Economy

The United States Senate has passed a sweeping tax bill championed by President Donald Trump, sending the controversial legislation to the House of Representatives for what could be a final vote.

Lawmakers passed the bill by a 51-to-50 vote in the Republican controlled-chamber on Tuesday, after Vice President JD Vance broke the tie.

The successful vote ended what was a marathon 27 hours of debate in the upper chamber. Three Republicans joined with Democrats to vote against the bill, which would enshrine many of Trump’s signature policies, including his 2017 tax cuts, reductions for social safety net programmes, and increased spending on border enforcement and deportations.

Critics on both sides of the aisle have taken aim at the estimated $3.3 trillion the bill would add to the national debt.

Others have blasted reductions to programmes like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). They argue that the bill takes support away from low-income families to finance tax cuts that will primarily help the wealthy.

Trump, however, has pressed for the bill to be passed by July 4, the country’s Independence Day. The legislation — informally known as the One Big Beautiful Bill — now heads back to the House of Representatives for a Wednesday vote on the updated version.

The president found out about the Senate’s passage in the midst of a news conference in south Florida, where he was touting his crackdown on immigration.

Despite tight odds in the House of Representatives, Trump struck an optimistic tone about the upcoming vote.

“ I think it’s going to go very nicely in the House,” Trump said. “Actually, I think it will be easier in the House than it was in the Senate.”

The president also downplayed one of the most controversial provisions in the bill: cuts to Medicaid, a government health insurance programme for low-income families. About 11.8 million people are anticipated to lose their health coverage in the coming years if the bill becomes law.

“I’m saying it’s going to be a very much smaller number than that, and that number will be all waste, fraud and abuse,” Trump said.

Criticisms in the Senate

Trump was not the only Republican to be celebrating the passage of the omnibus bill. In the Senate, leading Republican John Thune touted the bill as a victory for American workers.

“It’s been a long road to get to today,” Thune said from the Senate floor. “Now we’re here, permanently extending tax relief for hard-working Americans.”

But not all Republicans were as enthused about the bill. Three party members — Thom Tillis of North Carolina, Rand Paul of Kentucky and Susan Collins of Maine — all voted against its passage. And even a critical vote in favour, Lisa Murkowski of Alaska, appeared to express regret in the aftermath.

“Do I like this bill? No,” she told a reporter for NBC News. “I know, that in many parts of the country, there are Americans who are not going to be advantaged by this bill. I don’t like that.”

She later took to social media to criticise the haste of its passage. “Let’s not kid ourselves. This has been an awful process – a frantic rush to meet an artificial deadline that has tested every limit of this institution.”

Meanwhile, the top Democrat in the Senate, Chuck Schumer, said that Republicans had “betrayed the American people and covered the Senate in utter shame”.

“In one fell swoop, Republicans passed the biggest tax break for billionaires ever seen, paid for by ripping away healthcare from millions of people,” said Schumer.

Still, Schumer announced one symbolic victory on Tuesday, writing on the social media platform X that Trump’s name for the legislation — “One Big Beautiful Bill” — had been struck from its official title.

Republicans currently hold a trifecta in US government, with control of the Senate, the House of Representatives and the White House, giving Democrats reduced power in legislating.

But the Republicans have narrow majorities in Congress, leading to uncertainty about the bill’s fate. In the Senate, they hold 53 of the chamber’s 100 seats. In the House, where the bill heads now, they have a majority of 220 representatives to the Democrats’ 212.

‘Not fiscal responsibility’

The bill is therefore likely to face a razor-thin margin in the House. An early version that passed on May 22 did so with just one Republican vote to spare.

The House Freedom Caucus, a group of hardline conservatives, has continued to baulk at the bill’s high price tag and could push for deeper spending cuts in the coming days.

“The Senate’s version adds $651 billion to the deficit — and that’s before interest costs, which nearly double the total,” the caucus wrote in a statement on Monday.

“That’s not fiscal responsibility. It’s not what we agreed to.”

Billionaire Elon Musk, whose endorsement and funding helped propel Trump to victory in the 2024 presidential election, has also been a vocal opponent of the bill.

“What’s the point of a debt ceiling if we keep raising it?” Musk asked on social media on Tuesday. “All I’m asking is that we don’t bankrupt America.”

Musk has threatened to fund primary challenges against Republicans who support the bill and even floated on Monday launching a new political party in the US.

Trump, however, has brushed aside Musk’s criticism as a reaction to the elimination of tax credits for electric vehicles: The billionaire owns one of the most prominent manufacturers, Tesla.

The president also threatened to use the Department of Government Efficiency (DOGE) — which Musk helped to found — to strip the billionaire’s companies of their subsidies.

“DOGE is the monster that might have to go back and eat Elon,” Trump said as he travelled to Florida.

Reporting from Washington, DC, Al Jazeera correspondent Alan Fisher said that public support has been slipping as a clearer picture of the bill has emerged.

“The longer this has been talked about and the more details that become public, the fewer Americans support him,” Fisher said.

Several recent polls have shown a majority of Americans oppose the bill. A survey last week from Quinnipiac University, for example, found just 29 percent of respondents were in favour of the legislation, while 55 percent were against it.

Increase to national debt

All told, the legislation in its current form would make permanent Trump’s 2017 cuts to business and personal income taxes, which are set to expire by the end of the year.

It would also give new tax breaks for income earned through tips and overtime, a policy promise Trump made during his 2024 campaign.

At the same time, the bill would provide tens of billions of dollars for Trump’s immigration crackdown, including funding to extend barriers and increase technology along the southern border. The bill would also pay for more immigration agents and build the government’s capacity to quickly detain and deport people.

Beyond cuts to electric vehicle tax breaks, the bill also guts several of former President Joe Biden’s incentives for wind and solar energy.

Faced with criticism about the knock-on effects for low-income families, Republicans have countered that the new restrictions to Medicaid and SNAP — formerly known as food stamps — would help put the programmes on a more sustainable path.

Many Republicans have also rejected the Congressional Budget Office’s assessment that the legislation would add $3.3 trillion to the country’s already $36.2 trillion debt.

Nonpartisan analysts, meanwhile, have said the increase in debt has the potential to slow economic growth, raise borrowing costs and crowd out other government spending in the years ahead.

Amid their public feud over the looming tax bill, US President Donald Trump has suggested that the Department of Government Efficiency (DOGE) review subsidies tied to once ally Elon Musk, including those received by Tesla and SpaceX, in order to save money.

“Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!,” the president said in an early morning post on Trump’s social media platform Truth Social.

Trump’s remarks on Tuesday came after Musk renewed his criticism of the sweeping tax-cut and spending bill — which the White House hopes to sign into law by July 4th — pledging to unseat lawmakers who supported it after campaigning on limiting government spending.

Shortly after, Senate Republicans hauled Trump’s big tax breaks and spending cuts bill to passage Tuesday on the narrowest of margins, pushing past opposition from Democrats and their own GOP ranks after a turbulent overnight session.

The outcome capped an unusually tense weekend of work at the Capitol, the president’s signature legislative priority teetering on the edge of approval or collapse. In the end, that tally was 50-50, with Vice President JD Vance casting the tie-breaking vote.

Musk and Trump spar over bill

Feuding with Trump could create hurdles for Tesla and the rest of Musk’s business empire.

The US Transportation Department regulates vehicle design and would play a key role in deciding whether Tesla can mass-produce robotaxis without pedals and steering wheels, while Musk’s rocket company SpaceX has about $22bn in federal contracts.

Trump previously threatened to cut Musk’s government contracts when their relationship erupted into an all-out social media brawl in early June over the bill, which non-partisan analysts have said would add about $3 trillion to the US debt.

But after weeks of relative silence, Musk rejoined the debate on Saturday as the Senate took up the package, calling it “utterly insane and destructive” in a post on X.

On Monday, he said lawmakers who campaigned on cutting spending but backed the bill “should hang their heads in shame!” “And they will lose their primary next year if it is the last thing I do on this Earth,” Musk added.

The criticism marked a dramatic shift after the billionaire spent nearly $300m on Trump’s re-election campaign and led the administration’s controversial DOGE initiative.

Musk has argued that the legislation would greatly increase the national debt and erase the savings he says he achieved through DOGE.

Conflicts of interest

Musk was long slammed for his conflicts of interest while leading DOGE — accused of going after government agencies that had open investigations against him and his associated companies.

A report from the left-leaning think tank Public Citizen found that 70 percent of the agencies in May found that Musk aimed to make significant cuts to agencies, including the National Highway Traffic Safety Administration, which had been investigating Tesla.

The Food and Drug Administration, which had been investigating his brain implant chip, Neuralink, and cuts to the Department of Defense, which has been called for by both progressive Democrats as well, comes as SpaceX receives more than $22bn in federal contracts from the agency, according to the report.

The market response

There are conflicts with Musk within the bill he’s actively rallying against. The bill, which Trump eliminated the EV tax credit, Musk originally said would not hurt Tesla. The EV tax credit, however, has helped other carmakers make more affordable electric vehicles for more consumers, and Musk has recently changed his tune.

In a note last month, JP Morgan said cutting the EV tax credit could cost Tesla $1.2bn annually. Now the market is reacting as these plans might come to fruition in a matter of days, and amid the president’s Truth Social post, spooking investors.

Tesla stock tumbled roughly 6 percent as of 11:00am ET (15:00 GMT) and about 13 percent over the last five days.

“[This] BFF situation has now turned into a soap opera that remains an overhang on Tesla’s stock with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk related US government spending related to Tesla/SpaceX and most importantly the autonomous future with the regulatory environment key to the future of Robotaxis and Cybercabs,” Dan Ives, senior analyst at Wedbush Securities said in a note provided to Al Jazeera earlier this morning.

