adplus-dvertising
Connect with us

Investment

Trump economist says 'uncertainty' from trade disputes hit business investment – Financial Post

Published

5 years ago

 on


WASHINGTON — A slowdown in U.S. growth last year was at least partly the fault of President Donald Trump’s global trade battles and the resulting hit to business investment, the administration’s top economist said on Thursday in an outlook for the coming years.

“Once we got renegotiation of trade agreements, we saw uncertainty in the market, and investment took a hit,” Tomas Philipson, acting chair of the Council of Economic Advisers, said in a briefing with reporters about the CEA’s annual Economic Report of the President.

Philipson said the CEA had only done internal estimates of the impact but referred journalists to a Federal Reserve study https://www.federalreserve.gov/econres/notes/feds-notes/does-trade-policy-uncertainty-affect-global-economic-activity-20190904.htm that said trade uncertainty may have reduced growth in U.S. and world gross domestic products by as much as 1%.

Trump has blamed the Fed as the economy slowed from a 2.9% annualized growth rate in 2018 to 2.3% last year, and the central bank did trim rates three times to boost the economy.

But policymakers cited trade-related risks as a chief reason for the rate cuts. Philipson agreed with Trump that it was necessary to confront China on trade but said it did cause short-term disruption.

“I don’t know if we fully agree on the quantitative point, but on the qualitative we certainly agree … It is well known, if we have uncertainty, investment takes a hit,” Philipson said.

It was a rare public acknowledgement from the administration of the costs of a trade war characterized as largely beneficial to the U.S. economy despite lingering questions about who pays the price of higher tariffs, whether global supply chains will be reorganized to the U.S. economy’s benefit and even whether China will deliver on commitments made under a Phase 1 trade deal.

Philipson said he expects investment to rebound this year “if uncertainty settles down, which we hope it will.”

The CEA report, an annual exercise that is one part review of events and one part aspirational statement, outlined what will likely prove key talking points for Trump’s reelection campaign: The economy now is doing better than it did under President Barack Obama; it only started doing better under Trump and is poised to thrive even more if Trump administration proposals are enacted.

Those conclusions are likely to get pushback from Democrats who note that the jobs recovery, for example, began under Obama and accelerated in his second term.

A rise in the net worth of the poorest half of Americans, cited in the report and in Trump’s recent State of the Union speech, has been largely driven by a rise in home ownership and home values that began late in Obama’s term.

The CEA report projected economic growth this year will hit 3.1% and continue at 3% annually through 2024, as long as a full suite of suggested reforms are enacted including trade deals, an infrastructure plan and immigration rules that would favor more skilled workers.

Those changes, the CEA contends, would boost the annual increase in labor productivity from below 2 percent annually to 2.6 percent, a rate more akin to the high-growth 1990s than the more tepid growth of recent years.

Fed policymakers, whose forecasts do not take into account any of the administration’s policy proposals, see the economy growing around 2% this year, with even the most optimistic seeing growth at no more than 2.3%, unchanged from last year’s pace. (Reporting by Howard Schneider; Editing by Dan Burns and Cynthia Osterman)

Let’s block ads! (Why?)

728x90x4

Source link

Related Topics:
Continue Reading

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

6 days ago

 on

November 6, 2024

By

 

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

 on

October 16, 2024

By

 

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

1 month ago

 on

October 11, 2024

By

 

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending