REUTERS
"Ex Fed's Warsh highlights a path to lower rates, takes a fresh dig at the Fed"
By Ann Saphir and Howard Schneider
May 9, 2025
Summary
* Warsh says Fed would sacrifice the labor market to fight inflation
* Warsh is seen as a front-runner to be the next Fed Chair
* Remarks made at Hoover Institution, linked to Bush-Reagan Republicanism
Palo Alto, California May 9 (Reuters) - Kevin Warsh, an apparent frontrunner to be U.S. President Donald Trump's pick to be the next chair of the Federal Reserve, on Friday suggested a possible pathway to the lower policy rates that Trump has repeatedly pressed the current Fed Chair Jerome Powell to deliver, and delivered a fresh dig at the Fed's conduct of monetary policy.
A large and often growing Fed balance sheet can work at cross-purposes with the Fed's main policy lever of setting short-term borrowing rates, Warsh told a monetary policy panel at Stanford University's Hoover Institution, but "if the printing press could be quiet, we could have lower policy rates."
Warsh served as Fed Governor from 2006 until 2011, when he quit because he opposed the Fed's continued balance sheet expansion as central bank overreach that encouraged the expansion of the nation's debt.
The Fed is currently reducing its balance sheet.
On Friday, Warsh offered an added criticism of the Fed, saying there is no "cruel choice" between the Fed's two objectives of stable prices and full employment, a reference to the idea long prevalent among many central bank policymakers that the cost of bringing down inflation is harm to the job market.
"What it means is, we don't have to push the unemployment rate up to get the inflation rate to fall," Warsh said on the sidelines of the conference.
"At the Fed, when they talk about how we get inflation down, what they really mean is, how do we get the unemployment rate up ... we need to throw people out of work to get the inflation rate to come down, which is nonsense."
"But that's embedded in economic thinking, including at the Fed."
The idea that a "cruel choice" is "nonsense" is actually largely consistent with how the Fed has conducted policy over the last several years, as it brought inflation down from 40-year highs without pushing the unemployment rate above the rate that most economists feel is consistent with full employment, opens new tab.
Powell has repeatedly said he does not feel the current labor market is a source of inflation, suggesting that crushing the job market would do little to lower inflation.
Warsh made his remarks at a conference and an institution steeped in Bush-Reagan Republicanism, now out of favor as Trump and his ideas have come to dominate the party.
The conference was convened in part to celebrate John Taylor, a Bush economic adviser and author of one of the most famous monetary policy rules; Condoleezza Rice, Bush's Secretary of State, spoke on Thursday.
Warsh himself was a Bush appointee to the Fed but also has close family ties to Trump through his wife - the daughter of Trump's former donor Ronald Lauder.
He shared the stage on Friday with Fed Governor Christopher Waller, a Trump appointee who has also been mentioned as a possible candidate for Fed chair.
Waller has said he's prepared to lower rates swiftly should tariffs drive a slowdown in the economy and send the unemployment rate upward.
Asked what the Fed should do now, if its inflation and employment mandates come into tension, Warsh demurred.
"Well, that's a longer discussion," he said, heading back into the conference to hear the next speakers.
Reporting by Ann Saphir; Editing by Aurora Ellis
https://www.reuters.com/business/ex-fed ... 025-05-09/
THE MAGA-MAN DONALD TRUMP
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"Container shipping firms cull Asia-US service as Trump tariffs collapse trade"
By Lisa Baertlein
May 9, 2025
Summary
* Scheduled weekly service withdrawals show impact of US trade policies
* MSC, COSCO and others deploy fewer ships from China to US
* Container ship operators also cancelling individual voyages
LOS ANGELES, May 9 (Reuters) - Major container shipping companies are suspending at least six scheduled weekly routes between China and the United States as President Donald Trump's punishing tariffs on the world's top exporting country collapse trade, maritime consultants said.
The ships on those routes have the combined capacity to deliver 25,682 40-foot containers stuffed with toys, tennis shoes, car parts and things U.S. manufacturers use to produce goods each week - or more than 1.3 million 40-foot containers a year, based on capacity data provided in customer advisories.
The service cuts, coupled with cancellations of individual voyages, come as hulking container ship operators move to mitigate fallout from Trump's erratic trade policies.
Policy makers, economists, and business owners have become increasingly hungry for information on ocean trade, responsible for 80% of the world's commerce, because it is a gauge of global economic health.
"This is not the precursor, it is the proof of a drop in economic activity," Simon Sundboell, CEO of Danish maritime data provider eeSea, said of the container vessel capacity reductions now underway.
The route suspensions include scheduled weekly services operated by MSC, Zim and the Ocean Alliance that includes Cosco, Evergreen, CMA-CGM and Orient Overseas Container Line, Sundboell said.
Four of the service cuts affect West Coast ports, one impacts the East Coast and one hits the Gulf Coast, he said.
The container shipping companies culling those services either declined to comment or did not immediately respond.
Maersk and Hapag-Lloyd's Gemini Alliance have not suspended services - even though both partners experienced significant tariff-related China to U.S. booking cuts in April and have swapped out some ships for smaller vessels.
Representatives from the U.S. and China are meeting this weekend in Switzerland after more than two months of stalemate over trade.
BLANKETY BLANK
Global shipping companies use service suspensions and cancellations of individual voyages, known as blank sailings, to shelter profits by ensuring they do not have more ships on the water than are needed by customers.
That reduces unnecessary overhead costs and keeps supply and demand in balance, supporting competing off-contract spot rates.
Blank sailings increased significantly after the COVID pandemic upended global trade in 2020 - and are part of why global container ship operators have been enjoying record profits.
Major U.S. retailers like Amazon.com and Walmart, which account for nearly half of global container trade, responded to Trump's 145% tariffs on China last month by pausing or cancelling factory orders after those import duties more than doubled the cost of goods made in China.
Canceled, or blanked, individual voyages on the vital Transpacific route from Asia to North America surged from 9% in week ended March 30 to 24% in week ended May 4, maritime consultancy Drewry said in a podcast earlier this week.
Drewry's data shows blank sailings reduced capacity on the Asia to West Coast North America routes by 20% in April and 12% so far in May.
The cuts hit slightly harder on the North American East Coast, reducing 22% in April and 18% thus far in May, the consultancy said.
MSC, the world's largest container ship operator, in April canceled 30% of its scheduled Transpacific voyages - more than any other container carrier, said Daniela Ghimp, project manager for ocean freight rate benchmarking at Drewry.
The Premier Alliance, composed of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming Marine Transportation, leads so far in May with a 20% blank sailing rate, Ghimp said.
ONE declined comment, while HMM and Yang Ming did not immediately respond.
The full effect of Trump's tariffs will likely be delayed until July, when overall U.S. container import volume could be down 25% or more from the year earlier, said John McCown, senior fellow at the Center for Maritime Strategy.
