Economy

Argentina’s markets have tumbled, with the peso currency at a historic low, after a heavy defeat for President Javier Milei’s party at the hands of the Peronist opposition at local elections stoked worries about the government’s ability to implement its economic reform agenda.

On Monday, the peso was last down almost 5 percent against the US dollar at 1,434 per greenback while the benchmark stock index fell 10.5 percent, and an index of Argentine stocks traded on United States exchanges lost more than 15 percent. Some of the country’s international bonds saw their biggest falls since they began trading in 2020 after a $65bn restructuring deal.

The resounding victory for the Peronists signalled a tough battle for Milei in national midterm elections on October 26, when his party is aiming to secure enough seats to avoid overrides to presidential vetoes.

The government now faces the difficult choice of whether to allow the peso to depreciate ahead of next month’s midterms or spend its foreign exchange reserves to intervene in the FX market, according to Pramol Dhawan, head of EM portfolio management at Pimco.

“Opting for intervention would likely prove counterproductive, as it risks derailing the IMF programme and diminishing the country’s prospects for future market access to refinance external debt,” Dhawan said via email, referring to the International Monetary Fund (IMF). “The more resources the government allocates to defending the currency, the fewer will be available to meet obligations to bondholders — thereby increasing the risk of default.”

He said early indications that the government may double down on the current strategy “would be a strategic misstep”.

The 13-point gap in the Buenos Aires Province (PBA) election in favour of the opposition Peronists was much wider than polls anticipated and what the market had priced in. The government setback at the polls adds to recent headwinds for a market that had until recently outperformed its Latin American peers.

“We had our reservations about the market being too complacent regarding the Buenos Aires election results. The foreign exchange market will undoubtedly be under the spotlight, as any instability there can have a ripple effect on Argentine assets,” said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS, in response to emailed questions.

“However, it’s important to note that simply using reserves to prop up the currency isn’t likely to provide much reassurance to the market,” she added. “The midterm elections, in my opinion, carry more weight and their outcome will significantly influence how Argentine assets perform in the coming months.”

The bond market selloff saw the country’s 2035 issue fall 6.25 cents, on track for its largest daily drop since its post-restructuring issuance in 2020.

Based on official counts, the Peronists won 47.3 percent of the vote across the province, while the candidate of Milei’s party took 33.7 percent, with 99.98 percent of the votes counted.

Argentina – one of the big reform stories across emerging markets since Milei became president in December 2023 – has seen its markets come under heavy pressure over the last month following a corruption scandal involving Milei’s sister and political gatekeeper Karina Milei where she has been accused of accepting bribes for government contracts..

The government defeat also comes after the IMF approved a $20bn programme in April, of which some $15bn has already been disbursed. The IMF has eagerly backed the reform programme of Milei’s government to the point that its director, Kristalina Georgieva, had to clarify remarks earlier this year in which she invited Argentines to stay the course with the reforms.

The IMF did not respond to questions on whether this vote result would change its relationship with the Milei administration or alter the programme.

Market selloff

Argentina’s main equity index has dropped around 20 percent since the government corruption scandal broke, its international government bonds have sold off, and pressure on the recently unpegged peso has forced authorities to start intervening in the FX market.

“The result was much worse than the market expected – Milei took quite a big beating, so now he has to come up with something,” said Viktor Szabo, portfolio manager at Aberdeen Investments.

Morgan Stanley had warned in the run-up to the vote that the international bonds could fall up to 10 points if a Milei drubbing dented his agenda for radical reform. On Monday, the outcome saw the bank pull its ‘like’ stance on the bonds.

Barclays analyst Ivan Stambulsky pointed to comments from Economy Minister Luis Caputo on Sunday that the country’s FX regime won’t change.

“We’re likely to see strong pressure on the FX and declining reserves as the Ministry of Economy intervenes,” Stambulsky said. “If FX sales persist, markets will likely start wondering what will happen if the economic team is forced to let the currency depreciate before the October mid-terms.”

Some analysts, however, predicted other parts of the country were unlikely to vote as strongly against Milei as in Buenos Aires province given it is a traditional Peronist stronghold.

They also expected the Milei government to stick to its programme of fiscal discipline despite economic woes.

“The Province of Buenos Aires midterm election delivered a very negative result for the Milei administration, casting doubt on its ability to deliver a positive outcome in October’s national vote and risking the reform agenda in the second half of the term,” said JPMorgan in a Sunday client note.

“The policy mix adopted in the coming days and weeks to address elevated political risk will be pivotal in shaping medium-term inflation expectations — and, ultimately, the success of the stabilisation programme.”

The spectrum purchase allows SpaceX to expand the cell network’s capacity by ‘more than 100 times’ and will help ‘end mobile dead zones’.

