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Watch: Uddhav-Raj joint rally, PM Modi in Argentina & Trump tariff letters

Watch: Uddhav-Raj joint rally, PM Modi in Argentina & Trump tariff letters

The Hindua day ago
From Uddhav-Raj Thackeray joint rally to Trump's Tariff letters to 12 countries signed to Himachal Pradesh monsoon havoc to PM Modi arrival in Argentina in this edition of The Hindu's New Wrap.
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How America's economy is dodging disaster
How America's economy is dodging disaster

Mint

time9 minutes ago

  • Mint

How America's economy is dodging disaster

Economic doom beckoned after President Donald Trump announced his 'Liberation Day" tariffs on April 2nd. Stocks crashed; forecasters predicted a recession within the year. Three months on, the mood is rather more relaxed. Prices in shops are not noticeably higher, unemployment is flat and the S&P 500 index is resurgent, back at all-time highs. Mr Trump's 90-day pause for many of his tariffs, announced a week after Liberation Day to calm markets, will end on July 9th. Although he has threatened to send letters declaring talks over and tariffs back on, nobody seems too worried. What gives? Was the president right in thinking that tariffs were a smart way to squeeze money from foreigners? Were the doommongers overdoing it? For the moment, businesses, households and financial markets are locked in an elaborate game of wait-and-see. Companies stocked up heavily early in the year in anticipation of tariffs. Indeed, they did so by enough to drag measured GDP growth into the red in the first quarter, as a surge of imports distorted the numbers. These stockpiles will be run down. In many cases, they are already being depleted, meaning that businesses are turning again to imports. Last month customs duties were more than three times as high as the average in recent years (see chart 1). Companies that bring in goods from abroad now face an unpalatable choice: either they can eat the tariffs and accept lower profits, or they can pass the additional costs on to consumers. So far, they have mostly chosen the first option. Bosses are attempting to wait out the president. Why alienate customers with higher prices if Mr Trump might change his mind and render the exercise pointless? Even in the latest consumer-price data, which still shows inflation a little above the Federal Reserve's target of 2%, it is difficult to spot a tariff impact. In fact, doing so requires an economic microscope. Zooming in on the prices of affected categories at a few large retailers, Alberto Cavallo of Harvard Business School and co-authors do discern some slight price rises in both imported goods and their domestically produced competitors (see chart 2). However, such prices have risen by only a percent or two—a far smaller increase than that seen in tariffs. America's effective tariff rate is now at 12%, according to calculations by the Tax Foundation, a think-tank, its highest in nearly a century. Reverting to Mr Trump's initial Liberation Day offering would mean a significant step up. Oddly, though, tariffs may be pushing down prices via another mechanism—by taking a toll on the economy. The Liberation Day drama crushed consumer confidence, possibly softening demand. Until recently, this has been evident only in 'soft" data (surveys and the like). Now signs of it are starting to appear in 'hard" data, too. A recent release showed that household spending fell month-to-month in May. Employment figures for June were strong, but bolstered by government hiring, especially of teachers. Those for the private sector were lower than expected. A running estimate of GDP, produced by the Fed's Atlanta branch, suggests that its core components (private investment and consumption) have fallen from an annualised growth rate of 2-3% at the start of the second quarter to 1% now (see chart 3). Goldman Sachs, a bank, has compared the latest data to previous 'event driven" shocks that led to recessions, and found that today's slowdown is roughly in line with the historical norm. Whether this is the start of something more serious depends, in large part, on how punchy the president feels on July 9th. Without a deadline extension or similar, and especially if Mr Trump doubles down on tariffs, a further slowdown seems likely. As Britain discovered after Brexit—the most recent case of a rich country imposing large trade barriers on itself—elevated uncertainty can by itself be sufficient to suppress business investment for quite some time. And America is now an extremely uncertain country (see chart 4). All the same, a worse slowdown does not necessarily mean a recession. Tariffs are colliding with an economy that is, by any historical or international standard, extraordinarily dynamic. It has been growing at a consistent 2-3% a year since 2022. As a consequence, America is one of the few rich countries that might be able to shoulder even a big hit to growth and still dodge recession. The additional stimulus in Mr Trump's 'Big, Beautiful Bill" is also front-loaded, meaning that it will provide a boost this year and next, which could help obscure the impact of tariffs (even if it also creates an inflationary mess for the Fed to handle). All of this suggests a future in which economists endlessly debate the true impact of the tariffs, while the American public barely notices them, despite having been left poorer. Not a triumph for Mr Trump—but not a disaster either.

Musk launches ‘America Party'
Musk launches ‘America Party'

Hans India

time11 minutes ago

  • Hans India

Musk launches ‘America Party'

