Economy

Analysts have low expectations of a breakthrough, but host Switzerland hopes ‘roadmap’ will emerge.

China’s trade envoy He Lifeng has met United States Treasury Secretary Scott Bessent in Switzerland for talks aimed at easing a trade war between the superpowers that is roiling global markets.

The first official engagement, since the US slapped a 145 percent tariff on Chinese goods, prompting a retaliatory 125 percent duty from China, began on Saturday at an undisclosed location in Geneva, Switzerland, according to the Chinese state news agency Xinhua.

A motorcade of black cars and vans was seen leaving the home of the Swiss ambassador to the United Nations in the suburb of Cologny, The Associated Press news agency reported.

A diplomatic source, speaking to AP on condition of anonymity because of the sensitivity of the meeting, said the sides met for about two hours before departing for a previously arranged luncheon.

The trade dispute, which effectively amounts to a mutual boycott of products, was prompted by US President Donald Trump last month when he announced sweeping duties on almost every country in the world, which are now subject to a 90-day reprieve while negotiations take place.

Experts believe China may be looking for the same 90-day waiver as well as a reduction of the 145 percent tariff – Trump suggested that it could be reduced to 80 percent, saying in a Truth Social post on Friday that the amount “seems right”.

Trump’s press secretary, Karoline Leavitt, said on Friday that the US would not lower tariffs unilaterally, adding that China would need to make concessions as well.

Bessent has said the meetings in Switzerland would focus on “de-escalation”.

“The best scenario is for the two sides to agree to de-escalate on the … tariffs at the same time,” said Sun Yun, director of the China programme at the Washington, DC-based Stimson Center, adding even a small reduction would send a positive signal.

“It cannot just be words,” she said.

Distrust running high

Trump has justified the punitive tariff by citing unfair trade practices and accusing Beijing of failing to curb the export of chemicals used to produce fentanyl, a lethal synthetic opioid.

China, for its part, says it will not bow to “imperialists” and bullies.

With distrust running high, both sides have been keen not to appear weak, and economic analysts have low expectations of a breakthrough.

Trump has suggested the discussions were initiated by China. Beijing said the US requested the discussions and that China’s policy of opposing US tariffs had not changed.

Swiss Economy Minister Guy Parmelin met both parties in Geneva on Friday and said the fact that the talks were taking place was already a success.

“If a roadmap can emerge and they decide to continue discussions, that will lower the tensions,” he told reporters on Friday, saying talks could continue into Sunday or even Monday.

At first glance, after three years of the war and economic sanctions, Russia’s economy appears remarkably stable. Output is rising, unemployment is at a record low, and the Kremlin insists the country is thriving despite unprecedented Western sanctions. Russian Prime Minister Mishustin boasts of surging industrial growth and strong state finances. President Putin recently claimed that Russia has already overtaken Japan and Germany in terms of economy. But behind this facade lies a brittle system—one that depends on unsustainable trade-offs, devalues its labor force, and ultimately shifts the burden of war onto ordinary citizens.

What the official figures don’t show is a country running two separate economies under one flag: one that supports state interests, particularly the war in Ukraine, and another that forces the public to absorb the costs. The result is what some analysts describe as a form of “Potemkin prosperity”—a” structure that looks solid from afar but cracks under closer inspection.

While GDP growth and low unemployment are often cited as signs of resilience, these indicators lose meaning in the context of Russia’s deeply imbalanced political economy.

Russia does not operate as a capitalist democracy with independent markets and institutions but as a neo-feudal system—a vertical structure where power, not property rights, governs economic life. In this model, oligarchs function like medieval vassals: their wealth is conditional on personal loyalty to the sovereign. They do not truly own their assets in a legal or institutional sense; instead, they are allowed to “hold” factories, media empires, or natural resources in exchange for political compliance. Their fiefdoms can be expanded, shrunk, or confiscated entirely depending on the will of the Kremlin.

This explains why targeted sanctions on billionaires often appear ineffective: these individuals were never autonomous power centers to begin with. They are extensions of the regime, not counterweights to it. This neo-feudal arrangement forms the political foundation for Russia’s distinctive economic structure.

Two Economies in One Country

Within this neo-feudal framework, Russia’s modern economic design is deceptively simple but strategically cunning. It rests on three pillars: government funding for the industrial oligarchy, debt-financed consumption for ordinary citizens, and export revenues in hard currency to finance both.

The state bankrolls production in priority sectors, including defense, metallurgy, and heavy industry, providing contracts and subsidies to a small circle of these vassal conglomerates. Meanwhile, ordinary Russians finance their personal consumption largely through debt, buying everything from washing machines to imported food with loans. This structure depends critically on a steady flow of foreign exchange, primarily dollars, euros, and yuan, generated by the export of oil, gas, and commodities.

As long as the state earns enough hard currency, it can pay for industrial imports and subsidize essential goods. But when those revenues fall, such as during sanctions or price caps, the system shifts pressure onto citizens—much as medieval peasants absorbed the cost of warfare through higher taxes and conscription. The government cuts spending on consumption, devalues the ruble, and lets inflation erode household savings. In essence, the public becomes the shock absorber.

This arrangement is not accidental. After years of experimenting with centrally planned prices and consumer subsidies during the Soviet era, Russian leaders learned that trying to control everything invites blame when things go wrong. The modern system is designed to keep political liability low while maximizing resource extraction from both natural wealth and human labor.

Wartime Growth Without Welfare

The war in Ukraine has added fuel to Russia’s state-centered growth model. Military spending has surged. The government orders tanks, missiles, and uniforms in bulk, pouring rubles into defense enterprises. In turn, output rises. According to Prime Minister Mishustin, GDP in 2024 was 4.1%. Manufacturing, especially electronics, optics, and metallurgy, grew at unprecedented rates. By official measures, Russia is not just surviving sanctions—it’s outpacing many European economies.

