot of delay tactics.”Democrats – in the minority party – are able to slow-walk some confirmation votes through procedural maneuvers, and Senate Majority Leader John Thune said this could end up with Senate confirmation votes occurring over the weekend. In the meantime, some Democrats are raising flags about Bessent using a tax loophole to reduce the Medicare taxes paid by his hedge fund by $910,000 over three years, which has been disputed by the Internal Revenue Service.Bessent at his Jan. 16 confirmation hearing said that he would set aside funds to pay any taxes owed once the case is decided. He has pledged to shutter the fund, Key Square, to avoid conflicts of interest if his nomination is confirmed.But Senator Elizabeth Warren, a Democrat, on Wednesday said Bessent “refuses to submit his own taxes for an audit and agree to pay what he owes. That’s a real problem for someone who would be in charge of the IRS.” Confirmation hearings for other top economic posts, including Trump’s pick for Commerce Secretary, Howard Lutnick, and United States Trade Representative, Jamieson Greer, have yet to be scheduled by the Senate Commerce committee. More
The Federal Reserve’s decision to lower interest rates and hopes of a soft landing for the economy helped ease lenders’ concerns about potential credit defaults in 2025. Discover’s provision for credit losses fell to $1.20 billion in the quarter ended Dec. 31 from about $1.91 billion in the year-ago period.Strong consumer spending has helped credit card-focused lenders rake in a higher income from interest. Riverwoods, Illinois-based Discover recorded net interest income of $3.63 billion for the fourth quarter, up nearly 4.7% from the same quarter last year.”Discover’s fourth quarter results capped off a successful 2024 as loan growth, margin expansion, and credit improvement led to strong financial performance,” said interim CEO Michael Shepherd in a statement. Capital One Financial (NYSE:COF), which is acquiring Discover for $35.3 billion in an all-stock deal, also recorded a jump in fourth-quarter profit on Tuesday, helped by higher interest income. The merger between Capital One and Discover would form the sixth-largest U.S. bank by assets and a U.S. credit card behemoth. Discover posted a net income of $1.29 billion, or $5.11 per share, in the October-to-December period, compared to $366 million, or $1.45 per share, in the year ago period. Shares of the company, which jumped 54% in 2024, were up marginally in trading after the bell. More
WASHINGTON (Reuters) – U.S. President Donald Trump is pushing a plan to explicitly use revenue from higher tariffs on imported goods to help pay for extending trillions of dollars in tax cuts, an unprecedented shift likely to face opposition from many of his fellow Republicans in Congress.The U.S. collects less than $100 billion annually in trade penalties imposed on imported goods as a tool to protect and grow domestic industries. That money is rarely a topic in Washington’s routine budget battles because it makes up so little of the federal government’s revenue. Trump has threatened across-the-board import tariffs, but has yet to impose any. The president and his allies say he wants to use them much like the personal and corporate taxes that account for the vast majority of U.S. revenues, notching up tariffs to help pay for government programs and cover promised tax cuts. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties and revenues. It will be massive amounts of money pouring into our treasury coming from foreign sources,” Trump said during his inaugural address on Monday.Raising enough money in tariffs to make a dent on the U.S. budget would be a big ask; they have accounted for only about 2% of annual revenues in recent years. “Tariffs are going to be a really important part of the tax-cut discussion.” A 10% tariff is “about $350 to $400 billion in revenue. So you see the beauty of that in the negotiations,” Trump aide Peter Navarro told CNBC on Tuesday. Republican budget hawks concerned about the reliability and durability of tariff revenue, along with the potential dangers trade wars pose for individual districts and voters, are likely to put up a fight, U.S. lawmakers and trade analysts say. U.S. Representative Ralph Norman, a South Carolina Republican, told Reuters that any push by Trump to pass tariffs through Congress as legislation would be an uphill climb.”Everybody’s got their district and companies that are affected by tariffs, good and bad. I doubt he would think he could get it through,” Norman said.”It is technically, mathematically possible to find some tariff policy that would offset the Trump tax cuts, but there is no way they would have the votes to do that,” said Bobby Kogan, senior director of federal budget policy at the left-leaning Center for American Progress. Asked how seriously Republicans are looking at tariff revenue as an offset for the Trump agenda, House of Representatives Majority Leader Steve Scalise told Reuters: “Trump’s alluded to doing tariffs, but we don’t know any details yet. He said expect something to come. But until we see it, it’s really hard to speculate.” The White House did not respond to requests for comment.DEFICIT WORRIESImporting companies pay tariffs on goods that come into the U.S., and most economists and business executives say importers are likely to pass the costs to consumers or be forced to accept lower profits. The House Ways and Means Committee, the main tax-writing panel in the lower chamber, included a 10% across-the-board tariff in its menu of options to pay for extending the tax cuts, according to a recent memo seen by Reuters. It estimated such a tariff regime would fetch $1.9 trillion over 10 years, according to the memo. Extending the tax cuts Trump passed during his first term and which expire this year would cost $4 trillion over 10 years, analysts estimate. Trump has also promised to stop collecting taxes on workers’ tips and payments to Social Security retirees, which would add hundreds of billions to the federal deficit without matching revenue or cuts.Republicans are preparing to enact these plans through a parliamentary process called “budget reconciliation” that doesn’t require support from Democrats in the coming weeks. With a slim majority in the House and a 53-47 seat margin in the Senate, Trump needs to convince budget hawks within his party that his plans won’t add to the deficit. Democrats have been opposed to the vast majority of the Trump tax cuts. If they are not technically in the legislation, the tariffs would not likely be included in the official Congressional Budget Office scoring of the reconciliation bill. Counting tariffs as revenue would require Congress to vote on them as legislation and it would have a material impact on the budget, House Budget Committee Chairman Jodey Arrington, a Texas Republican, told Reuters. “So, it is a legitimate item that could be considered. But I’m not telling you that it’s being considered at this moment. In fact, it’s been discussed and debated, but there’s no final plan.”Even with tariff revenue included, Republicans would likely have to impose massive cuts to popular government programs, such as Social Security and the Medicare health insurance plan for seniors, to pass a balanced bill.The non-partisan Tax Foundation estimated Trump’s most extreme tariff proposals – a 20% universal tariff plus a 60% tariff on China’s exports to the U.S. would raise about $3.8 trillion over the 10-year budget window, falling short of the $4.3 trillion needed to fully offset the cost of making the expiring tax cuts permanent. ‘HIGHLY INEFFICIENT’ Erica York, vice president of federal tax policy at the Tax Foundation, said it’s “highly unusual and unprecedented” to use tariffs for revenue.”Tariffs are a highly inefficient way to raise revenue,” York said. “They create a larger burden on poorer households than they do on richer households, which means many lower- and middle-income households could be worse off under the proposed combination of tariffs and tax cuts.”Relying on tariffs to balance a budget also makes little long-term sense because of how consumers react to them, other experts noted. Tariffs are intended to shift behavior, much like so-called “sin taxes” on cigarettes or alcohol, which means that if they were effective, they would reduce revenues over time, said Martin Muehleisen, a senior fellow at the Atlantic Council think tank.”If tariffs are intended to shift domestic consumption to U.S. products, they would generate little revenue if successful. If they are mainly designed to raise revenues, they would be inflationary and reduce economic growth,” he said. More
Notifications