Trump's ‘Fiscal Dominance' Play
Those tax cuts will be financed by unprecedented borrowing. Textbook economics predicts that borrowing will push interest rates higher, neutralizing the benefits of lower tax rates.
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Yahoo
6 minutes ago
- Yahoo
Top Copper Nation Chile Sweats on Details of Trump's 50% Tariff
(Bloomberg) -- Chile, by far the biggest shipper of copper into the US, is waiting for details to emerge following President's Donald Trump's bombshell comments on tariffs. Are Tourists Ruining Europe? How Locals Are Pushing Back Can Americans Just Stop Building New Highways? Denver City Hall Takes a Page From NASA Philadelphia Trash Piles Up as Garbage Workers' Strike Drags On Trump sent shock-waves through the global copper industry on Tuesday by telling reporters that he would be slapping a 50% levy on copper imports — much higher than previously thought. Chile — and particularly state-owned Codelco — would be the most affected producer given the country accounts for about 500,000 metric tons of the total of 700,000 tons of refined metal that the US imports a year. Of that, Codelco alone ships about 350,000 tons. Asked about the 50% remarks, Chile's Foreign Ministry pointed out that there's still no executive order regarding a Commerce Department investigation into copper tariffs, and that Chile is yet to receive notification of any decision. Similarly, Codelco Chairman Maximo Pacheco said it's too soon to draw conclusions. Two major unknowns are whether there'll be country exemptions and whether the tariff will apply to both semi-fabricated copper products as well as refined metal, Pacheco said. The US needs that copper and Chile will continue to be ready to supply it, he said. Chilean officials participated in public consultations in the framework of the Commerce Department investigation. 'We remain in contact and engaged in discussions on this and other matters with the relevant authorities and technical teams,' Chile's Foreign Ministry said in a written response. Will Trade War Make South India the Next Manufacturing Hub? 'Telecom Is the New Tequila': Behind the Celebrity Wireless Boom SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate For Brazil's Criminals, Coffee Beans Are the Target ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
7 minutes ago
- Miami Herald
Sanctions, currency collapse fan fear of hyperinflation surge in Venezuela
Venezuela is spiraling once more into an inflationary storm as new data warns that price increases could skyrocket to 530% in 2025, fueled by a collapsing currency, oil export disruptions and mounting political and economic isolation. After two years of relative calm and moderate economic stabilization, inflation has returned with a vengeance. According to Bank of America Global Research, monthly inflation hit 26% in May, up from 18% in April—marking the fastest pace in years and triggering fears of a return to full-blown hyperinflation. 'Fears of hyperinflation have returned,' said Sebastián Rondeau, an economist at Bank of America. 'The deterioration in price stability is severe and accelerating.' The sharp surge in inflation follows a perfect storm of structural vulnerabilities and renewed external pressures, most notably the reimposition of U.S. sanctions on Venezuela's oil industry earlier this year and a concurrent fall in oil production. Venezuela's annual inflation reached 229% in April, up dramatically from a year-over-year average of 94% in 2024. If current trends persist, Bank of America projects an inflation rate of 530% for 2025 — potentially Venezuela's worst economic year since the infamous hyperinflation cycle of 2017–2019. Much of the inflationary pressure stems from Venezuela's crippled oil sector, one of the country's key lifelines for foreign currency and government revenue. Bank of America and Bloomberg report that oil production fell to 870,000 barrels per day in April, down from 980,000 in March—a drop that analysts say is directly tied to the U.S. decision to let key operating licenses for American and international companies expire. In late May, the Trump administration declined to renew the license that had allowed Chevron and several European firms to operate in Venezuela under sanctions waivers. As a result, Chevron was forced to halt the export of nearly five million barrels of oil, a significant loss for the cash-strapped socialist regime. To make matters worse, other foreign oil operators such as ENI and Maurel & Prom also had their licenses suspended. These policy shifts have led to a sharp decline in oil shipments and a loss of crucial hard currency inflows. Adding fuel to the fire, President Donald Trump announced