But this is growth without welfare. Most of the new production serves military needs, not consumer demand. Civilian goods are not increasing in availability or affordability. As the Central Bank of Russia pointed out, the economy’s growth has “nothing to do with consumption.” Instead, state orders for war material have pushed total output beyond sustainable capacity, creating bottlenecks and stoking inflation.

History offers a chilling parallel. In 1944, as the Allies bombed Germany into rubble, the Nazi regime recorded its highest-ever GDP. Why? Because war production soared—even as the country was collapsing. The same was true in the USSR during WWII. In both cases, GDP was inflated by weapons output that did nothing to improve civilian life.

Russia today may be repeating this pattern: a nation where GDP grows while hospitals languish, shelves thin out, and prices climb. As one analyst put it, “Measuring the achievements of a country waging war by its GDP is like measuring the well-being of a heroin addict by how much he spends on drugs.”

The Built-In Devaluation of Labor

Perhaps the most painful price of Russia’s war economy is paid not in rubles but in purchasing power. In 2023, the ruble fell to become one of the world’s most volatile currencies. Against the dollar, it lost over 50% in value year-on-year. Imports soared in cost, and everyday goods became less affordable for most Russians.

But for the country’s financial elites, the ruble collapse was a windfall. Banks earned hundreds of billions of rubles in profits from the currency’s devaluation. In just six months, they pocketed more than half a trillion rubles from foreign exchange gains.

Why is this tolerated—or even welcomed—by the authorities? Because inflation and devaluation serve a hidden function: they reduce real wages without politically explosive reforms. Each time Russians begin to earn more in nominal terms, a crisis—often involving currency depreciation—wipes out those gains.

In Russia, inflation isn’t an accident. It’s a mechanism. Every time the cost of labor rises in Russia, the government finds a way to reduce it—or even erase it altogether.

Ordinary Russians understand this intuitively. Many take out loans and buy durable goods when times are relatively good, assuming that another devaluation will soon follow. In a tragic twist, this borrowing spree can itself fuel inflation, reinforcing the very cycle that destroys real wages.

An Economy Bleeding Talent

While unemployment in Russia has hit record lows—2.4% in January 2025—this statistic is deeply misleading. The war effort has drained the civilian workforce, pulling hundreds of thousands of men into the army and driving many professionals to emigrate. Construction companies, factories, and service providers report severe labor shortages. Employers are raising wages to attract workers, but productivity has not kept pace.

This wage inflation is not a sign of economic health; it’s a sign of distortion. The state’s defense sector offers high pay and job security, siphoning talent from the private economy. And when bonuses aren’t enough, the state resorts to mobilization. But even military industries could soon feel the pinch, with high military losses demanding more people, leaving fewer to produce goods.

The Oligarchs Get Richer

For Russia’s billionaire class, war has brought not ruin but renewal. According to Forbes, the number of Russian billionaires increased from 110 to 125 people over the year. – the biggest surge in over a decade. Amazingly, those under Western sanctions fared better than those who weren’t. Of sanctioned oligarchs, 40% grew their fortunes during wartime, while most of the unsanctioned saw their wealth decline.

This explosion of elite wealth is no accident. It is tied to state contracts, import substitution, and the takeover of Western corporate assets. In a system where economic opportunity is granted through loyalty, sanctions have ironically concentrated wealth even more tightly around the Kremlin.

What many in the West fail to grasp is this: all Russian oligarchs should be sanctioned—not because they are independent economic actors, but precisely because they are not. In Russia’s neo-feudal system, their wealth is not the result of market competition but of loyalty. Every untargeted oligarch remains a potential conduit of regime financing and strategic influence. Sanctioning only a subset creates exploitable gaps.

Echoes of the Past, Warnings for the Future

Much of the Putin regime’s economic policy is shaped by fear of repeating the late-Soviet collapse and the chaos of the 1990s. Its obsession with budget discipline and low debt stems from memories of hyperinflation, defaults, and the loss of control. But in trying to avoid past mistakes, the Kremlin may be making new ones.

Despite decades of rhetoric about modernization and diversification, Russia remains deeply dependent on oil and gas exports. The Russian Academy of Sciences warns that the country still lacks the technological base and industrial complexity to become a true economic center in any “multipolar world.”

Exports of manufactured goods are falling. Integration with non-Western economies has stalled. Domestic production has contracted in sectors requiring imported components. Rather than building resilience, the regime has built a brittle system optimized for control, not innovation.

The risk is that when energy revenues decline, either due to global decarbonization or market shifts, Russia will have no backup plan. The oligarchs may survive. The people may not.

A Fragile Balance

Russia’s wartime economy has not collapsed, but it is rotting from the inside. The state has enough money, soldiers, and slogans to maintain the illusion of progress. But this stability is built on structural distortions: inflation that masks real income loss, production that ignores consumer needs, and an elite that profits while the rest shoulder the cost.

Sanctions may not trigger instant street protests or elite defections, but they are quietly degrading the foundations of the regime: corrupt redistribution networks, regional stability, technological sovereignty, and even elite cohesion. From failing regional budgets to a desperate central bank keeping the key rate at 21% in a last-ditch effort to curb inflation, the country’s economic vitality is an illusion maintained by repression, propaganda, and an archaic power structure.

As Russian historian Vasily Klyuchevsky once observed, “Why should I know what is to be done when I have the power to command that it be done?” It’s a mindset that still defines Russia’s ruling class—confusing control with competence. But no amount of command can indefinitely hold together a system that eats away at its own future.

As with all brittle systems built on loyalty and fear, the greatest risks come not from below, but from within. If pressure continues—especially targeted at the regime’s internal coalition—the facade of “stability” may give way, not with revolution, but with betrayal at the center.

