Evelyn Reynolds

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    A Devastating Trade Spat With China Shows Few Signs of Abating

    President Trump’s rapidly escalating trade war with China has resulted in eye-watering tariffs on products exchanged between the countries and scrambled prospects for many global businesses that depend on the trade. And there is no end in sight.The Trump administration has been waiting for the Chinese leader, Xi Jinping, to call Mr. Trump personally, but Beijing appears wary of putting Mr. Xi in an unpredictable and potentially embarrassing situation with the U.S. president.With the two governments at an impasse, businesses that rely on sourcing products from China — varying from hardware stores to toymakers — have been thrown into turmoil. The triple-digit tariff rates have forced many to halt shipments entirely.Mr. Trump has rapidly ratcheted up tariffs on Chinese products, from 54 percent on April 2 to 145 percent just one week later. The Chinese government has argued that the actions are unfair and closely matched his moves, raising its tariffs on American goods to 125 percent on Friday.But on Friday night, the administration created a significant carve out to its tariffs on China when it exempted some electronics, including smartphones, laptops and televisions. Those products will still be subject to other tariffs that Mr. Trump has put in place, like a 20 percent fee he added to Chinese goods in response to the country’s role in the fentanyl trade.Mr. Trump has said he would like to speak with Mr. Xi, but he has stopped short of requesting a phone call, believing that it is the Chinese government’s turn to ask for such a call, according to people familiar with the matter. Trump officials say that dozens of countries have reached out to the administration about negotiations since the levies were imposed. China did not, and instead responded with harsh words and tariffs of its own.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

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    Bessent Takes Tricky Center Stage as Trade Wars Roil U.S. Economy

    The Treasury secretary received counsel and criticism from some of his predecessors over President Trump’s policies.The traditional gathering of former Treasury secretaries to welcome a newly minted one into the fold is usually a lighthearted and pleasant affair. But when the group convened this month, on President Trump’s “Liberation Day,” the tone was strikingly serious.The dinner, organized by former Treasury Secretary Steven T. Mnuchin, took place at a moment of tumult for the U.S. economy. The president had upended global trade with punishing tariffs on both allies and adversaries, and Treasury Secretary Scott Bessent was at the center of it, defending a policy that many in the room viewed as economic malpractice.“The mood was somber,” said W. Michael Blumenthal, 99, who led the Treasury Department in the Carter administration and was in attendance.Mr. Bessent was pressed over the strategy behind the tariffs and the impact that they would have on the economy, according to Mr. Blumenthal and other people familiar with the dinner. At times, Mr. Bessent elevated his voice when his predecessors confronted him about Mr. Trump’s approach.“He didn’t just smile,” Mr. Blumenthal recalled. “There he is — he has to defend it.”The guest list included Robert E. Rubin, Henry M. Paulson, Lawrence H. Summers, Timothy F. Geithner and Jack Lew. Former Treasury Secretary Janet L. Yellen was traveling in Australia and did not attend, a spokesman said.The Treasury Department declined to comment on the dinner, and Mr. Bessent declined to comment for this article.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

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    How Much Are Tariffs on Chinese Goods? It’s Trickier Than You Think.

    <!–> –><!–> [–><!–>The escalating trade war between the United States and China has created deep uncertainty for U.S. companies that rely on Chinese suppliers. Retaliations in recent days by the two countries have resulted in huge average tax rates on their each other’s imports, with tariffs often costing more than the price of the goods […] More

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    As Tariffs Hit, Americans Are Racing to Buy Car Seats, iPhones and Christmas Gifts

    Many Americans have purchased foreign-made products out of fears that companies could start to raise prices soon.Emily Moen, a coffee shop manager in Omaha, was scrolling through TikTok earlier this week when she came across a video informing her that President Trump’s tariffs could lead to higher prices for essential baby products.Ms. Moen, who is 15 weeks pregnant, said that she had not planned to buy a car seat soon. But after watching the video, she researched the one made by Graco that she had been eyeing, and learned that it was manufactured in China. Worried that the $200 seat could get even more expensive, she bought the item on Amazon the same day.“It was like an awakening to get this done now,” said Ms. Moen, 29.As the Trump administration’s trade war with China escalates, many consumers have raced to purchase foreign-made products out of fear that companies could start to raise prices soon. Some have rushed to buy big-ticket items like iPhones and refrigerators. Others have hurriedly placed orders for cheap goods from Chinese e-commerce platforms.The White House this week imposed a minimum tariff rate of 145 percent on all Chinese imports to the United States, on top of other previously announced levies, including a 25 percent tariff on steel, aluminum, cars and car parts.And last week, Mr. Trump ordered the end of a loophole that had allowed goods from China worth less than $800 to enter the United States without tariffs.Early data show that consumers stocked up on goods after the Trump administration announced sweeping tariffs on nearly all trading partners.Angela Weiss/Agence France-Presse — Getty ImagesWe 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

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    Investors Seeking Safety Look to German Government Bonds

