The United States’ loss of its last triple-A credit rating and mounting concerns about government debt are threatening to disrupt the relative calm in financial markets that has prevailed since President Trump began pausing tariffs early last month.
One factor jarring markets is a bill in Congress that would make Mr. Trump’s signature 2017 tax cuts permanent and could add trillions of dollars to federal debt. A House committee voted to approve the bill on Sunday night although it was expected to remain a focus of contentious congressional debate.
On Friday, the ratings firm Moody’s cited the legislation, along with broader concerns about the fiscal deficit and growing debt costs, when it downgraded the credit rating of the United States. The move by Moody’s means that all three major rating agencies no longer consider the United States qualified for their top credit ratings.
U.S. stock futures indicated that markets would decline about 1 percent when they begin trading in the United States on Monday morning.
During Asia trading, South Korea’s Kospi and Taiwan’s Taiex indexes fell more than 1 percent. Stocks in Tokyo and Hong Kong declined about 0.5 percent. The U.S. dollar continued to weaken against other currencies including the euro and yen.
The U.S. credit rating downgrade could send further ripple effects through financial markets if it begins to shake the safe-haven status of Treasury bonds. That would likely spur global investors to demand higher premiums in return for buying U.S. debt.
The 10-year Treasury bond yield climbed to 4.51 percent in Asian trading, after closing at 4.44 percent on Friday.
Some analysts attributed the rise in yields to the credit downgrade exacerbating existing concerns about Mr. Trump’s tariff agenda and the effect it may be having on the American economy.
U.S. stocks had made strong gains last week when investors reacted positively to the U.S.-China deal to cut tariffs.
Analysts say that the downgrade of the U.S. credit rating could train a spotlight on fiscal spending and interest rates paid on government debt in other countries as well. That includes in Japan, which has one of the highest debt-to-GDP ratios in the world.
When Standard & Poor downgraded U.S. Treasury bonds in 2011, the move contributed to significant volatility in global financial markets. All three major stock indexes declined in the United States, dragging on markets in Asia and Europe as well.
In Saudi Arabia, he received a standing ovation from business elites as he announced the lifting of sanctions on Syria.
In Qatar, he took home an investment pledge of billions of dollars in American goods and services.
In the United Arab Emirates, he was awarded the country’s highest civilian honor.
If President Trump has been dogged at home by backlash over his tariff policies, protests over his immigration crackdown and questions over his ethics, a week in the Arabian Peninsula produced nothing but wins for the president.
“The last four days have been really amazing,” Mr. Trump said on Thursday, as he was leaving a palace in Abu Dhabi, United Arab Emirates, where he had just been feted. He added, looking rueful, “Probably going back to Washington, D.C., tomorrow.”
On Friday, the president reflected on his trip on Air Force One: “The respect shown to our country was incredible. Nobody’s treated like that. Nobody’s treated well like that.”
At every step of Mr. Trump’s whirlwind tour of the Middle East, he was treated with the kind of honor and respect he has long desired. Escorts of fighter jets. Extravagant welcoming ceremonies. Red and lavender carpets. Arabian horses. Glitzy chandeliers. Camels. Sword dancers. White marble palaces. In the United Arab Emirate of Dubai, the Burj Khalifa, the world’s tallest building, lit up with an image of the American flag. All in his honor.
“As a construction person, I’m seeing perfect marble. This is what they call perfecto,” Mr. Trump said at one point, admiring the royal court in Doha, the capital of Qatar. “We appreciate those camels. I haven’t seen camels like that in a long time.”
President Trump and Saudi Crown Prince Mohammed bin Salman meet with officials during a traditional welcome ceremony at the royal court in Riyadh, the capital, on Tuesday. (Win McNamee / Getty Images)
Such a welcome would have been unlikely in most other corners of the world, where governments, including the United States’ closest allies, are reeling from Mr. Trump’s aggressive tariffs and bellicose rhetoric toward Canada, Greenland and Panama.
But in the gulf, Mr. Trump’s every move was lauded.
Mr. Trump was able to announce what he said was more than $2 trillion in economic investments between the United States and the three nations he visited: Qatar, Saudi Arabia and the United Arab Emirates, each longtime purchasers of American military equipment.
Mr. Trump said that the investments from those three nations could reach as high as $4 trillion — roughly the size of all their sovereign wealth funds combined. While much of that total comes in the form of long-term pledges that may or may not materialize and counts some deals that were already underway, leaders of the gulf nations were all too happy to supply Mr. Trump with the eye-popping figures.
At a business event in Abu Dhabi on Friday, Mr. Trump was treated to a tour of deals underway between American and Emirati companies, including purchases of Boeing jets and G.E. engines.
Mr. Trump marveled at the wealth of his hosts, who can pay upfront for whatever deals they undertake.
“They don’t say ‘subject to financing,’” Mr. Trump said. “They have no problem.”
At each step of the trip, Mr. Trump surrounded himself with friendly audiences and often turned his events — such as a stop at Al Udeid Air Base in Qatar, the largest U.S. military facility in the Middle East — into campaign-style rallies: blasting his favorite playlists (“Gloria,” of course), bashing Democrats and falsely claiming he had won the 2020 election.