"Something's gotta give, and I believe either considerably more capacity will have to be culled, or spot rates will start to crash," said Alan Murphy, CEO of supply chain adviser Sea-Intelligence.
Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy
https://www.reuters.com/world/china/con ... 025-05-09/
"Container shipping firms cull Asia-US service as Trump tariffs collapse trade"
By Lisa Baertlein
May 9, 2025
Summary
* Scheduled weekly service withdrawals show impact of US trade policies
* MSC, COSCO and others deploy fewer ships from China to US
* Container ship operators also cancelling individual voyages
LOS ANGELES, May 9 (Reuters) - Major container shipping companies are suspending at least six scheduled weekly routes between China and the United States as President Donald Trump's punishing tariffs on the world's top exporting country collapse trade, maritime consultants said.
The ships on those routes have the combined capacity to deliver 25,682 40-foot containers stuffed with toys, tennis shoes, car parts and things U.S. manufacturers use to produce goods each week - or more than 1.3 million 40-foot containers a year, based on capacity data provided in customer advisories.
The service cuts, coupled with cancellations of individual voyages, come as hulking container ship operators move to mitigate fallout from Trump's erratic trade policies.
Policy makers, economists, and business owners have become increasingly hungry for information on ocean trade, responsible for 80% of the world's commerce, because it is a gauge of global economic health.
"This is not the precursor, it is the proof of a drop in economic activity," Simon Sundboell, CEO of Danish maritime data provider eeSea, said of the container vessel capacity reductions now underway.
The route suspensions include scheduled weekly services operated by MSC, Zim and the Ocean Alliance that includes Cosco, Evergreen, CMA-CGM and Orient Overseas Container Line, Sundboell said.
Four of the service cuts affect West Coast ports, one impacts the East Coast and one hits the Gulf Coast, he said.
The container shipping companies culling those services either declined to comment or did not immediately respond.
Maersk and Hapag-Lloyd's Gemini Alliance have not suspended services - even though both partners experienced significant tariff-related China to U.S. booking cuts in April and have swapped out some ships for smaller vessels.
Representatives from the U.S. and China are meeting this weekend in Switzerland after more than two months of stalemate over trade.
BLANKETY BLANK
Global shipping companies use service suspensions and cancellations of individual voyages, known as blank sailings, to shelter profits by ensuring they do not have more ships on the water than are needed by customers.
That reduces unnecessary overhead costs and keeps supply and demand in balance, supporting competing off-contract spot rates.
Blank sailings increased significantly after the COVID pandemic upended global trade in 2020 - and are part of why global container ship operators have been enjoying record profits.
Major U.S. retailers like Amazon.com and Walmart, which account for nearly half of global container trade, responded to Trump's 145% tariffs on China last month by pausing or cancelling factory orders after those import duties more than doubled the cost of goods made in China.
Canceled, or blanked, individual voyages on the vital Transpacific route from Asia to North America surged from 9% in week ended March 30 to 24% in week ended May 4, maritime consultancy Drewry said in a podcast earlier this week.
Drewry's data shows blank sailings reduced capacity on the Asia to West Coast North America routes by 20% in April and 12% so far in May.
The cuts hit slightly harder on the North American East Coast, reducing 22% in April and 18% thus far in May, the consultancy said.
MSC, the world's largest container ship operator, in April canceled 30% of its scheduled Transpacific voyages - more than any other container carrier, said Daniela Ghimp, project manager for ocean freight rate benchmarking at Drewry.
The Premier Alliance, composed of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming Marine Transportation, leads so far in May with a 20% blank sailing rate, Ghimp said.
ONE declined comment, while HMM and Yang Ming did not immediately respond.
The full effect of Trump's tariffs will likely be delayed until July, when overall U.S. container import volume could be down 25% or more from the year earlier, said John McCown, senior fellow at the Center for Maritime Strategy.
"Something's gotta give, and I believe either considerably more capacity will have to be culled, or spot rates will start to crash," said Alan Murphy, CEO of supply chain adviser Sea-Intelligence.
Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy
https://www.reuters.com/world/china/con ... 025-05-09/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"Trump to sign order discouraging criminal enforcement of regulatory offenses"
By Jeff Mason and Jody Godoy
May 9, 2025
WASHINGTON, May 9 (Reuters) - President Donald Trump plans to sign an executive order discouraging criminal enforcement of regulatory offenses, in a bid to combat the overcriminalization of federal regulations, a White House official told Reuters on Friday.
Trump's order is meant to ease the burden on small businesses that do not have the same compliance resources as large corporations, according to a draft the official shared.
The executive order would have agencies publicly post a list of regulatory violations that can trigger criminal charges, and guidance on the circumstances under which they would refer violators for prosecution.
The order would discourage prosecutors from filing charges not on the lists, and charges that do not require prosecutors to prove the defendant had criminal intent.
One such law has been used to prosecute executives for misbranded or adulterated food and drugs.
The order would not apply to immigration or national security.
The reach of federal criminal statutes has long been a target of criticism for some conservatives and business groups.
Reporting by Jody Godoy in New York and Jeff Mason in Washington; Editing by Leslie Adler and Chizu Nomiyama
https://www.reuters.com/world/us/trump- ... 025-05-09/
"Trump to sign order discouraging criminal enforcement of regulatory offenses"
By Jeff Mason and Jody Godoy
May 9, 2025
WASHINGTON, May 9 (Reuters) - President Donald Trump plans to sign an executive order discouraging criminal enforcement of regulatory offenses, in a bid to combat the overcriminalization of federal regulations, a White House official told Reuters on Friday.
Trump's order is meant to ease the burden on small businesses that do not have the same compliance resources as large corporations, according to a draft the official shared.
The executive order would have agencies publicly post a list of regulatory violations that can trigger criminal charges, and guidance on the circumstances under which they would refer violators for prosecution.
The order would discourage prosecutors from filing charges not on the lists, and charges that do not require prosecutors to prove the defendant had criminal intent.
One such law has been used to prosecute executives for misbranded or adulterated food and drugs.
The order would not apply to immigration or national security.
The reach of federal criminal statutes has long been a target of criticism for some conservatives and business groups.
Reporting by Jody Godoy in New York and Jeff Mason in Washington; Editing by Leslie Adler and Chizu Nomiyama
https://www.reuters.com/world/us/trump- ... 025-05-09/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"US oil and gas rig count falls to lowest since January, Baker Hughes says"
By Scott Disavino
May 9, 2025
Summary
* Total rig count falls six to 578, oil down five, gas steady Gulf of Mexico rig count drops to lowest since September 2021
* Permian shale rig count hits lowest since December 2021
May 9 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by six to 578 in the week to May 9.
Baker Hughes said this week's decline puts the total rig count down 25, or 4% below this time last year.
