Harvard and the Trump administration face off in court over funding cuts
The hearing represents a pivotal moment in the battle between Harvard University and the Trump administration as a federal judge hears arguments over whether the massive cuts to the university's federal research funding were illegal.
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Yahoo
13 minutes ago
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Europe Welcomes US Trade Fight Pause Despite Critic Warnings
(Bloomberg) -- European capitals defended the trade deal struck with President Donald Trump, which will see the European Union accept a 15% tariff on most of its exports to the US while reducing levies on some American products to zero. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Budapest's Most Historic Site Gets a Controversial Rebuild Trump Administration Sues NYC Over Sanctuary City Policy European Commission President Ursula von der Leyen, who met with Trump in his golf club in Turnberry, Scotland, on Sunday, hailed the agreement for the stability and predictability it will offer businesses and consumers. The EU knew that the deal would favor the US, but von der Leyen urged reporters to 'not forget where we came from,' referencing tariff rates Trump threatened that were as high as 50%. Subscribe to the Bloomberg Daybreak Podcast on Apple, Spotify and other Podcast Platforms. The lower rate came as a relief to member states that are dependent on exports, especially Germany, which exported $34.9 billion of new cars and auto parts to the US in 2024. 'The agreement has succeeded in averting a trade conflict that would have hit the export-oriented German economy hard,' German Chancellor Friedrich Merz said in a statement late Sunday. 'This has enabled us to safeguard our core interests, even if I would have liked to have seen further easing in transatlantic trade.' Without a deal, Bloomberg Economics estimated that the total US average effective tariff rate would rise to nearly 18% on Aug. 1 from 13.5% under current policies. The new deal brings that number down to 16%. Prior to Trump's latest trade fight, the EU estimated the average tariff rate to be about 1% on both sides. The pact removes a major risk for markets and the global economy, given the transatlantic partners did €1.7 trillion ($2 trillion) worth of cross-border commerce in 2024. European stocks and US equity futures climbed on Monday with the Stoxx 600 index gaining 0.7%. Industry officials in Germany, however, warned that the deal leaves the auto industry exposed and will make companies in Europe less competitive. 'The agreement is an inadequate compromise and sends a disastrous signal to the closely intertwined economies on both sides of the Atlantic,' said Wolfgang Niedermark, a member of the executive board of Germany's BDI industry federation. 'The EU is accepting painful tariffs. Even a 15% tariff will have immense negative consequences for Germany's export-oriented industry.' France, which took a more hawkish approach to the negotiations, highlighted the stability the agreement would bring, but also recommended triggering the EU's anti-coercion instrument, which would initiate a massive retaliation against the US, hitting American technology companies and blocking US firms from public procurement projects in Europe. 'Let's be clear: the current situation is not satisfactory and cannot be sustainable,' French Minister for European Affairs Benjamin Haddad said in a social media post. 'The free trade that has brought shared prosperity to both sides of the Atlantic since the end of the Second World War is now rejected by the United States, which is choosing economic coercion and complete disregard for WTO rules.' Dutch Minister for Foreign Trade Hanneke Boerma said the deal was 'not ideal' and called on the commission to continue negotiations with the US. Hungarian Prime Minister Viktor Orban, who has long been a thorn in the sides of the Brussels' institutions, took an even tougher line, in part criticizing von der Leyen while praising the American president. 'What's clear is that this isn't a deal Donald Trump struck with Ursula von der Leyen,' Orban said in an online interview with a pro-government influencer on Monday. 'Donald Trump ate Ursula von der Leyen for breakfast. The American president is a heavyweight negotiator, Madam President is featherweight.' Slovak Prime Minister Robert Fico, who typically joins Orban in criticizing the EU, said that 15% is 'a good negotiation result,' though he warned that the devil is 'hidden in the details.' Slovakia's car industry accounts for about 10% of the country's GDP and is home to plants owned by VW, Stellantis, Kia and Jaguar Land Rover, plus an extensive network of suppliers. Trade accords typically require years of negotiations and can run thousands of pages long. The deal reached between the EU and US was thin on details and so far hasn't produced any written details. 'The focus will now turn to interpretation and implementation risk, posing a mix of political and technical questions,' Carsten Nickel, deputy director of research at Teneo, wrote in a note. 'Given the nature of the deal, major uncertainties are likely to persist.' The EU agreed to purchase $750 billion in American energy products, invest $600 billion in the US on top of existing expenditures, open up countries' markets to trade with the US at zero tariffs and purchase 'vast amounts' of military equipment, Trump said. Key to getting the 15% rate to apply to pharmaceuticals and semiconductors was the bloc's promise to make US investments, according to people familiar with the matter. Clemens Fuest, president of Germany's Ifo Institute for Economic Research, called the deal a 'humiliation' that reflects the imbalance of power between the EU and US. 'The Europeans need to wake up, focus more on economic strength and reduce their military and technological dependence on the US,' Fuest said on social media. 'Then they can renegotiate.' French Prime Minister Francois Bayrou had even stronger words when discussing the new deal. 'It's a dark day when an alliance of free peoples, united to affirm their values and defend their interests, opts for submission,' he wrote on social media. --With assistance from Kamil Kowalcze, Alberto Brambilla, Zoltan Simon, Daniel Hornak, Sarah Jacob, James Regan and William Wilkes. (Updates with industry comment in the ninth paragraph.) Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme Scottish Wind Farms Show How to Counter Nimby Opposition ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Analysis-US tariffs will be test of luxury brands' pricing power
