Economy

Home builders, car manufacturers and can makers are among those that will see higher prices for materials. Those companies could charge customers more.President Trump has raised tariffs on steel and aluminum imports to 50 percent less than three months after imposing a 25 percent tariff on them. He said the move, made Wednesday, would help support U.S. steel companies, but many domestic businesses say that the latest increase would hurt them and raise prices for all Americans.U.S. home builders, car manufacturers, oil producers and can makers will be among the most affected. Many companies in those and other industries will likely pass on cost increases to their customers.“It means higher costs for consumers,” said Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, a research organization in Washington that tends to favor lower trade barriers.These are some of the industries that could feel the biggest effects from Mr. Trump’s latest tariffs.American Steel MakersIndustry groups representing domestic steel producers praised the steeper levies, which they said could spur investment and create jobs in the United States.Kevin Dempsey, the president and chief executive at the American Iron and Steel Institute, said the latest increase would help U.S. steel producers compete with China and other countries that have flooded the global market with metal. Mr. Dempsey said the industry had worried that the 25 percent tariff on steel imports alone was not sufficient.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

New data shows companies are passing along cost increases from tariffs to consumers despite President Donald Trump’s pressure not to.
Formal data and anecdotal reports alike offer insight into how executives are carefully discussing U.S. trade policy behind the scenes.

Johnson & Johnson manufacturing facility in Wilson, North Carolina.
Courtesy: Johnson & Johnson

Data from the New York Federal Reserve shows a majority of companies have passed along at least some of President Donald Trump’s tariffs onto customers, the latest in a growing body of evidence indicating the policy change is likely to stretch consumers’ wallets.
In May, about 77% of service firms that saw increased costs due to higher U.S. tariffs tariffs passed through at least at least some of the rise to clients, according to a survey conducted by the New York Fed that was released Wednesday. Around 75% of manufacturers surveyed said the same.

In fact, more than 30% of manufacturers and roughly 45% of service firms passed through all of the higher cost to their customers, according to the New York Fed’s statics.
Price hikes happened quickly after Trump slapped steep levies on trading partners, whether large or small. More than 35% of manufacturers and nearly 40% of service firms raised prices within a week of seeing tariff-related cost increases, according to the survey.

Trump announced in early April that he would impose “reciprocal” tariffs on more than 180 countries and territories, sending the stock market into a tailspin. But Trump soon rolled back or paused those levies for three months, unleashing the equity market to claw back most of its initial losses.
July deadline
Companies and investors alike are now looking to a July 9 deadline for the return of those suspended tariffs, coping in the meantime with continued confusion regarding to trade policy. The U.S. has already announced one trade deal with the United Kingdom, and Deputy Treasury Secretary Michael Faulkender said this week that the Trump administration is “close to the finish line” on some other agreements.
The New York Fed’s survey is the latest in a salvo of data releases and anecdotal reports that have shown companies’ willingness to pass down cost increases despite pressure from Trump not to do so.

Nearly nine out of 10 of the 300 CEOs surveyed in May said they have raised prices or planned to soon, according to data released last week by Chief Executive Group and AlixPartners. About seven out of 10 chief executives surveyed in May said they plan to hike prices by at least 2.5%.
Corporate executives have been careful in how they speak about the impact of Trump’s policies on their business, especially when it comes to trade, to avoid getting caught in the president’s crosshairs. Last month, for example, Trump warned Walmart in a social media post that the retailer should “eat the tariffs” and that he would “be watching.”
Consequently, survey data and anonymous commentary offer insights into how American business leaders are discussing the tariffs behind closed doors.
“The administration’s tariffs alone have created supply chain disruptions rivaling that of Covid-19,” one respondent said in the Institute for Supply Management’s manufacturing survey published Monday.
Another respondent said “chaos does not bode well for anyone, especially when it impacts pricing.” While another pointed to the agreement between the U.S. and China to temporarily slash tariffs, they said the central question is what the landscape will look like in a few months.
‘Hugely distracting’
“We are doing extensive work to make contingency plans, which is hugely distracting from strategic work,” this respondent said. “It is also very hard to know what plans we should actually implement.”
Responses to the ISM service sector survey released Wednesday revealed a similar focus on the uncertainty stemming from controversial tariffs.
“Tariffs remain a challenge, as it is not clear what duties apply,” one respondent wrote. “The best plan is still to delay decisions to purchase where possible.” More

Private payrolls increased just 37,000 In May, below the 60,000 in April and the Dow Jones forecast for 110,000. It was the lowest monthly job total from the ADP count since March 2023.
Regarding wages, annual pay grew at a 4.5% rate for those remaining in their positions and 7% for job changers, both little changed from April.

