Big US automakers report sales jump on pre-tariff demand
'They were able to capitalize on the tariff-induced fear and that drove sales, especially in the early part of the quarter,' said Garrett Nelson, equity analyst at CFRA Research. While the auto industry has been near the center of Trump's efforts to reset global trade, consumers have yet to see significant price increases due to tariffs. That is because companies have relied on existing inventories that include vehicles imported before tariffs took effect. Prices are expected to rise more in the second half of 2025, but market demand and supply forces could constrain such hikes, analysts said. GM notched a 7.3 percent rise in vehicle deliveries to 746,588 behind a continued solid performance in pickup trucks and SUVs, as well as good sales of models geared towards customers seeking affordable vehicles. These include the Chevrolet Equinox and Chevrolet Trax, a lower-priced vehicle imported from South Korea.
Ford, meanwhile, scored a 14.2 percent jump in sales to 612,095, reflecting the boon from a popular program that offered customers employee pricing on many models. Most of Ford's leading vehicles saw higher sales, including the best-selling pickup F-series, as well as the Ford Explorer SUV.
While Ford had lower sales of its all-electric F-150 Lightning Truck and the Mustang Mach-E, it reported a jump in hybrid vehicle sales. Higher sales had been expected for both companies, but the increases were slightly more than projected by analysts at Edmunds.com. At Toyota, sales jumped 7.2 percent to 666,470 autos, with double digit gains in several vehicles, including the Toyota Camry sedan and the Toyota Tacoma pickup truck. Honda, Kia and Hyundai reported quarterly sales increases of between five and 10 percent.—AFP
But Nissan reported a 6.5 percent drop in quarterly sales to 221,441, while Jeep-owner Stellantis was projected by Edmunds to have a 12.8 percent drop to just over 300,000 vehicles.
The United States imposed 25 percent tariffs on imported finished cars in early April. The Trump administration also enacted a 25 percent tariff on imported auto parts in early May, although White House officials allowed a two-year grace period and stipulated that automakers would not face duplicative tariffs due to a 25 percent levy on imported steel and aluminum.
While retail car prices have not risen significantly, analysts at Cox Automotive last week pointed to a recent ebbing in dealer incentives as evidence of a somewhat tighter market. Cox Automotive Chief Economist Jonathan Smoke has projected an eight percent rise in prices due to tariffs, adding that 'we don't think consumers or fleet buyers are able and willing to accept that added cost,' he said at a briefing last week. Smoke predicted that uncertainty about the economy and whether the Federal Reserve will cut interest rates could lead many buyers to defer purchases.
Nelson said automakers have to be 'very careful' with price hikes.
'Things have cooled off from where they were at the beginning of the quarter,' he said. 'Everything we're seeing suggests that consumers are still very price sensitive.' – AFP
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Kuwait Times
a day ago
- Kuwait Times
Global matcha 'obsession' drinks Japan tea farms dry
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Thousands of miles (kilometers) away in Sayama, northwest of Tokyo, Masahiro Okutomi -- the 15th generation to run his family's tea business -- is overwhelmed by demand. 'I had to put on our website that we are not accepting any more matcha orders,' he said. Producing the powder is an intensive process: the leaves, called 'tencha,' are shaded for several weeks before harvest, to concentrate the taste and nutrients. They are then carefully deveined by hand, dried and finely ground in a machine. A varieties of matcha are on offer for beverages at Kettl Tea in the Los Feliz neighborhood of Los Angeles, California. A matcha beverage is being prepared at Kettl Tea in the Los Feliz neighborhood of Los Angeles. Matcha is added to beverages on offer at Kettl Tea in the Los Feliz neighborhood of Los Angeles, California. (From left to right) Emily Harwitz, Stevie Youssef and Kate Harwitz sip their matcha beverages at Kettl Tea in the Los Feliz neighborhood of Los Angeles. A staff member of "Milia Matcha" preparing a matcha drink in the shop of Tokyo. A general view of a tea processing factory in Sayama city of Saitama Prefecture. Manager of Jugetsudo tea store Shigehito Nishikida making a bowl of matcha, in the shop of Tokyo's Tsukiji area. Manager of Jugetsudo tea store Shigehito Nishikida making a bowl of matcha, in the shop of Tokyo's Tsukiji area. Kate Harwitz displays her matcha beverage at Kettl Tea in the Los Feliz neighbourhood. This picture shows matcha on offer for beverages at Kettl Tea in the Los Feliz neighbourhood. A woman enjoys a cup of matcha with her book at Kettl Tea in the Los Feliz neighbourhood. Andie Ella, the founder of Milia Matcha talking to employees before the shop opening in Tokyo. A tea processing factory in Sayama. Bags of tea in a tea processing factory in Sayama. Tea farm owner Masahiro Okutomi presenting the steps of tea processing in a factory in Sayama. Unprocessed tea leaves in a tea processing factory in Sayama. Customers queing outside the Milia Matcha shop before its opening in Tokyo. A staff member of Milia Matcha preparing a matcha drink in Tokyo. Tea farm owner Masahiro Okutomi holding unprocessed tea leaves in a processing factory in Sayama. Tea farm owner Masahiro Okutomi working at his farm in Sayama. Tea farm owner Masahiro Okutomi posing for a photo at his tea field following an interview with AFP in Sayama. 'Long-term endeavor' 'It takes years of training' to make matcha properly, Okutomi said. 'It's a long-term endeavor requiring equipment, labor and investment.' 'I'm glad the world is taking an interest in our matcha... but in the short term, it's almost a threat -- we just can't keep up,' he said. The matcha boom has been fueled by online influencers like Andie Ella, who has more than 600,000 subscribers on YouTube and started her own brand of matcha products. At the pastel-pink pop-up shop she opened in Tokyo's hip Harajuku district, dozens of fans were excitedly waiting to take a photo with the 23-year-old Frenchwoman or buy her cans of strawberry or white chocolate flavored matcha. 