President Trump’s tariffs are upending crop trading, delaying tractor purchases and constraining imports of chemical supplies into the United States.

That’s the main message from big agricultural businesses as they report their quarterly earnings, giving an early glimpse into the far-reaching impacts of the U.S. president’s trade war.

The disruptions in global trade threaten to extend a years-long slump in the U.S. farm industry, which had already been struggling with ample supplies, depressed crop prices and rising competition from Brazil. Lack of clarity on how the Trump administration will address much-needed incentives for crop-based fuels in the next few years has added to concerns.

Crop traders and processors have been among the hardest-hit. Archer-Daniels-Midland Co. and Bunge Global SA saw their combined operating profits slump by about $750 million in the first quarter, with both companies citing an impact from trade and biofuel policy uncertainty.

Importers put off purchases of U.S. grain and oilseeds as Trump threatened tariffs as well as levies on any Chinese vessels docking at American ports, reducing trade flows, according to crop merchant the Andersons.

“Global trade uncertainties disrupted typical grain flows and caused many of our commercial customers to focus on just-in-time purchasing,” William Krueger, the Andersons’ chief executive, said Wednesday in a call with investors.

Tractor makers CNH Industrial NV and AGCO Corp. also reported lower first-quarter sales, and warned of the possibility of reduced demand for farmers, potentially giving them less to spend on machines to plant, harvest and treat their fields. Both companies have raised prices to ease the impact of tariffs on costs.

“Geopolitical uncertainties and trade frictions have dampened U.S. farmer sentiment recently,” AGCO CEO Eric Hansotia said during a conference call with analysts. “As a result, demand for machinery was lower in the quarter than we had expected.”

Duties also threaten to curb imports of some fertilizer and pesticide supplies. Shipments of phosphate — a key crop nourishing ingredient — into the U.S. have trailed last year’s levels because vessels have been diverted to other countries to avoid the nation’s 10% tariff, Mosaic Co. said in its earnings statement.

“The phosphate market remains tight, and while tariffs could disrupt trade flows, they cannot create more phosphate supply,” CEO Bruce Bodine said on a conference call with investors.

Farmers are expected to pay more for pesticides as the U.S. relies on tariff-hit countries such as China and India for some of its supplies. Nutrien Ltd. said its branded products could potentially cost as much as 7.5% more, with even higher adjustments expected for generic ingredients.

“Long story short is, we’re going to see price increases,” Jeff Tarsi, Nutrien’s president of global retail, said on a Thursday call. “Our plan is to pass those price increases through to our customers.”

Brazil is emerging as a winner from the trade tensions. Minerva SA said tariff turmoil drove increased Chinese demand and higher export prices for South American beef in the first quarter, helping lift profits for the Brazilian supplier. Meanwhile, China has effectively shut its market for U.S. meat exporters, including Smithfield Foods.

China, the world’s largest commodity importer, has already shifted to Brazil for a meaningful part of its soybean needs since Trump first raised tariffs on goods from the Asian nation in 2018.

“Any harmful impacts to the U.S. grower profitability stemming from tariffs and trade flow shifts” are likely to benefit Brazilian growers, Jenny Wang, executive vice president of commercial at Mosaic, said in the call with analysts.

Freitas writes for Bloomberg.

After working in the outdoor industry for three years at Smith, which makes helmets and goggles, Cassie Abel realised there were not many brands built exclusively with women in mind. In 2016, she founded Wild Rye, a rural Idaho-based outdoor apparel brand for women.

Building her business was a labour of passion and included big risks, such as leveraging her house for capital. It was not until 2021 that she became profitable. Now, her business faces yet another existential threat: High tariffs will drive up her costs, and she’s unsure how long she can keep her business alive.

Abel is expecting $700,000 worth of purchase orders arriving in July, which encompasses the brand’s full fall lineup, which she ordered in December from suppliers in China. She says Wild Rye, which imports twice a year, will now be subject to $1.2m in tariffs for its upcoming shipment.

“I don’t have the cash to pay for these tariffs. These tariffs are due upon entering the country. I won’t have time to sell this product before the tariffs are done. We could be out of business in the next four months,” Abel said.

Since taking office, United States President Donald Trump has imposed a 145-percent tariff on China and 10 percent on all other countries. The president has claimed the tariffs incentivise businesses to bring manufacturing back stateside. But that has left hundreds of small businesses like Abel’s scrambling to find ways to manage the hefty fee.

US Treasury Secretary Scott Bessent told a group of reporters at a White House briefing last week, “The goal here is to bring back the high-quality industrial jobs to the US. President Trump is interested in the jobs of the future, not the jobs of the past. You know, we don’t need to necessarily have a booming textile industry like where I grew up again, but we do want to have precision manufacturing and bring that back.”

His comments put additional pressure on employers like Wild Rye. To weather the storm caused by the Trump administration’s tariffs, Abel has frozen hiring, paused salary increases for her 11 full-time employees, and stalled new product development. She said she will need to raise prices on her products for the fall, ranging from 10 to 20 percent.

On April 29, she and hundreds of members of the outdoor apparel community met leaders in Washington to push for assistance. Abel said Democrats were unsure what they could do amid Republican control of the House of Representatives and Senate, while Republican leadership feared retribution if they went against the president.

“I was hearing it [concern] from both sides of the aisle. There’s frustration, it’s like it’s hard to find a path forward. Everyone understands that small businesses are going to crumble, and everyone feels like there’s no playbook for this,” Abel told Al Jazeera.

The US Chamber of Commerce has also pushed the White House to carve out exceptions for small businesses like Wild Rye, which the Trump administration quickly dismissed.

No comparable US alternative

Abel says she started as a made-in-USA brand, but that was not financially sustainable.

