Economics

For some small businesses, the last week brought even more twists and turns to the past two months of Trump’s chaotic tariffs.

The situation was already confusing, with stops and starts of tariffs at different levels. Then on Wednesday, a US court said Trump overstepped his authority in imposing most of those import levies – only for an appeals court on Thursday to pause the previous court’s ruling.

The confusion has made it challenging for some small companies to plan, business owners told CNN. In certain cases, they have had to consider changing their product strategy, looking into shifting their supply chains, reducing staff hours or delaying products.

https://archive.ph/u6ooy

The contraction in the economy in the first three months of 2025 was slightly smaller than originally reported, a government update showed, but the underlying message was the same: Ongoing trade disputes are hampering U.S. growth.

Gross domestic product fell at an annual rate of 0.2% in the first quarter instead of 0.3% as originally reported, the Bureau of Economic Analysis said Thursday. GDP is the official scorecard of the economy.

The economy officially shrank for the first time in three years because of a surge in imports that pushed the trade deficit to record highs. Trade deficits subtract from GDP.

Slower consumer spending was another factor.

KEY POINTS

• The “One Big Beautiful Bill Act,” includes the most sweeping changes to the tax treatment of foreign capital in the U.S. in decades under a provision known as Section 899.
• Section 899 will hit entities from so-called “discriminatory foreign countries” that impose levies that disproportionately affect U.S. companies.
• Under the new tax bill, the U.S. would hit investors from such countries by increasing taxes on U.S. income by 5 percentage points each year, potentially taking the tax rate up to 20%.

U.S. corporate profits fell sharply in the first quarter and could continue to be squeezed this year by higher costs from tariffs that are threatening to undercut the economic expansion.

Profits from current production with inventory valuation and capital consumption adjustments dropped $118.1 billion last quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said on Thursday. Profits surged $204.7 billion in the October-December quarter.

Donald Trump's sweeping import duties have cast a shadow over the economy, knocking business and consumer sentiment as well as unleashing unprecedented volatility on financial markets.

This week, Trump Media and Technology Group announced it is selling shares and bonds to raise $2.5 billion to create a "Bitcoin treasury.” It marks the Trump family’s latest addition to their cryptocurrency empire. Trump’s sons, Donald Jr. and Eric, run the family’s multiple crypto ventures and spoke at the world’s largest Bitcoin conference in Las Vegas. Laura Barrón-López reports.

cross-posted from: https://lemmy.world/post/30426802

The 10-year Treasury hit 4.63% and the 30-year Treasury hit 5.15%. 

A federal court on Wednesday blocked Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law, swiftly throwing into doubt Trump’s signature set of economic policies that have rattled global financial markets, frustrated trade partners and raised broader fears about inflation intensifying and the economy slumping.

The ruling from a three-judge panel at the New York-based U.S. Court of International Trade came after several lawsuits arguing Trump has exceeded his authority and left the country’s trade policy dependent on his whims.

Trump has repeatedly said the tariffs would force manufacturers to bring back factory jobs to the U.S. and generate enough revenue to reduce federal budget deficits. He used the tariffs as a negotiating cudgel in hopes of forcing other nations to negotiate agreements that favored the U.S., suggesting he would simply set the rates himself if the terms were unsatisfactory.

Shares of chip design software makers Cadence and Synopsys tumbled in Wednesday trading after the Financial Times reported that the White House told them to stop selling to clients in China.

Cadence stock declined nearly 11%, while Synopsys was down about 10%.

The Bureau of Industry and Security under the U.S. Commerce Department sent letters to both companies and to Siemens, the newspaper said.

Economic uncertainty has produced a double whammy for the housing market: sluggish home sales and plodding construction. Last month was the slowest April for existing home sales in 16 years — a sharp rebuke to hopes that this spring the housing market would recover after two very sleepy years.

In a May survey of builder confidence conducted by Wells Fargo and the National Association of Home Builders, home builder sentiment dropped to a level last seen in November 2023.

The problem, as ever, is the cost of housing: Home prices are out of reach for many who would like to buy. And the tariff drama under Trump has both made it more expensive to build new homes, and made the future more unpredictable for would-be homebuyers.

Much of the economic data we use to understand the world, such as the incomes people receive or the goods and services firms produce and people buy, is recorded in the local currencies of each country. For example, in 2023, Gross Domestic Product (GDP) per capita — a common measure of the average income of people in a year — was around 205,000 rupees in India, 89,000 yuan in China, and 83,000 dollars in the United States.

These numbers in local currencies can provide useful context within each country. But on their own, they tell us nothing about how these figures compare. How rich or poor is someone with 205,000 rupees in India compared to 89,000 yuan in China or 83,000 dollars in the United States?

International dollars are a hypothetical currency that helps us answer such questions by equating different currencies with what they can buy. They adjust for the fact that the cost of living is much higher in some countries than in others, allowing us to compare data denominated in different currencies in terms of their local “purchasing power”.

In this article, we explain what international dollars are, how they are calculated, and the crucial perspective they offer for understanding living standards worldwide.

A big part of why the bond market hates the GOP tax cuts is how they increase the debt: The bill cuts taxes for the rich while cutting spending on social safety net programs. Overall, economist Justin Wolfers summed it up as “the largest redistribution from poor to rich in American history.”

As a result, the GOP budget bill won’t just increase the annual government deficit, it will hurt economic growth. That’s because tax cuts to the rich provide less juice to the economy than other types of spending. Rich people are, well, already rich, so they have less of what economists call “marginal propensity to spend” the extra money they get to keep. Trump’s budget also cuts programs that directly increase economic growth, like clean energy tax benefits from the Inflation Reduction Act.

Add to that the fact that Trump’s tariffs remain at levels that amount to one of the greatest tax increases in American history, the cost of which will be borne disproportionately by middle- and lower-income consumers, and the outcome is simultaneous and wildly hypocritical fiscal austerity and profligacy that will hamper growth and increase the national debt.

Daily revenue from US customs duties rose to a record $16.5 billion as American importers made monthly payments to the government for goods received in April.

US customs duties collections hit a record $16.5 billion as importers made monthly payments to the government for goods received in April 2025, according to Treasury Department data released Friday. The surge in revenue indicates the impact of President Donald Trump’s latest tariff policy for the first time.

Nearly two-thirds of importers pay customs duties with a single monthly payment following the arrival of goods at US ports. The deadline for payments for the month of April was Wednesday.

With the continuation of current tariff policies, Trump will not reach the target of $2 billion a day in tariff revenue, which he claims will assist in funding the significant tax reductions included in a bill approved by the House of Representatives this week, reported Bloomberg News.

Wall Street’s quiet corner is making noise again.

While the bond market is typically seen as slower moving, it can pack a heavy punch when it’s alarmed. And right now, it’s getting worried about how much more Washington is preparing to pile onto its spiraling mountain of debt because of its desire to cut taxes.

The House of Representatives approved a bill of tax breaks early Thursday that could add trillions of dollars to the federal government’s debt, and it’s heading to the Senate next. Worries about the U.S. debt have sent yields jumping in the bond market, which in turn has shaken the stock market. The S&P 500 is potentially heading toward its worst week in seven.

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