President Trump spoke to American troops at Al Udeid Air Base in Qatar, the largest U.S. military facility in the Middle East. He was greeted with chants of “U.S.A.” (Doug Mills/The New York Times)
Speaking to American troops as their commander in chief, he was greeted with chants of “U.S.A.”
“We won three elections, OK? And some people want us to do a fourth. I don’t know. I’ll have to think about it,” Mr. Trump told the troops, yet again floating the idea of an unconstitutional third term in office. “The hottest hat is, it says, ‘Trump 2028.’ We’re driving the left crazy.”
If Mr. Trump hoped to avoid controversy about his family’s business dealings in the region, the gulf leaders helped with just that — highlighting deals with private firms that are unrelated to Mr. Trump’s personal business interests. There was no visit to the site of the Trump Organization’s deal with a Saudi real estate company to build a residential high-rise in Jeddah; no presentation of a $400 million luxury jet that Mr. Trump is seeking as a gift from Qatar; and no promotion of the Abu Dhabi-backed fund that is making a $2 billion business deal using the Trump firm’s digital coins.
On Air Force One, taking questions from reporters, Mr. Trump denied knowledge of the crypto deal.
“I really don’t know anything about it,” he said. “But I’m a big crypto fan, I will tell you.”
If a Democratic president did what Mr. Trump has done — praising a former jihadist, welcoming Qatar’s friendship with Iran and accepting a “gift” of a $400 million airplane — Republicans would have been howling in protest and ordering up congressional investigations. What transpired, instead, was mostly an uncomfortable silence.
A few Trump allies, like Senator Josh Hawley of Missouri and the far-right activist Laura Loomer, made clear they did not like the plane gift, but contorted themselves to express their discomfort in ways that would be least likely to offend Mr. Trump. Ms. Loomer preceded her criticism by saying she would “take a bullet” for the president, and Mr. Hawley avoided the implication of corruption and simply said he would prefer “if Air Force One were a big, beautiful jet made in the United States of America — that would be ideal.”
Mr. Trump’s declaration that the United States was shifting its policy toward the Middle East away from judgment and confrontation toward peace and profit was praised repeatedly.
US President Donald Trump, left, shakes hands with Saudi Crown Prince Mohammed bin Salman during a bilateral meeting in Riyadh on May 13, 2025. (Brendan Smialowski / AFP)
“It’s crucial for the wider world to note this great transformation has not come from Western interventionists or flying people in beautiful planes, giving you lectures on how to live and how to govern your own affairs,” Mr. Trump said at a gathering of Saudi royalty and business elites in Riyadh.
Even back home in the United States, Democrats and Republicans approved of Mr. Trump’s announcement that he was removing sanctions from Syria in an effort to give the war-torn country a fresh start.
“We commend President Trump’s decision to lift all sanctions on Syria,” the leaders of the Senate Foreign Relations Committee, Jim Risch, Republican of Idaho; and Jeanne Shaheen, Democrat of New Hampshire, said in a joint statement.
The trip was intended to deliver a series of economic, diplomatic and public relations wins for the countries involved, said Andrew Leber, an assistant professor at Tulane University in Louisiana, who focuses on the U.S.-Saudi relationship.
A military jet formation over Air Force One after President Trump delivered remarks to troops at Al Udeid Air Base in Doha on Thursday. (Doug Mills/The New York Times)
Saudi Arabia got the opportunity to highlight the changing nature of its society and economy, and present itself as a leader in global affairs, both in terms of business opportunities and diplomacy. Mr. Trump got a trip that essentially could not go wrong for him, Mr. Leber said.
“This was the one place that’s guaranteed to give him a very enthusiastic, warm and tightly controlled welcome,” Mr. Leber added. “If he went anywhere in Latin America, there would be protests. If he went anywhere in Europe, there would be protests. This is a place that’s going to speak with him and deal with him on very transactional terms, that’s going to put on a big show and where there’s not going to be any domestic protests whatsoever.”
That was indeed the case, as gulf leaders adopted Mr. Trump’s favorite phrases. Each nation talked about their trade deficits with the United States and how they buy more from the United States than they sell — a favorite topic of the president’s.
At a business forum in Saudi Arabia, panelists talked of “making aviation great again,” playing off Mr. Trump’s campaign theme.
At the meeting in Abu Dhabi on Friday, Mr. Trump walked into a large rotunda where five large screens showed various kinds of investment — starting with “Making Energy Great Again.” There, he was gifted a box containing a drop of oil.
In Doha, Sheikh Tamim bin Hamad al-Thani, the emir of Qatar, adopted Mr. Trump’s energy slogan, “Drill, baby, drill.”
“The U.S. and Qatar are feeding and fueling the world,” the emir said, before turning to Mr. Trump. “Glad to have you back on board.”
President Trump with Emirati President, Sheikh Mohammed bin Zayed, at the presidential palace in Abu Dhabi, on Thursday. (Doug Mills/The New York Times)
Mr. Trump is also a relief for gulf leaders: They now have a U.S. president who breezes past their human rights records as he chases high-dollar deals.