Musk’s other companies include SpaceX, X Corp, and Neuralink are privately held companies.

More broadly the markets erased some of the gains in the last few days. The tech-heavy Nasdaq is down by about a full percentage point and the S&P 500 down 0.3 percent.  Dow Jones Industrial Average, on the other hand, is trending upwards, roughly 0.6 percent higher than the market open.

The United States dollar has had its worst first six months of the year since 1973, as President Donald Trump’s economic policies have prompted global investors to sell their greenback holdings, threatening the currency’s “safe-haven” status.

The dollar index, which measures the currency’s strength against a basket of six others, including the pound, euro and yen, fell 10.8 percent in the first half of 2025.

President Trump’s stop-start tariff war, and his attacks that have led to worries over the independence of the Federal Reserve, have undermined the appeal of the dollar as a safe bet. Economists are also worried about Trump’s “big, beautiful” tax bill, currently under debate in the US Congress.

The landmark legislation is expected to add trillions of dollars to the US debt pile over the coming decade and has raised concerns about the sustainability of Washington’s borrowing, prompting an exodus from the US Treasury market.

Meanwhile, gold has hit record highs this year, on continued buying by central banks worried about devaluation of their dollar assets.

What has happened to the dollar?

On April 2, the Trump administration unveiled tariffs on imports from most countries around the world, denting confidence in the world’s largest economy and causing a selloff in US financial assets.

More than $5 trillion was erased from the value of the benchmark S&P 500 index of shares in the three days after “Liberation Day”, as Trump described the day of his tariffs announcement. US Treasuries also saw clear-outs, lowering their price and sending debt costs for the US government sharply higher.

Faced with a revolt in financial markets, Trump announced a 90-day pause on tariffs, except for exports from China, on April 9. While trade tensions with China – the world’s second-largest economy – have since eased, investors remain wary of holding dollar-linked assets.

Last month, the Organisation for Economic Co-operation and Development (OECD) announced that it had cut its US growth outlook for this year from 2.2 percent in March to just 1.6 percent, even as inflation has slowed.

Looking ahead, Republican leaders are trying to push through Trump’s One Big Beautiful Bill Act through Congress before July 4. The bill would extend Trump’s 2017 tax cuts, slash healthcare and welfare spending and increase borrowing.

While some legislators believe it could take until August to pass the bill, the aim would be to raise the borrowing limit on the country’s $36.2 trillion debt pile. The non-partisan Congressional Budget Office said it would raise Federal debt by $3.3 trillion by 2034.

That would significantly raise the government’s debt-to-GDP (gross domestic product) ratio from 124 percent today, raising concerns about long-term debt sustainability. Meanwhile, annual deficits – when state spending exceeds tax revenues – would rise to 6.9 percent of GDP from about 6.4 percent in 2024.

So far, Trump’s attempts to lower spending through Elon Musk’s Department of Government Efficiency have fallen short of expectations. And though import tariffs have raised revenue for the government, they’ve been paid for – in the form of higher costs – by American consumers.

The upshot is that Trump’s unpredictable policies, which prompted Moody’s rating agency to strip the US government of its top credit score in May, have slowed US growth prospects this year and dented the demand for its currency.

The dollar has also trended down on expectations that the Federal Reserve will cut interest rates to support the United States’ economy, urged on by Trump, with two to three reductions expected by the end of this year, according to levels implied by futures contracts.

Is the US becoming a ‘less attractive’ destination?

Owing to its dominance in trade and finance, the dollar has been the world’s currency anchor. In the 1980s, for instance, many Gulf countries began pegging their currencies to the greenback.

Its influence doesn’t stop there. Though the US accounts for one-quarter of global GDP, 54 percent of world exports were denominated in dollars in 2023, according to the Atlantic Council.

Its dominance in finance is even greater. About 60 percent of all bank deposits are denominated in dollars, while nearly 70 percent of international bonds are quoted in the US currency.

Meanwhile, 57 percent of the world’s foreign currency reserves – assets held by central banks – are held in dollars, according to the IMF.

But the dollar’s reserve status is supported by confidence in the US economy, its financial markets and its legal system.

And Trump is changing that. Karsten Junius, chief economist at Bank J Safra Sarasin, says “investors are beginning to realise that they’re over-exposed to US assets.”

Indeed, foreigners own $19 trillion of US equities, $7 trillion of US Treasuries and $5 trillion of US corporate bonds, according to Apollo Asset Management.

If investors continue to trim their positions, the dollar’s value could continue to come under sustained pressure.

“The US has become a less attractive place to invest these days… US assets are not as safe as they used to be,” Junius told Al Jazeera.

What are the consequences of a lower-value dollar?

Many within the Trump administration argue that the costs of the US dollar’s reserve status outweigh the benefits – because that raises the cost of US exports.

Stephen Miran, chair of Trump’s Council of Economic Advisers, has said high dollar valuations place “undue burdens on our firms and workers, making their products and labour uncompetitive on the global stage”.

“The dollar’s overvaluation has been one factor contributing to the US’s loss of competitiveness over the years, and… tariffs are a reaction to this unpleasant reality,” he added.

At first blush, a lower dollar would indeed make US goods cheaper to overseas buyers and make imports more expensive, helping to reduce the country’s trade deficits. However, these typical trade effects remain in flux due to ongoing tariff threats.

For developing countries, a weaker greenback will lower the local currency cost of repaying dollar debt, providing relief to heavily indebted countries like Zambia, Ghana or Pakistan.

Elsewhere, a weaker dollar should boost commodity prices, increasing export revenues for countries exporting oil, metals or agricultural goods such as Indonesia, Nigeria and Chile.

Have other currencies done well?

Since the start of Trump’s second term in office, the greenback’s slide has upended widespread predictions that his trade war would do greater damage to economies outside the US, while also spurring US inflation – strengthening the currency against its rivals.

Instead, the euro has risen 13 percent to above $1.17 as investors continue to focus on growth risks inside the US. At the same time, demand has risen for other safe assets like German and French government bonds.

For American investors, the weaker dollar has also encouraged equity investments abroad. The Stoxx 600 index, a broad measure across European stocks, has risen roughly 15 percent since the start of 2025.

Converted back into dollars, that gain amounts to 23 percent.

Meanwhile, inflation – again belying predictions – has come down from 3 percent in January to 2.3 percent in May.

According to Junius, there is no significant threat to the dollar’s status as the world’s de facto reserve currency anytime soon.

But “that doesn’t mean that you can’t have more of a weakening in the US dollar,” he said. “In fact, we continue to expect that between now and the end of the year.”

Researchers at Stanford University recently tested out some of the more popular AI tools on the market, from companies like OpenAI and Character.ai, and tested how they did at simulating therapy.

The researchers found that when they imitated someone who had suicidal intentions, these tools were more than unhelpful — they failed to notice they were helping that person plan their own death.

“[AI] systems are being used as companions, thought-partners, confidants, coaches, and therapists,” says Nicholas Haber, an assistant professor at the Stanford Graduate School of Education and senior author of the new study. “These aren’t niche uses – this is happening at scale.”

AI is becoming more and more ingrained in people’s lives and is being deployed in scientific research in areas as wide-ranging as cancer and climate change. There is also some debate that it could cause the end of humanity.

As this technology continues to be adopted for different purposes, a major question that remains is how it will begin to affect the human mind. People regularly interacting with AI is such a new phenomena that there has not been enough time for scientists to thoroughly study how it might be affecting human psychology. Psychology experts, however, have many concerns about its potential impact.

One concerning instance of how this is playing out can be seen on the popular community network Reddit. According to 404 Media, some users have been banned from an AI-focused subreddit recently because they have started to believe that AI is god-like or that it is making them god-like.

“This looks like someone with issues with cognitive functioning or delusional tendencies associated with mania or schizophrenia interacting with large language models,” says Johannes Eichstaedt, an assistant professor in psychology at Stanford University. “With schizophrenia, people might make absurd statements about the world, and these LLMs are a little too sycophantic. You have these confirmatory interactions between psychopathology and large language models.”

Because the developers of these AI tools want people to enjoy using them and continue to use them, they’ve been programmed in a way that makes them tend to agree with the user. While these tools might correct some factual mistakes the user might make, they try to present as friendly and affirming. This can be problematic if the person using the tool is spiralling or going down a rabbit hole.

“It can fuel thoughts that are not accurate or not based in reality,” says Regan Gurung, social psychologist at Oregon State University. “The problem with AI — these large language models that are mirroring human talk — is that they’re reinforcing. They give people what the programme thinks should follow next. That’s where it gets problematic.”

As with social media, AI may also make matters worse for people suffering from common mental health issues like anxiety or depression. This may become even more apparent as AI continues to become more integrated in different aspects of our lives.

“If you’re coming to an interaction with mental health concerns, then you might find that those concerns will actually be accelerated,” says Stephen Aguilar, an associate professor of education at the University of Southern California.

Need for more research

There’s also the issue of how AI could impact learning or memory. A student who uses AI to write every paper for school is not going to learn as much as one that does not. However, even using AI lightly could reduce some information retention, and using AI for daily activities could reduce how much people are aware of what they’re doing in a given moment.

“What we are seeing is there is the possibility that people can become cognitively lazy,” Aguilar says. “If you ask a question and get an answer, your next step should be to interrogate that answer, but that additional step often isn’t taken. You get an atrophy of critical thinking.”

Lots of people use Google Maps to get around their town or city. Many have found that it has made them less aware of where they’re going or how to get there compared to when they had to pay close attention to their route. Similar issues could arise for people with AI being used so often.

