President Donald Trump said in a social media post Friday morning that Apple will have to pay a tariff of 25% or more for iPhones made outside the United States.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,” Trump said on Truth Social.
Shares of Apple fell about 2% on Friday after the post.
Production of Apple’s flagship phone happens primarily in China, but the company has been shifting manufacturing to India in part because that country has a friendlier trade relationship with the U.S.
Some Wall Street analysts have estimated that moving iPhone production to the U.S. would raise the price of the Apple smartphone by at least 25%. Wedbush’s Dan Ives put the estimated cost of a U.S. iPhone at $3,500. The iPhone 16 Pro currently retails for about $1,000.
This is the latest jab at Apple from Trump, who over the past couple of weeks has ramped up pressure on the company and Cook to increase domestic manufacturing. Trump and Cook met at the White House on Tuesday, according to Politico.
Treasury Secretary Scott Bessent said in an interview with Fox News on Friday that he was not part of the meeting at the White House but the Apple situation could be part of the Trump administration’s push to bring “precision manufacturing” back to the U.S.
“A large part of Apple’s components are in semiconductors. So we would like to have Apple help us make the semiconductor supply chain more secure,” Bessent said.
Cook gave $1 million to Trump’s inauguration fund and attended the inauguration in January. Apple has announced a $500 billion spend on U.S. development, including AI server production in Houston.
Apple declined to comment for this story.
The company said during its May 1 earnings report that it expects about $900 million in additional costs for tariffs in the current quarter. Cook said on the company’s earnings call that the tariff outlook was “very difficult to predict” past June.
Foxconn, one of Apple’s main iPhone assembly partners, is spending $1.5 billion on expanding its India facilities, the Financial Times reported Thursday.
Trump has made public criticisms of other major U.S. companies, including Walmart, during his trade war push, but the levies on a specific consumer product is a new step. The exact legal mechanism for the tariff is unclear.
Trump followed up his post about Apple with another calling for a 50% tariff on products from the European Union. Taken together, the posts point to trade tensions increasing again after the U.S. had temporarily lowered many of its levies, including in an agreement with China.
Apple also had to navigate tariff threats during Trump’s first term, when a 15% tariff on Chinese imports was being considered in 2019. At that time, Cook had a strong relationship with Trump and the final trade deal excluded core Apple products from the duties.
As Apple is caught in the U.S. president’s crosshairs, the company is also seeing weak demand in China. On Friday the company hiked trade-in incentives for iPhones in China.
It’s been rare for a string of positive economic news to emerge out of the U.K. in 2025 — but this week in particular has given Britain three reasons to be optimistic.
Data on Friday signaled unexpected positive momentum in the country’s economy, with retail sales rising by a much better-than-expected 1.2% in April, and GfK’s consumer confidence index showing an improvement in sentiment.
Sterling gained 0.6% against the U.S. dollar after the figures were published on Friday, to trade at around $1.35.
The combination of the two positive figures on Friday bucked expectations, and logic, for some economists. Economic activity in April was widely expected to show a downtrend, in part thanks to U.S. President Donald Trump’s global trade war.
“Well now, that challenges the idea of a cautious consumer,” said Rob Wood, chief U.K. economist at Pantheon Macroeconomics, adding that a number of factors, some not influenced by politicians or businesses, were at play.
“That said, official sales growth looks too good to be true, likely as the seasonal adjustment fails to adequately control for the later Easter this year,” Wood added. “There’s no doubt the weather helped a lot, with both March and April registering the most sunshine since records began.”
Taken in isolation, Friday’s retail figures and consumer confidence data perhaps point to growth in the current quarter. However, British electricity regulator Ofgem added to the positive sentiment by declaring on Friday that electricity prices are set to decline by 7% in July. That could potentially fuel spending in other sectors in the coming months.
“This is certainly an improvement for household expenses, with monthly bills likely to fall on average by around £11,” said Ellie Henderson, economist at Investec.
Meanwhile, the string of positive elements could potentially bump up U.K. economic growth for the second quarter as a whole, according to Allan Monks, chief U.K. economist at JPMorgan who is forecasting a 0.6% annualised gain.
The U.K. has the fastest economic growth among G7 nations
“With the household savings rate so high, a continued improvement in confidence has the potential to unlock further consumer spending gains,” JP Morgan’s Monks said in a note to clients on Friday. “High inflation, softer wage growth and weak employment argue against a continuation of that trend. But the rise in confidence in May was matched by a notable drop in unemployment fears, lower inflation expectations and a rise in spending intentions.”
The outlook for the U.K. has seesawed over the past year. The country has grappled with setbacks like unexpected economic contraction and mounting concern about fiscal spending plans, while also seeing some more positive data and the agreement of landmark trade deals with the U.S., India and the EU.
