Evelyn Reynolds

More stories

  • 100 Shares119 Views

    in Economy

    Trump Announces ‘Great Deal’ on Trade With Indonesia

    President Trump said the agreement would partly walk back some of the steep tariffs he threatened on the country last week. Indonesia’s president called Mr. Trump a “tough negotiator.”Indonesia’s president, Prabowo Subianto, confirmed on Wednesday the broad outlines of a trade agreement with the United States that was reached after what he called “tough negotiations” with Washington.Under the terms, which President Trump on Tuesday called a “great deal for everybody,” U.S. exports to Indonesia would face no tariffs, while Indonesian goods would be charged a tariff of 19 percent in the United States.Mr. Prabowo confirmed in brief remarks in Jakarta that the two nations had “finally” reached an agreement. “We understand their interests, and they understand ours,” he added.The announcement comes as the Trump administration is trying to close trade deals with numerous countries, and threatening to impose double-digit tariffs on the exports of two dozen nations as of Aug. 1 if agreements aren’t reached.U.S. and Indonesian officials have been engaged in trade talks for several months. Last week, Mr. Trump threatened Indonesia with a 32 percent tariff on its exports in a letter posted to his social media account, as he sent similar form letters to dozens of countries. Indonesian officials said they were surprised to receive the letter, given that talks had been going well.“I think it’s a good deal for both parties,” Mr. Trump said, while saying that a forthcoming deal with India would also follow similar lines. He added that Indonesia also had minerals and “very high-quality copper, which we’ll be using.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 88 Shares149 Views

    in Economy

    UK inflation hits hotter-than-expected 3.6% in June

    UK inflation rose to a hotter-than-expected 3.6% in June after reaching 3.4% in May.
    The inflation data will be closely looked at by the Bank of England ahead of its next meeting in August.
    The U.K. is battling stubbornly high inflation rate and lackluster economic growth.

    A one pound price label in bowls of produce on a grocery stall at East Street Market in London, UK, in spring 2024.
    Bloomberg | Bloomberg | Getty Images

    The U.K.’s annual inflation rate hit a hotter-than-expected 3.6% in June, according to data released by the Office for National Statistics (ONS) on Wednesday.
    Economists polled by Reuters had anticipated inflation would reach 3.4% in the twelve months to June, after it hit 3.4% in May.

    June core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by an annual 3.7%, up from 3.5% in the twelve months to May.
    The British pound rose almost 0.2% against the dollar, to $1.3406, following the data release.
    “Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year,” Richard Heys, acting chief economist at ONS, commented on the data.
    “Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023,” he added.
    U.K. Finance Minister Rachel Reeves said the data showed that “working people are still struggling with the cost of living” and said the government had more work to do to help ease the pressure on consumers.

    The inflation data will be closely watched by the Bank of England as it tries to determine the trajectory for interest rates amid a stubbornly high inflation rate and lackluster economic growth.
    In an inflationary environment, central banks usually opt to maintain a higher key interest rate to encourage more saving and less spending in order to slow down price increases. The U.K.’s low-growth environment — the latest data showed the economy unexpectedly shrank again in May — is also a worry for the BOE, however.
    As such, economists expect BOE policymakers to cut rates by 25 basis points at their next gathering in August.
    “While price growth remains far above target, the U.K. economy contracting for a second straight month in May means the Bank is likely to look through the volatility in this inflation reading and proceed with a rate cut in August,” Adam Deasy, economist at PwC, said Wednesday in emailed comments.
    “Tomorrow’s payroll data release, the last major data release before the next MPC meeting, may spark the Bank into action to support an economy that increasingly looks like it needs a lift.”  More