SpaceX will buy wireless spectrum licences from EchoStar for its Starlink satellite network for about $17bn, a major deal crucial to expanding Starlink’s nascent 5G connectivity business.

The Elon Musk-owned aerospace company announced the purchase on Monday.

The companies also agreed to a deal that will enable EchoStar’s Boost Mobile subscribers to access Starlink direct-to-cell service to extend satellite service to areas without service.

The spectrum purchase allows SpaceX to start building and deploying upgraded, laser-connected satellites that the company said will expand the cell network’s capacity by “more than 100 times”.

Gwynne Shotwell, president and COO of SpaceX, said the deal will help the company “end mobile dead zones around the world … With exclusive spectrum, SpaceX will develop next-generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”

The push comes amid fast-rising wireless usage. In 2024, Americans used a record 132 trillion megabytes of mobile data, up 35 percent over the prior all-time record, the Cellular Telecommunications Industry Association (CTIA) said on Monday.

SpaceX has launched more than 8,000 Starlink satellites since 2020, building a distributed network in low-Earth orbit which has seen demand from militaries, transportation firms and consumers in rural areas.

Roughly 600 of those satellites – which SpaceX calls “cell towers in space” – have been launched since January 2024 for the company’s direct-to-cell network, orbiting closer to Earth than the rest of the constellation.

Crucial to those larger satellites’ deployment is Starship, SpaceX’s giant next-generation rocket that has been under development for roughly a decade. Increasingly complex test launches have drawn the rocket closer to its first operational Starlink missions, expected early next year.

The deal comes months after the US Federal Communications Commission (FCC) questioned EchoStar’s use of its mobile-satellite service spectrum and raised concerns about whether it was meeting its obligations to deploy 5G in the country.

EchoStar said it anticipates that the transaction with SpaceX and the AT&T deal will resolve the FCC’s inquiries.

An FCC spokesperson said the “deals that EchoStar reached with AT&T and Starlink hold the potential to supercharge competition, extend innovative new services to millions of Americans, and boost US leadership in next-gen connectivity”.

The company in August sold some nationwide wireless spectrum licences to AT&T for $23bn. AT&T agreed to acquire 50 MHz of nationwide mid-band and low-band spectrum.

US President Donald Trump previously prodded EchoStar and FCC Chair Brendan Carr to reach an amicable deal for the company’s wireless spectrum licences.

Underused airwaves

SpaceX will pay up to $8.5bn in cash and issue up to $8.5bn in stock. SpaceX has also agreed to cover roughly $2bn in interest payments on EchoStar’s debt obligations through late 2027.

After the sale, EchoStar will continue operating its satellite television service Dish TV, streaming TV platform Sling, internet service Hughesnet and its Boost Mobile brand.

SpaceX had aggressively pressed the FCC to reallocate underused airwaves for satellite-to-phone service after alleging EchoStar failed to meet certain obligations.

In a letter to the FCC in April, SpaceX said EchoStar’s spectrum in the 2 gigahertz band “remains ripe for sharing among next-generation satellite systems” and that the company has left “valuable mid-band spectrum chronically underused”.

The deal with EchoStar will allow SpaceX to operate Starlink direct-to-cell services on frequencies it owns, rather than relying solely on those leased from mobile carriers like T-Mobile.

In May, the FCC approved Verizon’s $20bn deal to acquire fibre-optic internet provider Frontier Communications. Verizon spent $5bn to acquire and clear key spectrum in 2021.

The news sent shares of EchoStar surging 14.7 percent as of 1pm in New York (17:00 GMT). Shares of US wireless carriers are trending downwards. AT&T is 1.6 percent lower and T-Mobile is down by 2.2 percent. Verizon as well is down 1.8 percent.

The American job market, a pillar of U.S. economic strength since the pandemic, is crumbling under the weight of President Trump’s erratic economic policies.

Uncertain about where things are headed, companies have grown increasingly reluctant to hire, leaving agonized job seekers unable to find work and weighing on consumers who account for 70% of all U.S. economic activity. Their spending has been the engine behind the world’s biggest economy since the COVID-19 disruptions of 2020.

The Labor Department reported Friday that U.S. employers — companies, government agencies and nonprofits — added just 22,000 jobs last month, down from 79,000 in July and well below the 80,000 that economists had expected.

The unemployment rate ticked up to 4.3% last month, also worse than expected and the highest since 2021.

“U.S. labor market deterioration intensified in August,’’ Scott Anderson, chief U.S. economist at BMO Capital Market, wrote in a commentary, noting that hiring was “slumping dangerously close to stall speed. This raises the risk of a harder landing for consumer spending and the economy in the months ahead.’’