The experts studying these effects say more research is needed to address these concerns. Eichstaedt said psychology experts should start doing this kind of research now, before AI starts doing harm in unexpected ways so that people can be prepared and try to address each concern that arises. People also need to be educated on what AI can do well and what it cannot do well.

“We need more research,” says Aguilar. “And everyone should have a working understanding of what large language models are.”

US Treasury says it removed 518 Syrian individuals and entities from its list of sanctions after president’s decree.

Washington, DC – United States President Donald Trump has signed an executive order to dismantle a web of sanctions against Syria, a move that will likely unlock investments in the country more than six months after the overthrow of President Bashar al-Assad.

Trump’s decree on Monday offers sanction relief to “entities critical to Syria’s development, the operation of its government, and the rebuilding of the country’s social fabric”, the US Treasury said in a statement.

The Syrian government has been under heavy US financial penalties that predate the outbreak of the civil war in the country in 2011.

The sprawling sanction programme, which included provisions related to the former government’s human rights abuses, has derailed reconstruction efforts in the country. It has also contributed to driving the Syrian economy under al-Assad to the verge of collapse.

Trump promised sanctions relief for Syria during his visit to the Middle East in May.

“The United States is committed to supporting a Syria that is stable, unified, and at peace with itself and its neighbours,” the US president said in a statement on Monday.

“A united Syria that does not offer a safe haven for terrorist organisations and ensures the security of its religious and ethnic minorities will support regional security and prosperity.”

The US administration said Syria-related sanctions against al-Assad and his associates, ISIL (ISIS) and Iran and its allies will remain in place.

While the US Treasury said it already removed 518 Syrian individuals and entities from its list of sanctions, some Syria penalties may not be revoked immediately.

For example, Trump directs US agencies to determine whether the conditions are met to remove sanctions imposed under the Caesar Act, which enabled heavy penalties against the Syrian economy for alleged war crimes against civilians.

Democratic US Congresswoman Ilhan Omar had partnered with Republican lawmaker Anna Paulina Luna to introduce earlier this week a bill that would legislatively lift sanctions on Syria to offer long-term relief.

Real relief for the Syrian people requires repealing certain laws.

My bill with @RepLuna permanently repeals the sanctions and gives the post-Assad Syria a fighting chance. https://t.co/gExbLiKS7z

— Rep. Ilhan Omar (@Ilhan) June 30, 2025

As part of Trump’s order, the US president ordered Secretary of State Marco Rubio to review the designation of interim Syrian President Ahmed al-Sharaa as a “Specially Designated Global Terrorist”.

Moreover, the US president ordered a review of the status of al-Sharaa’s group, al-Nusra Front – now Hayat Tahrir al-Sham (HTS) – as a designated “foreign terrorist” organisation. Al-Nusra was al-Qaeda’s branch in Syria, but al-Sharaa severed ties with the group in 2016.

Al-Nusra later became known as Jabhat Fath al-Sham before merging with other rebel groups as HTS.

Al-Sharaa was the de facto leader of a rebel enclave in Idlib in northwest Syria for years before leading the offensive that overthrew al-Assad in December 2024.

Trump met with al-Sharaa in Saudi Arabia in May and praised the Syrian president as “attractive” and “tough”.

The interim Syrian president – who was previously known by his nom de guerre Abu Mohammed al-Julani – has promised inclusive governance to allay concerns about his past ties to al-Qaeda.

But violence and kidnappings against members of al-Assad’s Alawite sect by former rebel fighters over the past months have raised concerns among some rights advocates.

Al-Sharaa has also pledged that Syria would not pose a threat to its neighbours, including Israel, which has been advancing in Syrian territory beyond the occupied Golan Heights and regularly bombing the country.

Beijing’s remarks come after Ottawa announced it would cease all Canadian operations of the company.

Canada’s request for Chinese surveillance equipment firm Hikvision to close local operations will “damage” bilateral trade, complicating recent efforts to improve ties between the countries, China’s Ministry of Commerce has said.

Beijing’s remarks came on Monday after Canadian Industry Minister Melanie Joly announced last week on the social media platform X that Hikvision Canada Inc had been ordered to cease all operations due to concerns their continuation would be “injurious” to the country’s security.

Her statement on Friday did not provide details on the alleged threat posed by Hikvision products, but said departments and agencies would be prohibited from using them, and that the government is “conducting a review of existing properties to ensure that legacy Hikvision products are not used going forward”.

China’s Commerce Ministry responded by accusing Ottawa of “over-generalising national security”, stating: “China is strongly dissatisfied.”

“This not only undermines the legitimate rights and interests of Chinese companies and affects the confidence of companies from both countries in cooperation, but also disrupts and damages the normal economic and trade cooperation between China and Canada,” the statement read.

“China urges Canada to immediately correct its wrong practices,” it added.

Hangzhou-based Hikvision is one of the world’s leading manufacturers of security cameras and other surveillance products, but it has faced scrutiny abroad for its role in Beijing’s alleged rights abuses against the Muslim minority Uighur population.

The United States included Hikvision in a 2019 blacklist of Chinese entities it said were implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs and other Muslim minority groups in Xinjiang.

The latest disagreement represents an early test for China-Canada relations after Prime Minister Mark Carney surged to electoral victory in April.

China said in response to the election result that Beijing was willing to improve ties with Ottawa, a relationship rocked in recent years by a range of thorny issues.

The arrest of a senior Chinese telecom executive on a US warrant in Vancouver in December 2018 and Beijing’s retaliatory detention of two Canadians on espionage charges plunged relations into a deep freeze.

Ties were further strained over allegations of Chinese interference in Canadian elections in 2019 and 2021, charges Beijing has denied.

Joly had said the decision to ban Hikvision had been reached following a “multi-step review” of information provided by the Canadian security and intelligence community.

At a minimalist matcha bar in Los Angeles, United States, powdered Japanese tea is prepared with precision, despite a global shortage driven by the bright green drink’s social media stardom.

Of the 25 types of matcha on the menu at Kettl Tea, which opened on Hollywood Boulevard this year, all but four were out of stock, according to the shop’s founder, Zach Mangan.

“One of the things we struggle with is telling customers that, unfortunately, we don’t have” what they want, he said.

With its deep grassy aroma, intense colour and pick-me-up effects, the popularity of matcha “has grown just exponentially over the last decade, but much more so in the last two to three years”, the 40-year-old explained.

It is now “a cultural touchpoint in the Western world” – found everywhere from ice-cream flavour boards to Starbucks.

This has caused matcha’s market to nearly double over a year, Mangan said.

“No matter what we try, there’s just not more to buy.”

In the Japanese city of Sayama, northwest of Tokyo, Masahiro Okutomi – the 15th generation to run his family’s tea production business – is overwhelmed by demand.

“I had to put on our website that we are not accepting any more matcha orders,” he said.

Producing the powder is an intensive process: the leaves, called “tencha”, are shaded for several weeks before harvest, to concentrate the taste and nutrients.

They are then carefully deveined by hand, dried and finely ground in a machine.

“It takes years of training” to make matcha properly, Okutomi said. “It’s a long-term endeavour requiring equipment, labour and investment.”

“I’m glad the world is taking an interest in our matcha … but in the short term, it’s almost a threat – we just can’t keep up,” he said.

The matcha boom has been propelled by online influencers like Andie Ella, who has more than 600,000 subscribers on YouTube and started her own brand of matcha products.

At the pastel-pink pop-up shop she opened in Tokyo’s hip Harajuku district, dozens of fans were excitedly waiting to take a photo with the 23-year-old Frenchwoman or buy her cans of strawberry or white chocolate-flavoured matcha.

“Matcha is visually very appealing,” said Ella.

To date, her matcha brand, produced in Japan’s rural Mie region, has sold 133,000 cans. Launched in November 2023, it now has eight employees.

“Demand has not stopped growing,” she said.

Last year, matcha accounted for more than half of the 8,798 tonnes of green tea exported from Japan, according to Japan’s Agriculture Ministry data – twice as much as 10 years ago.

Tokyo tea shop Jugetsudo, in the touristy former fish market area of Tsukiji, is trying to control its stock levels given the escalating demand.

“We don’t strictly impose purchase limits, but we sometimes refuse to sell large quantities to customers suspected of reselling,” said store manager Shigehito Nishikida.

“In the past two or three years, the craze has intensified. Customers now want to make matcha themselves, like they see on social media,” he added.

The global matcha market is estimated to be worth billions of dollars, but it could be hit by US President Donald Trump’s tariffs on Japanese products – currently 10 percent, with a rise to 24 percent in the cards.

Shortages and tariffs mean “we do have to raise prices. We don’t take it lightly”, said Mangan at Kettl Tea, though it has not dampened demand so far.

“Customers are saying, ‘I want matcha before it runs out’.”

Japan’s government is encouraging tea producers to farm on a larger scale to reduce costs.

But that risks sacrificing quality, and “in small rural areas, it’s almost impossible”, grower Okutomi said.

The number of tea plantations in Japan has fallen to a quarter of what it was 20 years ago, as farmers age and find it difficult to secure successors, he added.

“Training a new generation takes time… It can’t be improvised.”

The Republican-controlled Senate of the United States has voted to take President Donald Trump’s so-called “Big Beautiful Bill” into the next phase of discussion, making it more likely to pass in the coming days.

The measure, which is Trump’s top legislative goal, passed its first procedural hurdle in a 51 to 49 vote on Saturday, with two Republican senators joining all Democrats in voting against it.

The result came after several hours of negotiation as Republican leaders and Vice President JD Vance sought to persuade last-minute holdouts in a series of closed-door negotiations.

Trump has pushed his party to get the bill passed and on his desk for him to sign into law by July 4, the US’s Independence Day.

