America Can't Seem to Shake Reliance on China as Factory Floor
There's a common notion that since Trump's initial round of China tariffs in his first administration, the US has become drastically less reliant on the Asian nation. Headline data certainly suggests that, with the US share of imports from China falling in just a few years to about 13% in 2024 from nearly 22% in 2017.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Boston Globe
22 minutes ago
- Boston Globe
The SALT income tax deduction cap was increased to $40,000 in Trump's bill. Should you take it?
For the last seven years, the tax code has limited the amount taxpayers may write off for state and local taxes to $10,000. Prior to that, the cap was a much more generous $40,000. Advertisement The $10,000 cap was imposed by Congress as part of the first Trump administration's mammoth tax cut plan. It was quite costly to taxpayers in places like Boston's western suburbs, where local property tax bills range in excess of $25,000 (and where the state income tax is 5 percent and the sales tax 6.25 percent). Indeed, for some of the state's wealthiest residents, local property taxes plus state taxes exceeds $40,000. (Taxpayers must choose to include state income taxes or state sales taxes in their calculations, but not both.) This year's tax and spending bill, pushed by the current Trump administration, reversed what the previous Trump administration did by quadrupling the cap back to $40,000. It was done mostly to keep Republican Congress members who represent wealthy suburban districts on board for a bill that, overall, favors the well-off over those struggling to get by. Advertisement Here's what you should know about the SALT income tax deduction. Who qualifies for the SALT deduction? All taxpayers who pay state and local taxes may take the deduction, but it only makes sense for those who are relatively well-off. A threshold question for all federal income taxpayers is whether to take the How does the standard deduction work? The amount of income tax a taxpayer owes is based, logically enough, on how much income the taxpayer has. The more income, the more taxes . But the tax code allows for gross income to be reduced by a multitude of deductions, producing a taxable 'adjusted gross income.' Wealthier taxpayers who can afford CPAs and tax lawyers scour the tax code for deductions, while the vast majority of taxpayers simply accept a lump sum 'default' deduction, known as the standard deduction, which is set by Congress. What are the most common deductions for those who itemize? Besides state and local taxes, common deductions are for mortgage interest on a primary residence or second home; charitable contributions; and out-of-pocket medical and dental expenses. All are subject to certain limitations. Why take the standard deduction instead of itemizing? If all your itemized deductions come out to a sum that is less than the standard deduction, then the obvious choice is to take the standard deduction. Taking the standard deduction is also less time-consuming. Advertisement How much is the standard deduction? The standard deduction was greatly increased — almost doubled — under the first Trump administration tax cut. For individual filers it went from $6,500 to $12,000; for joint returns, $13,000 to $24,000. The tax bill enacted this month bumps up the standard deduction for single filers to $15,750 and for joint filers $31,500. It's a huge increase, one that benefits the vast majority of taxpayers, including those with lower and moderate incomes and do not itemize. What percentage of taxpayers take the standard deduction? Taxpayers have overwhelmingly — and increasingly — opted for the standard deduction. Since the 2017 tax cut, the percentage of Americans who take the standard deduction has skyrocketed to more than 90 percent, compared to less than 70 percent as recently as 2020. How long has the SALT tax reduction been around? It dates back to the advent of the federal income tax more than a century ago. Initially, the SALT deduction was unlimited, meaning you could deduct from your taxable income every dollar you paid in state and local taxes, without a cap. How has SALT changed recently? The biggest change came when, at Trump's behest, a Republican-controlled Congress in 2017 capped it at $10,000 over the objections of many blue state lawmakers. What was the rationale for reducing the SALT deduction in 2017? Trump in his first administration successfully lobbied for one of the largest tax cuts in history, including much lower personal and corporate income tax rates, higher standard deductions, and a doubling of the child tax credit. (A tax credit is a dollar-for-dollar reduction in taxes owed, as opposed to a tax deduction, which is a reduction in taxable income.) The 2017 tax cuts, however, were not offset by spending reductions. One relatively minor way the 2017 law sought to pay for the tax cuts was by slashing the SALT deduction by 75 percent. Advertisement What were the politics behind the 2017 SALT reduction? The SALT deduction favors mostly blue states that vote reliably Democratic in presidential elections. The Trump administration apparently felt politically safe imposing a heavier tax burden on taxpayers in states Republicans consider unwinnable. So why did the Republican-controlled Congress this year increase the SALT cap to $40,000? This year's tax bill passed the House by the slimmest of margins, 215-214, with all Democrats opposed and two Republicans voting against it on the grounds it explodes the national debt. Before the vote, a few moderate Republicans from blue states lobbied for increasing the SALT deduction cap. Doing so was apparently the price bill proponents were willing to pay to keep those few crucial Republican votes in line. When does the higher SALT deduction go into effect? Immediately. Taxpayers can take advantage of it before next year's midterm elections, which affords a modest political advance to Republicans. (Some of the most serious — and unpopular — cuts to the social safety net won't go into effect until after the midterms, another possible political advantage for Republicans.) How long will the higher SALT deduction continue? It will increase by $1,000 each year through 2029, but then revert back to $10,000 in 2030, unless Congress says otherwise. Got a problem? Send your consumer issue to
USA Today
22 minutes ago
- USA Today
GDP soars and Trump's economy roars. Liberals still won't give him credit.
