Top Trump official says free trade with Canada still possible
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CBC
2 hours ago
- CBC
Canada-U.S. trade deal hopes appear to fade after latest talks
Although U.S. President Donald Trump's Aug. 1 deadline is fast approaching, there is no sign of a breakthrough yet on a new Canada-U.S. trade deal after a week of talks in Washington, D.C. Ottawa continues to say it won't sign anything that isn't in Canada's best interest.
Globe and Mail
2 hours ago
- Globe and Mail
Companies focused on AI see surge this earnings season
Businesses focused on artificial intelligence are raking it in so far this earnings season. Those catering to actual people, less so. The AI spending surge is providing a big boost for semiconductor and software giants like Google parent Alphabet Inc. GOOGL-Q, while companies from airlines to restaurants and food manufacturers are struggling to navigate an erratic U.S. trade policy which is boosting costs, upending supply chains and hurting consumer confidence. Along with Alphabet, SK Hynix and India's Infosys exceeded market forecasts on Thursday and predicted brighter days to come, with Alphabet and SK Hynix both flagging plans to boost spending. SK supplies the world's most valuable company Nvidia Corp. NVDA-Q, the AI chipmaking giant that recently surpassed US$4-trillion in market value. By contrast, executives at many consumer names were less enthusiastic, from luxury bellwether LVMH, packaged food giant Nestle, to toymakers Hasbro and Mattel and airlines Southwest and American. They, along with automakers and giants like Coca-Cola, have indicated that some segments of the buying public have pulled in their spending as prices and interest rates remain high. The dichotomy is evident in IBM's results. Sales in Big Blue's 'AI book of business' grew 25 per cent in its most recent quarter to US$7.5-billion, while its software segment fell short of expectations and the company sounded cautious about how much its consulting segment might grow this year. The equity market has accentuated the positive. News that the U.S. had struck a trade deal with Japan and was closing in on a deal with the European Union ahead of an Aug 1. deadline boosted markets. The broad S&P 500 notched another record this week and the Eurostoxx was just a few points shy of that mark. Airlines are using AI to set ticket prices. Here's how you can avoid price manipulation when booking flights 'The market is getting friendly with a view that tariffs ending up higher than they have ever been for 100 years will not have a negative impact on economic growth, because we haven't seen any negative impact on economic growth so far,' said Van Luu, head of solutions strategy, fixed income and foreign exchange at Russell Investments. Whether companies continue to absorb that hit remains to be seen. So far, companies have reported over July 16-22 a combined full-year loss of as much as US$7.8-billion, with automotive, aerospace and pharmaceutical sectors hurt the most by tariffs, according to a Reuters tariff tracker. U.S. averages have been buoyed by the so-called Magnificent Seven, a group of tech giants that has benefited heavily from spending plans on artificial intelligence, and currently accounts for more than 30 per cent of the value of the S&P. 'AI is one of the strongest areas of growth for the economy, and the market mirrors the economy,' said Adam Sarhan, chief executive of 50 Park Investments. To be sure, the market's reaction may be in part because a larger-than-normal percentage of companies are clearing a lowered bar for estimates. Walmart unveils AI super agents roll-out to boost e-commerce growth At the beginning of April, the market expected 10.2 per cent year-over-year S&P earnings growth, but by July, that number had dropped to 5.8 per cent, according to LSEG data. With about 30 per cent of constituents reporting results, the blended earnings growth rate sits at 7.7 per cent. AI-focused businesses continued to print money in the most recent quarter. Nvidia supplier SK Hynix posted record quarterly profit, boosted by demand for artificial intelligence chips and customers stockpiling ahead of potential U.S. tariffs. Indian IT services provider Infosys raised the floor of its annual revenue forecast range to 1 per cent to 3 per cent, from flat to 3 per cent, matching analyst expectations. 'The tech community is going ahead full speed ahead ... and banks are in a very strong position now,' said Bill George, former chairman and CEO of Medtronic and executive education fellow at Harvard Business School. 'Other companies will struggle to get growth.' Consumer companies have been less upbeat. Nestle, the world's biggest packaged food maker, reported softer demand as it struggled to win thrifty shoppers to its big brands. U.S. airlines Southwest and American Airlines warned that Americans are travelling less, the latest signal that U.S. consumers are remaining cautious about their spending. Toymakers Mattel and Hasbro both said uncertainties around tariffs are acting as a headwind. Carmakers are among firms dealing with the most difficulty. The auto giants are resisting raising prices, eating the cost of tariffs that may cost them millions or billions of dollars. Levies on metals, copper and auto parts made it harder to navigate changing tariff policies. South Korea's Hyundai Motor on Thursday posted a 16-per-cent decline in second-quarter operating profit, saying U.S. tariffs cost it 828-billion won (US$606.5-million) in the second quarter, with a bigger hit expected in the current quarter. General Motors still expects a US$4-billion to US$5-billion hit to its bottom line this year. On Wednesday, Tesla chief executive Elon Musk said U.S. government cuts in support for electric-vehicle makers could lead to a 'few rough quarters,' as his firm reported its worst quarterly sales decline in over a decade.