in March that his administration would impose a 25% tariff on countries importing Venezuelan oil and a 15% tariff on direct imports from Venezuela. The sanctions and oil export cuts have placed enormous pressure on the already weakened bolívar, which has been depreciating at an average of 13% per month this year. That rapid decline follows a brief period of currency stability in 2024, during which the Caracas regime tried to maintain a controlled exchange rate using Central Bank interventions and limited dollar reserves. But those reserves have all but dried up. With declining oil exports, the government is struggling to get foreign currency and is once again resorting to monetary financing—printing bolívars to cover spending gaps. As a result, prices for basic goods have soared. A kilogram of beef now sells for $7 to $8 on the black market, compared to $4 just a few months ago. Public workers are reporting real wage declines of over 70% since the start of the year, and strikes are spreading among healthcare workers, teachers and pensioners. Failing to stop the economic firestorm, the socialist regime has turned its sights on those who dare to publicize the collapse. In recent weeks, authorities have detained economists, analysts and digital platform operators who publish independent financial data, intensifying a campaign of repression aimed at concealing Venezuela's worsening economic crisis. The arrests followed the publication of alarming inflation data by the independent Venezuelan Finance Observatory, which reported an annualized inflation rate of 229% as of May. The Central Bank of Venezuela, controlled by Maduro loyalists, stopped releasing official inflation figures in October 2024, when prices began surging again. 'The government wants to eliminate the parallel market without supplying enough dollars — and that's impossible,' said exiled economist José Guerra, who heads the observatory. 'They're trying to control inflation while printing money without backing. Monetary liquidity increased 250% through May alone. That inevitably fuels more inflation.' The government's sweeping effort to silence dissent has also extended to popular platforms like Monitor Dólar, which published unofficial exchange rates crucial for businesses and consumers in a country plagued by currency instability. The site stopped updating on May 27. Soon after, authorities detained around 20 people linked to the platform. The cryptocurrency exchange El Dorado — often used as a benchmark for Monitor Dólar — also shut down operations in Venezuela following the arrests. Now, many informal currency exchanges are being routed through platforms like Binance in an effort to avoid digital surveillance and government crackdowns. With the cost in bolivars of buying a U.S. dollar more than doubling since January, the regime has responded not with economic reform, but with political persecution.
CNN
10 minutes ago
- CNN
Fact check: Debunking 11 of Trump's false claims at Cabinet meeting
President Donald Trump again turned a Cabinet meeting into a wide-ranging conversation with reporters – and again uttered a whole bunch of false claims in the process. Trump's Tuesday remarks at the White House included inaccurate assertions about inflation, immigration, his tariff policy, the massive domestic policy bill he signed last week, China's use of wind energy, US and European aid to Ukraine, the US relationship with South Korea, and other subjects. Here is a fact check of 11 of the president's false claims. This is not a comprehensive list. Inflation: As he has repeatedly, Trump falsely claimed Tuesday, 'We have no inflation.' The US does have inflation – an annual inflation rate of 2.4% in May, an uptick from a 2.3% annual rate in April. That April rate was the lowest since early 2021, and lower than some economists expected for April after Trump imposed significant new tariffs, but it's not 'no inflation' whatsoever. (And on a month-to-month basis, US consumer prices increased 0.1% in May and 0.2% in April.) Tax on Social Security: Touting the new domestic policy legislation, Trump repeated his false claim that it achieves his campaign promise of 'no tax on Social Security.' It does not. The legislation does create an additional, temporary $6,000-per-year tax deduction for individuals age 65 and older (with a smaller deduction for individuals earning $75,000 per year or more), but the White House itself has implicitly acknowledged that millions of Social Security recipients age 65 and older will continue to pay taxes on their benefits – and that new deduction, which expires in 2028, doesn't even apply to the Social Security recipients who are younger than 65. Trump's tariff letters: Trump spoke