“Governments and publics throughout the gulf like Trump a lot,” said Jon B. Alterman, a global security expert at the Center for Strategic and International Studies in Washington.
“They feel Western liberals want to shame them on their domestic issues, everything from L.G.B.T. rights to abuse of migrant workers,” Mr. Alterman added. “While there certainly are rising liberal voices in the gulf, most people there see Trump as a common-sense, like-minded leader.”
As he ended his trip in Abu Dhabi on Friday, Mr. Trump worried aloud to the news media that whoever becomes president after him would get credit for the deals once they reach fruition.
“I’ll be sitting home, who the hell knows where I’ll be, and I’ll say, ‘I did that,’” he said. “Somebody’s going to be taking the credit for this. You remember, press,” he said, pointing to himself, “this guy did it.”
U.S. President Donald Trump speaks to the press on board Air Force One en route to Doha, Qatar, on Wednesday. (Brian Snyder/Reuters)
The Federal Reserve will reduce its work force by 10 percent over the next several years to ensure the institution is “right-sized and able” to carry out its duties to foster a healthy economy.
Jerome H. Powell, the chair of the central bank, announced the plan on Friday in an internal note to staff members reviewed by The New York Times. Certain employees will be eligible to participate in a voluntary deferred resignation program that is aimed at giving those close to retirement the option of an earlier exit. That offer will apply only to people at the Washington-based Board of Governors.
Cuts are expected to be made across the entire Federal Reserve System, including the 12 regional banks. Roughly 2,400 people will be affected.
“I have directed the leadership of the Federal Reserve, here at the board and across the system, to find incremental ways to consolidate functions where appropriate, modernize some business practices and ensure that we are right-sized and able to meet our statutory mission,” Mr. Powell said in the memo.
The Fed earlier imposed a hiring freeze on permanent workers as part of its efforts to align with the Trump administration’s decree that no federal position vacant at the time could be filled or new positions created. It also took steps to distance itself from diversity issues as well as those related to climate change — initiatives that President Trump has opposed.
The Fed is a politically independent institution, meaning it is not legally obligated to carry out orders by the executive branch. That buffer from the White House is being legally challenged by the Department of Justice, which has sought more sway over independent agencies.
The announcement on Friday mirrors an effort by the Fed during the Clinton administration to cull its work force, which Mr. Powell cited in his note. At that time, there were “governmentwide efforts to improve efficiency,” as is the case “now,” Mr. Powell said.
Yet at a congressional hearing in February, Mr. Powell pushed back on the idea that the Fed had too many employees. “Overworked, maybe, not overstaffed,” he said.
Mr. Trump is pursuing a similar goal, although much more aggressively than past administrations have. The newly formed Department of Government Efficiency, led by the billionaire entrepreneur Elon Musk, has taken to gutting the federal work force, including shuttering agencies wholesale. Tens of thousands of government employees have since left their jobs.
The Fed’s decision is not tied to the ongoing initiative by DOGE, although some members of the central bank’s staff were contacted this year via email by Mr. Musk’s group, according to people familiar with the matter.
“The Federal Reserve is a careful and responsible steward of public resources,” Mr. Powell said in his note on Friday.
Qatar, a nation roughly the size of Connecticut with a population smaller than Brooklyn’s, has leveraged its immense natural gas wealth to secure outsize influence in Washington and across the American academic and defense establishment. Over the past two decades, the Gulf monarchy has quietly spent billions of dollars on U.S. military cooperation, educational partnerships, and lobbying efforts—building a powerful soft power machine that has reshaped its image from regional outlier to indispensable partner.
At the core of Qatar’s U.S. influence strategy is Al Udeid Air Base, a sprawling American military installation outside Doha that hosts over 10,000 U.S. troops and serves as the forward headquarters for U.S. Central Command (CENTCOM). Since 2002, Qatar has spent an estimated $8 billion building and upgrading the facility, essentially offering it to the Pentagon rent-free.
“No other country in the region provides this level of military infrastructure support without asking much in return,” said Gen. Kenneth McKenzie, former CENTCOM commander. “It makes Qatar indispensable to American operations in the Middle East.”
In return, the U.S. has shielded Qatar from regional isolation campaigns, particularly during the 2017 blockade by Saudi Arabia, the UAE, Egypt, and Bahrain. Despite Qatar’s ties to Islamist groups and accusations of enabling Hamas financing, Washington has largely stood by Doha—a testament to the strategic leverage gained through deep pockets.
While its military investments fly under the radar, Qatar’s most public-facing influence effort has been its massive donations to American universities. According to U.S. Department of Education data, Qatari entities have contributed more than $4.7 billion to U.S. colleges since 2000, making it one of the largest foreign donors to American higher education.
Much of that money flows through Education City, a Doha-based campus complex hosting satellite branches of top-tier U.S. institutions including Georgetown, Northwestern, Carnegie Mellon, Texas A&M, and Cornell Medical College. While universities claim academic independence, critics argue the funding creates subtle forms of censorship and political self-censorship.