Alexa Mamoulides, 27, was laid off in the spring from a job at a research publishing company and has been hunting for work ever since. She uses a spreadsheet to track her progress and said she’s applied for 111 positions and had 14 interviews — but hasn’t landed a job yet.

“There have been a lot of ups and downs,” Mamoulides said. “At the beginning I wasn’t too stressed, but now that September is here, I’ve been wondering how much longer it will take. It’s validating that the numbers bear out my experience, but also discouraging.’’

The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the Federal Reserve’s inflation fighters in 2022 and 2023.

But the hiring slump also reflects Trump’s policies, including his sweeping and ever-changing tariffs on imports from almost every country, his crackdown on immigration and purges of the federal workforce.

Also contributing to the job market’s doldrums are an aging population and the threat that artificial intelligence poses to young, entry-level workers.

After revisions shaved 21,000 jobs off June and July payrolls, the U.S. economy is creating fewer than 75,000 jobs a month so far this year, less than half the 2024 average of 168,000 and not even a quarter of the 400,000 jobs added monthly in the hiring boom of 2021-2023.

When the Labor Department put out a disappointing jobs report a month ago, an enraged Trump responded by firing the economist in charge of compiling the numbers and nominating a loyalist to replace her.

“The warning bell that rang in the labor market a month ago just got louder,” Olu Sonola, head of U.S economic research at Fitch Rates, wrote in a commentary. “It’s hard to argue that tariff uncertainty isn’t a key driver of this weakness.”

Trump contends that his protectionist policies are meant to help American manufacturers. But factories shed 12,000 workers last month and 38,000 so far this year. Many manufacturers are hurt, not helped, by Trump’s tariffs on steel, aluminum and other imported raw materials and components.

Construction companies, which rely on immigrant workers vulnerable to stepped-up immigration raids under Trump, cut 7,000 jobs in August, the third straight drop. The sweeping tax-and-spending bill that Trump signed into law July 4 delivered more money for immigration officers, making threats of massive deportations more plausible.

The federal government, its workforce targeted by Trump and his Department of Government Efficiency team, cut 15,000 jobs last month. Diane Swonk, chief economist at the tax and consulting firm KPMG, said the job market “will hit a cliff in October, when 151,000 federal workers who took buyouts will come off the payrolls.’’

And any job gains made last month were remarkably narrow: Healthcare and social assistance companies — a broad category including hospitals and day-care centers — added nearly 47,000 jobs in August and now account for 87% of the private sector jobs created in 2025.

Democrats were quick to pounce on the report, arguing it is evidence that Trump’s policies were damaging the economy and hurting ordinary Americans.

“Americans cannot afford any more of Trump’s disastrous economy. Hiring is frozen, jobless claims are rising, and the unemployment rate is now higher than it has been in years,” said Rep. Richard Neal of Massachusetts, the ranking Democrat on the House Ways and Means Committee. “The president is squeezing every wallet as he chases an illegal tariff agenda that is hiking costs, spooking investment and stunting domestic manufacturing.″

Trump’s sweeping import taxes — tariffs — are taking a toll on businesses that rely on foreign suppliers.

Trick or Treat Studios in Santa Cruz, for instance, gets 50% of its supplies from Mexico, 40% from China and the rest from Thailand. The company, which makes ghoulish replica masks of such horror icons as Chucky the doll from the “Child’s Play” movies as well as costumes, props, action figures and games, has seen its tariff bill rise to $389,000 this year, said co-founder Christopher Zephro. He was forced to raise prices across the board by 15%.

In May, Zephro had to cut 15 employees, or 25% of his workforce. That marked the first time he’s had to lay off staff since he started the company in 2009. ″That’s a lot money that could have been used to hire more people, bring in more product, develop more products,” he said. “We had to do layoffs because of tariffs. It was one of the worst days of my life.”

Josh Hirt, senior economist at the financial services firm Vanguard, said that the tumbling payroll numbers also reflect a reduced supply of workers — the consequence of an aging U.S. population and a reduction in immigration. “We should get more comfortable seeing numbers below 75,000 and below 50,000’’ new jobs a month, he said. “The likelihood of seeing negative [jobs] numbers is higher,’’ he said.

Economists are also beginning to worry that artificial intelligence is taking jobs that would otherwise have gone to young or entry-level workers. In a report last month, researchers at Stanford University found “substantial declines in employment for early-career workers” — ages 22-25 — in fields most exposed to AI. The unemployment rate for those ages 16 to 24 rose last month to 10.5%, the Labor Department reported Friday, the highest since April 2021.

Job seeker Mamoulides is sure that competition from AI is one of the reasons she’s having trouble finding work.