He was monitoring the vote from the Oval Office late into the night, according to a senior White House official.

One Big Beautiful Bill Act

Al Jazeera’s Mike Hanna, reporting from Washington, DC, said the 940-page “One Big Beautiful Bill Act” was released shortly before midnight on Friday, and senators are still attempting to understand exactly what it means.

“One of the clear things in the bill is that it provides a $150bn boost to military spending. It also adds funding for mass deportations and building that border wall. Now, in order to get this money, what has happened is that there are cuts to Medicare, as well as to the Clean Energy funding programme,” he said.

“The other issue is that there are 53 Republicans and 47 Democrats in the Senate. Now all the Democrats are opposed to the bill. That means every single Republican vote will count,” Hanna added.

The procedural vote on Saturday, which would start a debate on the megabill, began after hours of delay.

It then remained open for more than three hours of standstill as three Republican senators – Thom Tillis, Ron Johnson and Rand Paul – joined Democrats to oppose the legislation.

Three others – Senators Rick Scott, Mike Lee and Cynthia Lummis – negotiated with Republican leaders into the night in hopes of securing bigger spending cuts.

In the end, Wisconsin Senator Johnson flipped his no vote to yes, leaving only Paul and Tillis opposed among Republicans.

Senate Democratic leader Chuck Schumer of New York said Republicans unveiled the bill “in the dead of night” and are rushing to finish the bill before the public fully knows what is in it.

He immediately forced a full reading of the text in the Senate, which would take an estimated 15 hours.

“Future generations will be saddled with trillions in debt. Debt is abstract, but what does it mean for the average American? Raising your costs, raising your costs to buy a home, raising your costs to buy a car, raising your costs on credit card bills. And why are they doing all this?” he asked.

“Why are they doing the biggest Medicaid cuts in history? Now it’s getting close to a trillion dollars, just in Medicaid alone, all to cut taxes for the ultra-rich and special interests.”

Elon Musk renews criticism

If passed in the Senate, the bill would go back to the House of Representatives for approval, where Republicans can only afford to lose a handful of votes – and are facing stiff opposition from within their own ranks.

Republicans are split on the Medicaid cuts, which will threaten scores of rural hospitals and lead to an estimated 8.6 million Americans being deprived of healthcare.

The spending plan would also roll back many of the tax incentives for renewable energy that were put in place under Trump’s predecessor, Joe Biden.

Nonpartisan analysts estimate that a version of Trump’s tax cut and spending bill would add trillions to the $36.2 trillion US government debt. They also say that the bill would pave the way for a historic redistribution of wealth from the poorest 10 percent of Americans to the richest.

The bill is unpopular across multiple demographic, age and income groups, according to extensive recent polling.

On Saturday, billionaire Elon Musk, with whom Trump had a public falling out this month over his criticism of the bill, again doubled down on his criticism of the draft legislation.

The Tesla and Space X CEO called the package “utterly insane and destructive”.

“The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country,” he wrote on X. “It gives handouts to industries of the past while severely damaging industries of the future.”

He later posted that the bill would be “political suicide for the Republican Party.”

As Canada pushes ahead with a new digital services tax on foreign and domestic technology companies, United States President Donald Trump has retaliated by ending all trade talks and threatened to impose additional tariffs on exports from Ottawa.

In a post on his Truth Social platform on Friday, Trump called the new Canadian tax structure a “direct and blatant attack on our country”, adding that Canada is “a very difficult country to trade with”.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he wrote. He added that he would announce new tariffs of his own for Canada in a matter of days.

US companies such as Amazon, Meta, Google and Uber face an estimated $2bn in bills under the new tax.

Trump’s decision marks a sharp return to trade tensions between the two countries, abruptly ending a more cooperative phase since Mark Carney’s election as Canada’s prime minister in March.

It also marks a further escalation in the trade-as-pressure tactic under Trump’s second term in Washington.

The US is Canada’s largest trading partner by far, with more than 80 percent of Canadian exports destined for the US. In 2024, total bilateral goods trade exceeded US$762bn, with Canada exporting $412.7bn and importing $349.4bn – leaving the US, which counts Canada as its second-largest trading partner, with a goods deficit of $63.3bn.

A disruption due to tariffs on products like automobiles, minerals, energy or aluminium could have large ripple effects across both economies.

So, what is Canada’s digital tax? Why is Carney facing domestic pushback on the taxes? And how is Washington responding?

What is Canada’s digital services tax?

Canada’s Digital Services Tax Act (DSTA) came into force in June last year. It is a levy on tech revenues generated from Canadian users – even if providers do not have a physical presence in the country.

The DSTA was first proposed during the 2019 federal election under then-Prime Minister Justin Trudeau, and received approval in Canada on June 20, 2024. It came into force a week later, on June 28. The first payments of this tax are due on Monday, June 30, 2025.

Large technology firms with global revenues exceeding $820m and Canadian revenues of more than $14.7m must pay a 3 percent levy on certain digital services revenues earned in Canada. Unlike traditional corporate taxes based on profits, this tax targets gross revenue linked to Canadian user engagement.

Digital services the levy will apply to include: Online marketplaces, social media platforms, digital advertising and the sale or licensing of user data.

One of the most contentious parts of the new framework for businesses is its retroactive nature, which demands payments on revenues dating back to January 1, 2022.

Why is Trump suspending trade talks over the new tax?

On June 11, 21 US Congress members sent a letter to President Trump, urging him to pressure Canada to eliminate or pause its Digital Services Tax. “If Canada decides to move forward with this unprecedented, retroactive tax, it will set a terrible precedent that will have long-lasting impacts on global tax and trade practices,” they wrote.

Then, in a Truth Social post on Friday this week, Trump said Canada had confirmed it would continue with its new digital services tax “on our American Technology Companies, which is a direct and blatant attack on our Country”.

He added that the US would be “terminating ALL discussions on Trade with Canada, effective immediately” and that he would be levying new tariffs of his own on Canada within seven days.

“They have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products,” Trump said, adding, “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

Later, at the Oval Office, Trump doubled down, saying: “We have all the cards. We have every single one.” He noted that the US holds “such power over Canada [economically]”. “We’d rather not use it,” Trump said, adding: “It’s not going to work out well for Canada. They were foolish to do it.

“Most of their business is with us, and when you have that circumstance, you treat people better.”

Trump also said he would order a Section 301 investigation under the Trade Act to assess the DSTA’s effect on US commerce, which could potentially lead to other punitive measures.

On Friday, White House National Economic Council director, Kevin Hassett, told the  Fox Business Friday programme: “They’re taxing American companies who don’t necessarily even have a presence in Canada.”

Calling the tax “almost criminal”, he said: “They’re going to have to remove it. And I think they know that.”

How has Canada responded?

Relations had seemed friendlier between the two North American neighbours in recent months as they continue with trade talks. Trump and former Prime Minister Justin Trudeau had clashed previously – with Trump calling Trudeau “very dishonest” and “weak” during the 2018 G7 talks in Canada.

But newly elected Carney enjoyed a cordial visit with Trump in May at the White House, while Trump travelled to Canada for the G7 summit in Alberta on June 16 and 17. Carney said at the summit that the two had set a 30-day deadline for trade talks.

In a brief statement on Friday, Prime Minister Carney’s office said of Trump’s new threats to suspend trade talks over the digital tax: “The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses.”

Last week, Canadian Finance Minister Francois-Philippe Champagne told reporters that the digital tax could be negotiated as part of the broader, ongoing US-Canada trade discussions. “Obviously, all of that is something that we’re considering as part of broader discussions that you may have,” he had said.

Those discussions had been expected to result in a trade deal in July. However, they are now in limbo.

What do Canadian business leaders say?

Carney has been facing pressure from domestic businesses as well, which have lobbied the government to pause the digital services tax, underlining that the new framework would increase their costs for providing services and warning against retaliation from the US.

The Business Council of Canada, a nonprofit organisation representing CEOs and leaders of major Canadian companies, said in a statement that, for years, it “has warned that the implementation of a unilateral digital services tax could risk undermining Canada’s economic relationship with its most important trading partner, the United States”.

“That unfortunate development has now come to pass,” the statement noted. “In an effort to get trade negotiations back on track, Canada should put forward an immediate proposal to eliminate the DST in exchange for the elimination of tariffs from the United States.”

Has Trump used tariffs to pressure Canada before?

Yes. Prior to the DSTA, Trump has used tariffs to pressure Canada over what he says is its role in the flow of the addictive drug, fentanyl, and undocumented migration into the US, as well as broader trade and economic issues.

On January 20, in his inaugural address, Trump announced a 25 percent tariff on all Canadian goods and a 10 percent tariff on Canadian energy resources. Trump claimed that Canada has a “growing footprint” in fentanyl production, and alleged that Mexican cartels operate fentanyl labs in Canada, particularly in British Columbia, Alberta and Ontario.

These tariffs were paused for 30 days following assurances from Canada that appropriate action would be taken to curb the flow of fentanyl, and then re-imposed in early March.

Do other countries levy a similar digital tax?

Yes, several countries around the world have introduced digital services taxes (DSTs) similar to Canada’s. France was one of the first to introduce a DST in 2019, eliciting an angry response from Trump who was serving his first term as president. The French tax is a 3 percent levy on revenues from online advertising, digital platforms and sales of user data.

The UK followed with a 2 percent tax on revenues from social media platforms and search engines. Spain, Italy, and Austria have also implemented similar taxes, with rates ranging from 3 to 5 percent. Turkiye has one of the highest DST rates at 7.5 percent, covering a wide range of digital services such as content streaming and advertising.