“That almost tanked the business before we launched because the US simply doesn’t have the capability or capacity to produce technical apparel,” Abel said.

Most textile products like clothes and shoes that Americans buy are not made in the US. The US imports about 97 percent of clothes, mostly from Asian countries including China, which has been hit hard by the 145-percent tariffs, but also from Vietnam and Bangladesh.

But it’s not just the apparel industry facing this challenge. It’s the entire small business community – defined as a business with 500 employees or less – a portion of the economy that employs roughly 61.7 million Americans, representing 45.9 percent of the US workforce and accounts for 43.5 percent of the US gross domestic product (GDP).

The broader economy has also already felt shockwaves from the tariffs that will impact small businesses. The US GDP fell in the first quarter, per the US Commerce Department, by 0.3 percent after a 2.4 percent increase in the fourth quarter of 2024. According to ADP, job growth stumbled to 62,000—a more immediate metric than the US Labor Department’s jobs report, which lags by a month and shows 177,000 jobs added.

Consumer confidence hit a 13-year low, and consumers are pulling back spending amid fears of further rising costs — which, in turn, means fewer people could buy products ranging from outdoor apparel to single-origin teas and spices.

‘In a tough place’

In 2014, Chitra Agrawal founded Brooklyn Delhi, an Indian cuisine-inspired food brand in Brooklyn, New York, with her husband Ben Garthus.

Over the last decade, they have created a range of products, including 14 different condiments and simmer sauces, that started as handmade and have since grown into a large-scale business distributing to major retailers like Whole Foods and Kroger, as well as meal kit services like HelloFresh and Blue Apron.

Because hers is a specialty brand, sourcing certain ingredients from other parts of the world is not just part of the brand’s allure, it is also a necessity.

“We are making these authentic Indian products that require ingredients that are just not grown or available at scale in the US. It kind of puts us in a tough place,” Agrawal told Al Jazeera.

Agrawal said 65 percent to 70 percent of the ingredients she uses come from outside of the US, primarily from India, and a handful from Mexico and Sri Lanka, as well as glass from China.

Like Agrawal, Anjali Bhargava faces a similar challenge. The founder of Anjali’s Cup, a brand that makes single-origin spices and teas from around the world, sources ginger from Vietnam, turmeric from Thailand, and tea from India, ingredients that, in her view, make the brand so special.

In 2024, the United States was the largest importer of both ginger and several different varieties of tea, including black and green, according to Tridge, a global food sourcing data analytics firm.

“I am going to have to pay the tariffs on those things if it comes down to it, if I want to continue making those products. [Not being able to make these products] is not negotiable for me,” Bhargava said.

She says that in order to cut costs, she is trying to find domestic alternatives for aspects of her production, like packaging, a big expense. Pre-tariffs, she imported tins from China. Once her stock runs out, she may have to discontinue four to six of the 11 products she offers because she cannot afford the extra cost for imports.

“Basically, to keep the business moving, I’m being forced to undertake a complete overhaul of my retail packaging [which can be produced stateside], which means redesigning, re-photographing, and that comes with a cost,” Bhargava added.

She says she will need to move away from tins, which she imports from China and explore other kinds of packaging options like pouches. The unexpected one-time costs of $10,000 to $20,000 will eat into her already slim margins, Bhargava says. She is the only full-time employee, but hires freelancers and outsources to other businesses for tasks ranging from packaging to delivery.

Prices go up

Unlike larger companies, it’s much harder for small businesses to absorb the tariffs.

“We’ve seen that it’s hard for small businesses to balance those costs as they have very small margins. They are the ones who are going to get hit hardest,” said Alexis D’Amato, director of government affairs for Small Business Majority, an advocacy group for small businesses.

“They’re bracing for impact on how they’re going to either eat these costs or pass them on to the consumer, which nobody wants to do,” D’Amato added.

Raising prices in response to market pressures does not guarantee they will fall when costs decline. At the start of the COVID-19 pandemic, supply chain disruptions forced producers to increase prices. But even after costs eased, grocers kept prices high because consumers continued paying them — and no policy or market force compelled reductions.

That burden weighs on Agrawal.

“Once you make that change and say at one point, I want to roll back those price increases, there’s no guarantee that on the shelf, the prices will decrease. It’s very difficult when you’re working with grocery stores to get your prices to be lowered again. We have to really be very careful about this move. We’re still contemplating it,” said Brooklyn Delhi’s Agrawal.

But these looming concerns have led consumers and businesses to import goods before tariffs kick in, to stock up on key items that may help them avoid raising prices, at least for some time.

In the first quarter, US imports surged by 41.3 percent, including by entrepreneurs like Sean Mackowski, owner of Tallon Electric, a company that makes guitar pedals in Columbus, Ohio.

“We did stock up a lot. I think everybody did their best to scramble, hoping that that will bridge the gap to this going away. But if we get to the end of that bridge, we’ll either need to find a different way or we’re going to start running out of stuff,” Mackowski told Al Jazeera.

Africa is a continent rich in natural resources with a young population. African nations in theory have the potential to transform their economies. But many of them are facing mountains of debt.

Africa’s external debt climbed to more than $650bn last year.

More than half of African countries are either in debt distress or teetering on the edge. But credit restructuring is painstakingly slow, and many governments end up spending more on servicing their debt than on healthcare or education.

The debt problem has plunged many nations into economic crisis with rising unemployment and poverty.

The United States has announced a ‘breakthrough deal’ with the United Kingdom that would create an aluminium and steel trading zone and secure the pharmaceutical supply chain.

The deal affirms that “reciprocity and fairness is a vital principle of international trade” and increases access for US agricultural products, US President Donald Trump said on Thursday, though he added that the final details were still being written up.