Baker Hughes said oil rigs fell by five to 474 this week, their lowest since January, while gas rigs were unchanged at 101.
In the Gulf of Mexico, drillers cut three rigs, bringing the total count down to nine, the lowest since September 2021.
In the Denver-Julesburg (DJ)-Niobrara shale in Colorado and Wyoming, Nebraska and Kansas, drillers cut one rig, reducing the count to 5, the lowest since January 2021.
In the Permian shale in West Texas and eastern New Mexico, the nation's biggest oil-producing shale basin, drillers cut two rigs, leaving 285 rigs, the lowest since December 2021.
In New Mexico, drillers cut four rigs, bringing the total down to 96, the lowest since April 2022.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
Even though analysts forecast oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) this week projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
That increase in production, however, was lower than the EIA's outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.
On the gas side, the EIA projected an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projected gas output would rise to 104.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
Oil and gas drilling permit applications in Texas, the top U.S. oil-producing state, hit a four-year low in April amid concerns that rising OPEC+ supplies and a trade war will continue to hit crude prices, consultancy Enverus said on Thursday.
Operators in Texas submitted 570 new drilling permit applications in April, down from 795 in March and the lowest number since February 2021, according to Enverus.
Shale producer Diamondback said on Monday it will drop three rigs in the second quarter, and could reduce activity further if oil prices fall more.
Rival Coterra Energy is reducing its 2025 Permian activity by three rigs, while producer Matador Resources is dropping one drilling rig by the middle of 2025.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 025-05-09/
"US oil and gas rig count falls to lowest since January, Baker Hughes says"
By Scott Disavino
May 9, 2025
Summary
* Total rig count falls six to 578, oil down five, gas steady Gulf of Mexico rig count drops to lowest since September 2021
* Permian shale rig count hits lowest since December 2021
May 9 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by six to 578 in the week to May 9.
Baker Hughes said this week's decline puts the total rig count down 25, or 4% below this time last year.
Baker Hughes said oil rigs fell by five to 474 this week, their lowest since January, while gas rigs were unchanged at 101.
In the Gulf of Mexico, drillers cut three rigs, bringing the total count down to nine, the lowest since September 2021.
In the Denver-Julesburg (DJ)-Niobrara shale in Colorado and Wyoming, Nebraska and Kansas, drillers cut one rig, reducing the count to 5, the lowest since January 2021.
In the Permian shale in West Texas and eastern New Mexico, the nation's biggest oil-producing shale basin, drillers cut two rigs, leaving 285 rigs, the lowest since December 2021.
In New Mexico, drillers cut four rigs, bringing the total down to 96, the lowest since April 2022.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
Even though analysts forecast oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) this week projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
That increase in production, however, was lower than the EIA's outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.
On the gas side, the EIA projected an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projected gas output would rise to 104.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
Oil and gas drilling permit applications in Texas, the top U.S. oil-producing state, hit a four-year low in April amid concerns that rising OPEC+ supplies and a trade war will continue to hit crude prices, consultancy Enverus said on Thursday.
Operators in Texas submitted 570 new drilling permit applications in April, down from 795 in March and the lowest number since February 2021, according to Enverus.
Shale producer Diamondback said on Monday it will drop three rigs in the second quarter, and could reduce activity further if oil prices fall more.
Rival Coterra Energy is reducing its 2025 Permian activity by three rigs, while producer Matador Resources is dropping one drilling rig by the middle of 2025.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 025-05-09/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"US oilfield giants brace for tough times as price slide rattles producers"
By Arunima Kumar
May 9, 2025
Summary
* Top oilfield service firms warn of slower 2025 activity
* Tariffs raising costs, adding pressure on service margins
* SLB, Halliburton, Baker Hughes cite weaker North America outlook
* Oil producers cutting back drilling activity
May 9 (Reuters) - Top U.S. oilfield service firms have signaled a challenging period ahead as a recent slide in oil prices pushes producers to temper their drilling activity and rethink their budgets.
SLB, Halliburton, and Baker Hughes all flagged cautious customer spending in their first-quarter reports, citing a lack of visibility, especially in North America.
Higher output from the OPEC+ grouping and a global tariff war that has raised demand concerns drove crude prices to near $55 a barrel this month, from around $78 just before U.S. President Donald Trump assumed office in January.
"With oil prices falling out of the well-defined range that had persisted for much of the past 2+ years, producer budgets are encountering meaningful strain for the first time in several years," said Raymond James analysts.
Many producers have warned that drilling becomes unprofitable below $65 per barrel.
Brent crude was trading around $63 on Friday.
Diamondback Energy trimmed its 2025 capital budget by $400 million and said it would drill and complete fewer wells, while Coterra Energy said it would cut its Permian rig count by 30% in the second half of the year.
The cuts by the independent producers could potentially affect the service firms that supply them with rigs, crews, and equipment.
Halliburton CEO Jeff Miller said customers were reviewing 2025 plans, which could lead to more idle time for fleets and, in some cases, sending equipment overseas or into retirement.
Analysts at Jefferies said while delays in North American activity have now stretched into the second quarter, international projects are facing slowdowns.
SLB flagged slow starts in Mexico and Saudi Arabia, and now expects global upstream investment to decline in 2025.
Baker Hughes forecast a low double-digit drop in North American spending and mid-to-high single-digit cuts internationally.
Tariffs are also adding fresh uncertainty, including driving up equipment costs.
Halliburton forecast a 2-cents-to-3-cents per share impact in the second quarter from the trade tensions, while Baker Hughes warned of a $100 million to $200 million hit to 2025 EBITDA if tariffs stay in place.
Meanwhile, all three companies are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades, and data center-driven power demand to weather a slower, more uneven recovery.
Baker Hughes expects to book at least $1.5 billion of orders in data-center equipment over the next three years.
"We're really not seeing customers pull back from LNG, gas infrastructure or the data-center projects," said CEO Lorenzo Simonelli.
Reporting by Arunima Kumar in Bengaluru; Editing by Arpan Varghese and Sriraj Kalluvila
https://www.reuters.com/business/energy ... 025-05-09/
"US oilfield giants brace for tough times as price slide rattles producers"
By Arunima Kumar
May 9, 2025
Summary
* Top oilfield service firms warn of slower 2025 activity
* Tariffs raising costs, adding pressure on service margins
* SLB, Halliburton, Baker Hughes cite weaker North America outlook
* Oil producers cutting back drilling activity
May 9 (Reuters) - Top U.S. oilfield service firms have signaled a challenging period ahead as a recent slide in oil prices pushes producers to temper their drilling activity and rethink their budgets.
SLB, Halliburton, and Baker Hughes all flagged cautious customer spending in their first-quarter reports, citing a lack of visibility, especially in North America.
