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    Mexican President Mulls Retaliatory Tariffs After Trump’s Threats

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    Mexico’s president, Claudia Sheinbaum, hit back on Tuesday morning at President-elect Trump’s vow to impose 25 percent tariffs on all products coming into the United States from Mexico, signaling that her country was prepared to respond with retaliatory tariffs of its own.Ms. Sheinbaum also said that raising tariffs would fail to curb illegal migration or the consumption of illicit drugs in the United States, an argument that Mr. Trump had made in his warning on tariffs.“The best path is dialogue,” Ms. Sheinbaum said at her daily news conference, calling for negotiations with the incoming Trump administration while laying out steps that Mexico has already taken to assuage some of Mr. Trump’s concerns.Ms. Sheinbaum, reading from a letter she is planning to send to Mr. Trump, noted that illegal crossings at the border between Mexico and the United States had plunged from December 2023 to November 2024, largely as a result of Mexico’s own efforts to stem migration flows within its own territory.“Migrant caravans no longer reach the border,” she added.Ms. Sheinbaum also called on U.S. authorities to do more to address the root causes of migration.“Allocating even a fraction of what the United States spends on warfare toward peace building and development would address the deeper drivers of migration,” Ms. Sheinbaum wrote in the letter.Ms. Sheinbaum also raised the specter of a broader tariff war that could inflict damage on the economies of both nations, pointing to multinational car manufacturers like General Motors, Stellantis and Ford Motor Co., which have operated in Mexico for decades.“Why endanger them with tariffs that would harm both nations?” Ms. Sheinbaum wrote. “Any tariffs imposed by one side would likely prompt retaliatory tariffs, leading to risks for joint enterprises.”Mexico is far more dependent on trade with the United States than vice versa, exporting about 80 percent of its goods to its northern neighbor.But numerous sectors in the United States, such as semiconductor and chemicals manufacturers, also rely on exporting to Mexico. Exports to Mexico accounted for nearly 16 percent of overall American exports in 2022.Ms. Sheinbaum also said that Mexico was already taking steps to combat the smuggling of fentanyl to the United States. But she argued that the core problem was demand for fentanyl within the United States, calling the crisis “fundamentally a public health and consumption issue within your society.”“It is widely known that the chemical precursors used to produce fentanyl and other synthetic drugs are illegally entering Canada, the United States, and Mexico from Asian countries,” Ms. Sheinbaum wrote. “This underscores the urgent need for international collaboration.” More

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    Can Wall Street Billionaires Deliver on Trump’s Blue-Collar Promise?

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    The president-elect has named wealthy financiers for key economic positions, raising questions about how much they will follow through on promises to help the working class.When Donald J. Trump first ran for the White House in 2016, his closing campaign advertisement lamented the influence of Wall Street in Washington, flashing ominous images of big banks and the billionaire liberal philanthropist George Soros.Now, as president-elect, Mr. Trump has tapped two denizens of Wall Street to run his economic agenda. Scott Bessent, who invested money for Mr. Soros for more than a decade, is his pick for Treasury secretary, and Howard Lutnick, the chief executive of Cantor Fitzgerald, will be nominated to lead the Commerce Department. Mr. Trump’s choices to lead his economic team show the prominence of billionaire investors in setting an agenda that is supposed to fuel a “blue-collar boom” but that skeptics think will mostly benefit the rich.As Mr. Trump prepares to assume the presidency in January, business owners and investors are closely attuned to which of his economic promises he will ultimately follow through on. He has promised to slash tax rates, impose hefty tariffs on China and other countries, and deport millions of immigrants who work in American farms and businesses.The selections of Mr. Bessent and Mr. Lutnick cement a hold by Wall Street executives over the two most important economic posts in any administration. The picks are drawing blowback from Democrats and left-leaning groups, who assailed Mr. Trump for giving top jobs to rich donors and suggested that they would soon be working to create new tax breaks for the rich, not those who are struggling.“For all his talk of looking out for working-class Americans, President-elect Trump’s choice of a billionaire hedge fund manager to lead the Treasury Department shows he just wants to keep a rigged system that only works for big corporations and the very wealthy,” said Tony Carrk, the executive director of the government watchdog group Accountable.US.Yet the decision to tap Mr. Bessent and Mr. Lutnick is raising speculation that Mr. Trump could take a more market-friendly approach to many of his economic policies than some had feared because of his professed love of tariffs, which had the potential for igniting a global trade war.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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    Trump’s Trade Agenda Could Benefit Friends and Punish Rivals

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    Donald Trump has a record of pardoning favored companies from tariffs. Companies are once again lining up to try to influence him.The sweeping tariffs that President-elect Donald J. Trump imposed in his first term on foreign metals, machinery, clothing and other products were intended to have maximum impact around the world. They sought to shutter foreign factories, rework international supply chains and force companies to make big investments in the United States.But for many businesses, the most important consequences of the tariffs, enacted in 2018 and 2019, unfolded just a few blocks from the White House.In the face of pushback from companies reliant on foreign products, the Trump administration set up a process that allowed them to apply for special exemptions. The stakes were high: An exemption could relieve a company of tariffs as high as 25 percent, potentially giving it a big advantage over competitors.That ignited a swift and often successful lobbying effort, especially from Washington’s high-priced K Street law firms, which ended up applying for hundreds of thousands of tariff exemptions. The Office of the United States Trade Representative, which handled exclusions for the China tariffs, fielded more than 50,000 requests, while the Commerce Department received nearly 500,000 exclusion requests for the tariffs on steel and aluminum.As Mr. Trump dangles new and potentially more expensive tariffs, many companies are already angling to obtain relief. Lawyers and lobbyists in Washington say they are receiving an influx of requests from companies that want to hire their services, even before the full extent of the president-elect’s tariff plans becomes clear.In his first term, Mr. Trump imposed tariffs of as much as 25 percent on more than $300 billion in Chinese goods, and 10 percent to 25 percent on steel and aluminum from a variety of countries, including Canada, Mexico and Japan.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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    Is Trump More Flexible on China Than His Hawkish Cabinet Picks Suggest?

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    President-elect Donald J. Trump is assembling a team of aides bent on confrontation with China. But he also has advisers who do business there, including Elon Musk.They are the new class of cold warriors, guns pointed at China.President-elect Donald J. Trump has chosen cabinet secretaries and a national security adviser who stress the need to confront China across the entire security and economic spectrum: military posture, trade, technology, espionage, human rights and Taiwan.Those choices could open a new era of conflict with a nuclear-armed nation that has the world’s largest standing army and second-largest economy, and where many top officials see the United States as a superpower in decline.Mr. Trump’s hawkish advisers so far include Marco Rubio, a Florida senator named as secretary of state; Michael Waltz, a Florida congressman tapped for national security adviser; and Pete Hegseth, a former Fox News television personality designated to be defense secretary. Cabinet secretaries must be confirmed by the Senate, although Mr. Trump has floated the idea of getting around that by using recess appointments.Those men are more explicitly hostile to China than their counterparts in the Biden administration, though President Biden has taken an aggressive tack with China and continued some of the policies from Mr. Trump’s first term. A consensus has solidified among Democrats and Republicans in Washington that China must be constrained because it is the nation most capable of upending American global dominance.Yet there are signs that Mr. Trump might consider a more moderate approach on trade, perhaps to avoid upsetting a roaring stock market nurtured by Mr. Biden.Mr. Trump with President Xi Jinping of China in Beijing in November 2017. Mr. Trump hosted Mr. Xi at Mar-a-Lago earlier that year, but their budding relationship eventually fell apart over a trade war that Mr. Trump started.Doug Mills/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

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    How Trump’s Tax Cuts and Tariffs Could Turn Into Law

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    Republicans are juggling complex political and tactical questions as they plan their congressional agenda next year.Republicans are starting to sketch out how to translate President-elect Donald J. Trump’s economic agenda into law, putting plans in place to bypass Democrats and approve multiple bills reshaping the nation’s tax and spending policies along party lines.With total control of Washington, Republicans have the rare — and often fleeting — opportunity to leave a lasting mark on federal policy. Some in the party are hoping to tee up big legislation for early next year and capitalize on Mr. Trump’s first 100 days.Much of the early planning revolves around the sweeping tax cuts the party passed and Mr. Trump signed into law in 2017, many of which will expire at the end of next year. Key Republicans are holding meetings about how to maneuver a bill extending the tax cuts through the Senate, while others are consulting economists for ideas to offset their roughly $4 trillion cost.Several questions loom over the Republican effort. They range from how fast the party should move next year to deeper political disagreements over which tax and spending policies to change. The overall cost of the legislation is a central preoccupation at a time of rising deficits. And whatever Republicans put together will most likely become a magnet for other issues the party has prioritized, including immigration.Here’s what to expect.A Difficult ProcessMost legislation needs a supermajority of 60 votes to pass the Senate. But for bills focused on taxes and spending, lawmakers can turn to a process called budget reconciliation that requires only a regular majority of 51 votes in the Senate.Reconciliation is a powerful but cumbersome tool. Its rules prevent lawmakers from passing policy changes unrelated to the budget, and lawmakers are only allowed to use reconciliation a limited number of times per year. Republicans could also raise the debt limit through the process.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 Trump’s Plans for Mass Deportations, Tariffs and Fed Could Affect the Economy