“No university wants to lose a $300 million donor,” said Deborah Lipstadt, U.S. Special Envoy to Combat Antisemitism, who has raised concerns about foreign influence. “That money buys access, and sometimes silence.”
In 2021, a congressional probe led by the House Education and Labor Committee found that several schools failed to report Qatar-linked donations in full, raising transparency and national security red flags.
Qatar has also cultivated a powerful presence in the Beltway’s influence industry. Since 2017, it has spent over $147 million on lobbying and public relations firms, according to the Justice Department’s Foreign Agents Registration Act (FARA) database. Notable beneficiaries include Skadden, Arps, Nelson Mullins, and former U.S. Attorney General John Ashcroft’s firm.
Qatar’s lobbying offensive intensified after the 2017 blockade, as it sought to shape U.S. public opinion and policymaking in its favor. In one instance, Qatar funded trips for over 250 American academics and opinion leaders to Doha, many of whom later wrote op-eds supporting Qatar’s position.
Additionally, Qatari-linked organizations have poured millions into American think tanks including the Brookings Institution, Atlantic Council, and Center for Strategic and International Studies (CSIS)—often sponsoring research and panel discussions on Gulf security and U.S.-Qatar relations.
Qatar’s investments have paid geopolitical dividends. Despite its support for groups like the Muslim Brotherhood and Al Jazeera’s frequent criticisms of U.S. allies, Washington continues to view Doha as a stabilizing partner. Qatar has also positioned itself as a mediator in high-stakes diplomacy, most notably brokering prisoner exchanges with Iran and facilitating ceasefire talks between Hamas and Israel.
The recent release of American-Israeli hostage Edan Alexander from Gaza, mediated in part by Qatari diplomats, is the latest example of its delicate balancing act—simultaneously housing a U.S. air base and hosting Hamas leadership in luxury hotels.
“Qatar plays every side, and they do it well,” said Steven Cook, senior fellow at the Council on Foreign Relations. “It’s transactional diplomacy, backed by enormous capital.”
Still, the tide may be turning. With bipartisan concern mounting over foreign interference in U.S. academia and defense policy, Qatar’s influence machine is facing greater scrutiny. A bipartisan bill introduced in April 2025 would require all universities receiving more than $10 million in foreign aid to submit detailed reports to the Treasury Department.
Furthermore, Republican lawmakers have proposed conditioning future military cooperation on Qatar’s transparency about Hamas ties and human rights practices, particularly its treatment of migrant workers and LGBTQ individuals.
“You can’t be both an ally and an enabler of terrorists,” said Rep. Mike Waltz (R-FL), who sits on the House Armed Services Committee. “We need to hold Qatar to the same standards we expect from any partner.”
Qatar’s influence in the U.S. was not inherited—it was engineered. Through a meticulous mix of strategic military support, educational philanthropy, and relentless lobbying, the Gulf state has carved out a role far greater than its size would suggest. As global politics evolve, the question is whether Washington will continue to accept Doha’s deep pockets as a substitute for shared values.
Walmart Inc. (NYSE: WMT), the world’s largest retailer, announced on Tuesday that it will begin raising prices on a broad range of consumer goods in the coming months, citing the intensifying impact of U.S. tariffs on Chinese imports and other global supply chain disruptions. The announcement marks a pivotal shift for the retail giant, which has long absorbed tariff-related costs to protect its price-sensitive customer base.
The move comes as the Biden administration recently expanded tariffs on key Chinese goods—including electric vehicles, semiconductors, and solar components—adding $380 billion in new levies and pushing the average U.S. tariff rate to its highest level in decades. Walmart executives now say the “buffer period” is ending.
“We’ve managed to shield our customers from much of the trade war’s fallout over the last five years,” said John Furner, President and CEO of Walmart U.S., during the company’s Q1 2025 earnings call. “But with the latest round of tariffs and persistent supply chain inflation, we expect to pass through more costs to consumers.”
Walmart sources a significant portion of its merchandise—especially electronics, apparel, and home goods—from Asia, with China historically representing over 25% of its import base. While the company has diversified its supply chain in recent years, new tariffs and retaliatory measures by trading partners are making global procurement increasingly expensive.
“The global tariff environment has changed materially,” said Chief Financial Officer John David Rainey. “These are not short-term headwinds. They are structurally altering input costs, shipping dynamics, and product margins.”
Walmart indicated that categories likely to see the sharpest price increases include:
Consumer Electronics: Affected by 25% tariffs on Chinese-made components such as microchips and lithium-ion batteries.
Home Appliances: Including air conditioners and washing machines, many of which rely on Chinese steel and circuit boards.
Seasonal Goods and Apparel: Where production has been slower to move away from China or Vietnam.
Company officials declined to specify the exact price increases but confirmed that in-store and online pricing adjustments will begin rolling out by mid-summer.
Walmart’s announcement underscores what many economists have long warned: that while large corporations initially absorbed much of the tariff shock, the cumulative effect is eventually borne by consumers.