Outside Europe, India has a 2 percent “equalisation levy” on foreign e-commerce operators which earn revenues from Indian users. Kenya and Indonesia have also created their own digital tax systems, though they’re structured slightly differently – Indonesia, for instance, applies Value Added Tax (VAT) – or sales tax – on foreign digital services, rather than a DST.

The US government has strongly opposed these taxes; some of these disputes have been paused as part of ongoing negotiations led by the Organization for Economic Co-operation and Development (OECD), an international organisation made up of 38 member countries, which is working on a global agreement for taxing digital companies fairly.

Canada held off on implementing its DST until 2024 to give time for the OECD talks. But when progress stalled, it went ahead with the 3 percent tax that applies retroactively since January 2022.

Should the EU be worried about this?

The European Union is likely to be watching this situation closely as digital tax is likely to be a key concern during its own trade talks with the US.

Trump has repeatedly warned that similar tax measures from other allies, including EU countries, could face severe retaliation.

Trump’s administration has previously objected to digital taxes introduced by EU member states like France, Italy, and Spain. In 2020, the US Trade Representative investigated these taxes under Section 301 and threatened retaliatory tariffs, though those were paused pending OECD-led global tax negotiations.

The European Commission has confirmed that digital taxation remains on the agenda, especially if a global deal under the OECD fails to materialise. President Ursula von der Leyen said on June 26 that “all options remain on the table” in trade discussions with the US, including enforcement mechanisms against discriminatory US measures.

The high-stakes trade negotiations ongoing between the US and the EU have a deadline for July 9 – the date that Trump’s 90-day pause on global reciprocal tariffs is due to expire. Trump has threatened to impose new tariffs of up to 50 percent on key European exports, including cars and steel, if a deal is not reached.

In response to these threats, the EU has prepared a list of retaliatory tariffs worth up to 95 billion euros ($111.4bn), which would target a broad range of US exports, from agricultural products to Boeing aircraft. EU leaders have signalled that they will defend the bloc’s tax sovereignty, while remaining open to negotiation.

Canada had approved a 3 percent digital tax last year in June, and the first set of payments is due on Monday.

United States President Donald Trump has announced that the US is immediately ending trade talks with Canada in response to the country’s digital services tax on technology companies, marking a clear escalation of pressure tactics.

Trump, in a post on his Truth Social platform on Friday, called the Canadian tax a “direct and blatant attack on our country” and said, “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”

He added, “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

Canada had approved the Digital Services Tax Act on June 20, 2024, and it came into force shortly after on June 28. Under this, Canada will charge a tax of 3 percent on the digital services revenue a firm makes from Canadian users above 20 million Canadian dollars ($14.6m) in a calendar year.

Businesses have been calling for a pause, saying it would increase the cost of providing services, as well as risk drawing the wrath of the US government. But the Canadian federal government so far has refused and is proceeding with the plans. The Canadian Revenue Authority is set to start collecting the tax on Monday and will cover revenue retroactively from 2022.

Last week, Finance Minister Francois-Philippe Champagne suggested to reporters that the digital tax may be negotiated as part of broader, ongoing US-Canada trade discussions, Bloomberg News reported. Those discussions seemed to have been going well, and a trade deal was expected in July. Now, the status of that deal is unclear.

Carney’s office issued a brief statement on Friday saying, “The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses.”

‘Escalation’

“This is definitely escalation from Trump,” said Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada. “But we have seen this tactic before. Canada will need to work behind the scenes to find an off-ramp without giving in to his demands,” she said.

“Digital tax is also part of Trump’s negotiations with the European Union [which has similar levies]. Canada will need to coordinate with the EU and other partners as it contemplates its response,” Nadjibulla added.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera that while Trump’s declaration was unfortunate, it was “not surprising”, adding that it would also act as a scare tactic for the European Union, with whom the US is still negotiating its trade deal.

Tariffs on Canadian goods are bad for both the US and Canada as they increase the cost for businesses and ultimately consumers, experts say.

Canada is the second-largest trade partner for the US after Mexico, and last year, it bought $349.4bn of US goods and exported $412.7bn, according to US Census Bureau data. Canada has already been hit by Trump’s tariffs on steel and aluminium, as well as some auto parts and cars. The Canadian economy has started to slow down, and unemployment is at a high 7 percent.

In an emailed statement to Al Jazeera, Candace Laing, president and CEO of the Canadian Chamber of Commerce, said that while “some last-minute surprises should be expected” as negotiations approach deadlines, “our position on the Digital Services Tax has been consistent, but primarily for the reason that it’s self-defeating in nature”.

“That said, it’s a pivotal time for Canada-US relations. The tone and tenor of talks has improved in recent months, and we hope to see progress continue,” Laing said.

California Governor Gavin Newsom has filed a $787m defamation lawsuit against Fox News, accusing the network of misrepresenting a phone call between him and US President Donald Trump earlier this month amid immigration arrests and the subsequent protests in Los Angeles.

The complaint was filed on Friday in Delaware Superior Court, the state in which Fox Corp is incorporated.

Newsom spoke by phone with Trump late on June 6 – early June 7 on the East Coast, soon after protests broke out in Los Angeles following federal immigration raids.

Less than 24 hours later, the president sent National Guard troops and 700 Marines to the state, bypassing the governor’s office.

In an interview with NBC News on June 8, Newsom said that he had a civil conversation with the president, but he never brought up sending the National Guard.

“I tried to talk about LA, he wanted to talk about all these other issues,” Newsom said.

“He never once brought up the National Guard,” he added.

Newsom said he did not speak with Trump again, and confirmed this after Trump falsely told reporters on June 10 that he had spoken with the governor “a day ago”.

The suit alleged that the network had a “willingness to protect President Trump from his own false statements by smearing his political opponent Governor Newsom in a dispute over when the two last spoke during a period of national strife”.

The complaint said Fox nonetheless made a misleading video clip and multiple false statements about the timing of the last call, acting with actual malice in an effort to brand Newsom a liar and curry favour with Trump.

“Why would Newsom lie and claim Trump never called him?” Watters said on June 10 on his show, Jesse Watters Primetime, according to the complaint.

Watters’s report was accompanied by a chyron, a banner caption along the bottom of a TV screen, that said “Gavin Lied About Trump’s Call,” the complaint added.

According to the complaint, Fox’s claim that Newsom lied was “calculated to provoke outrage and cause Governor Newsom significant harm” by making people less likely to support his causes, donate to his campaigns, or vote for him in elections.

“Gov. Newsom’s transparent publicity stunt is frivolous and designed to chill free speech critical of him. We will defend this case vigorously and look forward to it being dismissed,” a spokesperson for Fox News told Al Jazeera in an email.

In a follow-up, Al Jazeera asked Fox if Watters and his production team fact-checked claims about the phone call before speaking about it – which is industry standard – but the network did not provide clarification.

Newsom’s punitive damages request is nearly identical to the $787.5m that Fox paid in 2023 to settle Dominion Voting Systems’ lawsuit over alleged vote-rigging in the 2020 US presidential election.

To prevail in his lawsuit, Newsom would have to show Fox acted with actual malice, meaning it knew its statements were false or had reckless disregard for their truth.

According to the New York Times, Newsom would drop the lawsuit if Fox issued a retraction and host Jesse Watters apologised on-air for saying the governor lied about his call with Trump.

The governor’s office told Al Jazeera that it would not comment because Newsom is pursuing the lawsuit in a personal capacity and not through the office.

In an emailed statement, Newsom said, “If Fox News wants to lie to the American people on Donald Trump’s behalf, it should face consequences – just like it did in the Dominion case. I believe the American people should be able to trust the information they receive from a major news outlet. Until Fox is willing to be truthful, I will keep fighting against their propaganda machine.”

Out of Trump’s playbook

Newsom’s lawsuit comes as Trump has gone after news organisations that have been critical of him. He reached a $15m settlement with ABC News after the network made in an inaccurate claim that a jury found Trump liable for rape in the civil case involving E Jean Carroll, rather than sexual assault.

The White House also recently went after the network when former White House correspondent Terry Moran called White House Deputy Chief of Staff Stephen Miller a “world-class hater”. Moran was later suspended and subsequently dismissed from the network.

Trump also sued CBS News for $20bn for the editing of a 60 Minutes interview with his Democratic rival Kamala Harris, which was reportedly mediated into a settlement agreement of $20m with parent company Paramount Global, causing concern in the news division. Paramount has a pending merger with Skydance.

Trump has also slashed funding for public media, which the White House alleged was “radical, woke propaganda disguised as ‘news’”.

Nike has said it will cut its reliance on production in China for the United States market to mitigate the impact from US tariffs on imports, and forecast a smaller-than-expected drop in first-quarter revenue.

The sportswear giant’s shares zoomed 15 percent at the opening bell on Friday morning after it announced the change in conjunction with its earnings report released on Thursday.

US President Donald Trump’s sweeping tariffs on imports from key trading partners could add about $1bn to Nike’s costs, company executives said on a post-earnings call after the sportswear giant topped estimates for fourth-quarter results.

China, subject to the biggest tariff increases imposed by Trump, accounts for about 16 percent of the shoes Nike imports into the US, Chief Financial Officer Matthew Friend said. However, the company aims to cut the figure to a “high single-digit percentage range” by the end of May 2026 as it reallocates Chinese production to other countries.

“We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States,” he said on a call with investors.

Consumer goods are one of the most affected areas by the tariff dispute between the world’s two largest economies, but Nike’s executives said they were focused on cutting the financial pain. Nike will “evaluate” corporate cost reductions to deal with the tariff impact, Friend said. The company has already announced price increases for some products in the US.

“The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share in the US,” David Swartz, analyst at Morningstar Research, told the Reuters news agency.