Higher output from the OPEC+ grouping and a global tariff war that has raised demand concerns drove crude prices to near $55 a barrel this month, from around $78 just before U.S. President Donald Trump assumed office in January.
"With oil prices falling out of the well-defined range that had persisted for much of the past 2+ years, producer budgets are encountering meaningful strain for the first time in several years," said Raymond James analysts.
Many producers have warned that drilling becomes unprofitable below $65 per barrel.
Brent crude was trading around $63 on Friday.
Diamondback Energy trimmed its 2025 capital budget by $400 million and said it would drill and complete fewer wells, while Coterra Energy said it would cut its Permian rig count by 30% in the second half of the year.
The cuts by the independent producers could potentially affect the service firms that supply them with rigs, crews, and equipment.
Halliburton CEO Jeff Miller said customers were reviewing 2025 plans, which could lead to more idle time for fleets and, in some cases, sending equipment overseas or into retirement.
Analysts at Jefferies said while delays in North American activity have now stretched into the second quarter, international projects are facing slowdowns.
SLB flagged slow starts in Mexico and Saudi Arabia, and now expects global upstream investment to decline in 2025.
Baker Hughes forecast a low double-digit drop in North American spending and mid-to-high single-digit cuts internationally.
Tariffs are also adding fresh uncertainty, including driving up equipment costs.
Halliburton forecast a 2-cents-to-3-cents per share impact in the second quarter from the trade tensions, while Baker Hughes warned of a $100 million to $200 million hit to 2025 EBITDA if tariffs stay in place.
Meanwhile, all three companies are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades, and data center-driven power demand to weather a slower, more uneven recovery.
Baker Hughes expects to book at least $1.5 billion of orders in data-center equipment over the next three years.
"We're really not seeing customers pull back from LNG, gas infrastructure or the data-center projects," said CEO Lorenzo Simonelli.
Reporting by Arunima Kumar in Bengaluru; Editing by Arpan Varghese and Sriraj Kalluvila
https://www.reuters.com/business/energy ... 025-05-09/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"Fed's independent structure has proved its worth, Waller says"
By Howard Schneider
May 9, 2025
PALO ALTO, California, May 9 (Reuters) - The structure of the Federal Reserve's Board of Governors, with members who cannot be fired over policy disputes and serve for periods staggered across presidential terms, has "stood the test of time" and should be preserved, Fed Governor Christopher Waller said on Friday.
Waller, citing earlier research of his own and others, said the U.S. central bank's system provides electoral accountability by letting every U.S. president who serves a four-year term appoint some members of the seven-person Board of Governors, while the lengthy terms of up to 14 years allow objective, non-partisan policymaking.
That setup is more likely to produce better policy outcomes, with lower inflation and less economic volatility.
Economic stability is "enhanced by having a group of individuals set policy who could not be removed from office," said Waller, a former research director at the St. Louis Fed who was appointed as a Fed governor during President Donald Trump's first term in the White House.
"This structure is the one that we have in place today at the Federal Reserve," Waller told a monetary policy conference at Stanford University's Hoover Institution.
"I would argue that it has stood the test of time, and I hope that it continues to be in place for years to come."
His comments follow what seemed to be threats by Trump earlier this year to try to fire Fed Chair Jerome Powell, though the president has since backed down.
The Fed is closely monitoring a case before the U.S. Supreme Court to see if Trump is allowed to fire officials at other independent agencies.
Waller did not comment on monetary policy or the economic outlook in his prepared remarks.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/world/us/feds-i ... 025-05-09/
"Fed's independent structure has proved its worth, Waller says"
By Howard Schneider
May 9, 2025
PALO ALTO, California, May 9 (Reuters) - The structure of the Federal Reserve's Board of Governors, with members who cannot be fired over policy disputes and serve for periods staggered across presidential terms, has "stood the test of time" and should be preserved, Fed Governor Christopher Waller said on Friday.
Waller, citing earlier research of his own and others, said the U.S. central bank's system provides electoral accountability by letting every U.S. president who serves a four-year term appoint some members of the seven-person Board of Governors, while the lengthy terms of up to 14 years allow objective, non-partisan policymaking.
That setup is more likely to produce better policy outcomes, with lower inflation and less economic volatility.
Economic stability is "enhanced by having a group of individuals set policy who could not be removed from office," said Waller, a former research director at the St. Louis Fed who was appointed as a Fed governor during President Donald Trump's first term in the White House.
"This structure is the one that we have in place today at the Federal Reserve," Waller told a monetary policy conference at Stanford University's Hoover Institution.
"I would argue that it has stood the test of time, and I hope that it continues to be in place for years to come."
His comments follow what seemed to be threats by Trump earlier this year to try to fire Fed Chair Jerome Powell, though the president has since backed down.
The Fed is closely monitoring a case before the U.S. Supreme Court to see if Trump is allowed to fire officials at other independent agencies.
Waller did not comment on monetary policy or the economic outlook in his prepared remarks.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/world/us/feds-i ... 025-05-09/
Re: THE MAGA-MAN DONALD TRUMP
CNBC
"Tariff receipts topped $16 billion in April, a record that helped cut the budget deficit"
Jeff Cox @jeff.cox.7528 @JeffCoxCNBCcom
Published Mon, May 12 2025
Key Points
* Customs duties totaled $16.3 billion for the month, some 86% above the $8.75 billion collected during March and more than double the $7.1 billion a year ago.
* The fiscal year-to-date deficit fell to $1.05 trillion, which is still 13% higher than a year ago.
Receipts from U.S. tariffs hit a record level in April as revenue from President Donald Trump’s trade war started kicking in.
Customs duties totaled $16.3 billion for the month, some 86% above the $8.75 billion collected during March and more than double the $7.1 billion a year ago, the Treasury Department reported Monday.
That brought the year-to-date total for the duties up to $63.3 billion and more than 18% ahead of the same period in 2024.
Trump instituted 10% across-the-board tariffs on U.S. imports starting April 2, which came on top of other select duties he had leveled previously.
While the U.S. is still running a massive budget deficit, the influx in tariffs helped shave some of the imbalance for April, a month in which the Treasury generally runs a surplus because of the income tax filing deadline hitting mid-month.
The surplus totaled $258.4 billion for the month, up 23% from the same period a year ago.
That cut the fiscal year-to-date total to $1.05 trillion, which is still 13% higher than a year ago.
Also on an annual basis, receipts rose 10% in April from 2024, while outlays declined 4%.
Year to date, receipts are up 5%, while expenditures have risen 9%.
High interest rates are still posing a budgetary burden.
Net interest on the $36.2 trillion national debt totaled $89 billion in April, higher than every other category except Social Security.
