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    in Economy

    Oil Prices Are Falling. Here’s Where That Could Spell Trouble.

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    For countries that depend heavily on oil revenue, dropping prices are worrisome.Oil producing countries are bracing for a bumpy ride this year, with a precipitous drop in prices to the lowest levels in four years seen as the initial, alarming sign of looming turmoil.A price drop benefits any country seeking to cut its fuel bill. But in oil producing nations, lower prices can feed economic troubles, and sometimes political unrest, as governments slash spending.Analysts who had already been predicting lower oil prices because of softening demand amid increased global production said the possibility of a tariff trade war and the overall climate of uncertainty could well deepen producers’ woes.“The steep price dive and overall volatility is sending a very strong signal that the global economy is going to be rattled this year and that will translate into a lower demand for oil,” said Gregory Brew, a specialist on the geopolitics of oil and gas with the Eurasia Group, a New York-based risk analysis organization.Wealthy producers may be able to cushion the blowEarlier this year, the price for benchmark crude held steady around $73 a barrel, high enough to sustain the budgets of most producing nations. But some countries, like Saudi Arabia and the United Arab Emirates, base ambitious development plans on a price of at least $90 a barrel, analysts say.A huge, futuristic city project in Saudi Arabia is being financed with oil revenue.Planet Labs Pbc/Planet Labs PBC, via Associated PressWe 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

  • 150 Shares169 Views

    in Economy

    Howard Lutnick, Trump’s ‘Buoyant’ Trade Warrior, Flexes His Power Over Global Business

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    Since Howard Lutnick was tapped to serve as President Trump’s commerce secretary, executives from some of the world’s largest companies have been trying to win him over.Leaders of Nvidia, Facebook, Taiwan Semiconductor Manufacturing Company and Alphabet have visited his newly purchased $25 million property in Washington — a 16,250-square-foot mansion that Mr. Lutnick, a billionaire, recently quipped would be “big enough for my ego” — to persuade him to adopt a business-friendly agenda.As Mr. Trump ratcheted up tariffs to levels not seen in a century, Ford Motor, General Motors and other companies that have built their businesses around international trade reached out to Mr. Lutnick in the hope that he could persuade the president to take a less aggressive approach. Some chief executives have put in calls to the commerce secretary at midnight.Mr. Lutnick, 63, heads a department that both promotes and regulates industry, and he has been put in charge of overseeing trade. As a result, he has found himself in a position of incredible influence, as the go-between for a president imposing sweeping tariffs and the industries being crushed by them.A former bond trader who amassed billions on Wall Street, Mr. Lutnick has become one of the loudest salesmen for tariffs in an administration generally unified on their benefits. He has publicly echoed the president’s message that big tariffs are needed to revive American industry, and that if companies don’t like them, they should build factories in the United States.But in internal conversations in the administration, he has often been a voice for moderation. He argued in favor of Mr. Trump’s pausing his global tariffs for 90 days after they sent convulsions through the stock and bond markets. And he has made the case to the president to grant relief to certain favored industries, helping them to win exemptions from billions of dollars of levies.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

  • 150 Shares99 Views

    in Economy

    In Trade War Clash With Trump, China Refuses to Take the Bait

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    The Trump administration has been saying that the two countries are engaged in talks to resolve the dispute, but Beijing asserts that no such discussions are happening.If the trade war between China and the United States is a game of high-stakes brinkmanship, it is currently a game that Beijing is not willing to play.Faced with growing claims by President Trump and administration officials that the two countries are engaged in talks and that a deal could be reached in a matter of weeks, China’s Foreign Ministry pushed back forcefully on Friday by posting on X: “China and the U.S. are NOT having any consultation or negotiation. The U.S. should stop creating confusion.”The post came hours after a foreign ministry spokesman, Guo Jiakun, said the United States was “misleading the public.” A day earlier, Mr. Guo called the rumors of talks “fake news.”The response was the latest sign that China’s top leader, Xi Jinping, intends to hold firm in his standoff with Mr. Trump, sensing that his position is strengthening. Beijing is betting that it can stomach the pain of a trade war better than the Trump administration can because of U.S. political pressure and volatility on Wall Street, analysts say.“The Chinese are not eager to climb down the ladder,” said Yun Sun, the director of the China program at the Stimson Center in Washington. “They see Trump as wanting to climb down and are happy to let him stew in his own juice.”Ms. Sun said Beijing will not come to the negotiation table without any U.S. concessions or a good-will gesture. That could include scaling back tariffs, or making clear that Mr. Trump is reaching out to Mr. Xi first.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