“The final details are being written up,” Trump told reporters. “In the coming weeks, we’ll have it all very conclusive.”

The deal, the first one struck by the US since Trump imposed his far-reaching tariffs, is also said to strip back paperwork for British companies looking to export to the US.

The president said that the agreement would lead to more beef and ethanol exports to the UK, which would also streamline the processing of US goods through customs.

The White House said that the deal will bring in $6bn in external revenue from its 10-percent tariffs, which will stay in place, but that it would also bring in $5bn in new export opportunities. The UK agreed to lower its tariffs to 1.8 percent from 5.1 percent and provide greater access to US goods.

The US already runs a trade surplus with the UK, making it a bit easier to find common ground, as Trump has staked his tariffs on specifically eliminating the annual trade deficits with multiple nations that he says have taken advantage of the US.

British Prime Minister Keir Starmer joined the president in the announcement over the phone. Starmer said the deal would boost trade and create jobs.

Thursday’s announced agreement is the first agreement since the Trump administration started a global trade war with universal levies of 10 percent. The US has also imposed 25-percent tariffs on cars, steel and aluminium, 25-percent tariffs on Canada and Mexico, and 145-percent tariffs on China. US and Chinese officials are due to hold talks in Switzerland on Saturday.

British implications

Starmer has struck up a warm relationship with Trump since his centre-left Labour Party was elected in July.

Starmer’s government has been seeking to build new trading relationships post-Brexit with the US, China and the EU without moving so far towards one bloc that it angers the others.

Economists and one chief executive of an FTSE 100 company — the highest capitalised blue chip companies on the London stock exchange—said the immediate economic impact of a tariff deal was likely to be limited but that trade agreements in general would help long-term growth. The UK struck a free trade agreement with India this week.

The US and the UK have been aiming to strike a bilateral trade agreement since the British people voted in 2016 to leave the EU, allowing the country to negotiate independently of the rest of the continent. Then-Prime Minister Boris Johnson touted a future deal with the US as an incentive for Brexit.

The US ran a $11.9bn trade surplus in goods with the UK last year, according to the Census Bureau. The $68bn in goods that the US imported from the UK accounted for just 2 percent of all goods imported into the country.

Markets respond

The US has been under pressure from investors to strike deals to de-escalate its tariff war after Trump’s often chaotic policymaking upended global trade with friends and foes alike, threatening to stoke inflation and start a recession.

Top US officials have engaged in a flurry of meetings with trading partners since the president on April 2 imposed a 10-percent tariff on most countries, along with higher rates for many trading partners that were then suspended for 90 days.

On Wall Street, US markets were responding to the news amid hopes that this could be enough to ward off a recession.

As of 11:30am ET in the US (15:30 GMT), the S&P 500 was up 0.97 percent and on track for an 11th gain in the last 13 days. The Dow Jones Industrial Average was 1.02 percent higher and the tech-heavy Nasdaq composite was 1.17 percent higher than market open.

Stocks have been swinging for weeks with hopes that Trump could reach deals with other countries that would lower his tariffs, which many investors believe would cause a recession if left unchecked.

Canadians have long spent wintertime in Florida, trading in frigid temperatures for the Sunshine State’s sunny beaches and spending money in restaurants and hotels that cater to Canadian tourists.

But President Donald Trump’s rhetoric and actions targeting Canada have given some Canadians pause about spending money in the United States. Trump has repeatedly said Canada should become the 51st US state, called then-Prime Minister Justin Trudeau a “governor” and enacted substantial tariffs.

Canadians replied, “excusez-moi?” and, on April 28, elected Prime Minister Mark Carney’s Liberal Party. And according to a Florida congressman, many Canadians also ditched their Florida travel plans.

In a May 1 interview with Representative Jared Moskowitz, a Democrat who represents parts of Broward and Palm Beach counties, CNN’s Wolf Blitzer said he had heard from friends in Boca Raton, Florida, that many Canadians are not travelling to the state because of Trump’s actions. Blitzer asked Moskowitz: “Have you noticed a drop in Canadian tourism to Florida?”

Moskowitz said: “It’s 80 percent less is what we’re seeing in the travel data.”

When we asked Moskowitz’s team for comment, his spokesperson Christopher Bowman said Moskowitz referred to an April 2 report by WPTV, the NBC affiliate in West Palm Beach. The WPTV report said, “Airline reservations from Canada to Florida are down 76 percent this April compared to April 2024.”

WPTV’s report cited OAG, an aviation firm. In a blog post, the firm said April bookings recorded in March for the entire US-Canada market were down 75.7 percent compared with March 2024. It did not report Florida-specific numbers.

OAG said the nationwide drop “suggests that travellers are holding off on making reservations, likely due to ongoing uncertainty surrounding the broader trade dispute“.

We found other sources of data pointing to a decline in Canadian visitors to Florida, but by much less than the 80 percent cited by Moskowitz.

In 2024, more Canadians travelled to Florida by air (2.1 million) than by other means (1.1 million), such as road travel, according to Visit Florida, the state’s tourism arm.

Some data points to Canadian tourism drop, but full picture not yet available

Statewide estimated visitor data for the first quarter of 2025 won’t be available until May 15, according to Visit Florida. In 2024, about 3.27 million Canadians visited Florida, representing about 2 percent of tourists to the state.

Governor Ron DeSantis’s office said in April that in January and February, Florida saw a “0.5 percent increase in Canadian air visitation” compared with the same months in 2024.

Aviation firms and airports have said they’ve seen decreases.

OAG Chief Analyst John Grant told PolitiFact that in early March, there were 698,000 scheduled airline seats, or seats made available by airlines, between Canada and Florida from May to August. “That now stands at 628,000, so a reduction of 10 percent,” he said. He noted that his firm’s data includes anyone booked on a flight between Canada and the US, so a traveller could be a connecting passenger from China travelling via Vancouver to Denver, for instance.

