Economy

These measures, often presented as a way to protect domestic industries, carry a complex set of implications that could ripple across markets and households.For consumers, one of the immediate concerns is inflation. Tariffs generally lead to higher costs for imported goods, which can result in increased prices on store shelves. This could squeeze purchasing power, particularly for lower- and middle-income households, which are more vulnerable to price hikes on essentials like food and everyday goods. Yardeni Research notes that while real wage growth has recently turned positive after years of stagnation, any policy-induced rise in consumer prices could erode these gains, dampening household confidence and spending.From a business perspective, tariffs can raise input costs, potentially squeezing profit margins. However, Yardeni Research suggests that companies might find some relief through other economic dynamics. For instance, a stronger U.S. dollar—often a byproduct of tariffs—can mitigate some of the price increases by making imports relatively cheaper in dollar terms. Moreover, the analysts highlight that productivity gains could continue to offset rising costs, keeping production expenses in check. During the first term of the Trump administration, a combination of deregulation and favorable trade deals helped sustain corporate profit margins, even amid similar tariff regimes.Nevertheless, the broader impact on global supply chains could pose risks. Tariffs disrupt established trade flows, forcing businesses to reevaluate sourcing and manufacturing strategies. For some firms, this could mean relocating production domestically, which might involve higher labor costs, or finding alternative suppliers, which could affect quality and consistency. Yardeni Research points out that sectors relying heavily on imported components, such as technology and automotive, could be hit particularly hard.Geopolitically, the imposition of tariffs often leads to retaliatory measures from trade partners. This tit-for-tat dynamic can escalate tensions, reduce global trade volumes, and impact emerging markets disproportionately. Countries like Mexico, which are tightly integrated into the U.S. supply chain, could face economic headwinds if tariffs disrupt cross-border commerce.The full scope of the tariffs’ impact will depend on how they are implemented and whether complementary policies, such as tax cuts or deregulation, are introduced to cushion the blow. Yardeni Research remains cautiously optimistic, suggesting that while tariffs are unlikely to trigger a major inflationary wave—thanks to factors like the strong dollar and productivity improvements—they could still alter consumer behavior and business strategies in ways that reverberate across the economy. More

The ministry said it will actively communicate with the parliament to keep the economy stable, adding that it plans to announce its biannual policy plan before the end of this year.The leader of the main opposition Democratic Party, Lee Jae-myung, called for a National Stability Council for Governance comprising the government and parliament to discuss finance, economy and public livelihoods.The Bank of Korea said in a statement that it would use all available policy instruments in conjunction with the government to respond to and avert any escalation of volatility in financial and foreign exchange markets.The bank said it is necessary to respond more actively to the economic impact than in past presidential impeachment periods due to heightened challenges in external conditions, such as increased uncertainty in the trading environment and intensified global competition in key industries.South Korea’s financial regulator said in a statement that financial markets are expected to stabilise as recent political events are considered temporary shocks, but it will expand market-stabilising funds if needed. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

Nunes, a longtime Trump defender who led the U.S. House of Representatives Intelligence Committee during part of Trump’s first White House term, will remain Truth Social CEO while serving on the advisory panel, Trump said in a post on the platform. As committee chair, Nunes alleged that the FBI had conspired against Trump during its investigation of Russian interference in the 2016 presidential elections in which Trump defeated Democratic nominee Hillary Clinton. “Devin will draw on his experience as former Chairman of the House Intelligence Committee, and his key role in exposing the Russia, Russia, Russia Hoax, to provide me with independent assessments of the effectiveness and propriety of the U.S. Intelligence Community’s activities,” Trump wrote. The President’s Intelligence Advisory Board is a White House panel that offers the president independent assessments of intelligence agencies’ effectiveness and planning.Trump on Saturday also named IBM (NYSE:IBM) executive and former U.S. Department of Homeland Security official Troy Edgar to serve as the department’s deputy secretary, and businessman Bill White to serve as the U.S. ambassador to Belgium.(This story has been refiled to add the word ‘elect’ in paragraph 1) More