  • 150 Shares119 Views

    in Economy

    Trump Team Races to Form Trade Deals After Tariffs Sow Global Chaos

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    The president’s threats of tariffs have brought countries like Japan, South Korea and India rushing to negotiate, but they have sown chaos with bigger trading partners like China.For a president who advertises himself as a paramount deal maker, the next 11 weeks will be a pivotal test, as his advisers race to accomplish what no other administration has done before and reach dozens of individual trade deals with other governments.President Trump has promised big gains for American trade, and officials from Japan, South Korea, India and elsewhere have been pushing for agreements as they look to forestall punishing tariffs. But trade experts say the administration has set up a seemingly impossible task, given that traditional trade deals typically take months or years to negotiate.Mr. Trump has tried to use tariffs as leverage to notch quick agreements, and his trade adviser, Peter Navarro, has promised “90 deals in 90 days.” But the levies are creating chaos and financial pain for many businesses, and they have not brought some of America’s largest trading partners, including China, to the table.Some U.S. trade with China has ground to a halt after the countries imposed triple-digit tariffs on each others’ products, and a wave of bankruptcies, especially among small U.S. businesses that rely on Chinese imports, appears to be looming if the trade barriers are maintained.Some Trump officials recognize that the situation with China is not sustainable and have been strategizing how to reduce the tariffs between the countries, two people familiar with the discussions said. Another person familiar with the discussions said administration officials were concerned about the hit to the stock market, which has experienced intense volatility and some of its worst trading days in years. The S&P 500 is down 10 percent since Mr. Trump’s Jan. 20 inauguration.Speaking from the Oval Office on Wednesday, Mr. Trump said he wanted to make a deal with China. But he said what happens with his tariffs on China “depends on them.” He denied any concerns about what the tariffs are doing to small businesses, but said that the high tariff “basically means China isn’t doing any business with us.”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

  • 113 Shares189 Views

    in Economy

    IMF Expects Trump’s Tariffs Will Slow Global Economic Growth

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    President Trump’s trade war is expected to slow economic growth across the globe this year, in large part because his aggressive use of tariffs is likely to weigh heavily on the United States, the world’s largest economy.The economic projections were released on Tuesday by the International Monetary Fund, in the wake of Mr. Trump’s decision to raise tariffs to levels not seen since the Great Depression.The president has imposed a 10 percent tariff on nearly all imports, along with punishing levies of at least 145 percent on Chinese goods that come into the United States. Mr. Trump also imposed what he calls “reciprocal” tariffs on America’s largest trading partners, including the European Union, Japan, South Korea and Taiwan, although he has paused those until July as his administration works to secure bilateral trade deals.Mr. Trump’s approach has created paralyzing uncertainty for U.S. companies that export products abroad or rely on foreign inputs for their goods, dampening output just as economies around the world were stabilizing after years of crippling inflation. China and Canada have already retaliated against Mr. Trump’s tariffs with their own trade barriers, and the European Union has said it is prepared to increase levies if the United States goes ahead with its planned 20 percent tax.The World Economic Outlook report projects that global output will slow to 2.8 percent this year from 3.3 percent in 2024. In January, the fund forecast that growth would hold steady in 2025.The I.M.F. also expects output to be slower next year than it previously predicted.Much of the downgrade for this year can be attributed to the impact of the tariffs on the U.S. economy, which was already poised to lose momentum this year. The I.M.F. expects U.S. output to slow to 1.8 percent in 2025, down from 2.8 percent last year. That is nearly a full percentage point slower than the 2.7 percent growth that the I.M.F. forecast for the United States in January, when it was the strongest economy in the world.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