CEO Elliott Hill’s strategy to focus product innovation and marketing around sports is beginning to show some fruit, with the running category returning to growth in the fourth quarter after several quarters of weakness.

Having lost share in the fast-growing running market, Nike has invested heavily in running shoes such as Pegasus and Vomero, while scaling back production of sneakers such as the Air Force 1.

“Running has performed especially strongly for Nike,” said Citi analyst Monique Pollard, adding that new running shoes and sportswear products are expected to offset the declines in Nike’s classic sneaker franchises at wholesale partner stores.

Marketing spending was up 15 percent year on year in the quarter.

On Thursday, Nike hosted an event in which its sponsored athlete Faith Kipyegon attempted to run a mile in under four minutes. Paced by other star athletes in the glitzy event that was livestreamed from a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record.

Nike forecast first-quarter revenue to fall in the mid-single digits, slightly better than analysts’ expectations of a 7.3 percent drop, according to data compiled by LSEG. Its fourth-quarter sales fell 12 percent  to $11.10bn, but still beat estimates of a 14.9 percent drop to $10.72bn.

China continued to be a pain point, with executives saying a turnaround in the country will take time as Nike contends with tougher economic conditions and competition.

Looming trade deal as prices rise

Nike’s woes come as a trade deal with China could be on the horizon. US Treasury Secretary Scott Bessett said on Friday that the administration could have a deal with Beijing by Labor Day, which is on September 1.

Under the deal, the US will likely impose 55 percent tariffs across the board on Chinese goods, down from 145 percent, still a significant burden on businesses.

According to a survey from Allianz Global Trade last month, 38 percent of businesses say they will need to raise prices for consumers, with Nike being the latest.

In April, competitor Adidas said it would need to eventually raise prices for US consumers.

“Cost increases due to higher tariffs will eventually cause price increases,” CEO Bjorn Gulden said at the time.

Walmart said last month that its customers will see higher price tags in its stores as the nation’s biggest big box retailer prepares for back to school shopping season.

Target, which had a bad first quarter driven by boycotts and the looming threat of tariffs, also has been hit as the big box retailer gets 30 percent of its goods from China.

The United States has reached an agreement with China on accelerating shipments of rare earth minerals to the US, amid efforts to end a trade war between the world’s two biggest economies.

US President Donald Trump said on Thursday that the US had signed a deal with China the previous day, without providing more details, adding that he expects to soon have a trade deal with India as well.

Thursday’s announcement follows talks in Geneva in May, which led the US and China to reduce mutual tariffs.

In June, talks in London set a framework for negotiations. Thursday’s announcement appeared to formalise that agreement.

“The [Trump] administration and China agreed to an additional understanding for a framework to implement the Geneva agreement,” a White House official said on Thursday.

China also confirmed the framework for a deal, with its Ministry of Commerce stating that it will review and approve applications for items subject to export control rules.

What do we know about the US-China deal?

During US-China trade talks in Geneva, Beijing committed to removing non-tariff countermeasures imposed against the US following Donald Trump’s “Liberation Day” announcement on April 2.

That was when Washington announced so-called “reciprocal” import duties but later paused most of them, with the exception of its 145 percent tariff on China, for 90 days to allow for negotiations. This pause is due to come to an end on July 9.

In retaliation, China imposed its own tariff of 125 percent on US goods, suspended exports on a wide range of critical minerals, upending supply chains crucial to US carmakers, semiconductor companies and military contractors.

But on Thursday, US Commerce Secretary Howard Lutnick told Bloomberg TV that “they’re [China] going to deliver rare earths to us”, and once they do that “we’ll take down our countermeasures”. Those US countermeasures include export curbs on materials such as ethane, which is used to make plastic, and chip software.

A spokesperson for the Chinese Commerce Ministry said on Friday: “In recent days, after approval, both sides have further confirmed details on the framework.”

The spokesperson added: “The Chinese side will review and approve eligible applications for export of controlled items in accordance with the law. The US side will correspondingly cancel a series of restrictive measures taken against China.”

In early June, China granted temporary export licences to rare earth suppliers of the top three US automakers, according to two sources familiar with the matter, as supply chain disruptions began to surface from export curbs on those materials.

This week’s deal, which Lutnick said was signed on Wednesday, would amount to a wider agreement by codifying the terms laid out in Geneva, including a commitment from China to deliver rare earths to all US firms.

Why are Chinese rare earth minerals so vital?

China’s export of rare earth elements is central to ongoing trade negotiations with the US. Beijing has a virtual monopoly of critical minerals, mining 70 percent of the world’s rare earths and processing roughly 90 percent of their supply.

Critical minerals, a group of 17 elements which are essential to numerous manufacturing processes, have become particularly important for the auto industry, which relies on rare earth magnets for steering systems, engines and catalytic converters.

Car manufacturers have already complained about factories being brought to a near halt because of supply chain shortages of rare earths and the magnets they are used to make. A Ford executive said earlier this week that the company was living “hand to mouth”.

Rare earths are also vital for the transition to clean energy and are used in an array of products, including wind turbines, smartphones and televisions. They are also used to make fighter jets, missile systems and AI processors.

What other trade deals does Trump claim to be close to agreeing?

Lutnick told Bloomberg that Trump is also preparing to finalise a suite of trade deals in the coming weeks, ahead of his July 9 deadline for reinstating higher trade tariffs, which he paused on April 9.

“We’re going to do top 10 deals, put them in the right category, and then these other countries will fit behind,” he said.

Lutnick didn’t specify which nations would be part of that first wave of trade pacts. Earlier on Thursday, however, Trump suggested the US was nearing an agreement with India.

Indian trade officials, led by chief negotiator Rajesh Agarwal, are expected to hold meetings in Washington for two days this week, Bloomberg News has reported.

In recent months, US officials have also held talks with countries, including Vietnam, South Korea, Japan and the EU.

So far, only the United Kingdom has reached a trade agreement with the US, while China secured lower reciprocal tariffs in Geneva.

Still, the pact with the UK left several questions unaddressed, including the discount rates applied to certain British metal exports.

Which deals is the US still struggling to strike?

The majority of America’s major trade partners – from Canada to Vietnam and South Korea – are all expected to have fraught discussions with Washington before reciprocal tariffs expire in early July.

Most countries are hoping to have tariffs whittled down by as much as possible, and, failing that, to extend the July deadline, but there is no certainty yet for any of them.

Talks which have been particularly tricky include:

European Union

A major question mark remains over an agreement with the European Union, which ran a $235.6bn trade surplus with the US in 2024.

The hurdle facing EU leaders and the European Commission, which oversees trade issues for the 27-member bloc, is whether to accept an “asymmetrical” trade deal with the US, under which terms could be more favourable to the US in order to get a deal done faster.

Some member states are thought to be opposed to tit-for-tat retaliation, preferring a quick tariff deal over a perfect one.

But others disagree. France has rejected the notion of any deal skewed in favour of the US and is instead pushing for a complete removal of tariffs.

Japan

Japan is keen on settling all potential US tariffs in one fell swoop. But a sticking point in negotiations has been the 25 percent tariffs on cars and car parts imposed by Trump.

Washington is focused on autos because that sector is responsible for most of its trade deficit with Japan.

But Tokyo views its automotive industry as a key pillar in its economy as it generates about 10 percent of gross domestic product (GDP).

On Thursday, Japan’s chief trade negotiator, Ryosei Akazawa, reiterated Tokyo’s position, telling reporters: “We consider the 25 percent automobile tariff to be unacceptable.”

Could the US extend its tariffs deadline past July?

President Trump could decide to extend the deadline for reimposing tariffs on most of the world’s countries, the White House said on Thursday.

Trump’s July deadline for restarting tariffs is “not critical”, White House Press Secretary Karoline Leavitt told reporters.

“Perhaps it could be extended, but that’s a decision for the president to make,” Leavitt said.

She also said that if any of those countries refuse to make a trade deal with the US by the deadlines, “the president can simply provide these countries with a deal”.

“And that means the president can pick a reciprocal tariff rate that he believes is advantageous for the United States, and for the American worker,” she added.

Meanwhile, White House National Economic Council Director Kevin Hassett told Fox Business on Tuesday: “We know that we’re very, very close to a few countries.”

WASHINGTON — Americans’ per capita income–after adjustment for inflation–declined in 1991, the first drop in nine years, the Commerce Department reported Wednesday.

The fall in real personal income was even greater in California, reflecting the impact of the recession in the state.

Nationwide, personal income averaged $19,082 last year, a scant 2.1% improvement over the prior year. That compares to a 4.1% rise in consumer prices, meaning real per capita income fell last year.

In California, personal income averaged $20,952 in 1991, a 1.3% increase over 1990. Nevada lagged even more with personal income of $19,175, only 0.7% higher than the prior year.

It was the first time since 1982 that growth in per capita income failed to keep pace with inflation, and it was the slowest growth since per capita incomes rose just 1% in 1958, a recession year.

The Commerce Department calculates personal income using wages and salaries, rents, dividends and government payments such as Social Security. This total measure of income–$4.81 trillion nationally in 1991–divided by a population of 252.2 million yields the per capita income for America.

California last year was among a group of 14 slow-growing states, according to the Commerce Department. This represents a major change from the 1980s, when these states were enjoying rapid growth, significantly above the national expansion of per capita incomes. They led the boom, with the central part of the nation lagging behind.

Now the situation is reversed, with the Midwest enjoying growth while both coasts suffer from sluggish economic performance.

The eastern states, notably New England and New York, suffered “declines in earnings in construction, durables, manufacturing and retail trade,” the Commerce Department said. Incomes grew in the West, but population and inflation grew even faster.