“Tariffs function like a hidden tax on the American middle class,” said Beth Ann Bovino, U.S. Chief Economist at S&P Global. “For years, retailers buffered the impact. But the dam is breaking.”
Consumer watchdog groups are now bracing for inflationary pressures to accelerate again. The Consumer Price Index (CPI) rose 0.4% in April—driven largely by food, energy, and household goods—and economists say a wave of retail price hikes could fuel another surge.
At Walmart, average basket prices are still up 7% year-over-year, even before the new tariffs fully hit shelves.
The price hikes are also expected to become a flashpoint in the 2024 presidential race, with both parties accusing the other of mismanaging trade policy.
While President Biden has defended the tariffs as “strategic economic tools” to counter unfair practices and promote U.S. manufacturing, Republicans have blasted the levies as regressive and inflationary.
“Every time Washington escalates a trade war, working families pay the price,” said Senator Josh Hawley (R-MO). “Walmart’s warning is just the beginning.”
At the same time, labor unions and domestic manufacturers have welcomed the tariffs, arguing they level the playing field and create American jobs. The CHIPS Act and Inflation Reduction Act, for example, have spurred billions in U.S. investment.
To its credit, Walmart has so far navigated geopolitical turbulence better than most. It expanded sourcing in Mexico, India, and Vietnam, invested heavily in automation, and secured long-term logistics contracts to buffer freight volatility. Analysts have praised its supply chain agility and price discipline.
But the latest wave of tariffs, especially those targeting raw materials and components used in American-assembled products, has created what executives call an “inescapable cost environment.”
“We’re not just importing finished goods anymore,” said Rainey. “Tariffs now hit upstream components that show up in U.S.-made items, too.”
Despite the challenges, Walmart reiterated its commitment to affordability, especially as U.S. consumers become more price-conscious. The retailer reported better-than-expected Q1 earnings, with revenue rising 5.1% year-over-year to $162 billion, but cautioned that margins will tighten in the coming quarters.
Walmart’s decision to raise prices marks a turning point in America’s tariff-era economy. For years, the retailer’s scale and supply chain muscle helped mute the impact of trade wars. But with tariff walls rising and inflationary pressure mounting, even the strongest players are signaling that the burden is shifting—to consumers.
Whether these hikes are short-term adjustments or a new normal remains to be seen. But for millions of Walmart shoppers, the checkout line is about to become the frontline of U.S. trade policy.
Data Snapshot:
Tariff Exposure: Over 30% of Walmart’s imports originate from countries impacted by new U.S. tariffs.
Consumer Price Impact: Walmart basket prices have increased 7% YoY; projected to rise another 3–5% by Q3 2025.
U.S. Tariff Revenue: $92 billion in 2023 (U.S. Treasury), triple 2016 levels.
Top Categories at Risk: Electronics, home goods, small appliances, and apparel.
Sourcing Shift: 12% increase in India and Mexico sourcing since 2022.
A year after the $15-billion electric vehicle project in Ontario was announced, Honda Canada is pushing the project back.
The company said Tuesday it would put the plan to build an EV supply chain — which included a proposed EV battery plant and retooled vehicle assembly facility — in Alliston, Ont., on hold for about two years.
“Due to the recent slowdown of the EV market, Honda Motor has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada. The company will continue to evaluate the timing and project progression as market conditions change,” Honda Canada spokesperson Ken Chiu told CBC News in an email statement on Tuesday.
Honda also said the decision “has no impact” on current employment or production at the Alliston manufacturing facility.
Honda’s EV project in Canada includes a retooled assembly plant and an electric vehicle battery plant in close proximity, as well as two key battery parts facilities located elsewhere in Ontario.
The project was expected to see the two main plants create 1,000 jobs on top of retaining the existing 4,200 jobs at the assembly plant.
Under the original plan, the plant was set to produce up to 240,000 vehicles per year when fully operational in 2028.
The project was first announced in April 2024 at an event that included then-prime minister Justin Trudeau and Ontario Premier Doug Ford and was to receive support from the federal and Ontario governments.
Ottawa was set to give the Japanese automaker around $2.5 billion through tax credits, while Ontario committed to provide up to $2.5 billion in support directly and indirectly. However, Jennifer Cunliffe, a spokesperson for Ontario’s minister of economic development, job creation and trade, said the province hasn’t doled out any of that money to Honda yet.
Ford told reporters at a news conference that he was confident Honda would continue making cars in the province.
“When I talked to Honda, they promised us they’re going to continue on with that expansion,” Ford said of the pause. “So we’ll just see how that moves forward. But we’re very confident that we’ll continue producing Honda vehicles here in Ontario.”
The premier also said he would hold automakers that pull out of Ontario “accountable,” should that happen.
Richard Norcross, the mayor of New Tecumseth, which Alliston is part of, said he was still optimistic the project will come online, even though that day is further in the future now.
“Obviously a two-year delay, that’s not desirable, but understandable [given] what’s going on in the world today,” Norcross said. “I think the process is slowing down, but I don’t think they’ll walk away from the process. I believe [and] they believe that the EV battery is the way to go and that will be the future.”