Courtney Miller, founder of aviation data firm Visual Approach Analytics, told PolitiFact that Canadian airline seats to Florida are down by 13 percent for May and 10 percent for June compared with the same periods in 2024.

“I have not seen any data that suggest 80 percent,” Miller said. “We are seeing overall Canadian travel to the entire US down no more than 25 percent.”

A Visual Approach Analytics analysis showed that from January to March 27, two Florida airports – Fort Lauderdale-Hollywood International Airport and Orlando International Airport – had the biggest decrease in monthly arrivals from Canadian airlines, at 20 percent and 12 percent, respectively.

Other Florida areas are also experiencing declines in travel. “Fort Myers and Palm Beach are down 30 percent and 43 percent, respectively, compared to April schedules as they existed on January 1, 2025,” the analysis said.

A Miami International Airport spokesperson told PolitiFact that from January 1 to April 23, the number of arriving passengers from Canada was down 5.9 percent.

National data for Canada-US road travel also shows a drop.

US Customs and Border Protection data shows about 4.1 million travellers arriving from the northern border in March 2025, compared with 4.9 million the same time last year – a 17.4 percent decrease. The data doesn’t specify whether the travellers entered the US as tourists.

Richard Clavet, a longtime owner of Hollywood, Florida, motels and hotels, said his properties for years have attracted Canadians who gather at the pool or Friday night hot dog cookouts. Clavet told PolitiFact he saw a drop in Canadian visitors starting in February.

“A lot of them were blaming it on the political situation,” said Clavet, who is originally from Quebec. “They were not happy with the way Trump was talking about their prime minister. They wanted to boycott the US and make a statement so a lot of them cancelled.”

Clavet estimated that in recent months the number of Canadians staying in his properties was 50 percent less than last winter.

Usually, Canadians rush to book for the following year, but that hasn’t happened this year, Clavet said.

“They want a piece of the sun where it’s safe, the weather is great, that’s what I have been working on for so many years,” Clavet said. “I really enjoyed dealing with Canadians; hopefully they will come back.”

Our ruling

Moskowitz said Canadian tourism to Florida has declined by 80 percent.

His office pointed to information from a TV report, which cited information from aviation data firm OAG. The firm said April airline bookings recorded in March for the entire US-Canada market were down 75.7 percent compared with 2024. It did not report Florida-specific numbers.

Other data sources confirm a drop in Canadian tourism to Florida, but by far less than the percentage cited by Moskowitz. For example, individual airports in Florida cited declines from 6 percent to 43 percent over a few months.

The statement contains an element of truth but ignores critical facts that would give a different impression. We rate it Mostly False.

Study authors argue progressive taxes on wealth and carbon-intensive investments could provide a solution.

The wealthiest 10 percent of the world’s people are responsible for two-thirds of the global warming since 1990, according to researchers.

The way in which the rich consume and invest has substantially increased the risk of heatwaves and droughts, wrote the researchers of a study published on Wednesday in the monthly peer-reviewed scientific journal Nature Climate Change.

This is the first study to quantify the impact of concentrated private wealth on extreme climate events.

“We link the carbon footprints of the wealthiest individuals directly to real-world climate impacts,” lead author Sarah Schoengart, a scientist at the public university of ETH Zurich, told the AFP news agency. “It’s a shift from carbon accounting toward climate accountability.”

Compared with the global average, for example, the richest 1 percent contributed 26 times more to once-a-century heatwaves and 17 times more to droughts in the Amazon, according to the study.

Emissions from the wealthiest 10 percent in China and the United States – which together account for nearly half of global carbon pollution – each led to a two- to threefold rise in heat extremes.

“If everyone had emitted like the bottom 50 percent of the global population, the world would have seen minimal additional warming since 1990,” co-author Carl-Friedrich Schleussner said. “Addressing this imbalance is crucial for fair and effective climate action.”

Burning fossil fuels and deforestation have heated Earth’s average surface by 1.3 degrees Celsius (2.3 degrees Fahrenheit), mostly during the past 30 years.

‘Wealthy emitters play a major role in driving climate extremes’

Schoengart and her colleagues combined economic data and climate simulations to trace emissions from different global income groups and assess their impact on specific types of climate-enhanced extreme weather.

The researchers also emphasised the role of emissions embedded in financial investment rather than just lifestyle and personal consumption. The impact of this consumption and investment is particularly severe in tropical regions such as the Amazon, Southeast Asia and Southern Africa – all areas of the world that have historically contributed the least to global emissions but have been disproportionately impacted by extreme weather.

“Our study shows that extreme climate impacts are not just the result of abstract global emissions. Instead we can directly link them to our lifestyle and investment choices, which in turn are linked to wealth,” Schoengart said. “We found that wealthy emitters play a major role in driving climate extremes, which provides strong support for climate policies that target the reduction of their emissions.”

The authors argued that targeting the financial activities and investment portfolios of high-income individuals could lead to significant climate gains.

“Climate action that doesn’t address the outsized responsibilities of the wealthiest members of society risk missing one of the most powerful levers we have to reduce future harm,” Schleussner said.

Owners of capital, he noted, could be held accountable for climate impacts through progressive taxes on wealth and carbon-intensive investments, thus providing much needed support for adaptation and damage in vulnerable countries.

Earlier research has shown that taxing asset-related emissions is more equitable than broad carbon taxes, which tend to burden those with lower incomes.

Recent initiatives to increase taxes on the superrich and multinationals have mostly stalled, especially since US President Donald Trump’s return to power in January.

In 2021, nearly 140 countries agreed to work towards a global corporate tax for multinational companies with nearly half endorsing a minimum rate of 15 percent, but those talks have stalled as well.