Japan Forward
3 hours ago
- Japan Forward
The Astonishing Brazenness of Shigeru Ishiba
The Shigeru Ishiba government and the Trump administration have concluded their tariff negotiations. In a breakthrough just ahead of the August 1 US deadline, they reached an agreement to keep the reciprocal tariff rate at 15%. Had they not done so, the rate would have risen to 25%. An additional 25% tariff on Japanese cars will also be halved, so that together with the existing tariffs, the total tariff rate comes to 15%. Worst-case scenarios appear to have been avoided. Nevertheless, these tariffs are significantly higher than those instituted under the first Trump administration. It is disappointing that they will now be imposed. America is Japan's only ally. Despite being faced with the threat of unreasonably high tariffs from this same United States, Prime Minister Ishiba was unable to convince the US to withdraw the measures. We doubt whether the government did enough to protect Japan's national interests. It is outrageous that the Prime Minister should be allowed to remain in his position just because such a flawed agreement has been reached. He should rightly announce his resignation as soon as possible. Prime Minister Shigeru Ishiba meets with US President Donald Trump in Kananaskis, western Canada, on June 16. (©Cabinet Public Relations Office) President Donald Trump has gone wild during his second term. He has taken a self-righteous approach of pressuring other countries by arbitrarily imposing tariffs on their exports to the US. A series of unjustified claims have emanated from the White House, such as blaming Japan for the lack of sales of American cars, which are imported tariff-free into Japan. Those claims contain glaring factual errors and are unacceptable. First, the Japan-US trade agreement concluded by Trump in his first administration confirmed that additional tariffs would not be imposed on Japanese motor vehicle imports. However, Trump has acted as if he were free to simply renege on this agreement. Wasn't that exactly why the Ishiba administration kept calling for the US to withdraw its high tariff measures? Of course, it was bound to be difficult to convince Trump to stop using tariffs only in the case of Japan. It is a weapon he obviously dearly loves, and concessions by Japan might have been unavoidable to a certain degree. However, that doesn't mean we can agree with Prime Minister Ishiba's self-adulation for having "achieved the largest reduction among countries with a trade surplus with the United States." It was evident all along that the US response would depend on a decision made by Trump personally. Nonetheless, Ishiba chose to leave it up to his Cabinet to manage. He displayed absolutely no initiative to negotiate directly with Trump in order to break the deadlock. Ishiba hardly deserves the plaudits he is awarding himself. Ishiba has also said that the two sides reached an agreement that was "in line with the national interests of both Japan and the United States." Objectively, however, how much has Japan improved its national interests compared to before the advent of the current Trump administration? The Prime Minister is prioritizing the expansion of investment in the United States. This should both create American jobs and boost profits for Japanese companies. He has offered explanations, such as "Government-affiliated financial institutions will be able to provide investments, loans, and loan guarantees of up to $550 billion" (approximately ¥80 trillion JPY). Ishiba also emphasized that, together, Japan and the US will build resilient supply chains in areas important to economic security. However, the expansion of investment in the US has been a trend among Japanese companies for some time. It is also natural that the two countries should strengthen cooperation in terms of economic security. However, we must be careful not to fall into the trap of investing to fulfill our promises to the US without fully considering the costs. In the agricultural sector, Japan will increase the amount of rice it imports from the US within the existing minimum access framework. Fortunately, Japan's farmers were not sacrificed through tariff reductions or other measures. Nonetheless, a careful assessment of the impact of the increased inflow of US rice on rice prices is needed. For Japanese companies, the fact remains that the 15% tariff will constitute a heavy burden. Nevertheless, the conclusion of the negotiations means they can finally rework their strategies for doing business with the US. Not only large companies but also subcontractors must remain undeterred by the high American tariff policy. Hopefully, they will go all out to improve productivity and develop new demand. Prime Minister Shigeru Ishiba explains the results of the Upper House election at a press conference. July 21 (©Sankei by Akira Konno). With the conclusion of the negotiations, the government will now face other issues, including those involving domestic policies. However, Prime Minister Ishiba should not use these as an excuse to remain in power. He failed to attain his self-set minimum target for the number of ruling party seats in both the Lower and Upper House elections. As a consequence, the ruling parties lost their majorities in both houses of the Diet. It is the Prime Minister's responsibility to promptly announce his resignation. Even after his meeting with three former prime ministers from his own Liberal Democratic Party (LDP) on July 23, Ishiba again reiterated his intention to remain in office. His brazenness is absolutely astonishing. It is unacceptable for him to continue to ignore the will of the Japanese people as expressed at the polls. There is a rising chorus of demands from LDP lawmakers and local organizations for Ishiba to step down. This is a totally understandable reaction since, if he is allowed to remain prime minister, the LDP will be completely abandoned by its support base. Moreover, unless the LDP and its ruling coalition partner, Komeito, actually force him to resign, Ishiba will likely lose even more support than he did in the recent Upper House election. If that happens, implementation of the Japan-US trade agreement could become uncertain, and the ruling parties' ability to clean house would be called into question. An extraordinary Diet session will be convened on August 1. The Diet will require a certain number of days to thoroughly deliberate on the new Japan-US agreement. That will not change, regardless of whether there is a prime ministerial election as well. (Read the editorial in Japanese.) Author: Editorial Board, The Sankei Shimbun Keywords/tags:
