Friday, May 23rd
Last update03:57:01 AM GMT
Economic Glance
Major trade partners swiftly hit back at President Donald Trump’s increased tariffs on aluminum and steel imports, imposing stiff new taxes on U.S products from textiles and water heaters to beef and bourbon.
Canada, the largest supplier of steel and aluminum to the U.S., said Wednesday it will place 25% reciprocal tariffs on steel products and also raise taxes on a host of items: tools, computers and servers, display monitors, sports equipment, and cast-iron products.
On Friday, Americans across the country are participating in an economic boycott for 24 hours.
Organized by the People’s Union USA, a nonpartisan, grassroots organization, the boycott quickly picked up steam across social media, with thousands of users sharing posts with related hashtags. Participants are asked not to spend any money, and if they need to, it is recommended that they shop at a local, small business and pay in cash.
“February 28 is a symbolic start to economic resistance, a day where we show corporations and politicians that we control the economy,” reads the organization’s website. “The date itself is not tied to any historical event, it is the beginning of something bigger.”
Spurred by anger about companies rolling back their diversity, equity and inclusion (DEI) efforts, in response to large-scale government cuts by Donald Trump and Elon Musk’s so-called “department of government efficiency” (Doge), some consumers are attempting to show their discontent with their wallets.
US corporations and their supporters in Washington are pushing aggressively to roll back tax policies they once endorsed, in a move that could return hundreds of billions of dollars to some of America’s biggest companies.
As congressional negotiators attempt to keep the government funded past 19 January, an agreement is emerging that ties the corporate tax breaks to an increase in support for vulnerable American families – an effort to make the deal more palatable for Democrats.
Just six years ago the Business Roundtable, a lobbying group for CEOs of large US firms, described the Trump-era Tax Cuts and Jobs Act as “a remarkable, once-in-a-generation opportunity”. Now, the group is leading “a six-figure advocacy campaign” to roll back parts of it, according to Politico, and threatening that failing to secure new tax cuts will lead to “slower job creation, smaller wage increases and lower overall economic growth”.
FTX Trading on Friday filed for Chapter 11 bankruptcy, capping a sudden and startling downfall for one of the world's largest cryptocurrency exchanges.
Founder and CEO Sam Bankman-Fried also resigned from the company, which appointed John J. Ray III as its new chief executive. Bankman-Fried plans to stay with FTX while it works through the bankruptcy process, according to a statement on Friday.
"The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders," Ray said in the statement.
The central bank is considered likely to raise its benchmark short-term rate by three-quarters of a percentage point, far larger than the typical quarter-point increase, to a range of 1.5% to 1.75%. It will also likely forecast additional large rate hikes through the end of the year.
A series of sizeable increases would heighten borrowing costs for consumers and businesses, likely leading to an economic slowdown and raising the risk of a recession. The Fed's previous rate hikes have already had the effect of raising mortgage rates roughly 2 percentage points since the year began and have slowed home sales.
Macy’s Inc (M.N) said on Thursday it would lay off about 3,900 employees in corporate and management positions as U.S. businesses try to save cash in the face of dwindling demand caused by the COVID-19 pandemic.
Macy’s had in May warned of nearly $1 billion in operating losses in its first quarter and said it would turn into a “smaller company”.
The job cuts come at a time when unemployment figures in the United States are already high. Rising coronavirus infections in many U.S. states including California, Texas and Florida are likely to hurt employment further as some people stay away from consumer-facing establishments.
The deepening economic slump was underscored by other data on Friday that showed production at industries collapsed last month at its deepest pace in 101 years. The reports, combined with a historic 20.5 million job losses in April, buttressed Federal Reserve Chair Jerome Powell’s warning on Wednesday of an “extended period” of weak growth and stagnant incomes.
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