Tariffs and smaller appetite for EVs having an impact
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said Tuesday’s decision shows how U.S. tariffs continue to be felt in the auto industry.
“We hope to find a solution for Canada soon that restores the confidence Honda had when it made its historic EV expansion decision here,” Volpe wrote in an email statement.
In reporting its latest financial results Tuesday, Honda Motor Co. said its profit for the financial year through March fell 24.5 per cent from the previous year and warned that U.S. President Donald Trump’s tariffs will worsen its earnings.
The Tokyo-based automaker said its annual profit totalled 835.8 billion yen (around $8 billion Cdn), down from 1.1 trillion yen in the previous year. Annual sales edged up 6.2 per cent to nearly 21.69 trillion yen (around $205 billion Cdn).
Officials stressed major uncertainties remain, but said they felt it was important to give a realistic projection, no matter how pessimistic it might be.
Chief executive Toshihiro Mibe said Honda will do its best to minimize the impact from tariffs. In the long term, Honda will transfer auto production to U.S. plants and rethink its investment plans. All decisions will be made “very carefully,” Mibe told reporters.
David Adams, president and CEO of Global Automakers of Canada, says that while tariffs were a factor in today’s announcement, the slower than expected uptake of EVs also likely played a big role.
“Is electrification moving forward? Sure, it is. Are consumers continuing to buy EVs? Yes,” Adams said. “But we’re not seeing the sort of [rapid] uptake of EVs that … environmentalists and some in government anticipated.”
Despite that, Adams says EVs are still the way of the future — he says trillions have been spent globally to transition from traditional internal combustion engines to battery electric instead, and carmakers won’t simply walk away from those commitments. “But those investments might not just come to fruition as quickly as maybe originally anticipated.”
Gal Raz, a professor of operations management and sustainability at Western University’s Ivey Business School, agrees that today’s news comes as a result of tariffs and softer-than-expected demand for electric cars.
He says while governments in Canada have made big investments in getting more EVs built — including investments in this paused Honda project — there hasn’t been as much work done to address issues with demand.
Consumers are still worried about the upfront cost of battery EVs and the lack of charging facilities to keep these cars running. Raz says the latter has been a particular barrier.
“That’s where I feel that the government has not done enough,” Raz said. He points to countries like Norway, where the network of charging infrastructure is extensive. Electric cars now outnumber gas-powered ones in Norway.
Adams says he hopes the federal government will pause its zero-emission vehicle sales target, which aims to achieve 100 per cent zero-emission vehicle sales by 2035, given the amount of flux the industry is going through with U.S. tariffs and the slower uptake of EVs by consumers.
The UK’s job market has continued to weaken with the number of workers on payrolls falling in the first few months of the year and job vacancies declining again.
Analysts said the latest figures from the Office for National Statistics (ONS) indicated April’s increase in employer National Insurance contributions and the National Living Wage could be having an effect.
The ONS figures also showed that wage growth slowed, but pay is still rising faster than the rate of inflation.
Regular earnings, which exclude bonuses, grew at an annual pace of 5.6% in the first three months of the year.
“The broader picture continues to be of the labour market cooling,” said the ONS’s director of economic statistics, Liz McKeown.
The unemployment rate increased to 4.5% in the January to March period, the ONS said, up from the previous figure of 4.4%.
However, the ONS has said its unemployment figures should be treated with caution because of low response rates to the survey on which they are based.
Other ONS figures showing the number of employees on companies’ payrolls found the total fell by 47,000 in March and by an estimated 33,000 in April.
Job vacancy numbers fell again. The estimated number of vacancies in the UK fell by 42,000 on the quarter, to 761,000 in February to April 2025.
Some firms had warned that the changes to tax and the minimum wage that came into effect in April could affect recruitment.
A separate survey released on Monday had painted a gloomy picture of the labour market, suggesting that the number of employers expecting to hire more staff in the next three months had fallen to a record low, excluding the pandemic.
“The further softening in employment in April suggests businesses continued to respond to the rise in business taxes and the minimum wage by reducing headcount,” said Ruth Gregory, deputy chief UK economist at Capital Economics.
While wage growth had slowed, she added, it still remained relatively strong, meaning the Bank of England will remain cautious over future interest rate cuts.
The Bank cut interest rates last week, and indicated more cuts could follow, although governor Andrew Bailey said it would be moving “gradually and carefully”.
The Bank keeps a close eye on wage growth as the concern is that if earnings grow quickly, firms will seek to push up prices, and this will put up the rate of inflation.
“Sticky wage growth may mean the Bank remains uneasy about inflationary pressures in the near term,” Ms Gregory said.
“As a result, the ‘gradual’ interest rate cutting path will remain in the balancing act.”
Luke Bartholomew, deputy chief economist at fund manager Aberdeen, agreed that the Bank was likely stick to its current policy on rate cuts.
“While the labour market continues to slow, and there is some evidence of the impact of the increase in National Insurance… there is nothing to suggest it immediately fell off a cliff in response to the shock,” he said.