Earlier this week, official figures showed the economy grew by 0.7% in the first quarter of 2025 — although that came as domestic inflation surged to 3.5% in April. Last week, another data print showed average earnings in the U.K. had grown by 5.9% on an annual basis.
The mix of data meant economists appeared divided on Friday about what the latest bout of data meant for the U.K.’s long term economic picture.
Alex Kerr, U.K. economist at Capital Economics, warned that “the sun won’t shine on [Britain’s] retail sector forever.”
“Although for the first time since 2015, excluding the pandemic, retail sales volumes have risen for four months in a row, April’s impressive 1.2% m/m rise was largely driven by the unusually warm weather,” he said in a note sent shortly after the figures were published.
“That boost won’t last. So even though consumer confidence ticked up slightly in May, we suspect retail sales growth will slow over the coming months.”
‘Depressed’ Brits resorting to retail therapy
While most economists viewed the small increase in consumer confidence in May as a positive signal for next quarter’s economic growth, others suggested that as overall sentiment remains below pre-pandemic levels, the link between spending and sentiment may be broken instead.
“Depressed British consumers have resorted to retail therapy to cope with their economic and financial woes,” said Andrew Wishart, senior UK economist at Berenberg.
Instead, Wishart said a combination of the pandemic, and the ensuing inflation and interest rate hikes led consumers to shore up their finances.
“Households have increased their saving rate (the share of household income not spent) to a level previously unseen outside of periods of mass unemployment,” Wishart added.
Having stabilized their bank balances and secured pay rises, consumers are now spending in anticipation of a more stable interest rate and price environment, according to the economist.
Counter intuitively, the additional spending means the Bank of England was more likely to hold rates for the rest of the year, than cut, he added.
Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, said in an email on Friday morning that with wage growth now outpacing inflation, U.K. households are spending more generously. However, she cautioned that the state of Britain’s public finances “remain a constraint.”
“With higher borrowing costs, more tax rises and departmental spending cuts may happen,” she explained. “This poses some medium-term growth risks for the U.K amid ongoing uncertainty with how the global trade situation will settle.”
Hong Kong passed a stablecoin bill on Wednesday to expand its cryptocurrency licensing regime as more governments recognize the digital asset.
Unlike volatile digital assets like bitcoin, the value of stablecoins is tied to a real-world asset like fiat currencies or commodities like gold.
The new law — focused on fiat-referenced stablecoins — will require stablecoin issuers to obtain a license from the Hong Kong Monetary Authority and comply with a range of requirements, including proper management of asset reserves and segregation of client assets.
It will “enhance Hong Kong’s existing regulatory framework on virtual-asset (VA) activities, thereby fostering financial stability and encouraging financial innovation,” the central banking body said. It added that it would conduct further consultations on the detailed regulatory framework.
The Hong Kong government said in a statement that the stablecoins policy is expected to come into effect this year, with “sufficient time” allowed for the industry to understand the requirements.
In 2023, Hong Kong introduced its virtual asset licensing regime, which requires cryptocurrency firms with an official presence in the city to apply for licenses and meet specific standards and requirements to offer digital assets to retail investors in the city. However, the existing policy did not include stablecoins in its purview.
“Hong Kong’s new stablecoin policy sets a global benchmark by mandating full reserve backing, strict redemption guarantees, and HKMA oversight,” YeFeng Gong, risk and strategy director of HashKey OTC, told CNBC. HashKey OTC is a trading arm of the HashKey Group, which has a licensed crypto platform in Hong Kong.
The policy “ensures institutional-grade reliability for traders while positioning Hong Kong as a leader in compliant digital finance,” he added.
Crypto adoption and legitimacy
The move from Hong Kong comes just days after the U.S. Senate advanced the GENIUS Act, which would establish the first regulatory framework for issuers of stablecoins if implemented.
A push to regulate stablecoins has been intensifying globally, with other jurisdictions having also implemented their own regulatory frameworks, including the European Union, Singapore, the United Arab Emirates and Japan, blockchain intelligence firm Chainalysis said in a report on Wednesday.
Chengyi Ong, head of Asia-Pacific policy at Chainalysis, told CNBC that the latest regulations are expected to help with crypto adoption and legitimacy.
″[Stablecoins]form the backbone of the crypto ecosystem, but their stability also opens the door to their use in overcoming frictions dogging traditional finance, such as slow cross-border payments and settlement,” Ong said.
“This potentially transformative utility is what has driven governments around the world, from Europe to Asia, to take steps toward regulatory regimes that will facilitate the emergence of high-quality stablecoins,” she added.
According to Chainalysis, the total market cap of stablecoins is around $232 billion as of this month.
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)
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.
President Donald Trump on Thursday announced a new trade pact with the United Kingdom that he touted as likely just the first of many agreements with countries around the world, as the administration races to mitigate the damage from its global trade war.