According to the antipoverty NGO Oxfam, the richest 1 percent have accumulated $42 trillion in new wealth over the past decade.

It says the richest 1 percent have more wealth than the lowest 95 percent combined.

Reports come after US president teased the announcement of agreement with an unnamed country.

United States President Donald Trump is set to announce a trade deal with the United Kingdom on Thursday, US media have reported, in what would be the first such agreement since he rolled out his sweeping tariffs.

The reports come after Trump on Wednesday teased the announcement of a deal with an unnamed country on social media.

“Big News Conference tomorrow morning at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY,” Trump said in a post on his Truth Social platform. “THE FIRST OF MANY!!!”

The New York Times, which reported the news along with The Wall Street Journal, Politico and CNN, said that it was not clear whether the agreement had been finalised.

Investors have been anxiously waiting for signs of an easing of Trump’s trade war amid fears that prolonged uncertainty over tariffs could inflict serious damage to the global economy.

The International Monetary Fund last month lowered its global growth forecast for 2025 from 3.3 percent to 2.8 percent amid Trump’s trade salvoes.

On Tuesday, US and Chinese officials confirmed that they would hold their first round of trade talks in Switzerland this weekend, raising hopes of a breakthrough in the de facto mutual trade embargo between the world’s two largest economies.

The UK was spared from Trump’s “reciprocal” tariffs announced against dozens of countries last month, but its exports have been subject to a 10 percent “baseline” duty since April 9.

The US and UK did 314.6 billion pounds ($419bn) worth of trade in goods and services in 2024, an increase of 3.9 percent from the previous year, according to the UK’s Department for Business and Trade.

UK Prime Minister Keir Starmer earlier this week announced the finalisation of a “landmark” trade deal with India that he said would add 4.8 billion pounds ($6.4bn) a year to the economy.

The central bank will hold steady amid economic uncertainty driven by tariffs.

The US Federal Reserve has kept interest rates unchanged, brushing off President Donald Trump’s demands to lower borrowing costs, and said that the risks of higher unemployment and higher inflation have risen.

The Central Bank kept its benchmark rate at 4.25 percent to 4.5 percent, where it has been since December, after cutting it three times in a row at the end of last year. Its vote to hold rates steady was unanimous.

In a statement, the Fed said that “uncertainty about the economic outlook has increased further”, as it justified keeping rates consistent despite pressure from the White House.

Many economists and Wall Street investors still expect the Fed will reduce rates two or three times this year, but the sweeping tariffs imposed by Trump have injected a tremendous amount of uncertainty into the US economy and the Fed’s policies.

It is unusual for the Fed to say that the risk of both prices and unemployment have increased. But economists say that is the threat created by Trump’s sweeping tariffs. The import taxes could both lift inflation by making imported parts and finished goods more expensive, while also raising unemployment by causing companies to cut jobs as their costs rise.

The economy overall has “continued to expand at a solid pace”, the Fed said in a policy statement, attributing a drop in first-quarter output to record imports as businesses and households rushed to front-run new import taxes.

The Fed said that it was also “strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”

The Fed said that one of the driving factors behind its decision is the state of the labour market, as well as “inflation pressures and inflation expectations, and financial and international developments.”

The US Labor Department in the jobs report published last week showed 177,000 jobs were added to the US economy consistent with growth levels over the last 12 months. The report, however, was on employment before “liberation day”, when Trump announced his sweeping tariff policy, which has since driven global economic uncertainty. The ADP jobs report, which is a more immediate metric, showed job growth at 62,000.

Fed Chair Jerome Powell said in a news conference after the interest rate decision that leaving rates unchanged keeps the central bank in a good position to respond.

“For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance,” Powell told reporters. “It’s still a healthy economy, albeit one that is shrouded in some very downbeat sentiment on the part of people and businesses,” he added.

“The Fed statement was a statement of the obvious. They gave roughly equal airtime to the threats to growth and inflation, so that tells us we need to wait and see how the data shake out between now and the June meeting before deciding whether they’re going to prioritise keeping inflation expectations contained or to address any hit to growth,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

The unchanged rates come despite increased pressure from Trump to lower rates. Powell has long stressed the importance of an independent central bank. He said the pressure from the president has not changed their decision-making process. When asked why he has not sought a discussion with the president amid Trump’s public rebukes, Powell said, “I’ve never asked for a meeting with any president and I never will.”

The increased price tag is a result of Trump’s tariffs on auto imports which car companies ultimately will pass on to consumers for cars that will hit dealer lots in June.

Ford Motor Company has raised prices for three of its vehicles produced in Mexico, becoming one of the first major carmakers to adjust sticker prices following US President Donald Trump’s tariffs.

The new prices took effect on vehicles produced on May 2 or later, according to the news agency Reuters, which first reported the story on Wednesday.

Prices on the Mustang Mach-E electric SUV, Maverick pick-up — one of its most affordable and popular vehicles— and Bronco Sport will increase by as much as $2,000 on some models, according to a notice sent to dealers, which was reviewed by Reuters.  A Ford spokesperson said the cars with the raised price tag would arrive at dealer lots in late June.

Ford said the trade war would add about $2.5bn in costs for 2025, but it expects to reduce that exposure by about $1bn. General Motors said last week that tariffs were projected to cost it between $4bn and $5bn following the imposition of hefty levies on foreign imports of automobiles, but it expected to offset that by at least 30 percent.

Trump’s tariffs have unleashed weeks of uncertainty across the auto sector, as major carmakers in the United States and Europe have pulled forecasts, shifted production and caused companies to idle plants.

Following weeks of pushback from the auto industry, Trump softened his tariffs on foreign auto parts imports to give carmakers credits for what is produced in the US and to avoid double-tariffs on raw materials used in production. However, the White House has not rescinded a 25-percent tariff on the 8 million vehicles the US imports annually.

