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We should have known it was too good to last. After markets enjoyed a month of relative peace in Donald Trumps trade war with the worlda stretch of time during which Trump paused his so-called reciprocal tariffs on most countries and then rolled back his massive 145% tariffs on Chinathe president reignited the conflict Friday morning with a couple of posts on TruthSocial. First, he directly threatened Apple with a company-specific 25% tariff on all iPhones if it shifts production to India from China, rather than to the U.S. Then, he attacked the European Union for being very difficult to deal with, and said he wanted to impose a 50% tariff on all U.S. imports from the EU on June 1. The threatswhich he may not have the legal authority to follow through onrattled markets severely at first, with S&P futures dropping more than 2%. Stocks recovered somewhat after Treasury Secretary Scott Bessent tried to cool investor anxieties in an appearance on Fox, and European officials said they were continuing to negotiate. But the turmoil engendered by Trumps posts was a reminder of the fact that U.S. trade policy is now being made, in effect, by presidential whim, making the future profits of many American companies dependent on how Trump happens to feel on any given day. When the president first unveiled his plan to impose high tariffs on imports from most of the worlds countrieswhich he called “Liberation Day“he claimed that the goal of his scheme was to bring about an ECONOMIC REVOLUTION. But that implied a level of planning and strategy that has been sorely lacking in the way Trump has handled tariffs since April 2. He jacked up tariffs (relying on an absurd formula), only to roll them back when markets cratered. He promised that trade deals galore were in the offing, only to then say he would raise tariffs unilaterally because the deals were taking too long to do. And he promised a 90-day pause on all the reciprocal tariffs, only to now say hes going to tariff the EU less than 60 days into the pause. The most obvious consequence of Trumps chaotic trade policy is that he has massively increased the amount of uncertainty American businesses (and, by extension, American consumers) will face going forward. Its next to impossible for businesses that import goods (either for sale or as part of their supply chain) to make reasonable plans for the future, since theres no way for them to know what Trump will require them to pay for imports down the road. Nor is there any guarantee that the tariff rates Trump comes up with will stay the same over time. As a result, companies dont know whether they now should be massively stocking up on imports in anticipation of higher tariffs (a move that would increase their inventory costs)or if they should be buying like normal in anticipation that deals will get made. They have to decide, but that decision cant be built on much more than guesswork. The only thing companies do know, in fact, is that regardless of whatever else Trump decides, theyre going to have to pay a 10% universal tariff on everything they import (along with permanently higher tariffs on imports from certain countries, like China). This universal 10% tariffwhich Trump imposed on Liberation Day and kept in place even as he rolled his other tariffs backis not a bargaining tool or a threat: Its here to stay for as long as Trump remains president. So companies are facing permanently higher import costs on top of major uncertainty. The fact that, for all his changes of mind, Trump has stayed committed to the 10% universal tariff isnt surprising. In the first place, it was one of his oft-repeated campaign promiseshe said it would be a ring around the U.S. economy. And it fits well with Trumps basic view of trade, which is that when we buy stuff made abroad, we’re losing money, so the government should charge what he thinks of as effectively a cover charge to sell to U.S. customers. (That cover charge, of course, is paid by the U.S. businesses that are importing the goods, but Trump prefers to ignore that fact.) Trump may talk about the importance of opening foreign markets (as he did in his post about the EU Friday morning), but hes always been more interested in imposing tariffs on imports than he has been in encouraging exports. The 10% tariff is not as dramatic as the China tariffs or the threats against the EU and Apple, which helps explain why investors have, for the most part, shrugged off its potential impact. But American businesses and consumers wont be so lucky. Thats why Walmart said on an earnings call last week that it would be hiking prices as soon as the end of the month because of tariff costs. As the companys CFO explained in an interview with CNBC: Were wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb. And so Im concerned that consumer is going to start seeing higher prices. This of course infuriated Trump, who wrote on TruthSocial that Walmart should eat the tariffs. But the company was simply acknowledging economic reality: Its net profit margin last year was around 2.6%, and it imports almost $50 billion a year in goods from China alone, plus tens of billions of dollars of goods from other countries. It does not have the leeway to absorb a sizable increase in the price of those goods without passing at least some of the cost along. And the same is true of many other retailersindeed, its even more true of small- to medium-size retailers. In response to Trumps criticism, Walmart said: Well keep prices as low as we can for as long as we can, given the reality of small retail margins. But the message was ultimately the same: Prices will have to rise. Those price increases are not likely to be massive. But that doesnt mean they wont matter. What Trumps policy means is that we are now looking at a global economy in which tariffs are going to be higher across the board, and in which he is imposing, at a minimum, a new 10% tax on trade. When you tax something, you get less of itmeaning that in addition to higher retail prices, were likely to have less trade and lower retail sales. This will be even more true if Trump follows through on his latest threats. But even if he backs down from them, the Yale Budget Lab estimates that a universal 10% tariff, along with 60% tariffs on Chinese imports (which would be a little higher than they are now), would cost consumers, on average, a minimum of $1,900 a year in higher prices, and could shrink U.S. GDP by somewhere between 0.5% and 1.4%. We may yet dodge the disaster that the U.S. is headed for if Trump ends up returning to his original Liberation Day tariffs, and if we have a real trade war with the EU and China. But even if we do, the tariffs well still be stuck with ar going to be a permanent, steady drag on the economya drag that may not be big enough to make headlines but that nonetheless will be impossible to avoid.