Joined in the Oval Office by several of his top advisers and the new British ambassador to Washington, Trump praised the deal and said it would lower trade restrictions for U.S. exporters while bringing the two countries into closer economic alignment.
Commerce Secretary Howard Lutnick and other administration officials said the deal would create $5 billion in economic opportunities for U.S. exports, saying Britain had agreed to step up purchases of ethanol, beef, planes and other products while lowering tariffs and other domestic restrictions. Trump said the 10 percent minimum tariff he applied to all countries would remain in effect on the United Kingdom, but that certain British exports — such as automobiles — would be spared higher tariffs on those products. Jet engines and plane parts will also be subject to reduced tariffs, and the countries will also agree to lower tariffs on steel and aluminum as they work to parry cheap Chinese imports.
“Things are going to move very quickly both ways,” Trump said. “It’s so good for both countries.”
The announcement came as Trump officials face intense pressure to assure investors unnerved by fluctuations in the stock market, driven by uncertainty about U.S. trade policy. In early April, Trump announced tariffs on more than 70 countries worldwide, but he then implemented a 90-day pause to allow for negotiations before they went into effect. That pause provided some relief to investors, and markets have been buoyed by the prospect of deals to lower the import duties. All three stock indexes climbed on the news of the deal with the United Kingdom.
But experts say major headwinds remain. The U.S. currently has more than 145 percent tariffs on China, one of its biggest trading partners, and prospects for a quick resolution appear remote. Treasury Secretary Scott Bessent is expected to travel to Switzerland this weekend for talks with his Chinese counterparts, and experts have said the convulsions from the global trade shock are continuing to ripple through the economy.
Critics have also expressed skepticism of the significance of the “deals” the White House is attempting to negotiate in strikingly little time. Agriculture Secretary Brooke Rollins on Fox Business Thursday morning referred to the deal as one “in concept” and said she would be traveling to Britain soon to hammer out further details.
The White House distributed a three-page fact sheet that included some high-level areas of agreement but few details of how the agreements would work in practice. Free trade agreements can run into the thousands of pages and are usually the product of months or even years of painstaking negotiations among technical experts who fight over regulations around issues such as the precise placement of the brake lights on cars.
Economists say the deal will make little difference to the U.S. economy, with many continuing to forecast a recession later this year. Although lower auto, steel and aluminum tariffs on trade with the U.K. may offer “limited relief” for Americans, those measures are unlikely to make much of a dent as long as the United States’ 10 percent blanket tariff remains in place, said Michael Pearce, deputy chief economist at Oxford Economics.
Total trade between the United States and Britain amounts to less than $150 billion per year.
“The average U.S. tariff is still set to remain in double digits, which will deliver a big hit to real incomes in the U.S. which will cause growth to slow sharply in the second half of the year,” Pearce wrote in an email. “As a result, we are not minded to change our forecasts based on this deal, or likely future deals.”
Still, the agreement marked a major breakthrough for British Prime Minister Keir Starmer, who has tried to stay on Trump’s good side even as the president has infuriated European allies with new tariffs and a tilt toward Russia.
Starmer visited the White House in February armed with charm and a signed invitation to a royal audience with King Charles III, and repeatedly lavished praise on Trump and his top officials in a call he made to the White House during Trump’s announcement. British leaders have long sought to bolster economic ties to the U.S. to make up for the trade losses of their 2020 departure from the European Union. Starmer, the leader of the Labour Party, made the bet he could cross political lines to build a partnership with Trump. (Trump referred to Britain as the U.S.’s “oldest” ally, a claim France might object to.)
“You’ve done what you said you would do,” Peter Mandelson, the British ambassador to the U.S., said while standing beside Trump. “You have been true to your word.”
Trump also said he personally intervened in talks to lower tariffs on British automobile firms such as Rolls-Royce and Bentley, which he called some “very special cars.” “I said yeah let’s help them out with that one,” Trump said. Trump said tariffs should be higher on cars that a larger number of Americans purchase.
Other U.S. trade partners have struggled to gain traction with Trump’s team in recent weeks, noting the disparate views about the purpose of the tariffs among different officials. Come up with an offer that would satisfy Treasury Secretary Scott Bessent, one senior diplomat noted, and it was likely to be a nonstarter for trade adviser Peter Navarro, for instance. A different diplomat said the tone changed about two weeks ago, with the team of U.S. Trade Representative Jamieson Greer taking a clearer lead in the talks and the administration seeming to become more serious about hammering out agreements.
US President Donald Trump’s top trade officials will meet with their Chinese counterparts this week to discuss a de-escalation of their increasingly ugly and damaging trade war. The future of the global economy is riding on their success.
The trade talks, the first in-person meeting between Chinese and American officials since the tit-for-tat tariff escalation kicked off in earnest in March, are unlikely to result in a trade deal, Treasury Secretary Scott Bessent said Tuesday. But tariffs have reached such a high level that trade between the two countries has dropped off dramatically. Any thaw in the trade war could be a welcome sign for businesses and consumers in both countries and around the globe.