By Mimosa Spencer and Sami Marshak PARIS/NEW YORK (Reuters) -Luxury goods companies were spared their worst case scenario in Sunday's EU-U.S. trade deal but they face a delicate balancing act as already weak consumer demand tests their ability to raise prices further. Big labels like Chanel and LVMH's Louis Vuitton and Dior have relied on dramatic price increases in recent years to drive a chunk of their profit growth. Jacques Roizen, managing director, China, at Digital Luxury Group, said the deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday, imposing a 15% tariff on EU goods, brings much needed certainty to luxury's key U.S. market. Yet, "brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers," he said. Although baseline duties are below a hefty 30% levy that Trump had threatened just a couple of weeks ago, they are a far cry from the zero-for-zero tariff deal Brussels was hoping to clinch. Fresh tariffs also come as the luxury goods industry is counting on the U.S. as former growth engine China sputters and sales globally are in decline. 'Tariffs are definitely going to affect my buying behaviour, depending on the rate of the tariff. I would think twice before I just pick things up,' said Abida Taher, a 53-year-old physician who was out shopping at Saks Fifth Avenue in New York City last week and likes Valentino among other Italian and French brands. Bernard Arnault, chairman and CEO of French luxury giant LVMH, embarked on an intense lobbying campaign with EU leaders to ease tensions with the Trump administration and last week announced plans for a new Louis Vuitton factory in Texas. Such a move, however, would be too complicated and costly for most European brands - involving the transfer of local skills that take years to build up, industry experts caution. Some high end labels say they will be able to draw on pricing power to offset the cost of tariffs, but analysts and industry practitioners warn some players have limited wiggle room after a series of outsized price tag hikes. Big luxury companies profited from a rebound of consumer demand after the pandemic, hiking prices by 33% on average between 2019 and 2023, according to RBC estimates. The price tag of Chanel's classic quilted flap bag more than tripled between 2015 and 2024, while the Lady Dior bag and Louis Vuitton Keepall travel bag more than doubled, according to UBS analysts. LUXURY DISCONNECT Half of the luxury industry's sales growth came from price hikes in the four years from 2019, compared to a third between 2016 and 2023, UBS analysts said. Yet the sector lost 50 million customers last year, according to consultancy Bain, as economic pressures and price fatigue dampened appetite for designer clothing and handbags. Brands that got the pricing balance wrong are the ones struggling more today, said Flavio Cereda, who manages GAM's Luxury Brands investment strategy. "The significant deceleration in momentum, uneven as it was, is a natural consequence of a period of excess," said Cereda. Hermes, which notably held back on large price increases during the post pandemic boom, has outpaced rivals and analysts forecast a 10% rise in second quarter sales when it reports on Wednesday. UBS estimates that a 15% tariff on exports to the United States will require luxury brands on average to raise prices by around 2% in the United States, or around 1% globally if they want to avoid widening regional price gaps – or face an impact of around 3% on earnings before interest and tax. Such hikes may prove challenging while the latest round of luxury players' earnings shows little sign of a rebound. LVMH's second quarter sales missed expectations, weighed down by weakening sales at flagship brands Louis Vuitton and Dior, while outerwear specialist Moncler's sales contracted by 1% and Kering-owned Gucci is expected to continue to struggle. Caroline Reyl, head of premium brands at Pictet Asset Management, said there has been a "disconnect" between the prices of certain luxury items and their perceived quality and creativity in the past four years. Precious Buckner, a 37-year old clinical therapist from North Carolina, was looking at a Chanel classic flap bag at Saks Fifth Avenue in Manhattan last week but said if it goes up in price because of tariffs it would no longer be worth it. 'I'm going to these stores to see the size, the fit, how I like it, so I can get it on resale," Buckner said, noting she would be willing to pay $8,000 for a bag on a resale platform like The RealReal or Fashionphile rather than pay $12,000 in a department store. Bain forecasts worldwide luxury goods sales will fall by between 2% and 5% in 2025 after a 1% decline last year, the biggest contraction in 15 years excluding COVID. To counter the downtrend, the industry has embarked on a recruitment drive, with new designers at Chanel, Gucci, LVMH labels Dior, Celine, Givenchy and Loewe, and Versace. Yet, renewing styles to find a better alignment between prices and product value will take time. "You can't snap your fingers and do it in a couple of weeks," said Reyl.