The fast-growing states, in which per capita income outstripped the national average, had strong gains in construction, manufacturing and service industries, the Commerce Department said. This group included Texas, Colorado, Wyoming, Montana, Hawaii and Utah.

Nationally, the growth rate in per capita income has been slowing since the end of the Reagan Administration. The increase in 1988 was 7.1%, and then slipped to 6.9% in 1989, and 5.4% in 1990 before reaching 1.3% last year.

The Commerce Department indicated that the recession, now in its second year, has had widespread and pervasive impact throughout the country. The growth of income slowed in all 50 states compared to the previous year’s performance.

“The defense cutbacks are having a big impact,” said Rudolph E. DePass, a Commerce Department analyst. “The high-income states (in the 1980s) . . . were generally all pretty heavily involved in the defense industry.”

Only seven states enjoyed per capita incomes in 1991 matching or exceeding the national inflation rate. They were: Wyoming, 5.1%; Montana, 4.8%; North Dakota, 4.8%; Hawaii, 4.6%; Louisiana, 4.2%; New Mexico, 4.1%, and Arkansas, 4.1%. Mississippi at 4% virtually matched the national average.

Economists predicted that income growth would improve modestly this year as the economy recovers.

“1992 will be slightly better. You could see a 3% to 4% increase,” said economist Lawrence Chimerine of DRI-McGraw Hill, a Lexington, Mass., forecasting firm. “But we still will be lucky to match or exceed inflation, and we won’t make up for the weakness of the last several years.”

The Associated Press contributed to this report.

New Delhi, India – Getting into one of the prestigious Indian Institute of Technology (IIT) schools was supposed to be the end of the financial woes for Paras* and his family. Instead, things have only worsened due to the federal government’s long delays in dispensing Paras’s monthly fellowship allowance of 37,000 rupees ($435).

At the IIT, Paras is a research fellow, looking into solutions to a global public health crisis created by the spread of infectious diseases. His fellowship comes from the INSPIRE scheme, funded by India’s Department of Science and Technology (DST).

But delays in the scheme’s payment have meant that Paras was not able to pay the instalments on the laptop he bought for his research in 2022. His credit score plummeted, and his savings plans crashed.

Paras’s parents are farmers in a drought-affected region of western India, and their income depends on a harvest that often fails. So, he has resorted to borrowing money from friends, including as recently as between August and December, he told Al Jazeera.

Paras is not alone. Al Jazeera spoke to nearly a dozen current and former fellows enrolled in top institutes across India under the Innovation in Science Pursuit for Inspired Research (INSPIRE) programme. The interviewees studied at institutions such as the IIT, a network of engineering and technology schools across the country, and the Indian Institutes of Science Education and Research, another network.

All had gone from three to as long as nine months without a stipend.

The funding delays and procedural lapses have marred the fellowship and impaired their research capacity, they said.

Many researchers recently took to social media to complain, tagging Indian Prime Minister Narendra Modi and Minister of Science and Technology Jitendra Singh.

“For over a year now, many of us who are pursuing PhDs under DST-funded fellowships have not received our stipends,” Sayali Atkare, an INSPIRE fellow, wrote on LinkedIn. “This has pushed many young researchers into severe financial and emotional stress.”

Last year, India ranked 39th in the Global Innovation Index of 133 countries, up one spot from the year prior. It leads lower-middle-income countries like Vietnam and the Philippines in innovation. China leads upper-middle-income countries and is followed by Malaysia and Turkiye.

The federal government termed the ranking an “impressive leap” in a news release. It said that India’s “growing innovation potential has been supported by government initiatives that prioritise technological advancement, ease of doing business, and entrepreneurship”.

At a federal government conference in April, Modi boasted of India’s growing research acumen. Under his leadership in the past decade, the government has doubled its gross spending on research and development from 600 billion rupees ($7.05bn) to more than 1,250 billion rupees ($14.7bn), while the number of patents filed has more than doubled – from 40,000 to more than 80,000.

The numerous steps taken by the government – like doubling of expenditure on R&D (research and development), doubling of patents filed in India, creation of state-of-the-art research parks and research fellowships and facilities – ensure “that talented individuals face no obstacles in advancing their careers”, Modi said.>

However, an analysis of government documents, budgets and interviews with researchers reveals that the government is more focused on commercial research, primarily product development led by start-ups and big corporations. It is offering little funding for research conducted at the country’s premier universities.

For instance, in the current financial year, 70 percent of the Science and Technology Department’s annual budget has been allocated to a scheme under which interest-free loans are provided to private companies conducting research in sunrise domains, such as semiconductors.

At the same time, the government has made misleading statements about its investments in the country’s research institutes, including with schemes like the INSPIRE fellowship, where funds have actually been cut instead of being increased as touted by the government.

Poor pay, funding delays

The INSPIRE scheme offers PhD and faculty fellowships to “attract, attach, retain and nourish talented young scientific Human Resource for strengthening the R&D foundation and base”.

The fellowships are offered to top-ranking postgraduate students and doctoral researchers to conduct research in areas from agriculture, biochemistry, neuroscience and cancer biology to climate science, renewable energy and nanotechnology.

Under the scheme, PhD fellows are to receive 37,000 rupees ($435.14) to 42,000 rupees ($493.94) per month for living expenses and 20,000 rupees ($235.21) annually for research-related costs, such as paying for equipment or work-related travel.

Faculty fellows are offered teaching positions with a monthly salary of 125,000 rupees ($1,470) and an annual research grant of 700,000 rupees ($8,232).

In the year 2024-25, 653 fellows were enrolled in the PhD fellowship, and 85 in the faculty fellowship programme.

“I couldn’t attend an important annual meeting in our field because it required travel, and I was not sure if I would get my allowance,” a faculty fellow at an institute in eastern India said. He has not received his payments since September 2024.

Atkare, the PhD student who wrote about the government’s failure on LinkedIn, also wrote, “We’ve made endless phone calls, written countless emails – most of which go unanswered or are met with vague responses. Some officials even respond rudely.”

Another INSPIRE PhD fellow told us of a running joke: “If they pick up the phone, you can buy a lottery ticket that day. It’s your lucky day.”

In May, DST Secretary Abhay Karandikar accepted that there were funding delays and said that they would soon be resolved.

Karandikar told the Hindu newspaper that he was “aware” of the disbursement crisis but said that from June 2025, all scholars would get their money on time. “All problems have been addressed. I don’t foresee any issue in the future,” he said.

Al Jazeera requested a comment from the science and technology minister, the DST secretary and the head of the department’s wing that implements the INSPIRE scheme, but has not received a response.

Dodgy math

In January, the federal government folded three R&D-related schemes to start Vigyan Dhara or “the flow of science” to ensure “efficiency in fund utilisation”. The INSPIRE scheme had been funded under one of those schemes.

But instead of efficiency, there has been chaos.

Under Vigyan Dhara, DST asked institutes to set up new bank accounts, leading to delays in payments for INSPIRE fellowships.

New Delhi also said that it had “significantly increased” funding for the Vigyan Dhara scheme, from 3.30 billion rupees ($38.39m) in the last financial year to 14.25 billion rupees ($167.58m) in the current financial year.

However, that math was incomplete. The 3.30 billion rupees ($38.39m) is what the government earmarked for the scheme, which was only launched in the last quarter of the fiscal year. The budget for the full fiscal year of the three schemes that Vigyan Dhara replaced amounted to 18.27 billion rupees ($214.93m). So, in effect, the current budget saw a 22 percent decrease in allocation from 18.27 billion rupees to 14.25 billion rupees ($167.58m).

Overall, the budget for Vigyan Dhara’s constituent schemes reduced 67.5 percent from 43.89 billion rupees ($513.2m) in financial year 2016-17 to 14.25 billion rupees ($167.6m) in financial year 2025-26.

DST officials did not respond to Al Jazeera’s query requesting clarification of Vigyan Dhara’s budgetary allocations.

Commercialisation of research

On the other hand, the Indian government earmarked 200 billion rupees ($2.35bn) for the new Research, Development and Innovation (RDI) scheme targeting the private sector.

This money is part of a larger 1-trillion-rupee ($11.76bn) corpus previously announced by India’s finance minister to provide long-term financing at low or no interest rates.

These changes in schemes are intended to make India a “product nation”, get more patents filed in India, and curb the brain drain, as Union Minister Aswini Vaishnaw and DST officials explain in different videos.

But the plight of the researchers at state-run organisations remains unaddressed.

“The government throws around big terms, but those toiling in laboratories are suffering,” said Lal Chandra Vishwakarma, president of All-India Research Scholars Association.

“Stipends should be similar to salaries of central government employees. Fellows should get their money every month without fail,” he said.

In the current scenario, most fellows Al Jazeera spoke to said that they would prefer a fellowship abroad.

“It’s not just about funds but the ease of research, which is much better in Europe and [the United States]. We get so much staff support there. In India, you get none of that,” said a professor at an IIT, who supervises an INSPIRE PhD fellow who faced funding issues.

While the private sector is being heavily financed, researchers told us they downplay their funding costs as that improves their chances of landing government research projects.

“Cutting-edge research is so fast; if we lose the first few years due to cost-cutting, we are behind our colleagues abroad,” the IIT professor said.

“Once we submit necessary documents, like annual progress reports, DST takes at least three months to release the next instalment. It’s usual,” said a PhD fellow who is a theoretical mathematician.

“Right now, I would say only people with privilege [and high-income backgrounds] should be in academia. Not because that’s how it should be, but because for others, it’s just so hard,” the IIT professor said.

*Al Jazeera has changed names to protect the identity of interviewees.

The order to restrict cannabis use for medical purposes only must pass another hurdle before becoming law.