“The main objective of this meeting is to establish the conditions for a deal to be reached, including by defining what is feasible to be agreed upon and what isn’t,” said Alfredo Montufar-Helu, head of the Conference Board’s China Center. “There might be some quick wins, like a temporal pause of tariffs, which would bring much needed relief to businesses from both countries.”
The United States has placed at least a 145% tariff on most Chinese imports, and China has responded with a 125% tariff on some US imports. The last tariff-free ships — those on the water when the tariffs were announced — have almost all docked, and the first ships with goods that will be subject to tariffs are arriving at the ports.
That means businesses in China and the United States will soon face a difficult decision: pay a tariff that more than doubles the cost of the imported goods, or stop selling them altogether. That means consumers are weeks away from experiencing higher prices and some shortages.
The punishing tariffs have already damaged both economies. The US economy went into reverse in the first quarter, its first contraction in three years, as businesses stockpiled goods in anticipation of Trump’s “Liberation Day” tariffs, which began in the second quarter. Meanwhile, China’s factory activity contracted at its fastest pace in 16 months in April, and the government is expected to inject the economy with more stimulus measures.
Although the China-US trade standoff is by far the most aggressive, Trump has imposed large tariffs on most other countries around the world too: a 10% universal tariff on virtually all goods entering the United States, plus 25% tariffs on steel, aluminum, autos, auto parts and some goods from Mexico and Canada. So the world is watching the talks with anticipation.
Global economists at the International Monetary Fund, OECD and World Bank have all predicted that Trump’s trade war would have disastrous effects on the global economy, slowing growth dramatically in some countries, while reigniting inflation. The United States is expected to be among the hardest-hit economies as other nations, including China, retaliate against it with higher tariffs. Many US economists and large banks predict the United States could enter a recession this year.
A noticeable thaw
Bessent and US Trade Representative Jamieson Greer will both travel to Geneva, Switzerland, where they will meet the Chinese officials, authorities announced Tuesday.
In an interview with Fox News, Bessent Tuesday said the talks represent a first step, but he tried to downplay expectations for a deal.
“My sense is that this will be about de-escalation, not about the big trade deal … but we’ve got to de-escalate before we can move forward,” Bessent said.
Despite ongoing tensions, both countries have signaled for several weeks that the current standoff is unsustainable. Bessent and Trump have both acknowledged the tariffs are too high. In an interview with NBC News last week, Trump said he would lower tariffs on China “at some point.”
China has largely stood firm against Trump, denying his refrains that the countries were in active negotiations — a denial that Bessent concurred with under oath in congressional testimony Tuesday. China shifted its tone slightly last week, saying it was reviewing proposals by the United States to begin trade talks – but it has remained defiant in its criticism of Trump’s trade policies.
“We have also stated many times that China is open to dialogue, but any dialogue must be based on equality, respect, and mutual benefit,” said Lin Jian, spokesman for China’s foreign ministry on Wednesday. “Any form of pressure or coercion is unacceptable to China.”
Although Beijing has been projecting an aura of strength, its economy is starting to take a beating. On Wednesday, the People’s Bank of China, the central bank, said it would cut the amount of cash that banks must keep in reserve by half a percentage point, in an effort to promote economic growth by boosting liquidity. The bank’s governor, Pan Gongsheng, also announced a 0.1-percentage-point reduction to the seven-day reverse repurchase rate, which will result in a cut to an important interest rate that influences mortgages.
Wall Street welcomed the news: Markets rose on reports of the talks. Dow futures were up more than 300 points, or 0.8%. Futures for the broader S&P 500 rose 0.7% and Nasdaq futures were 0.7% higher. Asian markets were modestly higher on Wednesday.
Trade comes to a near-halt
As Chinese authorities frequently say in their statements about Trump’s tariffs: No one wins in a trade war. That has become evident in recent weeks as high tariffs imposed significant damage on both economies and effectively froze trade.
The number of cargo ships headed from China to the United States fell 60% in April, according to Flexport, a logistics and freight forwarding broker. JPMorgan estimates Chinese imports into the United States will plunge by as much as 80% by the second half of the year.
“A 60% decline in containers means 60% less stuff arriving,” Flexport CEO Ryan Petersen told CNN’s Pamela Brown Tuesday. “It’s only a matter of time before they sell through existing inventory, and then you’ll see shortages. And that’s when you see price hikes.”
The Port of Los Angeles had expected 80 ships to arrive in May, but 20% of those have been canceled, its executive director Gene Seroka told CNN Tuesday. Customers have already canceled 13 sailings for June.