Private sector job creation slowed to a near-standstill in May, hitting its lowest level in more than two years as signs emerged of a weakening labor market, payrolls processing firm ADP reported Wednesday.
Payrolls increased just 37,000 for the month, below the downwardly revised 60,000 in April and the Dow Jones forecast for 110,000. It was the lowest monthly job total from the ADP count since March 2023.

The report comes two days before the more closely watched nonfarm payrolls count from the Bureau of Labor Statistics, which is expected to show a gain of 125,000 and the unemployment rate steady at 4.2%.
While the two reports often differ, occasionally by large margins, the ADP count provides another snapshot of the jobs picture at a time when questions are being raised over broader economic conditions.
“After a strong start to the year, hiring is losing momentum,” said Nela Richardson, chief economist for ADP.
Following the release, President Donald Trump called on the Federal Reserve and Chair Jerome Powell to lower interest rates.
“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump said on his Truth Social site.

Losses in manufacturing

Goods-producing industries lost a net 2,000 positions for the month, with natural resources and mining off 5,000 and manufacturing down 3,000, offset by a gain of 6,000 in construction.
On the services side, leisure and hospitality (38,000) and financial activities (20,000) provided some signs of strength. However, declines of 17,000 in professional and business services, 13,000 in education and health services and 4,000 in trade, transportation and utilities weighed on the total.
Companies employing fewer than 50 workers saw a loss of 13,000 while those with 500 or more employees reported a drop of 3,000. Mid-size firms gained 49,000.
Regarding wages, annual pay grew at a 4.5% rate for those remaining in their positions and 7% for job changers, both little changed from April and still “robust” levels, Richardson said.
Economic data has provided a mixed bag of late for the labor market. The BLS reported Tuesday that job openings rose more than expected in April, though other indicators, such as surveys from employment site Indeed and the National Federation of Independent Business, show weaker levels of openings and hiring intentions.
“The market remains distressingly gridlocked, with limited hiring and low quits, and the market can’t keep steadily cooling off forever before it just turns cold,” Indeed economist Allison Shrivastava said after Tuesday’s job openings report.
Fed officials have been generally optimistic about economic conditions, though in recent days they have expressed concern about the potential impact from President Donald Trump’s tariffs on both inflation and employment.
“I see the U.S. economy as still being in a solid position, but heightened uncertainty poses risks to both price stability and unemployment,” Fed Governor Lisa Cook said Tuesday.
Fed officials are expected to stay on hold regarding interest rates when they meet in two weeks. More

Bulgaria has been given sign-off to join the euro zone.
The country becoming part of the euro zone would take the bloc from 20 to 21 members.
Countries need to meet several criteria, including on price stability, to adopt the euro.

A worker counts Bulgarian Lev banknotes at a store in Sofia, Bulgaria, on Friday, March 29, 2024.
Oliver Bunic/Bloomberg via Getty Images

Bulgaria on Wednesday secured the green light to join the euro zone, meaning the bloc could soon grow from 20 to 21 members.
The European Commission and European Central Bank both assessed that the country met the requirements to adopt the single currency starting next year.

“This positive assessment of convergence paves the way for Bulgaria to introduce the euro as of 1 January 2026 and become the 21st EU Member State to join the euro area,” Philip Lane, member of the ECB Executive Board, said in a press release.
The European Commission described the assessment as “a critical and historic step on Bulgaria’s journey towards euro adoption” in a statement.
European Commission President Ursula von der Leyen congratulated the country, saying the decision “will mean more investment and trade with euro area partners, and more stability and prosperity for the Bulgarian people.”
“Bulgaria will also take its rightful place in shaping euro area decisions,” she added in a social media post.
This marks a shift from last year’s reports, which concluded that Sofia did not meet the so-called convergence criteria to adopt the currency on the grounds that the country’s inflation rate was too high.