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    Predicting how White House policy is going to affect the American economy is always fraught with uncertainty. Donald J. Trump’s return to the White House has taken the doubt up a notch.Mr. Trump has proposed or hinted at a range of policies — including drastically higher tariffs, mass deportations, deregulation and a fraught relationship with the Federal Reserve as it sets interest rates — that could shape the economy in complex ways.“There are two multiplicative sources of uncertainty: One, of course, is what they’re going to do,” said Michael Feroli, the chief U.S. economist at J.P. Morgan. “The other is: Even if you know what they’re going to do, what is it going to mean for the economy?”What forecasters do know is that America’s economy is solid heading into 2025, with low unemployment, solid wage gains, gradually declining Federal Reserve interest rates, and inflation that has been slowly returning to a normal pace after years of rapid price increases. Factory construction took off under the Biden administration, and those facilities will be slowly opening their doors in the coming years.But what comes next for growth and for inflation is unclear — especially because when it comes to huge issues like whether or not to assert more control over the Federal Reserve, Mr. Trump is getting different advice from different people in his orbit. Here are some of the crucial wild cards.Tariffs: Likely Inflationary. How Much Is Unclear.If economists agree about one thing regarding Mr. Trump’s policies, it is that his tariff proposals could boost prices for consumers and lift inflation. But the range of estimates over how much is wide.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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    Why Trump’s Victory Is Fueling a Market Frenzy

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    Investors have been comforted by a clear election result and are anticipating tax cuts and deregulation from a second Trump administration.Donald J. Trump’s election victory reverberated through financial markets. And one week later, bets on the economy’s path and on corporate winners or losers — known as the “Trump trade” on Wall Street — are in full swing.Stock prices for perceived winners have snapped higher: Bank valuations have soared, as investors anticipate more lenient regulations. The same is true for many large companies seeking to consolidate through mergers and acquisitions, which have frequently been blocked or discouraged under President Biden.The share price of Tesla, run by Mr. Trump’s adviser and campaign benefactor Elon Musk, has surged by more than 40 percent since the election last week. Cryptocurrencies, which Mr. Trump has pledged to lend more support, popped as well, with Bitcoin hitting record highs.Based on the president-elect’s promises of drastic immigration enforcement, which might increase demand for detention services, the shares of private prison operators also rose sharply.Presumed losers slumped in price, including smaller green energy firms benefiting from Biden-era tax credits. A range of retailers and manufacturers reliant on imported goods have also suffered, because they may be negatively exposed to tariffs that Mr. Trump has floated.The stock market overall, though, has ripped to new highs, surpassing the records it set earlier in the year.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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    Europe Braces for Trump: ‘Worst Economic Nightmare Has Come True’

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    The United States is the biggest trading partner for the European Union and Britain, whose economies could be at risk from the president-elect’s policies.The outlook for Europe’s economy has been disappointing.Last week — after Donald J. Trump’s presidential election — it got worse.Deep uncertainty about the Trump administration’s policies on trade, technology, Ukraine, climate change and more is expected to chill investment and hamstring growth. The launch of a possible tariff war by the United States, the biggest trading partner and closest ally of the European Union and Britain, would hammer major industries like automobiles, pharmaceuticals and machinery.And the need to raise military spending because of doubts about America’s guarantees in Europe would further strain national budgets and increase deficits.In addition, the president-elect’s more confrontational attitude toward China could pressure Europe to pick sides or face retribution.“Europe’s worst economic nightmare has come true,” said Carsten Brzeski, chief economist at the Dutch bank ING. The developments, he warned, could push the eurozone into “a full-blown recession” next year.With political turmoil in Germany and France, Europe’s two largest economies, this latest blow could hardly come at a worse time.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