“This week, we’re down about 35% compared to the same time last year, and these cargo ships coming in are the first ones to be attached to the tariffs that were levied against China and other locations last month,” Seroka said. “That’s why the cargo volume is so light.”
Despite the increasingly dire warnings and economic turmoil, the two countries remain quite far from a deal. Both sides have dug in, saying they’ll need major concessions at the outset to begin negotiations. Bessent has said it could take two to three years for trade to normalize with China.
So much is riding on the Switzerland talks. Even without a trade deal in hand, the face-to-face discussions are encouraging. With the two countries inflicting so much damage on themselves, they have left very little choice other than to start the thawing process.
“At some point, I’m going to lower them because otherwise you could never do business with them,” Trump said in an interview with NBC’s “Meet the Press with Kristen Welker,” which taped on Friday. “They want to do business very much … their economy is collapsing.”
Apollo Global Management (NYSE: APO) says it is directing over $100 billion of capital into industries reshaped by trade friction. In a Q2 2024 investor briefing, the firm highlighted a multibillion-dollar allocation across private equity, credit and infrastructure to capitalize on reshoring trends, supply-chain reorientation and commodity arbitrage amid U.S.–China decoupling and new green levies. Apollo executives note that “private assets” can “offer a measure of stability during times of turbulence, such as the current stretch driven by U.S. President Donald Trump’s tariffs”. In effect, Apollo treats tariffs not merely as costs but as catalysts for value – redeploying capital from affected sectors to advantaged ones.
Investment breakdown: Apollo says roughly $28 billion is earmarked for North American reshoring infrastructure. This includes semiconductor fabs and EV battery plants supported by the U.S. CHIPS and Science Act, and new duties (e.g. U.S. tariffs on Chinese steel) that improve domestic project economics. Another $19 billion goes to energy and metals logistics – for example, warehouse and transport assets that can arbitrage carbon-border taxes and critical-mineral import curbs. A further $14 billion is set aside for supply-chain finance: credit lines and working-capital support for companies moving manufacturing out of China into Southeast Asia or Mexico (reducing tariff exposure to roughly 4% vs. 19% on Chinese imports).
Apollo co-President Scott Kleinman puts it bluntly: “Tariffs are creating the most significant capital reallocation since the 2008 financial crisis.” His team views this shift as a once-in-a-decade rebalancing where firms must rebuild shorter, more secure supply chains.
Market Context: Rising Tariffs and Supply Shifts
Global tariff barriers are indeed on the rise. The U.S. now keeps duties on hundreds of billions of dollars of imports that average well above historical lows. For example, the Trump-era tariffs still cover over $300 billion of Chinese goods at rates from 7.5% up to 25%. And in 2024 the Biden administration approved further hikes: Chinese electric vehicles now face a 100% U.S. tariff, and solar panels 50%. New 25% duties also apply to certain medical supplies, lithium batteries and even China-made ship-to-shore cranes. (The U.S. now flatly bans EVs and advanced batteries from China, while quadrupling EV tariffs.) In short, import-tax burdens on high-value and strategic goods have jumped sharply (about double the 2016 level), reshaping sourcing economics.
The policy backdrop has spurred a massive supply-chain overhaul. Industry surveys suggest a large majority of leading companies have shifted production since 2022. For instance, a recent McKinsey survey found roughly 78% of Fortune-500 firms have at least partially diversified their supply bases away from China. Apollo itself has banked on this trend: it now controls a growing real estate footprint south of the U.S. border (reports note Apollo’s platform includes some 12 industrial parks in Mexico) to serve nearshoring. European green trade rules add to the mix – with planned carbon border tariffs reaching about $95 per ton of embedded CO₂ by 2030 – which further tilts advantage toward low-carbon supply hubs. Notably, Apollo’s commodity and resource portfolio returned 34% in 2023, underscoring the payoff from such policy-driven gaps.
Key Sectors in Focus
Semiconductors: Apollo is plowing roughly $12 billion into chip manufacturing. This includes equity stakes in established players (GlobalFoundries) and emerging firms (e.g. “VoltChip” start-ups). In June 2024 Apollo announced a near-$11 billion investment to take a 49% stake in Intel’s new fab in Ireland – effectively subsidizing part of Intel’s $18.4 billion buildout. Such deals are aimed at capturing government incentives (like CHIPS Act subsidies) and the U.S. drive to onshore cutting-edge chip capacity.
EV Materials: Apollo has allocated about $8 billion to critical battery raw materials. That includes projects in Chile and Canada to secure lithium and other inputs for North American EV supply chains. With tariffs and subsidies skewing autos’ geometry (e.g. U.S. duties on Chinese EVs, and local content bonuses under the Inflation Reduction Act), owning the upstream supply means higher margins.