The world’s two superpowers have reached an accord on their bruising trade war—for 90 days, at least. On Monday, the U.S. and Chinese governments announced they had agreed to slash reciprocal tariffs for 90 days as they continue to hammer out details on a broader deal. Markets soared on the news, with the S&P 500 gaining 3.26%.
Though Trump has imposed wide-ranging tariffs against all imports coming into the U.S. during his second term in office, China has been his primary target. Trump has argued that the Chinese government has not done enough to stem the flow of fentanyl into the U.S.
As part of Monday’s deal, both countries will reduce their so-called “reciprocal” tariffs from 125% to 10%, though a 20% tariff imposed by Trump related to fentanyl will remain—meaning U.S. levies will be 30%. Treasury Secretary Scott Bessent hailed the agreement, describing it to reporters on Monday as “substantial progress” between the two countries. He told CNBC in an interview that he does not want a “generalized decoupling from China,” but rather a more strategic approach to make U.S. supply chains more resilient.
Stocks surge
While investors expected booming markets under Trump’s second term, his insistence on a severe tariff campaign against many of the U.S.’s top trade partners has sent markets reeling. Stocks fell dramatically after Trump’s Liberation Day event in early April, where he introduced the tariff plan. Though they have largely recovered from the dip, markets have yet to rise to the levels achieved around his inauguration.
Monday’s announcement—the latest reversal by the Trump administration from its initial trade strategy—spurred stocks to rise to a two-month high. Though Bessent has argued that the administration is prioritizing moving manufacturing of key industries such as steel and semiconductors to the U.S., much of the country’s economy remains dependent on imports from China. On Monday, Trump described Monday’s deal as a “total reset,” while adding that it doesn’t apply to specific sectors such as cars, steel, and aluminum.
Still, the long-awaited accord represents a temporary pause, with investors still anxious for further clarity. Bessent told CNBC on Monday that the two countries would be meeting again in the next few weeks for a “more fulsome agreement.” He added in a later interview with Bloomberg that the reciprocal tariffs with China will likely not fall below 10%.
Wedbush analyst Daniel Ives argued on Monday that the deal meant new highs for the market—and tech stocks in particular—are possible for 2025. “These massive tariff reductions at this time likely take a recession off the table for now in our view,” he wrote. Apple’s shares rose 6.31% on Monday, while Amazon rose 8.07%.
A key question is still on the table for both countries: rare earth minerals. Dexter Roberts, nonresident Senior Fellow at the Atlantic Council, argued to Fortune that China will likely use the key resources, which are used in everything from smartphones to missiles, as a negotiating chip. “Dominating this sector is probably one of their most important sources of leverage over the U.S. and over the world,” he said.
For weeks, wealthy individuals have been scooping up the Trump family’s cryptocurrency in hopes of amassing enough to qualify for one of 220 seats at a dinner with President Donald Trump himself. In the words of Trump’s own website: “The competition is fierce. Own $TRUMP—or watch from the sidelines.” Now, the leaderboard is final and the winners from around the world are set to descend on Washington, D.C., to rub shoulders with the world’s most powerful man. So, who is going?
While the leaderboard is public, the identity of each winner—obscured by pseudonymous blockchain addresses—is not. But an analysis by Fortune revealed that 18 out of these top 25 holders have interacted with Binance, a foreign crypto exchange that excludes Americans, meaning they are likely foreign nationals.
Meanwhile, some of the winners—the top 25 of whom are entitled to attend an “ultra-exclusive private VIP Reception”—have publicly identified themselves or been identified by a crypto analytics firm. Here are three guests slated to go to the “Gala Dinner,” which critics have lambasted as an unprecedented example of corruption.
The White House did not respond to a request for comment.
Chinese crypto billionaire Justin Sun
With more than $18 million in Trump’s memecoin, according to Monday prices, the top spot on the leaderboard is identified simply by the name “SUN.” The crypto analytics firms Arkham Intelligence and Nansen have said that the wallet is linked to HTX, a crypto exchange for which the billionaire Justin Sun serves as global adviser.
Neither Sun, who toldForbes in March that his net worth exceeds $40 billion, nor HTX responded to requests for comment.
The billionaire is a controversial figure in the crypto industry. Born in China, Sun founded Tron, a blockchain that hosted 58% of all illicit activity in crypto in 2024, according to a report from crypto analytics firm TRM Labs. (Illicit crypto volumes on Tron, however, declined by $6 billion from the year prior.)
Sun has found himself in the midst of numerous crypto debacles. Most recently, he allegedly pushed crypto trade outlet CoinDesk to spike a story on how the crypto billionaire bought and ate a $6.2 million banana.
Singapore crypto firm MemeCore
With about $17.5 million in Trump’s memecoin, the second largest holder on the leaderboard is the Singaporean crypto startup MemeCore, according to public posts from the firm and Nansen.
Founded in January 2024, the firm is building a blockchain for memecoins, or cryptocurrencies created as jokes without any inherent value, Ting Hsu, MemeCore’s chief business development officer, told Fortune. Trump himself is one of the most “iconic” memes, she said.
