Carry Trades Roar Back Into Favor as Emerging Currencies Rally
An index of carry returns — for which a trader borrows in a low-yielding currency and then invests in another offering higher returns, hit a seven-year high in late May. Asset managers have boosted long positions in developing-nation currencies in recent weeks, with those on Mexico's peso reaching a nine-month high, based on CME Group Inc. data.
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Yahoo
13 minutes ago
- Yahoo
Philippines goods to face 19% tariff, Trump says
The US will levy a 19% tax on imports from the Philippines, US President Donald Trump has announced after meeting with the country's president at the White House. Trump wrote on social media on Tuesday that the new tariff was part of a wider pact, in which the Philippines would remove duties on US goods and the two countries would cooperate militarily. "It was a beautiful visit, and we concluded our Trade Deal," he wrote on social media, offering no further details about the apparent agreement. The plan, which was not confirmed by the Philippines, would leave the country facing a tax even higher than what Trump had threatened when he first announced sweeping global tariffs in April. At the time, Trump said his goal with instituting tariffs was to push countries to drop policies he saw as unfair to the US. His plans set off a flurry of trade talks with countries around the world. He has since announced a handful of deals, including with the UK, China and Indonesia. But the agreements so far have kept in place high tariffs, with key issues unresolved or unconfirmed by both parties. With Trump now threatening a new round of higher duties to go into effect 1 August, some of America's biggest and most important trade partners, including the European Union and Canada, remain in limbo. As hopes for a deal dim, officials in Europe are increasingly rallying around plans for potential retaliation. In Canada on Tuesday, Prime Minister Mark Carney said that "complex negotiations" were continuing but was noncommittal on the prospect of reaching a deal by Trump deadline next week. "We'll see," he told reporters after meeting with premiers in Ontario. "The Americans objectives are multiple, they change over time ... but what is clear is that the Canadian government will not accept a bad agreement. The objective is not to have an agreement at any cost." Trump's tariff plans sparked widespread financial turmoil when he announced them originally in April, putting forward a plan that would leave the US with its highest duties since the early 1900s. He subsequently suspended some of the plan's most aggressive measures, while leaving in place a universal 10% tariff on most goods and separately hitting certain items, such as cars, copper, steel and aluminium, with higher duties. But in recent weeks, as markets have calmed and the US economy held steady, Trump has returned to plans for higher duties, sending letters to countries outlining plans for new tariffs that he says will go into force on 1 August. In a letter to leaders in the Philippines this month, he had said he would charge a 20% tariff on the country's goods. That was up from 17% rate he had threatened in April. In a statement on Wednesday, the Embassy of the Republic of the Philippines said the reduction in the tariff from the most recent rate threatened was "encouraging". "We will continue to find other ways to enhance and deepen our economic partnership," it said. The Philippines is a relatively small trade partner with the US, sending about $14.2bn worth of goods to the America last year. That included car parts, electric machinery, textiles and coconut oil. Meanwhile for companies, the cost of the new tariffs is increasing. General Motors on Tuesday said tariffs had cost it more than $1bn over three months. That followed an earlier disclosure from rival Stellantis, maker of Jeep, which said the measures had cost it €300m (£259.6m, $349.2m). Error while retrieving data Sign in to access your portfolio Error while retrieving data
Atlantic
15 minutes ago
- Atlantic
Donald Trump's Gift to AI Companies
Earlier today, Donald Trump unveiled his administration's 'AI Action Plan'—a document that details, in 23 pages, the president's 'vision of global AI dominance' and offers a road map for America to achieve it. The upshot? AI companies such as OpenAI and Nvidia must be allowed to move as fast as they can. As the White House officials Michael Kratsios, David Sacks, and Marco Rubio wrote in the plan's introduction, 'Simply put, we need to 'Build, Baby, Build!'' The action plan is the direct result of an executive order, signed by Trump in the first week of his second term, that directed the federal government to produce a plan to 'enhance America's global AI dominance.' For months, the Trump administration solicited input from AI firms, civil-society groups, and everyday citizens. OpenAI, Anthropic, Meta, Google, and Microsoft issued extensive recommendations. The White House is clearly deferring to the private sector, which has close ties to the Trump administration. On his second day in office, Trump, along with OpenAI CEO Sam Altman, Oracle CEO Larry Ellison, and SoftBank CEO Masayoshi Son, announced the Stargate Project, a private venture that aims to build hundreds of billions of dollars worth of AI infrastructure in the United States. Top tech executives have made numerous visits to the White House and Mar-a-Lago, and Trump has reciprocated with praise. Kratsios, who advises the president on science and technology, used to work at Scale AI and, well before that, at Peter Thiel's investment firm. Sacks, the White House's AI and crypto czar, was an angel investor for Facebook, Palantir, and SpaceX. During today's speech about the AI Action Plan, Trump lauded several tech executives and investors, and credited the AI boom to 'the genius and creativity of Silicon Valley.' At times, the action plan itself comes across as marketing from the tech industry. It states that AI will augur 'an industrial revolution, an information revolution, and a renaissance—all at once.' And indeed, many companies were happy: 'Great work,' Kevin Weil, OpenAI's chief product officer, wrote on X of the AI Action Plan. 'Thank you President Trump,' wrote Collin McCune, the head of government affairs at the venture-capital firm Andreessen Horowitz. 'The White House AI Action Plan gets it right on infrastructure, federal adoption, and safety coordination,' Anthropic wrote on its X account. 