Washinton: Techbillionaire Elon Musk has launched a new political party to the surprise of many Americans and consternation of some.'By a factor of 2 to 1, you want a new political party, and you shall have it!' he posted on X on Saturday and declared the result of the 24-hour poll he had conducted on the social media platform he owns. The poll showed that 64 per cent of the respondents favoured the formation of a new political party. 'When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom. The way we are going to crack the uniparty system is by using a variant of how Epaminondas shattered the myth of Spartan invincibility at Leuctra: Extremely concentrated force at a precise location on the battlefield,' he explained in a subsequent post. Epaminondas was a Greek statesman and military strategist in the 4th Century BC credited with breaking the military dominance of Sparta and disrupting the balance of power among Greek states. Musk had threatened to form a new political party if President Trump's 'Big Beautiful Bill' was passed by the Congress. He had also threatened that every single member of the Congress who voted for the Bill did not deserve winning another term. In the event, barring three Republican Senators in the US Senate and two Republican Members of the House of Representatives voted in favour of the Bill, while every Democratic Member in the two Houses voted against. The MAGA (Make America Great Again) supporters of President Donals Trump reacted to the announcement with disappointment, dismay and even anger, believing that a third party will cut into Republican votes, divide Trump supporters and allow the Democratic Party to win the next election. However, some Republicans seemed to believe that the third party will destroy the Democratic Party by attracting opponents of Trump into what will be essentially another conservative and 'rightist' party. The poll that Musk conducted on X, however, was immediately contested. Some even claimed to have asked the AI tool created for X, Grok, about the party affiliation of the respondents. The reply received from Grok was claimed to be the following: 'X doesn't track or reveal voter nationalities in polls, so the exact number is unknown. However, with Elon's global audience (over 200M followers) and X's user base being only 17 per cent American, it's likely a significant portion—possibly over half—of the voters are non-American)." Response from Republican Party supporters were varied. 'A big mistake. A third political party would be Perot 2.0 and guarantee electing Democrats to the Oval Office and Congress. We have seen this show before. If you want to curb government spending, devote resources to elect more Republicans because the solution is not more Democrats in office,' responded one of them. Ross Perot was a businessman and industrialist from Texas who ran for the US presidency as an independent candidate in 1992 and 1996, losing both times to Bill Clinton. Perot passed away in 2019. Others were angry at Musk's seeming betrayal of President Trump. 'You turned out to be a real Trojan horse. There is nothing in you but a thirst for power and profit. Even a thousand lifetimes would not be enough to spend what you have now. Why want more? In history books, you will be described as a Judas who backstabbed the sitting president,' posted another. Others vented their outrage by asking, 'Does anyone remember the Leftist surge in attacks on Elon Musk and vandalisation of Tesla? Many large MAGA accounts and millions of other Trump supporters strongly, vocally expressed their support of Musk and Tesla - often stating they would buy stock and buy vehicles in support of Elon. Is he really mocking us now?' Many more respondents appeared convinced that the venture would never take off. Musk responded to them by reposting a supporter who reminded people that sceptics who believed that Tesla, the electric car with a driverless model, would never succeed, that Musk could never start a space company, that SpaceX could never re-use a rocket, that SpaceX would never occupy Mars, that Musk cannot do politics or run a social media have already been proved wrong. Sixteen hours after Musk's announcement of the America Party, Donald Trump was yet to dignify it with his response, choosing to ignore it. The US President, soaking in his moment under the Sun after getting the Congressional approval for his 860-page 'Big and Beautiful Bill', can afford to ignore the blip—at least for the time being.

Trumps First Reaction On Elon Musk Launching New Political Party, Calls It Ridiculous
Trumps First Reaction On Elon Musk Launching New Political Party, Calls It Ridiculous

India.com

time30 minutes ago

  • India.com

Trumps First Reaction On Elon Musk Launching New Political Party, Calls It Ridiculous

In a move that could change the American political landscape, ex-Dodge chief Elon Musk took a bold political initiative, officially launching his faction, the 'America Party', on Sunday. The move comes on the heels of an increasingly public and bitter feud between United States President Donald Trump and Tesla CEO Musk, two powerful figures. President Trump, wasting no time, blasted Musk's move in his first public response. Speaking to the media, Trump dismissed the creation of the America Party as 'ridiculous.' He doubled down on his belief that the US should remain a two-party nation. "It is ridiculous to start a third party. We have had tremendous success with the Republican has always been a two-party system. Starting a third party adds to confusion... He can have fun with it, but I think it is ridiculous," he said. #WATCH | On Elon Musk launching 'America Party', US President Donald Trump says, "It is ridiculous to start a third party. We have had tremendous success with the Republican has always been a two-party system. Starting a third party adds to can have fun… — ANI (@ANI) July 6, 2025 In a post on the social media platform X, on Friday, Musk teased the idea of the formation of a new political party and posted a poll for the users to tell if they wanted a new faction. He announced the result of the online poll and introduced the 'America Party'. "Today, the America Party is formed to give you back your freedom," Musk posted on X on Sunday. 'Train Wreck…': Trump In a post on Truth Social, Trump posted, 'I am saddened to watch Elon Musk go completely 'off the rails,' essentially becoming a TRAIN WRECK over the past five weeks. He even wants to start a Third Political Party, despite the fact that they have never succeeded in the United States - The System seems not designed for them.' 'The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats, who have lost their confidence and their minds! Republicans, on the other hand, are a smooth running 'machine,' that just passed the biggest Bill of its kind in the History of our Country,' he added. Musk-Trump Public Showdown Tensions between Trump and Musk skyrocketed during the tech mogul's brief tenure as head of the DOGE. He reportedly pushed for more spending cuts and a reduction in federal workforce policies that clashed with Trump's plans. After their fallout, Musk has been a vocal critic of the US President's recent bill. Is Elon Musk's New Party A Political Shift? Elon Musk's entry into politics is a step in the political system of America that is more than just bold; it could be the new wave that the voters of the US were waiting for, or, as Trump said, Musk having 'fun'.

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