For the fiscal year, net interest has run to $579 billion, also second highest of any outlay.
https://www.cnbc.com/2025/05/12/tariff- ... ficit.html
"Tariff receipts topped $16 billion in April, a record that helped cut the budget deficit"
Jeff Cox @jeff.cox.7528 @JeffCoxCNBCcom
Published Mon, May 12 2025
Key Points
* Customs duties totaled $16.3 billion for the month, some 86% above the $8.75 billion collected during March and more than double the $7.1 billion a year ago.
* The fiscal year-to-date deficit fell to $1.05 trillion, which is still 13% higher than a year ago.
Receipts from U.S. tariffs hit a record level in April as revenue from President Donald Trump’s trade war started kicking in.
Customs duties totaled $16.3 billion for the month, some 86% above the $8.75 billion collected during March and more than double the $7.1 billion a year ago, the Treasury Department reported Monday.
That brought the year-to-date total for the duties up to $63.3 billion and more than 18% ahead of the same period in 2024.
Trump instituted 10% across-the-board tariffs on U.S. imports starting April 2, which came on top of other select duties he had leveled previously.
While the U.S. is still running a massive budget deficit, the influx in tariffs helped shave some of the imbalance for April, a month in which the Treasury generally runs a surplus because of the income tax filing deadline hitting mid-month.
The surplus totaled $258.4 billion for the month, up 23% from the same period a year ago.
That cut the fiscal year-to-date total to $1.05 trillion, which is still 13% higher than a year ago.
Also on an annual basis, receipts rose 10% in April from 2024, while outlays declined 4%.
Year to date, receipts are up 5%, while expenditures have risen 9%.
High interest rates are still posing a budgetary burden.
Net interest on the $36.2 trillion national debt totaled $89 billion in April, higher than every other category except Social Security.
For the fiscal year, net interest has run to $579 billion, also second highest of any outlay.
https://www.cnbc.com/2025/05/12/tariff- ... ficit.html
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"Trump signs executive order to demand pharma industry cuts prices"
By Steve Holland, Michael Erman and Patrick Wingrove
May 12, 2025
Summary
* Trump tells drugmakers to cut prices to 'most favored nation' pricing
* Pharmaceutical shares rise as analysts question how it can be implemented
* Order calls for FTC to look for anti-competitive pricing
WASHINGTON, May 12 (Reuters) - U.S. President Donald Trump signed a wide-reaching executive order on Monday directing drugmakers to lower the prices of their medicines to align with what other countries pay that analysts and legal experts said would be difficult to implement.
The order gives drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make "significant progress" towards those goals within six months of the order being signed.
Trump told a press conference that the government would impose tariffs on companies if the prices in the U.S. did not match those in other countries and said he was seeking cuts of between 59% and 90%.
"Everybody should equalize."
"Everybody should pay the same price," Trump said.
Investors were skeptical about the order's implementation, and shares, which had been down overnight on the threat of "most favored nation" pricing, recovered and rose in early morning trade on Monday.
The United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations.
Trump tried in his first term to bring the United States in line with other countries but was blocked by the courts.
Trump's drug pricing proposal comes as the president has sought to fulfill a campaign promise of tackling inflation and lowering prices for a host of everyday items for Americans, from eggs to the gas pump.
Trump said his order on drug prices was partly a result of a conversation with an unnamed friend who told the president he got a weight loss injection for $88 in London and that the same injection in the U.S. cost $1,300.
If drugmakers do not meet the government’s expectations, it will use rulemaking to bring drug prices to international levels and consider a range of other measures, including importing medicines from other developed nations and implementing export restrictions, a copy of the order showed.
Trade groups representing biotech and pharmaceutical decried the move.
"Importing foreign prices from socialist countries would be a bad deal for American patients and workers."
"It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America," PhRMA CEO Stephen Ubl said in a statement.
Ubl said the real reasons for high drug prices are "foreign countries not paying their fair share and middlemen driving up prices for U.S. patients."
The order also directs the U.S. Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers.
"We're all familiar with some of the places where pharmaceutical companies push the limits to prevent competition that would lower their prices," one White House official said, pointing to patent protections and deals drugmakers make with generic companies to hold off on cheaper copies.
The executive order is likely to face legal challenges, particularly for exceeding limits set by U.S. law, including on imports of drugs from abroad, said health policy lawyer Paul Kim.
"The order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows," Kim said.
The FTC has a long history of antitrust enforcement actions against pharmaceutical and other healthcare companies.
Trump last month ordered the FTC to coordinate with other federal agencies to hold listening sessions on anticompetitive practices in the drug industry.
On Monday, he was expected to ask the FTC to consider taking enforcement action, sources said.
"President Donald Trump campaigned on lowering drug costs and today he’s doing just that."
"Americans are tired of getting ripped off."
"The Federal Trade Commission will be a proud partner in this new effort," said FTC spokesperson Joe Simonson.
Shares of major drugmakers, after initially falling during premarket trading, rallied on Monday, despite the wide-ranging order.
Shares of Merck rose 5.2%, while Pfizer gained 3.2% and Gilead Sciences was up 6.7%.
Eli Lilly, the world's largest drugmaker by market value, rose 2.4%.
The executive order differed from what drugmakers had been expecting.
Four lobbyist sources told Reuters they were expecting an executive order that called for "most favored nation" pricing on a subset of Medicare drugs.
"Implementing something like this is pretty challenging."
"He tried to do this before and it was stopped by the courts," said Evan Seigerman, analyst at BMO Capital Markets.
The White House officials did not specify any targets.
Trump's order also directs the government to consider facilitating direct-to-consumer purchasing programs that would sell drugs at the prices other countries pay.
It also orders the Secretary of Commerce and other agency heads to review and consider actions regarding the export of pharmaceutical drugs or ingredients that may contribute to price differences.
The Commerce Department did not immediately respond to a request for comment.
Reporting by Patrick Wingrove and Michael Erman in New York; Steve Holland, Susan Heavey and Jarrett Renshaw in Washington D.C., Additional reporting by Jody Godoy and Karen Freifeld in New York and Maggie Fick in London; Editing by Caroline Humer, Mark Porter and Alistair Bell
https://www.reuters.com/business/health ... 025-05-12/
"Trump signs executive order to demand pharma industry cuts prices"
By Steve Holland, Michael Erman and Patrick Wingrove
May 12, 2025
Summary
* Trump tells drugmakers to cut prices to 'most favored nation' pricing
* Pharmaceutical shares rise as analysts question how it can be implemented
* Order calls for FTC to look for anti-competitive pricing
WASHINGTON, May 12 (Reuters) - U.S. President Donald Trump signed a wide-reaching executive order on Monday directing drugmakers to lower the prices of their medicines to align with what other countries pay that analysts and legal experts said would be difficult to implement.
The order gives drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make "significant progress" towards those goals within six months of the order being signed.