One of the obstacles to cross was inflation. Bulgaria’s harmonized consumer price index — which is comparable across European countries — came in at 2.8% in April according to statistics agency Eurostat.
Price stability is just one of the requirements a country needs to fulfil in order to join the euro zone, and thereby the European Central Bank. Others include limitations on the size of a nation’s government deficit and debt ratio, its average nominal long-term interest rate and its exchange rate stability.
There is also a legal requirement that covers central bank independence.
Bulgaria joined the European Union in 2007 and committed at the time to also join the euro zone and relinquish the Bulgarian lev as its official currency. Around 341 million people use the euro across the current 20 euro zone countries, according to the European Union. The ECB says over 29 billion euro bank notes with a value of more than 1.5 trillion euros ($1.7 trillion) are in circulation.
One euro is equivalent to 1.96 lev, a rate set when Bulgaria became part of the board which anchors the currencies.
There are mixed attitudes about joining the euro within Bulgaria. A survey published last year by the EU suggested 49% of the public was in favor of the becoming part of the euro bloc. Political opinion is also split, with several nationalist parties and the country’s president advocating against it, while Prime Minister Rosen Zhelyazkov is supportive.
The European Commission said that alongside its assessment, it had also adopted proposals for a council decision and council regulation on Bulgaria’s euro adoption at the start of next year. The council of the EU has the final say on countries joining the euro zone. More

The president has ratcheted up the rate on foreign metals to 50 percent, double the previous rate, saying the levies weren’t high enough to help the U.S. industry.U.S. tariffs on steel and aluminum imports doubled on Wednesday, as President Trump continued to ratchet up levies on foreign metals that he claims will help revitalize American steel mills and aluminum smelters.The White House called the increased tariffs, which rose to 50 percent from 25 percent just after midnight Eastern time, a matter of addressing “trade practices that undermine national security.” They were announced during Mr. Trump’s visit to a U.S. Steel mill last week, and appear to be aimed at currying favor with steelworkers and the steel industry, including those in swing states like Pennsylvania, where U.S. Steel is based.The higher levies have already rankled close allies that sell metal to the United States, including Canada and Europe. They have also sent alarms to automakers, plane manufacturers, home builders, oil drillers and other companies that rely on buying metals.In an executive order, Mr. Trump said the higher tariffs would “more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market and thereby undercut the competitiveness of the United States steel and aluminum industries.”Kevin Dempsey, the president of the American Iron and Steel Institute, an industry group, praised the move. He said China and other countries oversupplied the international market, making it harder for U.S. producers to compete.“Given these challenging international conditions that show no signs of improvement, this tariff action will help prevent new surges in imports that would injure American steel producers and their workers,” Mr. Dempsey said. More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldUK industry was on Tuesday exempted from a doubling of US steel and aluminium tariffs by Donald Trump, as British bosses urged Sir Keir Starmer to work quickly to implement a trade pact that would cut the levies to zero. The surprise move by the Trump administration to hand Britain a carve-out from its latest tariff increases provided some respite for the prime minister, who is facing mounting frustration from industry over delays to implementing the US-UK trade accord.Announcing the new tariffs via an executive order, Trump said the UK would escape a 50 per cent levy on steel and aluminium “to allow for the implementation of the US-UK Economic Prosperity Deal” — but British metal producers will contend with a 25 per cent tax until the pact takes effect.Under the terms of the agreement, the UK will receive a zero-tariff quota for steel if it meets US security requirements to exclude China from its supply chains.However, since the May 8 signing ceremony involving Starmer and Trump, negotiations over implementing the deal have dragged on. Trump’s executive order added a note of jeopardy to the UK exemption, saying the president reserved the right to increase steel and aluminium tariffs on Britain to 50 per cent if “he determines that the United Kingdom has not complied with relevant aspects” of the trade deal.The Trump administration’s decision to spare Britain came after UK business secretary Jonathan Reynolds held talks with his US counterpart Jamieson Greer in Paris on Tuesday, in a further effort to expedite the pact.Reynolds said after the meeting that both sides were working to implement the agreement “as soon as possible” without specifying a timeline. The UK government said in a statement: “We’re pleased that as a result of our agreement with the US, UK steel will not be subject to these additional tariffs.“We will continue to work with the US to implement our agreement, which will see the 25 per cent US tariffs on steel removed.”The trade pact also promised to reduce US tariffs on up to 100,000 British car exports from 25 per cent to 10 per cent. Before Trump unveiled his executive order, Duncan Edwards, chief executive of BritishAmerican Business, a transatlantic trade body, said it was “very frustrating” from a British point of view that US tariffs on UK steel exports had not yet been cut to zero. Trump imposed 25 per cent tariffs on aluminium and steel imports in March.Edwards said Starmer had slightly “oversold” the trade pact. “There’s a credibility issue when you say you have done it, but it’s not finished yet,” he added.UK industry leaders showed growing signs of impatience earlier on Tuesday, telling parliament’s business and trade committee that it was urgent the trade accord was operationalised. Russell Codling, director of markets business development at Tata Steel, which has steel making operations at Port Talbot in south Wales, said US tariffs of 25 per cent had already a “big impact” on the business, creating “huge levels of uncertainty” for the industry. “My ‘ask’ is please can the government act as quickly as possible on this,” he told MPs. The US is the UK’s second most important export market for steel, worth around £400mn a year.UK carmakers are also in limbo, awaiting details on how they can qualify for a US export quota of 100,000 cars at a reduced 10 per cent tariff, and how it will be shared out.Murray Paul, public affairs director at Jaguar Land Rover, said the company would continue hurting for as long as the UK government failed to conclude the negotiations on the trade pact.“It comes down to speed. We are losing business rapidly — a complete cessation of activity with US customers and orders . . . I have confidence [in the deal], but it needs to happen, really, really quickly,” he added.The hastily agreed trade pact announced by Starmer and Trump had an important disclaimer in the small print: “Both the United States and the United Kingdom recognise that this document does not constitute a legally binding agreement.”British officials have been working to persuade the Trump administration to bring it into force, but some admitted there was no “clarity” about when this might happen.The UK made concessions to the US side, agreeing 13,000 tonnes of beef and 1.4bn litres of bioethanol could be exported to the UK tariff free. Bioethanol is used to make the UK’s standard E10 petrol less carbon intensive. More