  • 75 Shares99 Views

    in Economy

    The Business Playbook for Tariff Chaos

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    President Trump’s trade war is forcing companies to cut costs, raise prices, shrink profits, discontinue products and find other suppliers.Shock. That was the first response to the Trump administration’s barrage of tariffs.Businesses that rely on imported products expected duties, which President Trump had promised. Just not this high, this universal or this sudden, with almost no time to adjust. A 145 percent tariff on all Chinese products, after all, is more like a trade wall than a mere barrier. But shock is settling into reality, and corporate leaders are trying to manage. Here are the main tacks that businesses are taking — at least for now, given that whatever duties the White House declares today may change tomorrow.Move out of China, preferably yesterdayFor many importers, this round of tariffs isn’t as painful as it might have been eight years ago. Mr. Trump’s first trade war, in 2018, while milder, pushed many to diversify their sourcing beyond China. The Covid-19 pandemic sent yet another signal that dependence on a single market, however cheap and efficient, is unwise.For William Westendorf, the chief executive of the medical supply distributor Air-Tite Products, the final straw was a 100 percent tariff on Chinese-made syringes imposed by the Biden administration last fall. He sent a staff member to scour Europe for a factory that could meet the Food and Drug Administration’s exacting standards.After six months of hunting and hoop-jumping — and with Chinese syringes now tariffed at 245 percent total — Mr. Westendorf has a shipment on the way from Turkey. It’s lucky timing, because factories outside of China are getting flooded with orders.“It’s not something you can do real quickly because of the regulatory environment,” Mr. Westendorf said. “Fortunately, we were there early.”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

  • 150 Shares169 Views

    in Economy

    Trump Maintains 104% China Tariffs as U.S. Officials Signal Openness to Talks

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    President Trump’s next round of punishing tariffs on some of America’s largest trading partners was set to go into effect just after midnight on Wednesday, including stiff new levies that will increase import taxes on Chinese goods by at least 104 percent.Mr. Trump acknowledged on Tuesday that his tariffs had been “somewhat explosive.” But throughout the day he continued to defend his approach, saying that it was encouraging countries with what he calls “unfair” trade practices to offer concessions.“We have a lot of countries coming in to make deals,” he said during remarks at the White House on Tuesday afternoon. At a dinner with Congressional Republicans in Washington later that evening, he said other countries wanted to make a deal with the United States but he was happy just collecting the revenue from tariffs, which he claimed would reach $2 billion a day.“I know what the hell I’m doing,” he said, adding that he would be announcing “a major tariff on pharmaceuticals” very shortly.The president and top administration officials signaled on Tuesday that the White House was ready to negotiate deals, saying that 70 governments had approached the United States to try to roll the levies back. Mr. Trump said officials would begin talks with Japan, South Korea and other nations.The president, whose punitive and successive tariffs on China have triggered a potentially economically damaging trade war, also said he was open to talking to Beijing about a deal.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

  • 163 Shares99 Views

    in Economy

    Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal

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    Free trade has been so beneficial to so many countries that the world may find a way to live without its biggest player.President Trump’s self-proclaimed “liberation day,” in which he announced across-the-board tariffs on the United States’ trading partners, carries an echo of another moment when an advanced Western economy threw up walls around itself.Like Brexit, Britain’s fateful vote nearly nine years ago to leave the European Union, Mr. Trump’s tariffs struck a hammer blow at the established order. Pulling the United States out of the global economy is not unlike Britain withdrawing from a Europe-wide trading bloc, and in the view of Brexiteers, a comparable act of liberation.The shock of Mr. Trump’s move is reverberating even more widely, given the larger size of the American economy and its place at the fulcrum of global commerce. Yet as with Brexit, its ultimate impact is unsettled: Mr. Trump could yet reverse himself, chastened by plummeting markets or mollified by one-off deals.More important, economists say, the rise of free trade may be irreversible, its benefits so powerful that the rest of the world finds a way to keep the system going, even without its central player. For all of the setbacks to trade liberalization, and the grievances expressed in Mr. Trump’s actions, the barriers have kept falling.The European Union, optimists point out, did not unravel after Britain’s departure. These days, the political talk in London is about ways in which Britain can draw closer to its European neighbors. Still, that sense of possibility has come only after years of turbulence. Economists expect similar chaos to buffet the global trading system as a result of Mr. Trump’s theatrical exit.“It will not be the end of free trade, but it is certainly a retreat from unfettered free trade, which is the way the world seemed to be going,” said Eswar S. Prasad, a professor of trade policy at Cornell University. “Logically, this would be a time when the rest of the world bands together to promote free trade among themselves,” he said. “The reality is, it’s going to be every country for itself.”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