Trump told a press conference that the government would impose tariffs on companies if the prices in the U.S. did not match those in other countries and said he was seeking cuts of between 59% and 90%.
"Everybody should equalize."
"Everybody should pay the same price," Trump said.
Investors were skeptical about the order's implementation, and shares, which had been down overnight on the threat of "most favored nation" pricing, recovered and rose in early morning trade on Monday.
The United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations.
Trump tried in his first term to bring the United States in line with other countries but was blocked by the courts.
Trump's drug pricing proposal comes as the president has sought to fulfill a campaign promise of tackling inflation and lowering prices for a host of everyday items for Americans, from eggs to the gas pump.
Trump said his order on drug prices was partly a result of a conversation with an unnamed friend who told the president he got a weight loss injection for $88 in London and that the same injection in the U.S. cost $1,300.
If drugmakers do not meet the government’s expectations, it will use rulemaking to bring drug prices to international levels and consider a range of other measures, including importing medicines from other developed nations and implementing export restrictions, a copy of the order showed.
Trade groups representing biotech and pharmaceutical decried the move.
"Importing foreign prices from socialist countries would be a bad deal for American patients and workers."
"It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America," PhRMA CEO Stephen Ubl said in a statement.
Ubl said the real reasons for high drug prices are "foreign countries not paying their fair share and middlemen driving up prices for U.S. patients."
The order also directs the U.S. Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers.
"We're all familiar with some of the places where pharmaceutical companies push the limits to prevent competition that would lower their prices," one White House official said, pointing to patent protections and deals drugmakers make with generic companies to hold off on cheaper copies.
The executive order is likely to face legal challenges, particularly for exceeding limits set by U.S. law, including on imports of drugs from abroad, said health policy lawyer Paul Kim.
"The order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows," Kim said.
The FTC has a long history of antitrust enforcement actions against pharmaceutical and other healthcare companies.
Trump last month ordered the FTC to coordinate with other federal agencies to hold listening sessions on anticompetitive practices in the drug industry.
On Monday, he was expected to ask the FTC to consider taking enforcement action, sources said.
"President Donald Trump campaigned on lowering drug costs and today he’s doing just that."
"Americans are tired of getting ripped off."
"The Federal Trade Commission will be a proud partner in this new effort," said FTC spokesperson Joe Simonson.
Shares of major drugmakers, after initially falling during premarket trading, rallied on Monday, despite the wide-ranging order.
Shares of Merck rose 5.2%, while Pfizer gained 3.2% and Gilead Sciences was up 6.7%.
Eli Lilly, the world's largest drugmaker by market value, rose 2.4%.
The executive order differed from what drugmakers had been expecting.
Four lobbyist sources told Reuters they were expecting an executive order that called for "most favored nation" pricing on a subset of Medicare drugs.
"Implementing something like this is pretty challenging."
"He tried to do this before and it was stopped by the courts," said Evan Seigerman, analyst at BMO Capital Markets.
The White House officials did not specify any targets.
Trump's order also directs the government to consider facilitating direct-to-consumer purchasing programs that would sell drugs at the prices other countries pay.
It also orders the Secretary of Commerce and other agency heads to review and consider actions regarding the export of pharmaceutical drugs or ingredients that may contribute to price differences.
The Commerce Department did not immediately respond to a request for comment.
Reporting by Patrick Wingrove and Michael Erman in New York; Steve Holland, Susan Heavey and Jarrett Renshaw in Washington D.C., Additional reporting by Jody Godoy and Karen Freifeld in New York and Maggie Fick in London; Editing by Caroline Humer, Mark Porter and Alistair Bell
https://www.reuters.com/business/health ... 025-05-12/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
"Insight: This US-owned factory in China made toys for Walmart. Tariffs put it on life support"
By Nicholas P. Brown
May 12, 2025
Summary
* For a US-owned toy factory in China, tariffs are an existential threat
* The US and China agreed to lower tariffs for 90 days on Monday
* Huntar Company CEO says any tariff over 50% would make survival difficult
May 12 (Reuters) - The emails started pouring in on April 9, the day President Donald Trump’s 145% tariff on Chinese imports took effect.
Clients were canceling orders for toys from Huntar Company’s factory in Guangdong Province, China.
But Huntar CEO Jason Cheung, 45, had already halted production at the 600,000-square-foot facility in Shaoguan.
He saw the tariff for what it was: an existential threat to his company, which manufactures educational toys bound for the shelves of Walmart and Target, like Learning Resources Inc's Numberblocks, which help teach kids math.
“I needed to start saving money as soon as possible,” Cheung said.
In the four weeks since, he has cut production by 60% to 70%, laid off a third of the factory’s 400 Chinese workers, and reduced hours and wages to those still employed.
Now, he’s pursuing a frantic, long-shot effort to move his operation to Vietnam before the company his dad founded 42 years ago runs out of money.
He figures he has about a month.
Huntar’s plight typifies a crisis facing countless factories in China, where about 80% of toys sold in the U.S. are manufactured, according to trade group The Toy Association.
New orders have fallen sharply amid a brutal trade war with the United States that threatens to devastate the sector in both countries.
Huntar is also unique in one key way: based in the U.S., it straddles both sides of the trade war.
On paper, Cheung is Trump’s bogeyman, the Chinese factory owner taking American jobs.
But he’s also the U.S. small business owner tariffs were meant to protect.
He's the American son of a Chinese immigrant, running a second-generation family-owned business that employs 15 people in the U.S. - people who would lose their jobs if Huntar falters.
Trump has said tariffs will incentivize companies to reshore manufacturing, or, at least, drive it out of China.
Huntar illustrates why economists say that’s unlikely: a dearth of facilities and workers with toy making expertise in other countries; heavy equipment that’s hard to move and would cost millions of dollars to replace; and, most acutely, no time to solve those hurdles before coffers run dry.
More likely, factories like Cheung's will simply shut down, a prospect that drove Beijing to the negotiating table with U.S. officials in Geneva over the weekend, three sources familiar with the Chinese government's thinking told Reuters.
Realistically, China cannot replace U.S. market demand for product categories like toys, furniture, and textiles, which are already feeling the impact of tariffs, one of the officials said.
On Monday, after two days of talks, the U.S. and China said they would slash tariffs for 90 days.
The U.S. will cut tariffs imposed on Chinese imports to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two sides said Monday.
Cheung says any tariff rate over 50% would make survival difficult for Huntar.
Crises have hit Huntar before, Cheung says, but not like this.
The 2008 recession brought a steady slowdown, one he could plan around.
And the COVID pandemic dealt a blow, but his volume of production remained high enough to keep him afloat through a temporary slump.
This time, he says, “our manufacturing business essentially halted overnight.”
Cheung is starting to feel like his only hope is just that - hope.
“I refresh my ‘tariff’ Google search five or six times a day, hoping something's changed,” he says.
A DREAM AND A LUCKY DESK
Huntar manufactures toys for U.S., Canadian and European sellers, like Learning Resources Inc and Play-a-Maze, which distribute them to retailers or sell directly to consumers.
It also makes its own educational toys under its Popular Playthings brand, which it has had to stop shipping to the U.S., costing the company hundreds of thousands of dollars so far, Cheung estimates.
American-owned factories in China are uncommon, as Chinese law makes it difficult and costly for foreign entities to own them, says attorney Dan Harris, a partner at Harris Sliwoski who focuses on international manufacturing law.
But Huntar has roots in a business Cheung’s father set up in 1983, a few years after escaping communist China and settling in California’s Bay Area.
Cheung grew up in San Francisco's Inner Richmond district, he says, in a small house whose broken door you could simply kick open.
His father would sell clothes and furniture at a flea market to augment his janitor’s wages, with Cheung tagging along, bored to tears.
As the operation matured, Cheung’s father set up a factory in China, to exert more control over quality.
Cheung, who joined the company in 2004, still uses the desk his father set up in their living room decades ago.
“We think maybe it’s lucky or something,” he says.
The last few weeks have been anything but lucky.
The factory is sitting on $750,000 in canceled shipments - value Cheung couldn't fully recover even if the trade war ended, because his shipping costs would surely spike as factories raced to clear backlogs.
That's what happened after COVID, Cheung recalls, when shipping costs ballooned from $2,000 per container to more than $20,000.
“They don’t deserve this,” said Rick Woldenberg, CEO of toy company Learning Resources, and a client of Cheung's since his father was in charge more than 20 years ago.
Woldenberg has canceled future production in China, saying his annual tariffs would jump from $2 million to $100 million.
“It’s not who we want to be,” Woldenberg said, “but they know we have no choice.”
According to an April survey by the Toy Association, more than 45% of small and mid-sized toy companies in the U.S. say China tariffs will put them out of business within weeks or months.
Learning Resources, which employs 500 people in the U.S. and manufactures 60% of its products in China, has sued the U.S. government, asking a federal judge to stop tariffs from taking effect.
"If nothing changes, we'll be crippled," Woldenberg said.
CANNIBALIZE MYSELF’
Cheung has been scouring his contact list, calling factories in Vietnam in hopes of finding a new home for Huntar.
Moving to the U.S. is out of the question.
Wages here are so high that manufacturing stateside would be even more expensive than staying in China and absorbing the tariffs, Cheung says.
Even in Vietnam, financial and logistical hurdles are proving too tall.
Few factories have enough space to handle his operation, and competition is high among others looking to move.
Even if he found a good spot, Cheung would have to train a new staff and run safety and quality control checks that could easily take months.
There’s also the question of infrastructure.
Cheung’s factory is solar-powered, helping ensure profitability in a thin-margin business.
It has specific HVAC and wastewater systems designed to negate the environmental risks of spray paint and chemicals used to decorate toys.
And it owns more than 30 injection machines, each weighing several tons, which craft toys by pumping molten plastic into steel casings.
These likely can’t be moved, and Cheung says he’s not sure where he’d find the money - well over $1 million - to buy new ones.
A more realistic move would be to outsource certain operations and shutter others.
Cheung could cut losses by finding a Vietnamese factory to take Huntar's Popular Playthings proprietary line, while ditching the business of manufacturing toys for third-party clients.
Going all-in - that is, keeping his factory intact in China in hopes the trade war is resolved - is a higher-risk, higher-reward gambit.
If tariffs came down quickly, his company would survive, but if they didn't, he'd lose everything.
The costs of keeping a large factory running, and paying employees, while producing just a fraction of his normal output, would sink him within several weeks, he says.
“I’m approaching this moment where I have to choose basically to cannibalize myself,” he says.
It’s hard to pare down a business that once embodied the American dream.
Cheung’s father came to the U.S. in 1978, after escaping China by swimming across the Shenzhen River into Hong Kong - all for a shot at freedom.
He “wanted to see this business continue through me and hopefully his grandkids,” Cheung says.
His dad, he says, is feeling hopeless these days.
Though grateful for the life he built here, America's sheen as a land of milk and honey has worn off.
"His idea of the U.S. has definitely changed," Cheung says.
Reporting by Nicholas P. Brown; Editing by Vanessa O'Connell and Michael Learmonth
https://www.reuters.com/world/china/thi ... 025-05-12/
"Insight: This US-owned factory in China made toys for Walmart. Tariffs put it on life support"
By Nicholas P. Brown
May 12, 2025
Summary
* For a US-owned toy factory in China, tariffs are an existential threat
* The US and China agreed to lower tariffs for 90 days on Monday
* Huntar Company CEO says any tariff over 50% would make survival difficult
May 12 (Reuters) - The emails started pouring in on April 9, the day President Donald Trump’s 145% tariff on Chinese imports took effect.
Clients were canceling orders for toys from Huntar Company’s factory in Guangdong Province, China.
But Huntar CEO Jason Cheung, 45, had already halted production at the 600,000-square-foot facility in Shaoguan.
He saw the tariff for what it was: an existential threat to his company, which manufactures educational toys bound for the shelves of Walmart and Target, like Learning Resources Inc's Numberblocks, which help teach kids math.
“I needed to start saving money as soon as possible,” Cheung said.
In the four weeks since, he has cut production by 60% to 70%, laid off a third of the factory’s 400 Chinese workers, and reduced hours and wages to those still employed.
Now, he’s pursuing a frantic, long-shot effort to move his operation to Vietnam before the company his dad founded 42 years ago runs out of money.
He figures he has about a month.
Huntar’s plight typifies a crisis facing countless factories in China, where about 80% of toys sold in the U.S. are manufactured, according to trade group The Toy Association.
New orders have fallen sharply amid a brutal trade war with the United States that threatens to devastate the sector in both countries.
Huntar is also unique in one key way: based in the U.S., it straddles both sides of the trade war.
On paper, Cheung is Trump’s bogeyman, the Chinese factory owner taking American jobs.
But he’s also the U.S. small business owner tariffs were meant to protect.
He's the American son of a Chinese immigrant, running a second-generation family-owned business that employs 15 people in the U.S. - people who would lose their jobs if Huntar falters.
Trump has said tariffs will incentivize companies to reshore manufacturing, or, at least, drive it out of China.
Huntar illustrates why economists say that’s unlikely: a dearth of facilities and workers with toy making expertise in other countries; heavy equipment that’s hard to move and would cost millions of dollars to replace; and, most acutely, no time to solve those hurdles before coffers run dry.
More likely, factories like Cheung's will simply shut down, a prospect that drove Beijing to the negotiating table with U.S. officials in Geneva over the weekend, three sources familiar with the Chinese government's thinking told Reuters.