The Thai government is moving to tighten rules around the sale of cannabis, just three years after the kingdom decriminalised recreational use of the popular substance.

Thailand’s Ministry of Public Health on Tuesday night ordered that cannabis use be restricted to medical use only, throwing the estimated $1bn industry into a state of uncertainty.

Government spokesperson Jirayu Houngsub said cannabis had created serious social problems for young people, and the industry, which has boomed in recent years, needed to be scaled back.

“The policy must return to its original goal of controlling cannabis for medical use only,” Jirayu said in a statement.

The order, however, is not law yet.

It will need to be published in the official Royal Gazette to come into force, and the government has not indicated when that will happen.

Thailand became the first country in Asia to fully decriminalise cannabis in 2022, in a move that has been wildly popular with tourists but less so among more conservative Thais.

Thousands of cannabis stores have opened across Thailand in the past three years, although it has remained relatively unregulated despite multiple attempts by the government.

The latest move to restrict cannabis use comes amid wider political turmoil in Thailand.

Last week the Bhumjaithai Party, previously a champion of decriminalising cannabis, withdrew from the government’s ruling coalition due to its mishandling of a border conflict with Cambodia.

The Thai Chamber of Commerce previously estimated that the cannabis trade could be worth $1.2bn by 2025, although experts say it has not reached its full potential due to the uncertainty that has plagued regulation around the industry since it was decriminalised.

Mexican Finance Ministry says it has not received evidence to support claims against CIBanco, Intercam and Vector banks.

The United States has imposed sanctions on three Mexican banks, alleging they had been used to launder money for drug cartels.

On Wednesday, the US Department of the Treasury tied the banks – CIBanco, Intercam Banco and Vector Casa de Bolsa – to the cross-border trafficking of the deadly synthetic drug fentanyl.

It accused them of playing “a longstanding and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl”.

The sanctions are part of a wider pressure campaign by the administration of US President Donald Trump against Latin American gangs, criminal networks and drug traffickers.

That campaign has included designating several groups as “foreign terrorist organisations” and using tariffs to pressure Mexico’s government to increase enforcement of irregular traffic across the border.

In a statement, the Treasury Department said the banks were the first to be targeted under new pieces of legislation – the Fentanyl Sanctions Act and the FEND Off Fentanyl Act – passed to expand its ability to target money laundering related to opioid trafficking.

The sanctions would block transfers between the targeted Mexican banks and US banks, although it was not immediately clear how far-reaching the limits would be.

In a statement, Secretary of the Treasury Scott Bessent accused the banks of “enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain”.

But Mexico’s Secretariat of Finance and Public Credit responded to the sanctions by saying it had yet to receive conclusive evidence justifying them.

“We want to be clear: If we have conclusive information proving illicit activities by these three financial institutions, we will act to the fullest extent of the law,” the Finance Ministry said.

“However, to date, we have no information in this regard.”

CIBanco did not immediately respond to the allegations. The US Treasury Department accused it of being connected to money laundering by the Beltran-Leyva Cartel, the Jalisco New Generation Cartel (CJNG) and the Gulf Cartel.

Intercam, which is also accused of having connections to the CJNG cartel, also did not respond.

Meanwhile, the brokerage firm Vector, which was linked to money laundering by the Sinaloa Cartel and Gulf Cartel, said the US claims tying its operations to drug traffickers were false.

“Vector categorically rejects any accusation that compromises its institutional integrity,” the company said in a statement, adding that it would cooperate to clarify the situation.

In what marks a major shift for NATO, the bloc’s member states have agreed to raise defence spending to five percent of gross domestic product (GDP).

The move will inject billions more dollars into armies and weapons, raising questions over how governments will foot the bill.

With public budgets under strain, many European politicians dismissed the target as unachievable earlier this year, when US President Donald Trump demanded it.

Europe’s priorities now appear to be shifting to security, citing growing threats from Russia.

And Chinese goods are flooding markets from Southeast Asia to Europe.

Plus, top economists call for debt relief in developing nations.

The US agency harshly criticised Boeing’s safety culture as well as ineffective oversight by the FAA.

Boeing failed to provide adequate training, guidance and oversight to prevent a midair cabin panel blowout of a new 737 MAX 9 flight in January 2024, which spun the planemaker into a major crisis, the United States National Transportation Safety Board has said.

The board on Tuesday harshly criticised Boeing’s safety culture and its failure to install four key bolts in a new Alaska Airlines MAX 9 during production, as well as the ineffective oversight by the Federal Aviation Administration (FAA).

NTSB chair Jennifer Homendy said at a board meeting that the incident was entirely avoidable because the planemaker should have addressed the unauthorised production that was identified in numerous Boeing internal audits, reports and other forums for at least 10 years.

“The safety deficiencies that led to this accident should have been evident to Boeing and to the FAA,” Homendy said. “It’s nothing short of a miracle that no one died or sustained serious physical injuries.”

Boeing’s on-the-job training was lacking, the NTSB said, adding that the planemaker is working on a design enhancement that will ensure the door plug cannot be closed until it is firmly secured.

The accident prompted the US Department of Justice to open a criminal investigation and declare that Boeing was not in compliance with a 2021 deferred prosecution agreement. CEO Dave Calhoun announced he would step down within a few months of the midair panel blowout.

Homendy praised new Boeing CEO Kelly Ortberg, but said, “He has his work cut out for him, a lot of challenges to address, and that’s going to take time.”

Boeing said it regretted the accident and was continuing to work on strengthening safety and quality across its operations.

The FAA said on Tuesday that it has “fundamentally changed how it oversees Boeing since the Alaska Airlines door-plug accident and we will continue this aggressive oversight to ensure Boeing fixes its systemic production-quality issues”.

Damaged reputation

The incident badly damaged Boeing’s reputation and led to a grounding of the MAX 9 for two weeks as well as a production cap of 38 planes per month by the FAA, which still remains in place.

“While Boeing is making progress, we will not lift the 737 monthly production cap until we are confident the company can maintain safety and quality while making more aircraft,” the FAA added.

Boeing created no paperwork for the removal of the 737 MAX 9 door plug – a piece of metal shaped like a door covering an unused emergency exit – or its re-installation during production, and still does not know which employees were involved, the NTSB said on Tuesday.

Then-FAA administrator Michael Whitaker said in June 2024 that the agency was “too hands off” in Boeing oversight and has boosted the number of inspectors at Boeing and the MAX fuselage manufacturer’s, Spirit AeroSystems, factories.

Boeing agreed last July to plead guilty to a criminal fraud conspiracy charge after two fatal 737 MAX crashes in Indonesia and Ethiopia. But it last month struck a deal with the US Justice Department to avoid a guilty plea.

The Justice Department has asked a judge to approve the deal, which will allow Boeing to avoid pleading guilty or facing oversight by an outside monitor.

Earlier this month, Boeing’s problems resurfaced when an Air India flight crashed soon after takeoff from the western Indian city of Ahmedabad, killing all but one on board. The aircraft being flown was a nearly 12-year-old Dreamliner. Investigations behind that crash are currently under way.

As heat related power outages surge, things are expected to worsen, with AI-focused data centres sucking up power.

The heatwave currently blanketing two-thirds of the United States with record-setting temperatures is straining the nation’s power system.

On Monday, Con Edison, New York City’s power provider, urged residents to conserve electricity. It reduced power voltage to the borough of Brooklyn by 8 percent as it made repairs; it did the same to areas in the boroughs of Staten Island and Queens yesterday. Thousands also lost power as the grid could not handle the strain.

Comparable outages have been felt around much of the East Coast and Midwest including in the states of Virginia and New Jersey. In Philadelphia and Cleveland, power went out for thousands of customers after severe thunderstorms late last week, and has yet to be restored as the region faces high temperatures.

The national railroad corporation Amtrak reported delays on Tuesday due to speed restrictions caused by the heat on routes that went through Washington, Philadelphia and New York.

Power grid woes

This heatwave is bringing attention to the vulnerability of the power infrastructure in the US.

In the latest annual assessment from the North American Electric Reliability Corporation (NERC), large parts of the US have insufficient power reserves to operate in “above-normal conditions”, including parts of the Midwest, Texas, New England and southern California.

Heat-related power grid strains have surged in recent years. According to a report from Climate Central released last year, there have been 60 percent more heat-related power outages between 2014-2023 than in the 10 years prior.

This comes amid new but growing pressures on the US power grid, including the prevalence of artificial intelligence data centres and the energy needed to power them. In 2022, in northern Virginia, Dominion Energy warned that data centres there used up so much energy that it might be unable to keep up with surging demand.

For AI data centres, that strain is only set to get more pressing as generative AI booms. It is expected that AI server farms’ power demand will increase to 12 percent by 2030.

There are also more immediate concerns of a cyberthreat from Iranian-backed “hacktivists”, which could target the US power grid at a vulnerable moment to avenge the recent US attack on Iran’s nuclear sites, CNN reported. The US power grid cyberthreat sharing centre has been monitoring the dark web for threats, it said, as the Department of Homeland Security issued a warning on Sunday about potential cyberattacks.

“Both hacktivists and Iranian government-affiliated actors routinely target poorly secured US networks and Internet-connected devices for disruptive cyber attacks,” the advisory said.

In 2023, Iran-linked hacktivists targeted a water authority in Pennsylvania with minimal success. In 2024, US authorities discovered that Iran-associated hackers were behind cyberattacks on US healthcare facilities.

Power grids are particularly at risk, according to a 2024 report by the North American Electric Reliability Corporation (NERC), which said that there are as many as 23,000 to 24,000 susceptible points in the US power grid systems that could be vulnerable to cyberattacks.