  • 113 Shares179 Views

    in Economy

    Rising Inflation Underscores Risks in Trump’s New Tariff Threats

    New data showing price increases last month could foreshadow even higher costs if the president imposes steep tariffs on Aug. 1.President Trump’s steep tariffs have started to weigh on consumers’ wallets, sending prices higher as the White House readies a more drastic — and potentially costly — expansion of its global trade war.The risks in Mr. Trump’s economic strategy began to show on Tuesday, with the release of data that found inflation had accelerated in June. Prices rose noticeably on appliances, clothing and furniture, products that are all heavily exposed to the president’s taxes on imports from Canada, China and other major trading partners.The inflation report undercut Mr. Trump’s continued assertions that Americans would not face financial repercussions from his increasingly aggressive trade brinkmanship. Since taking office, the president has imposed withering duties on allies and adversaries alike, with additional taxes on a range of products such as cars and steel.The latest reading of the Consumer Price Index recorded the first signs of what economists had predicted all along, with U.S. businesses and consumers shouldering a growing share of the burden from the taxes Mr. Trump has imposed on imports.The data also carried perhaps a new warning for the president as he prepares another round of tariffs on dozens of countries in about two weeks, including a 30 percent tax on the European Union. Some experts said that an uptick in inflation could foreshadow more significant price increases later, especially if Mr. Trump proceeds as planned.“Up until this report, you could have argued that inflation is on a journey lower,” said Padhraic Garvey, who leads ING’s research team for the Americas. “Now we are on a journey higher.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 138 Shares179 Views

    in Economy

    Inflation picks up again in June, rising at 2.7% annual rate

    People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.
    Spencer Platt | Getty Images

    Consumer prices rose in June as President Donald Trump’s tariffs began to slowly work their way through the U.S. economy.
    The consumer price index, a broad-based measure of goods and services costs, increased 0.3% on the month, putting the 12-month inflation rate at 2.7%, the Bureau of Labor Statistics reported Tuesday. The numbers were right in line with the Dow Jones consensus, though the annual rate is the highest since February.

    Excluding volatile food and energy prices, core inflation picked up 0.2% on the month, with the annual rate moving to 2.9%, with the annual rate in line with estimates. The monthly level was slightly below the outlook for a 0.3% gain.

    Prior to June, inflation had been on a generally downward slope for the year, with headline CPI at a 3% annual rate back in January and progressing gradually slower in the subsequent months despite fears that Trump’s trade war would drive prices higher.
    While the evidence in June was mixed on how much influence tariffs had over prices, there were signs that the duties are having an impact.
    Vehicle prices fell on the month, with prices on new vehicles down 0.3% and used car and trucks tumbling 0.7%. However, tariff-sensitive apparel prices increased 0.4%. Household furnishings, which also are influenced by tariffs, increased 1% for the month.

    Shelter prices increased just 0.2% for the month, but the BLS said the category was still the largest contributor to the overall CPI gain. The index rose 3.8% from a year ago. Within the category, a measurement of what homeowners feel they could receive if they rented their properties increased 0.3%. However, lodging away from home slipped 2.9%.

    Elsewhere, food prices increased 0.3% for the month, putting the annual gain at 3%, while energy prices reversed a loss in May and rose 0.9%, though they are still down marginally from a year ago. Medical care services were up 0.6% while transportation services edged higher by 0.2%.
    With the rise in prices, inflation-adjusted hourly earnings fell 0.1% in June, the BLS said in a separate release. Real earnings increased 1% on an annual basis.
    Markets largely took the inflation report in stride. Stock market indexes were mixed while Treasury yields were mostly negative.
    Amid the previously muted inflation ratings, Trump has been urging the Federal Reserve to lower interest rates, which it has not done since December. The president has insisted that tariffs are not aggravating inflation, and has contended that the Fed’s refusal to ease is raising the costs the U.S. has to pay on its burgeoning debt and deficit problem.
    Central bankers, led by Chair Jerome Powell, have refused to budge. They insist that the U.S. economy is in a strong enough position now that the Fed can afford to wait to see the impact tariffs will have on inflation. Trump in turn has called on Powell to resign and is certain to name someone else to the job when the chair’s term expires in May 2026.
    Markets expect the Fed to stay on hold when it meets at the end of July and then cut by a quarter percentage point in September. More