Ford is in a better position to weather tariffs than some of its competitors because of its strong US manufacturing base. The Dearborn, Michigan, automaker assembles 79 percent of its US-sold vehicles domestically, compared with GM’s 53 percent, according to an analyst note from Barclays.

Pricing pressure

Ford and GM also face significant levies on imports from China and South Korea, respectively. GM estimated that the costs on its Korean imports totalled about $2bn, while Ford declined to specify the expenses around importing vehicles from China.

Automakers that rely on exports to the US are facing increased pricing pressure. A dozen major carmakers, including Toyota and GM, import at least 40 percent of the vehicles they sell in the US, with some, such as Volkswagen and Hyundai Motor, importing more than 60 percent, according to 2024 data from S&P Global Mobility.

Before Ford’s move, most carmakers had not taken the step of boosting prices, but had warned that it was on the way. Porsche said it would have to boost its selling cost if tariffs remained in place, while US Volkswagen’s Audi brand also suggested potential price increases, without providing any details.

By contrast, BMW expects US car tariffs to decline from July, based on its contacts with US officials – a more upbeat assessment of the trade climate than many rivals. GM’s finance chief, Paul Jacobson, told analysts last week that the automaker was not expecting imminent price increases, saying they “feel good about where the pricing environment is today”.

US Treasury Secretary Scott Bessent says Washington does not wish to decouple from China but wants ‘fair trade’.

The United States and China will hold trade talks in Switzerland this week, officials have said, as the world’s two largest economies seek to de-escalate tensions that have led to a de facto mutual trade embargo.

The talks would be the first official engagement between Washington and Beijing on trade since US President Donald Trump slapped a 145 percent tariff on Chinese goods, prompting a retaliatory 125 percent duty from China.

US Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer will attend the talks for the US side, their offices said in a statement on Tuesday.

Chinese Vice Premier He Lifeng will represent Beijing, China’s Ministry of Foreign Affairs said in a statement.

Businesses and investors have been anxiously waiting for signs of a thaw in US-China tensions amid fears a prolonged trade war could cause serious damage to the global economy.

The International Monetary Fund last month lowered its global growth forecast for 2025 from 3.3 percent to 2.8 percent amid Trump’s trade salvoes.

Economists have increasingly warned of the possibility of the US economy tipping into a recession this year, with JP Morgan Research putting the likelihood at 60 percent.

The US economy shrank 0.3 percent in the first quarter – a period before most of Trump’s tariffs came into effect – the first decline since early 2022.

In an interview with Fox News after the talks were announced, Bessent said the two sides had a “shared interest” in talks as the current levels of tariffs were unsustainable.

“We don’t want to decouple. What we want is fair trade,” Bessent told Fox News host Laura Ingraham.

Bessent said he expected the initial talks to focus on “de-escalation,” rather than a “big trade deal”.

“We’ve got to de-escalate before we can move forward,” he said.

China’s Ministry of Commerce said on Wednesday that the talks should proceed on the “basis of mutual respect, equality, consultation, and mutual benefit”.

“As a Chinese saying goes, ‘Listen to their words and observe their actions,’” a ministry spokesperson said.

“If the US wishes to resolve issues through negotiation, it must acknowledge the severe negative impacts its unilateral tariff measures have had on itself and the world, respect international economic and trade rules and the voices of fairness and reason from various sectors, demonstrate sincerity in negotiations, correct its wrongful actions, and work with China to address concerns through equal consultations.”

New data show both imports and exports with US fall as Canada expands trading relationships with other countries.

Canada’s trade with the United States has tumbled in March, but a surge in exports to other countries have helped make up the downward shift.

Exports to the US dropped by 6.6 percent during the month while imports from the US fell by 2.9 percent amid growing public discontent towards Canada’s longstanding ally and top trading partner, according to data released by Statistics Canada on Tuesday.

Total exports fell by 0.2 percent in March mainly on lower prices whereas imports tumbled by 1.5 percent.

Canada’s trade deficit shrank from 1 billion Canadian dollars (US$1.4bn) in February to 367 million Canadian dollars (US$506m) in March. Its trade surplus with the US fell to 6.1 billion Canadian dollars (US$8.4bn) .

“This decline was almost entirely offset by a significant rise in exports to countries other than the United States,” the agency said, highlighting a 24.8 percent surge in overseas shipments. Canada increased exports of gold to the United Kingdom, crude oil to the Netherlands and various goods to Germany.

Exports of motor vehicles and parts also increased amid US tariffs targeting the auto sector. Exports of pharmaceuticals and uranium to the US as well as pork to Asian markets declined. Natural gas exports also fell.

Steel exports dropped while aluminium exports rose for a fourth straight month. Imports of steel declined, but imports of aluminium grew as both products face 25 percent US tariffs.

Analysts have warned that the full effects of the tariffs have yet to be seen. Canada should “brace for increasing headwinds to trade as the worst of the trade conflict is expected to take place over the coming quarters”, TD Economics analyst Marc Ercolao said in a research note.

Carney and Trump meet 

The trade data was released the day Canadian Prime Minister Mark Carney met with US President Donald Trump in Washington, DC, to discuss strained trade and security ties.

Carney won last week’s elections on a pledge to stand up to Trump and his America First agenda. He said the strained relationship between the two countries can never be the same again.

The US imposed broad tariffs on Canadian goods at the beginning of March before announcing several reductions and exemptions even as tariffs on cars, aluminium, steel and potash stayed in place. Canada has hit back with countermeasures.

“Canada and the United States are strongest when we work together – and that work starts now,” Carney said on the social media platform X as he arrived in Washington, DC, on Monday night.