Logistics and Industrial Real Estate: Some $6 billion is targeted at U.S.–Mexico warehousing and transport hubs. The thinking is that sprawling cross-border logistics parks will benefit from the southward shift of manufacturing. Apollo (through funds like its ACORE vehicle) has bulked up on industrial REITs and logistics portfolios. These assets serve goods coming in from Asia via alternative routes or from nearshore factories, and thus can charge rents that fully factor in tariff and friction premiums.
No strategy is without headwinds. Numerous policy and market risks could blunt the playbook. For example, U.S. Section 301 tariffs on China have already been challenged at the WTO (China’s case DS543), and Congress or a future administration might roll back some measures. Similarly, some U.S. “green” levies could be softened or delayed following domestic political pressures (e.g. EU election outcomes may force renegotiation of carbon rules). Even where plants are built, capacity might overshoot demand: Goldman Sachs warns that up to 40% of U.S. battery cell capacitycould lie idle by 2026 absent stronger end-market growth. On Apollo’s own books, the $45 billion credit portfolio is exposed to 9% coupon lending and an estimated 5.2% default probability in a slowing economy – a reminder that higher rates and tariffs could strain borrowers.
Some industry veterans counsel caution. As RBC Capital Markets strategist Gerard Cassidy tersely observes, “Betting on tariffs is betting on politics.” In other words, asset prices tied to trade policy must factor in the risk of political change, not just economic logic.
Apollo is not alone in chasing trade-tailwinds. Other large asset managers have also announced bold commitments. Blackstone has cited roughly $50 billion of investment plans in Europe and emerging markets (notably data centers and Indian renewables) that ride parallel decoupling trends. KKR recently unveiled a $30 billion logistics fund targeting U.S. fulfillment centers (leveraging the e-commerce surge and re-shored inventory). Brookfield has dedicated about $20 billion to critical minerals and renewable energy worldwide, anticipating commodity supply strains. The competition underscores that supply-chain resilience – whether through warehouses, fiber routes or power plants – is increasingly prized. As Apollo’s chief economist Torsten Slok puts it, “In a multipolar world, supply chain resilience is the new prime real estate.”
Apollo’s strategy treats tariffs not as mere externalities but as alpha-generating catalysts. By deliberately allocating capital to the beneficiaries of trade fragmentation – domestic fabs, alternative routes, and non-Chinese suppliers – Apollo aims to earn outsized returns so long as U.S.–China tensions and green trade frictions persist. The firm’s success hinges on the assumption that global supply chains will remain balkanized for years, rather than reverting quickly to pre-trade-war norms. If tariffs and subsidies indeed endure or deepen, Apollo’s repositioning could pay off handsomely. If not, or if demand falters, the strategy faces a stark test.
By the Numbers: Key metrics and targets mentioned above include 100% (new U.S. tariff on Chinese EVs); 50% (tariff on Chinese solar panels); 25% (tariff on ship-to-shore cranes); 17% (year-over-year AUM growth in Q1 2025); $785 billion (Apollo’s assets under management, Mar. 2025); $43 billion (new capital raised by Apollo in Q1 2025); 21% (year-on-year jump in Apollo’s fee revenue for Q1); $11 billion (Apollo’s announced investment in the Intel Ireland fab JV); and $300+ billion (approximate value of Chinese imports still under U.S. tariffsreuters.com).
Tech giant Apple, led by CEO Tim Cook, delivered revenue of $95.36 billion for the second quarter of 2025 overshadowed by sweeping new tariffs imposed on China by the Trump administration.
The iPhone maker’s overall revenues, up 5 percent year-on-year, surpassed analyst expectations after a consensus estimate from FactSet forecast Apple would record $94.4 billion in revenue.
Apple’s services segment, which includes Apple TV+, Apple Music, Apple Arcade and other products, posted overall revenue of $26.65 billion, up 11.6 percent from a year-earlier $23.8 billion and a slight miss on an analyst consensus estimate for $26.70 billion for Q2 2025.
The iPhone maker reported net income of $24.7 billion, up from $23.6 billion in 2024, and earnings per-share came in at $1.65, up from a year-earlier $1.53, and beating an analyst forecast of $1.63 for the latest quarter.
During an after-market analyst call, Apple execs are expected to discuss a potential impact on demand for its products from the U.S.-China trade war and how the tech giant will deal with fall out from the Trump administration’s global trade war affecting supply chain costs out of China, Vietnam and India.
Tariff exemptions have been allowed for smartphones and other electronics, if only temporarily. But the looming talks on reducing or ending sweeping new tariffs on China has rattled investors for its potential impact on Apple’s global-spanning business.
Other tariffs-induced impacts, including recessionary pressures on a wobbly economy leading to lower consumer spending, could impact subscriber numbers for Apple TV+ and Apple Music and whether iPhone users upgrade to the newer handsets. The tech giant reported “record viewership” for Apple TV+ during the second quarter, without breaking out numbers.