  • 100 Shares169 Views

    in Economy

    Trump Adds 17% Tariff on Tomatoes From Mexico

    The Trump administration is adding a 17 percent tariff to a year-round grocery store staple, while funneling more business to domestic tomato growers, largely in Florida.The Trump administration announced Monday that it would impose a 17 percent tariff on most imports of tomatoes from Mexico, as it withdrew from a decades-old trade agreement that had prevented those levies from snapping into place.The tariffs will add to the price of a year-round grocery store staple for many Americans, while funneling more business to domestic tomato growers, largely in Florida.The levies stem from a nearly 30-year-old trade case that found Mexican tomato growers to be selling their products in the United States at unfairly low prices. The U.S. tomato industry brought a case against their Mexican competitors in 1996, arguing that Mexican tomatoes dumped into the United States were injuring American growers. A U.S. trade court agreed with them, and ordered tariffs to be imposed.But on five occasions since then — in 1996, 2002, 2008, 2013 and 2019 — the United States agreed to suspend the tariffs, as long as Mexican growers would keep their prices above a certain minimum level. The United States and Mexico had been in recent talks about entering into a new agreement.“Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” Howard Lutnick, the secretary of commerce, said in a statement. “That ends today. This rule change is in line with President Trump’s trade policies and approach with Mexico.”The 17 percent duty is calculated to measure the percentage by which Mexican tomatoes have been sold in the United States at unfair prices, the Commerce Department said. The United States imported $2.8 billion of tomatoes from Mexico in 2023, according to data from the World Bank, representing more than 85 percent of American imports.The Fresh Produce Association of the Americas, which represents companies that import and sell produce and flowers, said it was “disappointed” in the decision. It said that its members distributed vine-ripened, greenhouse-grown tomatoes from Mexico that are not replaceable by tomatoes grown in Florida and the Southeast, most of which are grown in an open field, picked green and gassed to induce a color change.“As an industry, we are saddened that American consumers will have to pay a tomato tax, or duty, for a reduced selection of the tomatoes they prefer,” the group said.Robert Guenther, the executive vice president of the Florida Tomato Exchange, said that the previous five agreements with Mexico had failed, and that strong enforcement of U.S. trade laws was needed to protect “the stability of our food supply chain.”“This decision will protect hardworking American tomato growers from unfair Mexican trading practices and send a strong signal that the Trump administration is committed to ensuring fair markets for American agriculture,” he said. More

  • 163 Shares119 Views

    in Economy

    The Economy Has Been Resilient. The New Round of Tariffs May Hit Harder.

    The economy’s resilience so far to President Trump’s global trade war risks emboldening him and unleashing the sort of economic devastation that economists have long feared.President Trump has had little reason to scale back his global trade war ambitions with inflation subdued, unemployment stable and U.S. stock markets back to record highs.But the latest escalation, including 30 percent levies on the European Union, could deliver a much more painful blow to the United States. If the tariffs go into effect on Aug. 1, they could unleash the sort of devastation to consumers and businesses that economists have long worried about and that Mr. Trump has mostly avoided. Their fear stems from the specter of a stagflationary shock, in which inflation intensifies as growth stalls.“The higher that tariffs end up being, the more stagflationary it will be,” said Eric Winograd, an economist at the investment firm AllianceBernstein.Tariffs have already had an impact on the economy in a number of ways, and the levies now threatened against the European Union risk causing even more painful disruptions, given that the bloc and the United States are each other’s largest trading partner.Ursula von der Leyen, the president of the European Commission, said in a statement that Mr. Trump’s latest tariffs “would disrupt essential trans-Atlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic.”So far, businesses have been able to mitigate some of the impact of Mr. Trump’s levies. To get ahead of the tariffs, they stockpiled products earlier this year, causing imports to surge before later crashing down. Americans have grown less confident about the economy as uncertainty surrounding Mr. Trump’s policies has frozen businesses in place.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 175 Shares189 Views

    in Economy

    Inflation report Tuesday should provide clues on the impact tariffs are having on prices

    The consumer price index, due Tuesday at 8:30 a.m. ET, is expected to show an uptick in both headline and core readings, with the latter still well above the Federal Reserve’s target.

    Groceries are seen at a Walmart supermarket in Houston, Texas, on May 15, 2025.
    Ronaldo Schemidt | AFP | Getty Images

    June’s inflation report will be looked at not so much for what the headline numbers show than what’s in the underlying data, especially whether tariffs are starting to have an impact.
    The consumer price index, due Tuesday at 8:30 a.m. ET, is expected to show an uptick in both headline and core readings, with the latter still well above the Federal Reserve’s target.

    But what will really matter is the extent to which President Donald Trump’s tariffs are hitting prices and potentially driving inflation higher.
    “June is the first reading [when] these tariffs are really going to start to bite in a very noticeable way,” said Chris Hodge, head U.S. economist at Natixis CIB Americas.
    CPI, which measures a broad basket of goods and services across the U.S. economy, is expected to show a 0.3% monthly increase for both headline and core rates, with the latter excluding volatile food and energy costs. On an annual basis, the index is expected to show a 2.7% headline reading and 3% on core.