Will Democrats put politics aside and applaud as the American economy shows a strength and resilience that so many of them doubted? Probably not. Thanks to President Donald Trump's bold policies, it appears that the United States will avoid a recession this year − one that so many liberals were predicting only months ago. Will Democrats put politics aside and applaud as the American economy shows a strength and resilience that so many of them doubted? Probably not. The Bureau of Economic Analysis on July 30 released more good news about our nation's vibrant economy. Gross domestic product grew a healthy annual rate of 3% in the second quarter after recording a less than 1% decline in the first three months of this year. Fears of a recession should now dissipate like morning haze after the sunrise. Nearly all markers of a strong economy are in top form. Unemployment is low, hovering at 4.1%. The past three months have seen steady job growth. Average hourly earnings for U.S. workers grew 3.7% over the 12 months ending in June. Consumer spending is expected to rise, and there's been a modest uptick in consumer confidence. The Consumer Price Index, which measures inflation, increased 2.7% over the 12 months ending in June, far below the 40-year high recorded in President Joe Biden's term. Even the average price of eggs has dropped dramatically, to $3.31 per dozen, down from a spike to $8 in February and back to roughly the same price level as a year ago. Stock indexes continue to grow at a strong pace, recovering from the sell-off this spring driven by concerns over Trump's tariffs. The Nasdaq and S&P 500 have set multiple record highs in July, a boon to millions of Americans with retirement accounts and other investors. On the tariff front, Trump's new trade deal with the European Union should be a catalyst for further economic growth, particularly in the energy and construction sectors. If this is what a recession looks like, let's keep it coming. Critics said Trump was destroying the economy Despite such healthy economic markers, I doubt I'll see many kudos offered to the Trump administration for powering past a recession, which the left predicted in doomsday terms. Nobel Prize-winning economist Paul Krugman wrote in May that Trump and "MAGAnomics" were "destroying the economy and waging war on the middle class and the poor." The headline thundered that Trump was "making America backward again." Opinion: Trump's EU trade deal ushers in a golden age for blue-collar workers Interestingly, Krugman claimed that the U.S. economy was in good overall shape when Biden left office in January. He charged Trump with wrecking the economy in a mere three months. Now, that the data clearly shows otherwise, will Krugman admit his errors? I doubt it. Krugman, to be fair, wasn't the only so-called expert spouting off about our supposedly crumbling economy. CNN published an analysis in April with a headline that claimed "Trump took the US economy to the brink of a crisis in just 100 days." That same month, the Center for American Progress bemoaned that "President Donald Trump's decision to unilaterally launch a global trade war could be one of the worst economic statecraft blunders in American history." I read these articles in the mainstream news media and wonder if we share the same universe. Do progressives not see the same healthy economic markers that millions of other Americans and I see? The answer, of course, is that they do see − but they are too blinded by partisanship to admit it. Good economic news should be nonpartisan I don't have a problem with liberals criticizing Trump. Sometimes he deserves it. But when it comes to obvious wins like a blossoming economy, the constant derision is tiresome and pedestrian. A robust economy under any president is good news for Americans, regardless of their party affiliation. Right? I didn't care for Biden's leftist policies. But I didn't cheer when the economy struggled. It was bad news not just for Biden but, far more important, also for our nation and its citizens. More than a year after Biden entered the White House, annual inflation spiked to 9% in June 2022, the highest rate in four decades. Americans were hit with sudden