Category:
E-Commerce
Want to watch history being preserved in real time? The Internet Archive, the digital library of internet sites and other cultural artifacts, has started livestreaming on YouTube from its scanning center in California for anyone to watch. Monday through Friday, from 10:30 a.m. ET to 6:30 p.m. ET, viewers can tune in and watch live as fragile film cards are turned into searchable public documents, soundtracked to relaxing lo-fi beats. This work is part of Democracys Library, a global initiative to digitize and make publicly available millions of government records. This livestream shines a light on the unsung work of preserving the public record and the critical infrastructure that makes democracy searchable, said Brewster Kahle, founder of the Internet Archive. Transparency cant be passiveit must be built, maintained, and seen. Thats what this livestream is all about. If youre confused about what exactly youre watching on the livestream, scanning operators are specifically working with documents on microfiche, a flat piece of film containing microphotographs of the pages of documents. This format dates back to the mid-20th century and has been used to archive newspapers, court documents, government records, and more. The livestream features five active microfiche digitization stations, with a close-up view of one in action,” Chris Freeland, the Internet Archives director of library services, explains in a blog post on the site. “Operators feed microfiche cards beneath a high-resolution camera, which captures multiple detailed images of each sheet. Software stitches these images together, after which other team members use automated tools to identify and crop up to 100 individual pages per card.” Each page is then processed, made fully text-searchable, and added to the Internet Archives public collectionscomplete with metadataso that researchers, journalists, and the general public can explore and download them freely,” the blog post adds. This livestream was brought to life by Sophia Tung, a software engineer and app developer. She is also behind the 24/7 livestream of a Waymo parking lot that went viral last year. In off hours, the Internet Archive livestream turns into a stream of silent films and historical images from NASA to keep viewers entertained. There is also a live chat. This is such a good vibe to work on research, one viewer commented. I hope your work is as mysterious and important as this, Tung replied.
Category:
E-Commerce
Three years after suing to block Microsoft from buying one of the biggest names in video games, the U.S. government is finally giving up. The FTC announced plans Thursday to drop a Biden-era case against Microsoft over its $69 billion acquisition of game maker Activision Blizzard, a decision the regulator said now best serves the public interest. In 2022, the FTC first announced that it would try to kill Microsofts planned acquisition of the gaming giant, which makes hit games like Call of Duty and World of Warcraft. The following year, after the FTC failed to secure a preliminary injunction to stop it, Microsoft actually finalized the massive deal, but the regulator vowed to continue appealing that decision. Earlier this month, the 9th Circuit Court of Appeals upheld the lower courts order denying the injunction, ruling that the FTCs claims that the deal would limit competition in the gaming industry were weak. The acquisition was destined for intense scrutiny from day one, both for its size and its potential to totally reshape the landscape for one of techs hottest sectors. Microsoft swooped in to save Activision Blizzard from itself When Microsoft announced its plan to buy Activision Blizzard in January 2022, the smaller company had been rocked by emerging allegations of systemic sexual harassment and discrimination in the workplace. Those ongoing scandals eventually forced longtime CEO Bobby Kotick out of the company as Microsoft cleaned house leading into the merger. Microsoft also had to clear major regulatory hurdles in the U.K., resolving antitrust concerns there over its cloud gaming services before getting the green light to close the deal. That bit of regulatory maneuvering resulted in an unusual arrangement to offload cloud streaming rights for its games to competitor Ubisoft in order to appease the Competition and Markets Authority, the U.K.s powerful trust buster. (This portion of the deal isnt great news for anyone whos wrestled with Ubisofts awkward online gaming service over the years.) A boost to Microsofts online gaming roadmap By bringing Activision Blizzard under its wing, Microsoft can also bring the companys many hit titles into the popular Xbox Game Pass service, which gives players unlimited access to games for a monthly subscription fee. Gaming companies have increasingly turned to monthly subscriptions and live service games over the last decade and many of Activision Blizzards hit franchises revolve around online multiplayer, including Call of Duty, Overwatch, Diablo and World of Warcraft. Activision Blizzard also owns Candy Crush, a colorful tile-matching game thats still synonymous with mobile gaming almost a decade after Activision Blizzard bought its developer King for a then whopping $5.9 billion. Microsoft President Brad Smith described his company as grateful to the FTC for its decision to allow the acquisition to settle. Todays decision is a victory for players across the country and for common sense in Washington, D.C., Smith said.
Category:
E-Commerce
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