    Germany has long taken flak from Wall Street and financial capitals around Europe for the extreme fiscal conservatism that has kept the country’s debt levels low. But as global markets convulsed this week, investors rewarded Germany’s caution by snapping up its government bonds, which are known as bunds.Investors have reeled after President Trump imposed 10 percent tariffs on nearly every trading partner, temporarily rescinded even higher “reciprocal” tariffs hours after they came into effect and steadily ratcheted up tariffs on China to well above 100 percent.The resulting tumult hit U.S. assets hard, including Treasuries and the dollar, normally considered haven assets. That sent investors seeking other places for safety, such as gold, the Swiss franc and German bunds.The 10-year yield on German bunds, which moves inversely to prices, fell to 2.56 percent, near its lowest level in more than a month. That is notable relative to the 10-year U.S. Treasury yield, arguably the most important interest rate in the world, which has soared higher. On Friday, the 10-year U.S. yield was around 4.5 percent, climbing nearly half a percentage point in one week, a huge move in that market.Germany’s strict limits on government borrowing have given the country a stellar AAA credit rating. But last month, lawmakers decided that the next government could abandon the borrowing limit and take on trillions of euros in fresh debt to bolster the country’s military and crumbling public infrastructure. Germany’s export-driven economy is also heavily exposed to tariffs, given the large amount of trade its automakers and other industrial companies do with the United States.The prospect of extra borrowing and a slowing economy had begun to put pressure on German bunds. But the turmoil elsewhere in recent weeks prompted investors to turn back to the country’s debt as a source of safety.This week, Germany’s expected next chancellor, Friedrich Merz, also announced the blueprint for his government, which included an economic plan to jump-start the ailing German economy. And ahead of its planned borrowing binge, Germany benefits from low debt relative to the size of its economy, at about 60 percent of gross domestic product. By comparison, U.S. debt is about 120 percent of the size of its economy.It was “very striking” that in a moment of stress German bunds were acting as the “haven of choice” instead of U.S. Treasuries, said Sander Tordoir, chief economist at the Centre for European Reform, a research institute.“There does seem to be a real safety premium now being place on German government debt,” he said. More

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    Bond Market is Upended by Trump’s Tariffs

    The bedrock of the financial system trembled this week, with government bond yields rising sharply as the chaotic rollout of tariffs shook investors’ faith in the pivotal role played by the United States in the financial system.U.S. government bonds, known as Treasuries because they are issued by the U.S. Treasury, are backed by the full faith of the American government, and the market for Treasuries has long been deemed one of the safest and most stable in the world.But the Treasury market’s erratic behavior all week has raised fears that investors are turning against U.S. assets as President Trump’s trade war escalates.The yield on the 10-year Treasury, which underpins corporate and consumer borrowing and is arguably the most important interest rate in the world, rose roughly 0.1 percentage points on Friday. The rise added to sharp moves throughout the week that have taken the yield on the 10-year Treasury from less than 4 percent at the end of last week to around 4.5 percent.These increases may seem small, but they are large moves in the Treasury market, prompting investors to warn that Mr. Trump’s tariff policies are causing serious turmoil. It matters to consumers as well. If you have a mortgage or car loan, for example, then the interest rate you pay is related to the 10-year yield.Ten-year treasuries are also considered a safe haven for investors during time of volatility in the stock market, but this week’s sharp rise in yields have made this market unusually perilous.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

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    Fed Under Pressure as Inflation Expectations Surge

    Federal Reserve officials have had one clear message since President Trump sharply escalated the global trade war this month. Keeping inflation expectations in check as price pressures rise is their No. 1 priority.On Friday, they faced a big setback.A new survey released by the University of Michigan found that as consumer sentiment took another nosedive because of fears associated with Mr. Trump’s tariffs, expectations about inflation — in the year ahead and over a longer time horizon — jumped sharply.Over the next 12 months, respondents now expect inflation to surge to 6.7 percent, the highest reading since 1981 and a significant increase from the March level of 5 percent. In five years’ time, they are bracing for inflation to stay stuck above 4 percent. The Fed’s goal is 2 percent inflation.There are reasons to take this data with a grain of salt. For one, the survey tends to reflect political biases. Since Mr. Trump returned to the White House, Democrats, once optimistic about the outlook, have turned much more downbeat, about not only inflation but also growth and the labor market. Republicans, meanwhile, have flipped from being far more pessimistic during Biden’s presidency to much more positive.On the margins, that political divide may be beginning to narrow, with the decline in sentiment in April “pervasive and unanimous across age, income, education, geographic region and political affiliation,” according to Joanne W. Hsu, director of the consumer surveys. Independents are also starting to change their opinions in a distinct way, accounting for a large part of the rise in longer-run inflation expectations.What has helped to somewhat alleviate concerns about the survey findings is the fact that market measures of longer-run inflation expectations, which are based on U.S. government bonds, have stayed far more stable. The divergence has been so stark as to prompt Jerome H. Powell, the Fed chair, to refer to the University of Michigan survey as an “outlier,” as recently as last month.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

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    What to Know About Who Pays the Higher Costs of Trump’s Tariffs

    President Trump’s latest tariffs are about to become an unavoidable and expensive reality for American businesses and for people who rely on foreign goods.Shoppers buying clothes from retailers in China may soon pay more than twice as much, now that a special exemption for lower-value imports is disappearing. And companies involved in international trade must now make even more complicated calculations to decide how much they owe in tariffs.“Maybe 3 percent of the people are well prepared,” said Jeremy Page, a founding partner of Page Fura, an international trade law firm, whose clients include large companies. “And that might even be charitable.”Imports from China have been hit with tariffs of 145 percent. That means for every $100 worth of goods a business buys from that country, it has to pay $145 to the federal government. Goods from most other countries have a new 10 percent tax, though that could rise if the countries do not reach trade agreements with the United States by July. And there are separate tariffs on cars, steel and aluminum. Mr. Trump has also said he wants to impose new tariffs on pharmaceuticals and computer chips.Mr. Trump contends that the tariffs will encourage businesses to produce goods in the United States. The tariffs on Chinese goods will almost certainly reduce imports from the country. But American businesses will not be able to quickly get goods from elsewhere — U.S. imports from China totaled $439 billion last year — and they will end up owing huge amounts in tariffs.A garment factory in Guangzhou, China. Imports from China have been hit with tariffs of 145 percent. Qilai Shen for The New York TimesWe 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