    For the Fed, both numbers will still be north of its 2% target, though central bank policymakers use a separate Commerce Department gauge as their primary forecasting tool.
    More importantly, though, the CPI will provide a glimpse into how the Trump duties have worked their way into consumer pockets. When Hodge views the report, he will be looking at two key areas.

    “I’m looking at autos and I’m looking at apparel, and last month’s reading was very low for both of them, which is very counterintuitive to what you would have” expected, he said. “These are two sectors that are very sensitive to increased tariffs.”
    In fact, the May reading was subdued overall and seemed to indicate little upward pressure from the limited tariffs that went into effect in April. Both headline and core CPI rose just 0.1% on a monthly basis. New (-0.3%) and used (-0.5%) vehicle prices fell while apparel was off 0.4% and energy prices declined 1%.
    Those numbers are generally expected to turn around, though Goldman Sachs economists notably think used vehicles still may have seen a decline based on trends at recent auto auctions. Goldman is forecasting a below consensus gain of 0.2% in core CPI for June. Fed officials believe core provides a better guide to long-term inflation trends.
    Broadly speaking, economists will be looking to core goods trends as the best barometer for tariff impacts. The category includes items such as apparel and footwear, electronics, housing goods and furniture.
    Goldman expects increases in auto insurance and air fares, and a general contribution from tariffs of some 0.08 percentage point to the core reading. Tariff-impacted sectors such as furniture, recreation, education, communication and personal care could see price hits, the firm said.
    Economists also will keep an eye on shelter prices, which have been a stubborn component keeping readings higher.
    “Our forecast reflects a sharp acceleration in most core goods categories but limited impact on core services inflation, at least in the near term,” Goldman said in a note.
    The White House also will be watching the report closely — Trump and other administration officials have been pressuring the Fed to lower interest rates, and a higher than expected inflation reading could cause central bankers to dig in their heels further on policy easing.
    “The Fed is going to want to make sure that longer run expectations are not becoming unanchored, and I think that the Fed is going to have to see that peak of tariff-induced inflation before they’re going to be comfortable cutting,” said Hodge, the Natixis economist. “We’re at a time right now where breaking down [the inflation report] into individual components is more useful and more necessary than ever.” More

  • 138 Shares179 Views

    in Economy

    He Helped Big Companies Dodge Taxes. Now He’s Writing the Rules.

    Ken Kies, a longtime tax lobbyist who worked for some of the world’s largest businesses, is now running the Treasury Department’s office that will administer Trump’s tax law.In January 2022, the Internal Revenue Service was cracking down on a tax dodge from the agency’s “dirty dozen” list of abusive shelters. To fight back, promoters of the scheme turned to the lobbyist Ken Kies.In a conference call with lawyers and financial advisers, Mr. Kies outlined plans to fight the I.R.S., including by capitalizing on his close relationship with a top agency official, according to a recording of the call obtained by The New York Times.Now Mr. Kies has become the Treasury Department’s top tax policy official. The former veteran lobbyist, who has worked for some of America’s biggest companies, was confirmed by the Senate last month to serve as Treasury’s assistant secretary for tax policy.It is not uncommon in President Trump’s Washington for lobbyists or other interested parties to get high-level positions at agencies where they once sought access on behalf of corporate clients. But Mr. Kies is not just any lobbyist. For decades, he has played an instrumental role in enabling some of the most lucrative and most important tax avoidance strategies used by multinational companies and the wealthiest Americans.When the Clinton administration sought to stem the tide of companies shifting trillions of dollars of profits into offshore havens, Mr. Kies led the effort on behalf of a coalition of businesses to kill the regulation. In the George W. Bush administration, Mr. Kies successfully pushed for legislation to make such offshore tax dodges even easier to execute. During the Obama administration, he fended off another attempted crackdown on those strategies.In 2017, as part of a sweeping package of tax cuts signed by Mr. Trump, Mr. Kies lobbied for a new tax break that provides a 20 percent deduction to certain businesses, which overwhelmingly benefits the richest Americans. And most recently, he advised the Trump Organization on a dispute with the I.R.S.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More