CEO Cook during an analyst call pointed to plans to spend around $500 billion over four years in the U.S. market, and to open a factory for “advanced server manufacturing” in Texas this year for high-performance computing, data centers and other applications. But that was far short of answering calls from U.S. President Donald Trump to move production of the iPhone and other popular electrical products to the U.S., rather than continue to off-shore manufacturing.
Cook said the tariffs impact on Apple during the second quarter to March 29, 2025 was “limited” as the company managed its supply chain costs and product inventory and consumers bought new products before Trump’s tariffs regime kicks in. But making projections for the third quarter and the rest of 2025 has been more problematic.
Cook did forecast the current global tariff rates, absent new ones to come from the Trump administration, would add around $900 million to costs at Apple for its April-to-June quarter. “I don’t want to predict the future, because I’m not sure what will happen with the tariffs,” the Apple CEO added when pressed by an analyst to forecast future tariff-related costs for the tech giant, which so far have mostly hinged on a product’s country of origin.
“As we look ahead, we remain confident that we will continue to build the world’s best products and services, confident in our ability to innovate and enrich our users’ lives and confident that we continue to run our company in a way that has always set Apple apart,” the Apple boss did tell analysts in earlier prepared remarks on the conference call.
Cook spoke against a global market background where Apple is caught between being unable to move the manufacture of electronic products to the U.S. market without years of delay to new American factories, and facing likely consumer pushback for its marquee products in China and elsewhere internationally as Trump imposes fast-shifting tariffs to reshape global trade.
Apple is working hard to move production of its iPhones and other electronic products out of China, which faces the steepest U.S. tariffs globally, based on the country of origin for manufacturing. For the current third quarter to June 2025, Cook predicted India will be where the “majority” of iPhones sold in the U.S. originate, and Vietnam will be where virtually all iPads, Mac computers, Apple Watches and AirPods are made.
“What we learned some time ago was that having everything in one location had too much risk with it, and so we have over time and with certain parts of the supply chain — not the whole thing, but certain parts of it — opened up new sources of supply, and you could see that kind of thing in the future,” Cook said in answer to an analyst question about supply chain risks.
Cook didn’t make predictions on the mix of country of origins to produce iPhones and other Apple electrical products beyond the third quarter. To weigh possible future tariff-related costs, the Cupertino, California-based company and other major U.S. retailers face a Section 232 investigation due to the Trade Expansion Act of 1962, where the U.S. Secretary of Commerce is probing the impact from imports on U.S. national security.
The U.S. labor market remained resilient in April, with employers adding 177,000 jobs, a solid showing despite ongoing economic uncertainty that has caused many employers to put hiring plans on hold.
The unemployment rate held steady at 4.2 percent, near historic lows, according to a jobs report released Friday by the Labor Department. Economists had largely expected growth to cool, following the addition of 185,000 jobs in March, figures that were revised downward.
Monthly Change in Non-Farm Jobs
Monthly change in non-farm jobs
Seasonally adjusted; the figures for the most recent two months are preliminary
Source: Bureau of Labor Statistics
The labor market has been a pillar of strength for years, helping to prop up the economy through a period of high inflation and elevated interest rates. Economists have been on high alert that surrounding weakness — including data this week showing the U.S. economy shrank in the first three months of 2025 — could drag down the labor market. But, so far, the slowdown has been gradual.
“Today’s report is a welcome surprise,” Ger Doyle, U.S. manager at ManpowerGroup, wrote in an email. “Overall, the labor market is not in crisis but at a crossroads.”
Employers continued to add key services jobs in April, with gains in health care, transportation and warehousing, financial activities, and social assistance leading the way. Federal government employment declined for the third straight month, reflecting ongoing layoffs and firings by the Trump administration.
The retail industry also lost jobs in April, as uncertainty over new tariffs led many consumers and businesses to rethink their plans. Americans are spending more cautiously, by cutting back on travel and dining out, while many employers are loading up on equipment but pausing hiring and expansion plans.
The strength in the labor market was enough to buoy the stock market. All three major indexes were up by more than 1 percent Friday around lunchtime, with the Dow Jones Industrial Average jumping more than 500 points.
The solid report also makes it likely the Federal Reserve will hold interest rates firm at its meeting next week. Even though inflation is cooling, policymakers have expressed concerns that tariffs could push prices up further.
President Donald Trump on Friday cited the April jobs report as “more good news” in the economy and suggested the central bank — which operates independently of the government — should slash borrowing costs. “THE FED SHOULD LOWER ITS RATE!!!,” he wrote on his social media site, Truth Social.
But many economists say it’s too soon to declare victory. It could take several more months before tariff-related disruptions work their way through businesses’ hiring practices, said Daniel Zhao, lead economist at job-review site Glassdoor.
“There is still a big question mark hanging over the job market,” he said. “Clearly, the full impacts from the tariffs are not here yet.”