Hsu didn’t share exactly how the company is funding its Trump crypto investments, but she did say some of the money came from the company’s “internal treasuries” as well as from one of the startup’s anonymous cofounders, whose identity she declined to share. That anonymous founder will attend the dinner with Trump on May 22, according to Hsu.
The Memecore executive didn’t know who else was planning to attend the dinner and was also curious to see the guest list. “Why [do] you guys want to join this?” she asked.
Australian investor Kain Warwick
While he’s not one of the top 25 largest Trump memecoin holders, Kain Warwick, an Australian crypto investor, has made the top 220, according to The New York Times. (Warick did not immediately respond to a request for comment from Fortune.)
The founder of the crypto company Infinex, Warwick was playing basketball with his kids on a weekend afternoon in January when he saw on social media that the 47th president had apparently launched his own memecoin, according to his X account.
He didn’t know whether the cryptocurrency was legitimately Trump’s and worked feverishly to verify that it was real. He eventually did, invested some money, and went back to playing with his children.
But, as he was taking his kids to the beach, he doubled his bet. “Yesterday was a once-in-a-career opportunity,” he wrote, reflecting one day later on Trump’s cryptocurrency launch.
Pope Leo XIV, the newly elected pontiff, must answer to at least one more higher power: the IRS.
The United States generally requires all citizens to file an annual tax return, even those who live out of the country. But assuming he doesn’t renounce his U.S. citizenship, Leo — born in the Chicago area and known until this week as Robert Prevost — has special tax considerations, both as a clergyman and now as the head of a foreign government.
Leo’s situation differs from that of other popes in recent memory, because many countries do not assess taxes on citizens living abroad. “Recent popes from Poland, Germany and Argentina were not taxed by their home countries,” said Jared Walczak, a vice president of the Tax Foundation,a nonpartisan think tank in Washington, who called the first American pope’s accounting situation “uncharted.”
The pope’s job as a member of the clergy does not exempt him from U.S. taxes. American citizens abroad must generally file tax returns if their income level and other personal circumstances would require them to file if they were living in the U.S., according to the Internal Revenue Service.
That doesn’t mean they have to pay the same amount in taxes. Americans who spend the year in a foreign country can exclude much of their earnings from U.S. income tax. For the 2025 tax year, Americans abroad can exclude up to $130,000 in foreign income.
That doesn’t apply to income earned working for a foreign government, however, so that won’t let Leo off the hook, as he is in the employ of the Vatican.
That means Leo will need to calculate the value of his earnings. The pope does not earn a set salary, but the Vatican covers his housing, food, travel and health care, and provides a monthly stipend for personal expenses. (“When I need money to buy shoes or something, I ask for it,” is how the latePope Francis, an Argentine native, once explained it.) Leo probably will need an accountant to determine how to translate such benefits into income for a U.S. tax return.
Leo’s housing at the Vatican is likely exempt, whether he chooses to live in the grand Apostolic Palace like prior popes or the more humble Santa Marta guesthouse where Francis resided. Walczak said that employer-provided housing is generally not taxed as income if the housing is on the business’s property and it is “essential” that the employee live there for the benefit of the business. The papal palace, Walczak said, “is not a taxable fringe benefit.”
Also, the U.S. grants clerics special tax benefits relating to their housing — a “parsonage” exemption — that don’t apply to workers in other professions.
If Americans living abroad pay income taxes to a foreign government, that amount can be subtracted from their U.S. tax liability thanks to the foreign tax credit. That may have applied to Leo during the many years he worked in Peru, which also taxes full-year residents on all of their worldwide income. He became a Peruvian citizen in 2015.
Walczak said that he doesn’t expect Leo to end up paying U.S. taxes but that it’s possible the IRS will issue a private letter specifically addressing his situation. Or Congress might even pass a law spelling out the tax situation of the first American pope, Walczak speculated.
What makes all of this even more complicated is that Leo is the head of state of the Vatican.
Since 2015, the Vatican has been affected by a U.S. federal law that requires financial institutions around the world to report to the IRS details of accounts held by U.S. clients, theVatican Bank’s 2023 annual report said. “For customers who are nonresident in Italy, the principles of international tax law are applied. This means that each customer must declare his or her holdings and all derived income in his or her country of tax residence in accordance with the laws of that country,” the report states.
U.S. citizens living abroad have to file a report with the Treasury Department’s Financial Crimes Enforcement Network if they have “signature authority” — meaning control over the use of funds or other assets — over foreign bank accounts whose total value exceeds $10,000, according to Brittany Benson, an analyst with the Tax Institute at H&R Block. “This would likely apply [to Pope Leo XIV] if he has signature authority on Vatican accounts,” Benson said in an email to The Washington Post.
Edward A. David, an assistant professor in the department of theology and religious studies at King’s College London, said most of the Vatican’s income comes from donations, admission to museums, and the property it owns around the world and in the Vatican itself.
David said it’s hard to predict how the unprecedented situation will work in reality. “U.S. tax law is very far-reaching. And while there might be an exemption for heads of state, this is brand-new territory for us and brand-new territory for the United States and the Vatican.”