Realistically, China cannot replace U.S. market demand for product categories like toys, furniture, and textiles, which are already feeling the impact of tariffs, one of the officials said.
On Monday, after two days of talks, the U.S. and China said they would slash tariffs for 90 days.
The U.S. will cut tariffs imposed on Chinese imports to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two sides said Monday.
Cheung says any tariff rate over 50% would make survival difficult for Huntar.
Crises have hit Huntar before, Cheung says, but not like this.
The 2008 recession brought a steady slowdown, one he could plan around.
And the COVID pandemic dealt a blow, but his volume of production remained high enough to keep him afloat through a temporary slump.
This time, he says, “our manufacturing business essentially halted overnight.”
Cheung is starting to feel like his only hope is just that - hope.
“I refresh my ‘tariff’ Google search five or six times a day, hoping something's changed,” he says.
A DREAM AND A LUCKY DESK
Huntar manufactures toys for U.S., Canadian and European sellers, like Learning Resources Inc and Play-a-Maze, which distribute them to retailers or sell directly to consumers.
It also makes its own educational toys under its Popular Playthings brand, which it has had to stop shipping to the U.S., costing the company hundreds of thousands of dollars so far, Cheung estimates.
American-owned factories in China are uncommon, as Chinese law makes it difficult and costly for foreign entities to own them, says attorney Dan Harris, a partner at Harris Sliwoski who focuses on international manufacturing law.
But Huntar has roots in a business Cheung’s father set up in 1983, a few years after escaping communist China and settling in California’s Bay Area.
Cheung grew up in San Francisco's Inner Richmond district, he says, in a small house whose broken door you could simply kick open.
His father would sell clothes and furniture at a flea market to augment his janitor’s wages, with Cheung tagging along, bored to tears.
As the operation matured, Cheung’s father set up a factory in China, to exert more control over quality.
Cheung, who joined the company in 2004, still uses the desk his father set up in their living room decades ago.
“We think maybe it’s lucky or something,” he says.
The last few weeks have been anything but lucky.
The factory is sitting on $750,000 in canceled shipments - value Cheung couldn't fully recover even if the trade war ended, because his shipping costs would surely spike as factories raced to clear backlogs.
That's what happened after COVID, Cheung recalls, when shipping costs ballooned from $2,000 per container to more than $20,000.
“They don’t deserve this,” said Rick Woldenberg, CEO of toy company Learning Resources, and a client of Cheung's since his father was in charge more than 20 years ago.
Woldenberg has canceled future production in China, saying his annual tariffs would jump from $2 million to $100 million.
“It’s not who we want to be,” Woldenberg said, “but they know we have no choice.”
According to an April survey by the Toy Association, more than 45% of small and mid-sized toy companies in the U.S. say China tariffs will put them out of business within weeks or months.
Learning Resources, which employs 500 people in the U.S. and manufactures 60% of its products in China, has sued the U.S. government, asking a federal judge to stop tariffs from taking effect.
"If nothing changes, we'll be crippled," Woldenberg said.
CANNIBALIZE MYSELF’
Cheung has been scouring his contact list, calling factories in Vietnam in hopes of finding a new home for Huntar.
Moving to the U.S. is out of the question.
Wages here are so high that manufacturing stateside would be even more expensive than staying in China and absorbing the tariffs, Cheung says.
Even in Vietnam, financial and logistical hurdles are proving too tall.
Few factories have enough space to handle his operation, and competition is high among others looking to move.
Even if he found a good spot, Cheung would have to train a new staff and run safety and quality control checks that could easily take months.
There’s also the question of infrastructure.
Cheung’s factory is solar-powered, helping ensure profitability in a thin-margin business.
It has specific HVAC and wastewater systems designed to negate the environmental risks of spray paint and chemicals used to decorate toys.
And it owns more than 30 injection machines, each weighing several tons, which craft toys by pumping molten plastic into steel casings.
These likely can’t be moved, and Cheung says he’s not sure where he’d find the money - well over $1 million - to buy new ones.
A more realistic move would be to outsource certain operations and shutter others.
Cheung could cut losses by finding a Vietnamese factory to take Huntar's Popular Playthings proprietary line, while ditching the business of manufacturing toys for third-party clients.
Going all-in - that is, keeping his factory intact in China in hopes the trade war is resolved - is a higher-risk, higher-reward gambit.
If tariffs came down quickly, his company would survive, but if they didn't, he'd lose everything.
The costs of keeping a large factory running, and paying employees, while producing just a fraction of his normal output, would sink him within several weeks, he says.
“I’m approaching this moment where I have to choose basically to cannibalize myself,” he says.
It’s hard to pare down a business that once embodied the American dream.
Cheung’s father came to the U.S. in 1978, after escaping China by swimming across the Shenzhen River into Hong Kong - all for a shot at freedom.
He “wanted to see this business continue through me and hopefully his grandkids,” Cheung says.
His dad, he says, is feeling hopeless these days.
Though grateful for the life he built here, America's sheen as a land of milk and honey has worn off.
"His idea of the U.S. has definitely changed," Cheung says.
Reporting by Nicholas P. Brown; Editing by Vanessa O'Connell and Michael Learmonth
https://www.reuters.com/world/china/thi ... 025-05-12/
Re: THE MAGA-MAN DONALD TRUMP
REUTERS
Trump calls on Fed to cut rates, saying prices of 'practically everything' are down"
By Reuters
May 13, 2025
May 13 (Reuters) - U.S. President Donald Trump on Tuesday repeated his call for the Federal Reserve to lower interest rates, saying prices for gas, groceries and "practically everything else" are down.
"No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!"
"THE FED must lower the RATE, like Europe and China have done," Trump said on Truth Social.
"What is wrong with Too Late Powell?"
"Not fair to America, which is ready to blossom?"
"Just let it all happen, it will be a beautiful thing!," Trump added, repeating criticism of Fed Chairman Jerome Powell.
Reporting by Ismail Shakil in Ottawa; editing by Rami Ayyub
https://www.reuters.com/world/us/trump- ... 025-05-13/
Trump calls on Fed to cut rates, saying prices of 'practically everything' are down"
By Reuters
May 13, 2025
May 13 (Reuters) - U.S. President Donald Trump on Tuesday repeated his call for the Federal Reserve to lower interest rates, saying prices for gas, groceries and "practically everything else" are down.
"No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!"
"THE FED must lower the RATE, like Europe and China have done," Trump said on Truth Social.
"What is wrong with Too Late Powell?"
"Not fair to America, which is ready to blossom?"
"Just let it all happen, it will be a beautiful thing!," Trump added, repeating criticism of Fed Chairman Jerome Powell.
Reporting by Ismail Shakil in Ottawa; editing by Rami Ayyub
https://www.reuters.com/world/us/trump- ... 025-05-13/