'Matcha is visually very appealing,' Ella told AFP. To date, her matcha brand, produced in Japan's rural Mie region, has sold 133,000 cans. Launched in November 2023, it now has eight employees. 'Demand has not stopped growing,' she said. In 2024, matcha accounted for over half of the 8,798 tons of green tea exported from Japan, according to agriculture ministry data -- twice as much as a decade ago. Tokyo tea shop Jugetsudo, in the touristy former fish market area of Tsukiji, is trying to control its stock levels given the escalating demand. 'We don't strictly impose purchase limits, but we sometimes refuse to sell large quantities to customers suspected of reselling,' said store manager Shigehito Nishikida. 'In the past two or three years, the craze has intensified: customers now want to make matcha themselves, like they see on social media,' he added. Tariff threat Anita Jordan, a 49-year-old Australian tourist in Japan, said her 'kids are obsessed with matcha.' 'They sent me on a mission to find the best one,' she laughed. The global matcha market is estimated to be worth billions of dollars, but it could be hit by US President Donald Trump's tariffs on Japanese products -- currently 10 percent, with a hike to 24 percent in the cards. Shortages and tariffs mean 'we do have to raise prices. We don't take it lightly,' said Mangan at Kettl Tea, though it hasn't dampened demand so far. 'Customers are saying: 'I want matcha, before it runs out'.' At Kettl Tea, matcha can be mixed with milk in a latte or enjoyed straight, hand-whisked with hot water in a ceramic bowl to better appreciate its subtle taste. It's not a cheap treat: the latter option costs at least $10 per glass, while 20 grams (0.7 ounces) of powder to make the drink at home is priced between $25 and $150. Japan's government is encouraging tea producers to farm on a larger scale to reduce costs. But that risks sacrificing quality, and 'in small rural areas, it's almost impossible,' grower Okutomi said. The number of tea plantations in Japan has fallen to a quarter of what it was 20 years ago, as farmers age and find it difficult to secure successors, he added. 'Training a new generation takes time... It can't be improvised,' Okutomi said.—AFP
Kuwait Times
a day ago
- Kuwait Times
What happens with Trump's July tariff deadline?
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Kuwait Times
a day ago
- Kuwait Times
US debt worries financial markets
US debt worries financial markets Why are yields on US bonds climbing? PARIS: Since the return of Donald Trump to the White House uncertainty about US financial policy has caused concern as US debt continues to rise. Those concerns have been visible on financial markets as US bond yields have climbed, an indication that investors are worried about the sustainability of the debt of the world's top economy. Those concerns have also affected the dollar, which as the global reserve currency has usually been seen as a safe haven currency. Foreigners have to purchase dollars if they want to buy US bonds, which have also been seen as one of the safest assets in times of volatility. The US dollar lost more than 10 percent during the first half of the year, its worst performance since 1973. The US Treasury raises funds by issuing three types of debt instruments: short-term bills, medium-term notes and long-term bonds. They carry a face value but are sold at a discount, with that price helping determine the yield, or rate of return for investors. Higher yields indicate investors are demanding a higher rate of return to hold US debt, which can be an indication about concern over whether they will eventually be repaid. The yields on 30-year US bonds rose above the symbolic level of 5.0 percent in May, but have since retreated to around 4.8 percent. 'Most of the concerns stem from the 'One Big Beautiful Bill', the law supported by the White House that includes measures to prolong tax cuts brought in by Donald Trump during his first term,' said Gregoire Kounowski, an investment advisor at asset manager Norman K. 'If the text remains unchanged it would add three to four trillion dollars to the US debt,' he added. The bill faces a final vote in the US House of Representatives Thursday after squeaking through the Senate on Tuesday. When Moody's cut the United States's top triple-A credit rating in May it cited rising levels of government debt and the impact of the interest costs on the US budget. 'It was a warning signal for markets and put the trajectory of US debt in the center of concerns,' said Raphael Thuin, head of capital market strategy at Tikehau Capital. Who holds US debt? US debt now totals more than $36.2 trillion according to the US Treasury, or 120 percent of annual economic output. Around $29 trillion of that is bonds that the Treasury sells on markets to investors: principally banks, pension funds and foreign governments. Foreign governments currently own $9 trillion in US debt, with Japan, Britain and China the top holders. China had until March been either the top or the second-largest holder of US government debt. Since the US-China trade war in 2020 during Trump's first term in office, 'China has gotten rid of US debt in favor of gold. It didn't sell its bonds but it didn't replace those that matured,' said Aurelien Buffault, an asset manager at Delubac AM. Safe haven status at risk? The rest of the world buys US debt as they want to hold a solid dollar-denominated asset. The size of the US debt market also makes it attractive to investors. 'It is about 20 percent larger than the European sovereign debt market in terms of capitalization,' said Guy Stear, head of developed markets research at Amundi. That makes it easier to buy and sell US debt quickly. US debt has until recently also benefited from being considered a 'safe haven' investment as the US government was seen as a reliable borrower. However, since April investors have started to pass over US debt and the dollar when seeking safe haven assets, noted Stear. In the current environment, 'investors are looking for alternative safe havens, that is, a currency and assets that protect them when volatility and increased uncertainty,' said Imene Rahmouni-Rousseau, director general of market operations at the European Central Bank. 'It is precisely the euro and European government bonds that have played this role of protective shield' and 'for the first time since the 2011 financial crisis European financial markers are considered very attractive by investors' globally, she opined.- AFP