Instead of battling over tariffs, Washington and Beijing have turned to a potentially far more harmful strategy: flexing their control over global supply chains.The U.S.-China trade conflict is quickly morphing into a fight over global supply chains, as the two nations limit the sharing of critical technologies that could have lasting consequences for scores of industries.The United States last week suspended some sales to China of components and software used in jet engines and semiconductors, a response to a clampdown by Beijing on the export of minerals used in large sectors of manufacturing. Both sides over the last few days have accused the other of operating in bad faith.The supply chain warfare, which comes on top of tariffs the two countries have inflicted on the other’s imports, has alarmed companies that say they cannot make their products without components sourced from both. And it has made officials in Washington increasingly nervous about other choke points where China could squeeze the United States, including pharmaceuticals or shipping.In recent weeks, the airplane industry has emerged as both a weapon, and a victim, in this fight.The jet engine technology that powers airplanes, and the navigation systems that control them, largely come from the United States, developed by companies like General Electric. In China’s quest to build a viable competitor to Boeing, for example, it has had to source engine technology from GE Aerospace.But a jet engine also cannot be made without China. Minerals that are processed there are essential for special coatings and components that help the engine operate smoothly at high temperatures, as well as other uses.Beijing restricted exports of those minerals, known as rare earths, in April after President Trump began imposing high tariffs on Chinese imports.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

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldUS tariffs of 50 per cent on steel and aluminium will take effect from June 4 after Donald Trump signed an executive order on Tuesday escalating his global trade war a week after a court ruled the bulk of his levies illegal.The new tariffs double existing levies on the sector of 25 per cent that the president introduced earlier this year. Duties on UK steel and aluminium will remain at 25 per cent — a carve-out for London after it signed a trade deal with Washington last month.Trump said on Tuesday that the tariffs were necessary to prevent dumping by foreign producers that would “threaten to impair the national security”.“The increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminium in the US market and thereby undercut the competitiveness of the United States steel and aluminium industries,” Trump wrote in the order. The additional duties intensify the president’s bid to reshape international commerce even as much of his trade agenda remains in legal limbo. A court ruled last week that he lacked the authority cited when he imposed his most sweeping “liberation day” tariffs on April 2.The ruling — which has since been paused by an appeals court — did not affect sector-specific levies, such as those on steel and aluminium, which Trump introduced using a different authority.The additional steel and aluminium duties, which take effect from 12:01am eastern time on Wednesday, will not immediately apply to the UK, which last month became the first country to strike a trade pact with the administration.But Trump indicated he could hit yet London with the higher rate if his commerce secretary Howard Lutnick “determines that the United Kingdom has not complied with relevant aspects” of the agreement after a July 9 deadline.The president announced his plan to double the tariffs during a rally at a Pennsylvania steel mill last week, promising to erect a “fence” around the domestic metals industry that would in effect lock out foreign producers. “That means that nobody’s going to be able to steal your industry,” he told a jubilant crowd of steel workers on Friday. “At 25 per cent, they can sort of get over that fence. At 50 per cent they can no longer get over the fence.”The policy drew swift condemnation from Canada, the largest supplier of steel and aluminium to the US, where the industry warned in recent days of “mass disruption” and “catastrophic” job losses. More