'It reflects many policy aims core to Anthropic.' (The Atlantic and OpenAI have a corporate partnership.) In a sense, the action plan is a bet. AI is already changing a number of industries, including software engineering, and a number of scientific disciplines. Should AI end up producing incredible prosperity and new scientific discoveries, then the AI Action Plan may well get America there faster simply by removing any roadblocks and regulations, however sensible, that would slow the companies down. But should the technology prove to be a bubble—AI products remain error-prone, extremely expensive to build, and unproven in many business applications—the Trump administration is more rapidly pushing us toward the bust. Either way, the nation is in Silicon Valley's hands. The action plan has three major 'pillars': enhancing AI innovation, developing more AI infrastructure, and promoting American AI. To accomplish these goals, the administration will seek to strip away federal and state regulations on AI development while also making it easier and more financially viable to build data centers and energy infrastructure. Trump also signed executive orders to expedite permitting for AI projects and export American AI products abroad. The White House's specific ideas for removing what it describes as 'onerous regulations' and 'bureaucratic red tape' are sweeping. For instance, the AI Action Plan recommends that the federal government review Federal Trade Commission investigations or orders from the Biden administration that 'unduly burden AI innovation,' perhaps referencing investigations into potentially monopolistic AI investments and deceptive AI advertising. The document also suggests that federal agencies reduce AI-related funding to states with regulatory environments deemed unfriendly to AI. (For instance, a state might risk losing funding if it has a law that requires AI firms to open themselves up to extensive third-party audits of their technology.) As for the possible environmental tolls of AI development—the data centers chatbots run on consume huge amounts of water and electricity —the AI Action Plan waves them away. The road map suggests streamlining or reducing a number of environmental regulations, such as standards in the Clean Air Act and Clean Water Act—which would require evaluating pollution from AI infrastructure—in order to accelerate construction. Once the red tape is gone, the Trump administration wants to create a 'dynamic, 'try-first' culture for AI across American industry.' In other words, build and test out AI products first, and then determine if those products are actually helpful—or if they pose any risks. The plan outlines policies to encourage both private and public adoption of AI in a number of domains: scientific discovery, health care, agriculture, and basically any government service. In particular, the plan stresses, 'the United States must aggressively adopt AI within its Armed Forces if it is to maintain its global military preeminence'—in line with how nearly every major AI firm has begun developing military offerings over the past year. Earlier this month, the Pentagon announced contracts worth up to $200 million each with OpenAI, Google, Anthropic, and xAI. All of this aligns rather neatly with the broader AI industry's goals. Companies want to build more energy infrastructure and data centers, deploy AI more widely, and fast-track innovation. Several of OpenAI's recommendations to the AI Action Plan—including 'categorical exclusions' from environmental policy for AI-infrastructure construction, limits on state regulations, widespread federal procurement of AI, and 'sandboxes' for start-ups to freely test AI—closely echo the final document. Also this week, Anthropic published a policy document titled 'Building AI in America' with very similar suggestions for building AI infrastructure, such as 'slashing red tape' and partnering with the private sector. Permitting reform and more investments in energy supply, keystones of the final plan, were also the central asks of Google and Microsoft. The regulations and safety concerns the AI Action Plan does highlight, although important, all dovetail with efforts that AI firms are already undertaking; there's nothing here that would seriously slow Silicon Valley down. Trump gestured toward other concessions to the AI industry in his speech. He specifically targeted intellectual-property laws, arguing that training AI models on copyrighted books and articles does not infringe upon copyright because the chatbots, like people, are simply learning from the content. This has been a major conflict in recent years, with more than 40 related lawsuits filed against AI companies since 2022. (The Atlantic is suing the AI company Cohere, for example.) If courts were to decide that training AI models with copyrighted material is against the law, it would be a major setback for AI companies. In their official recommendations for the AI Action Plan, OpenAI, Microsoft, and Google all requested a copyright exception, known as 'fair use,' for AI training. Based on his statements, Trump appears to strongly agree with this position, although the AI Action Plan itself does not reference copyright and AI training. Also sprinkled throughout the AI Action Plan are gestures toward some MAGA priorities. Notably, the policy states that the government will contract with only AI companies whose models are 'free from top-down ideological bias'—a reference to Sacks's crusade against 'woke' AI—and that a federal AI-risk-management framework should 'eliminate references to misinformation, Diversity, Equity, and Inclusion, and climate change.' Trump signed a third executive order today that, in his words, will eliminate 'woke, Marxist lunacy' from AI models. The plan also notes that the U.S. 'must prevent the premature decommissioning of critical power generation resources,' likely a subtle nod to Trump's suggestion that coal is a good way to power data centers. Looming over the White House's AI agenda is the threat of Chinese technology getting ahead. The AI Action Plan repeatedly references the importance of staying ahead of Chinese AI firms, as did the president's speech: 'We will not allow any foreign nation to beat us; our nation will not live in a planet controlled by the algorithms of the adversaries,' Trump declared. The worry is that advanced AI models could give China economic, military, and diplomatic dominance over the world—a fear that OpenAI, Anthropic, Meta, and several other AI firms have added to. But whatever happens on the international stage, hundreds of millions of Americans will feel more and more of generative AI's influence—on salaries and schools, air quality and electricity costs, federal services and doctor's offices. AI companies have been granted a good chunk of their wish list; if anything, the industry is being told that it's not moving fast enough. Silicon Valley has been given permission to accelerate, and we're all along for the ride.
Washington Post
15 minutes ago
- Washington Post
Tesla earnings show ongoing fallout from Elon Musk's broken alliance with Trump
Tesla's latest earnings report released Wednesday showed an ongoing slump in profits and revenue after CEO Elon Musk's controversial stint in politics, and the company said President Donald Trump's recently passed tax bill is set to cause more pain. The company attributed its protracted decline in profits to an array of factors, including falling vehicle deliveries. But a primary challenge to its business, the company said, was the tax bill passed this month that is expected to have implications beyond ending a $7,500 consumer tax credit for the purchase of a new electric vehicle.