of the letters he sent to various foreign leaders announcing the tariff rates he plans to impose on their countries beginning in August – and said, 'I just want you to know - a letter means a deal.' That's just not true. Multiple letters the White House revealed on Monday announced tariff rates Trump said he plans to unilaterally place on imports from foreign countries; those letters did not describe negotiated deals. Who pays tariffs: Trump repeatedly spoke of how his new tariffs mean other countries will have to 'pay' the US for the privilege of doing business in the US. Contrary to Trump's frequent assertions, it is the US importers who buy foreign products, not foreign countries themselves, who make the tariff payments to the US government. Tariff history: Trump repeated his regular false claim that the US was 'proportionately' at its 'wealthiest' between 1870 and 1913, when tariff revenue made up a much larger share of federal revenue before the reintroduction of the income tax. Trump didn't explain what he meant by 'proportionately' or 'the wealthiest,' but economists say that by any standard measure, the US is far wealthier today than it was in the early 20th century and prior; per capita gross domestic product is now many times higher than it was then. China and wind power: Trump, asserting that 'smart countries' don't use wind and solar energy, repeated his recent false claim that China, the world's biggest manufacturer of wind turbines, barely uses such equipment itself - wrongly saying, 'They don't have a lot of wind farms, I'll tell you; very, very few.' In reality, China is the world leader in the generation of wind power and has massive wind farms onshore and offshore; it continues to install additional wind capacity much faster than the US. California and energy: Trump, reviving a previous inaccurate complaint about California's use of renewable energy sources, falsely claimed: 'They have blackouts and brownouts every week.' The state simply does not; its power system has improved significantly since the rolling blackouts of a 2020 heat wave. Daniel Villasenor, a spokesperson for Gov. Gavin Newsom, said in a Tuesday email that Trump is again 'lying about California.' Villasenor wrote: 'The state has not experienced any rotating outages since 2020 – and in the last three years, no Flex Alert calling to conserve power has even been issued. Not only has our grid been increasingly resilient, it's also cleaner than ever – clean energy provided for 100% of demand on our grid for at least some part of the day 167 out of the first 180 days of the year.' US and European aid to Ukraine: Trump repeated his frequent false claim that the US has provided 'far more' wartime aid to Ukraine that Europe has, saying the US is 'in there for over $300 billion; Europe's in there for over $100 billion.' Those numbers are not close to accurate. According to the Kiel Institute for the World Economy, a German think tank that closely tracks international aid to Ukraine, the US had committed about $139 billion in military, financial and humanitarian aid to Ukraine from late January 2022, just prior to Russia's full-scale invasion, through April 2025 – well short of about $298 billion committed by European countries and the European Union. The gap was much narrower in terms of aid actually allocated through April 2025 – about $183 billion for Europe to about $134 billion for the US – but even those figures clearly disprove Trump's claim. South Korea's military cost-sharing: Trump repeated his false claim that South Korea convinced former President Joe Biden to let it stop making payments to help cover the cost of the US military presence in South Korea, saying Biden 'cut it down to nothing.' In fact, Biden's administration signed two cost-sharing agreements with South Korea, one in 2021 and one in 2024, that included South Korean spending increases – meaning South Korea agreed to pay more than it did during Trump's first term. US troops in South Korea: Trump again exaggerated the US troop presence in South Korea, falsely saying, 'You know, we have 45,000 soldiers in South Korea.' Official Defense Department data, published online, says the US had 26,206 military personnel in South Korea as of March 31, 2025, with 22,844 on active duty. Migration and mental health: Trump falsely claimed that unnamed foreign countries 'released their insane asylum – the insane asylum population into our country.' Even Trump's own presidential campaign could not produce any evidence for his frequent claims, which he has repeated for more than two years, that foreign countries deliberately emptied their mental health facilities to somehow get patients to migrate to the United States.