Yahoo
13 minutes ago
- Yahoo
Former Democratic North Carolina Gov. Roy Cooper will run for Senate in 2026
RALEIGH, N.C. (AP) — Former Democratic Gov. Roy Cooper will run for the U.S. Senate in North Carolina, giving Democrats a proven statewide winner in an open-seat race that is expected to be one of the most competitive 2026 contests. Cooper made the announcement Monday with a video released on social media and his campaign website. The former two-term governor will immediately become the front-runner for the Democratic nomination in the race to succeed retiring Republican Sen. Thom Tillis. Republican National Committee Chairman Michael Whatley plans to run for the GOP nomination, with President Donald Trump's blessing, according to two people familiar with his thinking who were not authorized to discuss the matter publicly before an official announcement. Whatley, the former North Carolina GOP chairman, received Trump's endorsement after the president's daughter-in-law, Lara Trump, passed on the seat. Cooper's candidacy is a big recruiting win for Democrats, who see the open seat as a top pick-up opportunity in what will be a challenging year. To retake the majority in 2026, Democrats need to net four seats, and most of the contests are in states that Trump easily won last year. Trump won North Carolina by about 3 percentage points, one of his closest margins of victory. Trump endorsed Whatley on his Truth Social platform Thursday night, posting that should he run, 'Mike would make an unbelievable Senator from North Carolina.' Ex-U.S. Rep. Wiley Nickel already has been campaigning for the Democratic nomination for months. Party primaries would be March 3. Cooper, 68, has been on statewide ballots going back a quarter-century — serving 16 years previously as attorney general before being first elected governor in 2016. With a political career going back nearly 40 years, Cooper has had a knack for winning in a state where the legislature and appeals courts are now dominated by Republicans. State law barred Cooper from seeking a third consecutive gubernatorial term. He spent the spring on a teaching gig at Harvard. State and national Democrats were longing for Cooper to join the race well before Tillis announced June 29 that he would not seek a third term. That news came after Trump threatened to back a primary candidate against him as Tillis opposed Medicaid reductions in the president's tax break and spending cut package, Democrats haven't won a Senate race since 2008 in North Carolina, where independent voters tend to vote Republican in federal elections. Statewide races can be financially exorbitant because there are so many television markets — hundreds of millions of dollars are expected to be spent in the race. Cooper's recent political history has painted him as a fighter against what he's considered extreme Republican policies, while at times finding consensus with GOP rivals. When asked by The Associated Press last December about a Senate bid, Cooper replied: 'If you're going to run for public office again, you must have your heart and soul in it, you must have the fire in the belly." As governor he steered the state through the coronavirus pandemic, Hurricanes Helene and Florence and a law that became an early flashpoint in the culture wars over access to public restrooms by transgender people. That 'bathroom bill' was rolled back early in Cooper's first term, and the state's economy soared during Cooper's tenure, marked by big jobs announcements and low unemployment. While Cooper also managed to get Medicaid expansion approved and a landmark greenhouse gases law enacted, he fell short in stopping legislation that widely expanded private school vouchers and narrowed abortion rights. Cooper's perceived accomplishments raised his national profile in 2024, making him as a potential running mate for Kamala Harris until he said it 'just wasn't the right time' for him and for North Carolina. Republicans have argued that Cooper remains susceptible politically, citing what they consider an extreme record supporting abortion rights and opposing school choice that led to many vetoes. They've also cited a gubernatorial administration marked by spending overruns at the state Department of Transportation; its response to Helene and delays in rebuilding or renovating homes after Hurricanes Matthew and Florence; and executive orders that restricted businesses and school instruction during COVID-19. As for the roaring economy, Republicans credit themselves through lower taxes and deregulation. Tillis' retirement announcement heartened far-right Republicans and strong Trump supporters who have been unhappy for years with his willingness to challenge Trump's actions and his Cabinet agency choices. Republicans had deferred to the president's daughter-in-law Lara Trump, who is a North Carolina native, North Carolina State University graduate and a popular former RNC co-chair with Whatley during the 2024 election campaign. She posted on the social media platform X on Thursday that she would not seek the Senate seat.
