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South China Morning Post
18 minutes ago
- South China Morning Post
US treasury secretary says meetings with Chinese have ‘advanced our talks'
US Treasury Secretary Scott Bessent said on Friday that meetings with his Chinese counterparts this week 'advanced our talks', but stopped short of confirming that US President Donald Trump approved the consensus that Beijing claimed they had reached. 'This week's negotiations in Stockholm have advanced our talks with China, and I believe that we have the makings of a deal that will benefit both of our great nations,' Bessent wrote on X. 'Thanks to the powerful bond between @POTUS and President Xi, I am optimistic about the path forward,' he added, without specifying where consensus stands following talks that ended on Tuesday. Since then, the US side is seen taking its time to confirm any new agreement reached with China, its third-largest trading partner, after neighbouring Mexico and Canada. China's vice-minister of commerce, Li Chenggang, who also took part in the talks, said before leaving Stockholm on Tuesday that a pause on new tariff increases – in place since May – would be extended, but neither Trump nor Bessent has made similar announcements. The Trump administration has instead delivered mixed messages.
South China Morning Post
6 hours ago
- South China Morning Post
Wall Street slumps on Trump tariff news and weak US job data
Stocks slumped in afternoon trading on Wall Street on Friday and US Treasury yields fell sharply after the government reported a sharp slowdown in hiring last month. Markets are also reacting to the latest tariff news. US President Donald Trump once again extended the date at which punishing import taxes will take effect for a long list of countries. The tariffs are now expected to take effect on August 7 for countries that have yet to make a deal with the US. The S&P 500 fell 1.2 per cent. The decline marks a sharp shift for the index, which has not fallen by more than 1 per cent since June. It is also on track for a weekly loss following last week's record-setting streak. The Dow Jones Industrial Average fell 451 points, or 1 per cent as of 12.01pm. The Nasdaq composite fell 1.6 per cent. Worries on Wall Street about a weakening economy were heavily reinforced by the latest report on job growth in the US. Employers added just 73,000 jobs in July. That is sharply lower than economists expected. The US Labour Department also reported that revisions shaved a stunning 258,000 jobs off May and June payrolls. The surprisingly weak hiring numbers led investors to step up their expectations for an interest-rate cut in September.
AllAfrica
7 hours ago
- AllAfrica
Trump's new trade order is here. Will it work?
The beginning of August marks the latest deadline for US President Donald Trump's 'Liberation Day' tariff policy. This era of chaos and uncertainty began on April 2, and the situation remains fluid. With the deadline for partners to secure a deal with Washington now passed, it's a good time to take a broader view and consider if Trump's trade gamble is paying off. The objectives of the tariff policy include raising tax revenues, delivering lower prices for American consumers, and boosting American industry while creating manufacturing jobs. The president has also vowed to get better trade deals for the US to reduce its trade deficit and to face down China's growing influence on the world stage. But recently the US Federal Reserve voted to keep interest rates unchanged at 4.25% to 4.5%, despite pressure from Trump to lower them. In his monthly press briefing, Federal Reserve chair, Jerome Powell, said they were still in the early stages of understanding how the tariff policy would affect inflation, jobs and economic growth. On tariffs, Powell did say that revenues had increased substantially to US$30 billion a month. However, only a small portion of the tariffs are being absorbed by overseas exporters, with most of the cost being borne by US import companies. In comments that will concern the Trump administration, the Fed said the cost of the tariffs was beginning to show up in consumer prices. The Fed expects inflation to increase to 3% by the end of the year, above its 2% target. US unemployment remains low, with Powell saying the economy is at or very close to full employment. While Powell's decision to hold interest rates probably irritated Trump, economic theory suggests that lowering them with the US economic cycle at full employment would be likely to increase inflation and the cost of living for US consumers. A survey by Bloomberg economists suggests that US GDP growth forecasts are lower since April 2025, specifically because of its tariff policy. In terms of boosting US employment, the US administration can point to significant wins in the pharmaceutical sector. In July, British-Swedish drugmaker AstraZeneca announced plans to spend $50 billion expanding its US research and manufacturing facilities by 2030. The announcement follows a similar pledge from Swiss pharmaceuticals firm Roche in April to invest $50 billion in the US over the next five years. The impact of tariffs on traditional US manufacturing industries is less positive. The Ford Motor Company has warned that its profits will see a sharp drop. This is largely down to a net tariff impact that the firm says will cost it $2 billion this financial year. This is despite the company making nearly all of its vehicles in the US. Firms such as Ford are seeing an increase in tariff-related costs for imports. This dents their profits as well as dividends to shareholders. In recent weeks and months, the US has announced major new trade agreements, including with the UK, Japan, South Korea and the EU. Talks on a trade deal with China continue. But rather than trade deals, these announcements should be thought of as frameworks for trade deals. No legally binding documents have been signed to date. It will take many months before a clear picture emerges of how these bilateral deals will affect the US trade deficit overall. Meanwhile, in Washington, a federal appeals court will hear a case from two companies that are suing Trump over the use of his International Emergency Economic Powers Act (IEEPA) of 1977. VOS Selections Inc, a wine and spirits importer, and Plastic Services and Products, a pipe and fittings company, are arguing that the president has 'no authority to issue across-the-board worldwide tariffs without congressional approval.' With so much in play, it is difficult to judge whether Trump's tariff policy can be viewed as a success. Higher tariff revenues from imports, as well as significant investments from the pharmaceutical industry, can be seen as clear wins. But increasing consumer costs through rising inflation, as well as tariff costs hurting US manufacturers, are clear negatives. While several framework trade deals have been announced, the real devil will, of course, be in the details. Perhaps the greatest impact of the tariff policy has been the uncertainty of this new approach to trade and diplomacy. The Trump administration views trade as a zero-sum game. If one side is winning, the other side must be losing. This view of international trade harks back to mercantilism, an economic system that predates capitalism. Adam Smith and David Riccardo, the founders of capitalist theory, advocated for free trade. They argued that if countries focused on what they were good at making, then both sides could benefit – a so-called positive-sum game. This approach has dominated global trade since the post-war period. Since then, the US has become the largest and wealthiest economy in the world. By creating the institutions of global trade (the IMF, World Bank and World Trade Organization), the US has advanced its interests – and American-based multinationals dominate, especially in areas such as technology. But China and others now threaten this US domination, and Trump is tearing up the economic rulebook. But economic theory clearly positions tariffs as the wrong policy path for the US to assert and further its economic interests in the medium to long term. That's why Trump's course of action remains such a gamble. Conor O'Kane is senior lecturer in economics, Bournemouth University This article is republished from The Conversation under a Creative Commons license. Read the original article.
