After a lag, US consumers begin to feel the pinch of tariffs
Government data showed prices rose in June on items heavily exposed to tariffs, such as home furnishings, toys and appliances.
Companies are starting to shift more tariff-related costs onto consumers.
Many businesses chose to absorb the additional tax during the early days of
President Donald Trump's trade war . But evidence is emerging that they are running out of options to keep prices stable in the face of deteriorating profit margins, suggesting that the tariffs could have a more pronounced effect on prices in the months ahead.
Government data shows that prices rose in June on items heavily exposed to tariffs, such as home furnishings, toys and appliances.
And in recent days – before Mr Trump
announced tariffs for much of the world on the night of July 31 – Adidas, Procter & Gamble, Stanley Black & Decker and other large corporations told investors that they either had increased prices or planned to do so soon to offset the tariff costs.
Companies like Walmart and toy makers Hasbro and Mattel had already warned that tariffs would lead to higher prices.
'We have no interest in running a lower-margin business, particularly due to tariffs,' Mr Richard Westenberger, the chief financial officer of Carter's, a children's apparel maker, said on a call with analysts July 25.
'And if this is something that's going to be a permanent increase to our cost structure, we have to find a way to cover it.'
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Economists have been watching for signs of tariff-related price increases since Mr Trump rolled out his trade policy in the spring. But inflation remained relatively muted, defying expectations and prompting the White House to declare that those who predicted the tariffs would elevate prices were mistaken.
Even some forecasters are acknowledging that the tariffs have taken longer to work their way through to consumer prices than initially anticipated.
Mr Jerome Powell, chair of the Federal Reserve, said on July 30 that the process might be 'slower than expected at the beginning'.
'We think we have a long way to go to really understand exactly how it will be,' he said.
Ms Sarah House, an economist at Wells Fargo, said the next three to six months would be 'crunch time,' as more tariff rates solidified.
'Businesses are grappling with the fact that tariffs are here to stay, and as there's more certainty around a higher tariff environment, they are going to be more willing and able to adjust their prices,' she said.
'We're getting to a point where you're going to start to see those feed through.' NYTIMES
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Straits Times
20 minutes ago
- Straits Times
Trump's deal-making with other elite US schools scrambles Harvard negotiations
Sign up now: Get ST's newsletters delivered to your inbox WASHINGTON – By the start of last week, Harvard University had signalled its readiness to meet President Donald Trump's demand that it spend US$500 million (S$643 million) to settle its damaging, monthslong battle with the administration and restore its crucial research funding. Then, two days after The New York Times reported that Harvard was open to such a financial commitment, the White House announced a far cheaper deal with Brown University: US$50 million, doled out over a decade, to bolster state workforce development programs. The terms stunned officials at Harvard, who marvelled that another Ivy League school got away with paying so little, according to three people familiar with the deliberations. But Harvard officials also bristled over how their university, after months of work to address antisemitism on campus and with a seeming advantage in its court fight against the government, was facing a demand from Mr Trump to pay 10 times more. The people who discussed the deliberations spoke on the condition of anonymity because they did not want to be identified discussing talks that are supposed to remain confidential. White House officials are dismissive of the comparison between Brown and Harvard, arguing that their grievances against Harvard are more far-reaching, including assertions that the school has yet to do enough to ensure the safety of Jewish students and their claim that the school is flouting the Supreme Court's ruling on race-conscious admissions. 'If Harvard wants the Brown deal, then it has to be like Brown, and I just think it's not,' Ms May Mailman, the top White House official under Mr Stephen Miller who has served as the architect of the administration's crusade against top schools, said in an interview in the West Wing last week. Ms Mailman, who graduated from Harvard Law School, pointed out that Brown, unlike Harvard, did not sue the administration. She challenged Harvard to reach an agreement that included terms that would allow the government to more closely scrutinise its behaviour. 'If Harvard feels really good about what it's already doing, then great,' she said. 'Let's sign this deal tomorrow.' Harvard said on Aug 4 that it had no comment. But the White House's recent record of deal-making threatens to complicate the settlement talks, according to the people familiar with the talks. University officials were sensitive to the possibility that a deal with the government – after Harvard spent months waging a public fight against Mr Trump – would be seen as surrendering to the president and offering him a political gift. The terms of the Brown agreement, though, added new complexity to Harvard's internal debates about the size of a potential financial settlement. For many people close to those discussions, spending US$500 million is less of a concern than what forking that money over would signal on the Cambridge, Massachusetts, campus and beyond. For those close to the discussions, Mr Trump's demand is far too large and they argue that acquiescing to it would be seen as the university scrambling to buy its way out of Mr Trump's ire. They contend that Harvard has taken far more aggressive steps than Columbia University – which agreed to a US$200 million fine in July – to combat antisemitism. They also note that Harvard, unlike Brown, did not publicly agree to consider divesting from Israel as a condition of ending campus protests lin 2024. (Brown's board ultimately voted not to divest.) Others at Harvard regard Mr Trump's proposal as a bargain for the school to get back billions of dollars in funding that make much of its society-shaping research possible. Before the Brown deal, Harvard leaders and the school's team were studying settlement structures that could insulate the nation's oldest and wealthiest university from accusations that it caved to Mr Trump. In their stop-and-start talks with the White House, they are expected to maintain their insistence on steps to shield the university's academic freedom. To that end, they are also likely to remain equally resistant to a monitoring arrangement that some fear would invite intrusions and stifle the school's autonomy. 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Last week, after the Times reported the US$500 million figure, a journalist asked Mr Trump whether that amount would be enough to reach a deal. 'Well, it's a lot of money,' he replied. 'We're negotiating with Harvard.' Although Brown and Harvard are among the nation's richest and most prominent universities, the schools have significant differences, especially around their finances. The Trump administration has repeatedly castigated Harvard for its US$53 billion endowment, which is loaded with restrictions that limit how it may be used, but it has made far less fuss about Brown's similarly tied-up US$7 billion fund. Harvard also has much more federal research money at stake. The Trump administration has warned that it could ultimately strip US$9 billion in funding for Harvard; it threatened US$510 million in funding for Brown. One reason the Brown deal has so miffed Harvard officials is that some terms look much like those they expected for themselves. The government agreed, for instance, that it could not use the deal 'to dictate Brown's curriculum or the content of academic speech.' Brown avoided a monitoring arrangement, and the university won the right to direct its US$50 million settlement payment toward workforce programmes of its choosing. But Harvard has a more antagonistic relationship with the Trump administration, as the university has sued the administration to stop its retribution campaign against the school. That dynamic has fuelled worries at Harvard that the White House is seeking a far higher financial penalty as a punishment for fighting, not because the school's troubles alone warrant US$500 million. After Harvard refused a list of Trump administration demands in April, the university sued. In July, a federal judge in Boston appeared skeptical of the government's tactics when it blocked billions in research funding from Harvard. Before and after the July 21 hearing, the administration pursued a wide-ranging campaign against the university. In addition to its attack on Harvard's research money, the government has opened investigations, sought to block the school from enrolling international students, demanded thousands of documents and tried to challenge the university's accreditation, which is essential for students to be eligible for federal student aid programmes, such as Pell Grants. Last week, the Department of Health and Human Services told Harvard that it had referred the university to the Justice Department 'to initiate appropriate proceedings to address Harvard's antisemitic discrimination.' 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AsiaOne
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Trump again threatens India with harsh tariffs over Russian oil purchases, World News
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Business Times
20 minutes ago
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Gold rises as Fed rate cut bets pressure dollar, yields
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