The question now is how long the labor market can withstand rising uncertainty across the economy. Gross domestic product, the broadest measure of economic activity, contracted by 0.3 percent in the first quarter of the year, a sudden pullback after almost three years of steady growth. Economists attributed much of that drop to a mismatch in trade, as U.S. businesses stockpiled imports ahead of tariffs, as well as a large decline in federal government spending.
Already, there are signs of strain in the job market. Employers are posting fewer openings, and the number of people who report being permanently out of a job is at its highest level since 2021. Last week, 241,000 Americans filed new applications for unemployment benefits, an increase of 18,000 from the week before.
Widespread funding cuts and layoffs by the U.S. DOGE Service (the Department of Government Efficiency), which began earlier this year, may also become more evident in April jobs data. Even though federal workers account for a small share of the total workforce, economists say recent layoffs and firings are likely to ripple into other industries across contracting companies and nonprofits.
“Employment tied to industries that receive bulk contracting dollars, such as health care, scientific research, education, transportation and manufacturing, are most vulnerable,” Seema Shah, chief global strategist at Principal Asset Management, said in an email.
The chill from federal funding freezes has already been far-reaching. Brittany Frodge, a lecturer at Ohio State University, recently found out she will be out of a job starting May 15. Her position teaching Spanish will soon go to a graduate student.
“Everywhere I look, there’s a hiring freeze because there’s so much paranoia and uncertainty about the new administration,” she said. “There aren’t as many tenure-track positions, and there are severe limits on research.”
Frodge has applied for every opening she has found that fits her qualifications, she said: a grand total of two, including one in Arkansas. For now, her husband still has a job at Ohio State, teaching in the philosophy department, but she worries about long-term stability.
“It’s a really difficult moment to get work,” she said.
The two largest U.S. oil companies reported their lowest first-quarter profits in years on Friday as they braced for the economic fallout from President Trump’s trade war, which has weakened consumer confidence and pushed oil prices down.
U.S. crude prices slipped below $60 a barrel this week, a threshold below which many companies cannot make money drilling new wells. Crude oil is now about $20 a barrel cheaper than it was just before Mr. Trump took office. Not only is oil fetching less, companies are paying more for steel and other materials because of tariffs the president has imposed.
There are signs that some companies are already pulling back as a result.
As of last week, the number of rigs drilling wells in the Permian Basin, the largest U.S. oil field, had fallen 3 percent in a month, according to Baker Hughes, an oil field service provider. That company’s customers have been putting off discretionary expenses, and spending across the industry is likely to fall this year, Baker Hughes executives said last week.
Chevron, the second-largest U.S. oil company, said months ago that it would spend less in 2025, and it has not changed its annual production or capital spending forecasts since. However, the company said that it would pare its spending on share buybacks in the second quarter, compared with the first three months of the year.
“We’re comfortable with where we are right now,” Eimear Bonner, the company’s chief financial officer, said in an interview. “We’ve navigated cycles before. We know what to do.”
The financial results that Chevron and Exxon Mobil, the largest U.S. oil and gas company, reported on Friday reflect the market before Mr. Trump announced his latest round of tariffs. Around the same time, members of the producers cartel known as OPEC Plus surprised the market by saying its members would speed up plans to pump more oil.
Chevron’s first-quarter profit fell more than a third to $3.5 billion, missing analyst expectations, as the company earned less for each barrel of oil it produced. Lower margins in refining also hurt earnings.
Exxon’s profit of $7.7 billion in the first three months of the year also came up shy of analyst forecasts collected by FactSet. Earnings fell around 6 percent from a year earlier.
“In this uncertain market, our shareholders can be confident in knowing that we’re built for this,” Darren Woods, Exxon’s chief executive, said in a statement.
Chevron’s stock price fell more than 2 percent in premarket trading. Exxon’s rose about 1 percent.
The question for many companies is how long oil prices will remain around $60 a barrel or less. If they slip to $50, domestic production could fall roughly 8 percent in a year, according to S&P Global Commodity Insights. The United States is the world’s largest oil producer.
Companies are cutting costs where they can as they wait for greater clarity on U.S. trade policy, said Joseph Esteves, chief executive of Maine Pointe, a consulting firm that specializes in operations and supply chain issues.
“It’s getting to the point of no rock unturned, no couch cushion unexplored,” Mr. Esteves said.
Ms. Bonner said Chevron was experiencing a “limited direct impact” from tariffs. The company has been working to mitigate the effects by buying supplies such as steel locally, she said.
Chevron faces a late-May deadline to wind down activity in Venezuela after Mr. Trump took steps to reverse a Biden-era policy that allowed more oil to be produced in the country. The new rules are already having an effect. The company has been unable to load oil onto ships to be exported because of changes to its license, Ms. Bonner said.
“We’re just continuing to engage with the administration on the topic,” she said.
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