increases in food, housing and transportation costs. Opinion: Nvidia CEO says Trump gives America an advantage. Hear that, progressives? Compounding the pain, the Federal Reserve acted to cool inflation by raising interest rates, which pushed up consumers' payments for auto, housing and credit card loans. Democrats tried to blame decisions made in Trump's first term, including federal spending used to fight consequences of the COVID-19 pandemic. But Biden spent more even as the pandemic began to wane. In 2024, more than half of American voters said the economy was the issue that mattered to them the most. It's why Trump won more than 77 million votes and returned to the White House. Now, he is delivering on his promises to rebuild our nation's economy. But not everyone is happy about it. It's too bad liberals can't separate economic success from Trump's party affiliation. I can't help but wonder if they wanted a recession so they could blame Trump even more. Nicole Russell is a columnist at USA TODAY and a mother of four who lives in Texas. Contact her at nrussell@ and follow her on X, formerly Twitter: @russell_nm. Sign up for her weekly newsletter, The Right Track, here.
Axios
22 minutes ago
- Axios
The GDP report's case for rate cuts
Here's some irony for you: In the details of Wednesday's GDP report, you can find a solid case for Federal Reserve interest rate cuts. However, it's the opposite of what President Trump blasted out Wednesday morning. Why it matters: Despite a robust headline number, underlying domestic demand looked strikingly soft in Q2 — and the softness was driven in significant part by interest rate-sensitive sectors bearing the brunt of Fed policy. Meanwhile, inflation was well-contained. Driving the news: Overall GDP rose at a 3% annual rate in the April-through-June quarter, the Commerce Department said, bouncing back after contracting in Q1. The major driver of the swings was an import surge in Q1, as companies sought to get ahead of tariffs. Imports fell back to normal levels in Q2, which, in the arithmetic of GDP, created a surge. Trump noted the GDP gain was "WAY BETTER THAN EXPECTED!" on Truth Social and said that Fed chair Jerome Powell "MUST NOW LOWER THE RATE." Yes, but: Underlying private-sector demand grew at the slowest pace in more than two years — and contraction in both the residential and commercial construction sectors was a reason why. It suggests that the Fed's policy of keeping rates elevated is unnecessarily dragging down overall growth. By the numbers: Real final sales to private domestic purchasers — which excludes the effects of trade and inventory swings, as well as government spending —rose at only a 1.2% rate in Q2, the weakest since the end of 2022. That figure, a measure of underlying private-sector demand, rose at a 1.9% rate in Q1 and was up 3% for the full year 2024. It was held down in Q2 in significant part by contractions in residential investment (which fell at a 4.6% annual rate) and investment in business structures (which fell at a 10.3% annual rate). Both those sectors contracted in Q1 as well. Homebuilders and commercial construction executives have complained about high interest rates as a headwind. Of note: The Personal Consumption Expenditures Price Index, the Fed's preferred inflation measure, rose at only a 2.1% annual rate in Q2, which is awfully close to the Fed's 2% goal. That said, core PCE inflation, which better captures underlying inflation trends, clocked somewhat higher at 2.5%. Between the lines: An economy with below-trend underlying demand, where rate-sensitive sectors are ailing, paired with near-target inflation, is the textbook story of an economy in which interest rates should no longer be in restrictive territory. The case for delaying rate cuts hinges on projections of what will happen to inflation trends in the future as the impact of tariffs filters through to consumer prices. What they're saying: "The policy takeaway here is that the economy is growing well below the 1.8% long term trend which will lead to a policy change at the Federal Reserve once they get a sense of where inflation is on the back of tariff induced inflation," wrote RSM chief economist Joe Brusuelas in a note.