Bayrou, whose appointment on Friday made him the fourth person to serve as French prime minister this year, will be responsible for steering a 2025 budget through the fractious parliament. It was the same task that ultimately toppled his predecessor Michel Barnier, whose three-month tenure was the shortest in modern French history.Bayrou’s meetings will take place in order of the size of the parties. Le Pen’s Rassemblement National won most seats when President Emmanuel Macron called a snap election in June, but failed to secure a majority. A leftist alliance called the New Popular Front is the largest bloc.”My first job is to be a builder and, failing that, a repairman,” Bayrou told the newspaper.Barnier sought to implement tax increases on corporations and wealthy individuals to cut a deficit that is expected to reach 6% of Gross Domestic Product at the end of this year. He was unable to find a parliamentary majority to back the plan, with Le Pen saying Barnier should have done more to incorporate her party’s concerns.After Barnier sought to pass the bill without a majority vote, lawmakers from the far-right and left backed a no-confidence vote and he resigned. Credit rating agency Moody’s (NYSE:MCO) handed France an unexpected downgrade late on Friday, to “Aa3” from “Aa2,” saying that the next government was unlikely to materially reduce the country’s deficit and that the public finances would be weaker over the next three years than their October baseline scenario. More

“As always, Premium and Premium+ users get higher usage limits and will be the first to access any new capabilities in the future,” the artificial intelligence startup said in a blog.xAI has been quietly testing a new version of the Grok-2 model over the past few weeks, it said. More

(Reuters) – U.S. President-elect Donald Trump has expressed a keen interest in privatizing the U.S. Postal Service in recent weeks, the Washington Post reported on Saturday, citing three people with knowledge of the matter. Trump, who takes office on Jan. 20, has discussed his desire to privatize the Postal Service with Howard Lutnick, his pick for commerce secretary, at Mar-a-Lago, the report said. More

ACCRA (Reuters) – Ghana’s President-elect John Dramani Mahama has said he will not abandon the country’s $3 billion rescue package with the International Monetary Fund, but wants to review the deal to tackle wasteful state spending and upgrade the energy sector.Mahama, a former president who won the Dec. 7 election by a wide margin, told Reuters late on Friday he would also seek to tackle inflation and currency depreciation to mitigate a cost-of-living crisis in the West African nation.Mahama had said previously that he would renegotiate the IMF programme secured by the government of outgoing President Nana Akufo in 2023.”When I talk about renegotiation, I don’t mean we’re jettisoning the programme,” Mahama said.”We’re bound by it but what we’re saying is within the programme, it should be possible to make some adjustments to suit reality.”Ghana’s electoral commission declared Mahama, who was in office from 2012-16, winner of the presidential poll with 56.55% of the vote.The president-elect of the world’s number two cocoa producer inherits a nation emerging from its worst economic crisis in a generation, with turmoil in its vital cocoa and gold industries.FOCUS ON SPENDING, ENERGYThe IMF deal helped to halve inflation and returned the economy to growth, but Mahama said more work was needed to ease economic hardship.”The economic situation is dire … and I’m going to put my soul, physique and everything into it and focus on making lives better for Ghanaians,” said Mahama, whose National Democratic Congress party also won comfortably in a parliamentary vote held on Dec. 7.He said the “multiplicity of taxes” agreed to as part of the IMF programme had made Ghana “unpleasant for business”.”We also think that (the IMF) have not put enough pressure on the government to cut wasteful expenditures,” he said, adding a review would aim to reduce spending, including by the president’s office.”If the president is asking us to tighten our belt, he must also tighten his,” he said.Mahama said the IMF had agreed to send an early mission to conduct a regular review, adding discussions would focus on “how to smoothen out the debt restructuring” that is now in its final lap.He said a revised IMF deal would also seek sustainable solutions to the energy problems to avoid sustained power outages.”We’re going to face quite a critical situation in the energy sector. The electricity company of Ghana is the ‘sick man’ of the whole value chain and we need to quickly fix it,” Mahama said. More