“I know at my previous company, they were really embracing AI and trying to integrate it as much as they could into people’s workflow,” she said. “They were getting lots of [Microsoft] ‘Copilot’ licenses for people to use. From that experience, I do think companies may be relying on AI more for entry-level roles.”

Some relief may be coming.

The weak August numbers make it all but certain that the Federal Reserve will cut its benchmark interest rate at its next meeting, Sept. 16-17. Under Chair Jerome Powell, the Fed has been reluctant to cut rates until it sees what effect Trump’s import taxes have on inflation. Lower borrowing costs could — eventually, anyway — encourage consumers and businesses to spend and invest.

Vanguard’s Hirt expects the Fed to reduce its benchmark rate — now a range of 4.25% to 4.5% — by a full percentage point over the next year and says it might cut rates at each of its next three meetings.

Trump has repeatedly pressured Powell to lower rates and has sought to fire one Fed governor, Lisa Cook, over allegations of mortgage fraud. Cook denies the allegations, which she contends are a pretext for the president to gain control over the central bank.

Trump blamed Powell again for slowing jobs numbers Friday in a social media post, saying that “Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’”

The July 4 budget bill also “included a big wallop of front-loaded spending on defense and border security, as well as tax cuts that will quickly flow through to household and business after-tax incomes,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary.

But the damage that has already occurred may be difficult to repair.

James Knightley, an economist at ING, noted that the University of Michigan’s consumer surveys show that 62% of Americans expect unemployment to rise over the next year. Only 13% expect it to fall. Only four times in the last 50 years of surveys has the employment outlook been so bleak.

“People see and feel changes in the jobs market before they show up in the official data — they know if their company has a hiring freeze or the odd person here or there is being laid off,” Knightley wrote. “This suggests the real threat of outright falls in employment later this year.”

Wiseman, D’Innocenzio and Lewis write for the Associated Press. AP writer Josh Boak contributed to this report.

Canadian PM Carney also announced a fund of $5 billion in Canadian dollars ($3.6bn US) to help firms in all sectors hurt by tariffs.

Canada will waive a requirement that 20 percent of all vehicles sold next year be emissions-free, part of an aid package designed to help companies deal with damage done by tariffs from United States President Donald Trump.

Prime Minister Mark Carney made the announcement on Friday.

The 20 percent target was mandated by the Liberal government of then-Prime Minister Justin Trudeau in 2023.

Carney, Trudeau’s successor, said waiving the rule would help the industry deal with punitive US measures that are also targeting the steel and aluminium sectors.

“This will provide immediate financial relief to automakers at a time of increased pressures on economic competitiveness,” Carney told a televised press conference.

Ottawa will also launch an immediate 60-day review to reduce costs linked to the EV sales requirement.

The Canadian Vehicle Manufacturers’ Association welcomed the move, saying the push for mandates imposed unsustainable costs on companies and threatened investment.

Carney said it was too soon to draw any conclusions about whether Ottawa should lift the 100 percent tariffs it imposed on Chinese-made electric vehicles last year. China on Friday prolonged a probe into imports of canola from Canada, one of the world’s leading suppliers.

Carney, who won an April election on the need to diversify the economy away from the US, said Ottawa would set up a new fund worth $5 billion Canadian dollars ($3.6bn US) with flexible terms to help firms in all sectors affected by tariffs.

The US measures are “causing extreme uncertainty that is holding back massive amounts of investment”, he said.

Ottawa will introduce a new policy to ensure the federal government buys from Canadian suppliers and is also introducing a new biofuel production incentive, with more than $370 million Canadian dollars ($267m US) for farmers to address immediate competitiveness challenges.

Carney did not mention specific new aid for the steel and aluminium sectors. When pressed, he said companies could apply for help from existing funds.

Tech giant fined for third time in a week after being hit with multimillion-dollar penalties in US and France.

The European Union has imposed a penalty of 2.95 billion euros ($3.45bn) on Google for favouring its own advertising services, marking the fourth time the tech giant has been fined in its decade-long fight with the bloc’s competition regulators.

The European Commission accused Google of distorting competition in the 27-nation bloc after investigating a complaint from the European Publishers Council, moving to rein in the tech firm despite threats of retaliation from United States President Donald Trump.

EU competition chief Teresa Ribera had originally planned to hand out the fine on Monday, but delayed her move after meeting opposition from EU trade chief Maros Sefcovic over concerns about the potential impact on US promises to lower tariffs on European cars under a trade deal agreed in July.

The Commission said Google favoured its own online display technology services to the detriment of rivals and online publishers and that it has abused its market power from 2014 until today.

“Google abused its dominant position in adtech, harming publishers, advertisers, and consumers. This behaviour is illegal under EU antitrust rules,” Ribera said on Friday.

Regulators had been probing Google over adtech since 2021 and in 2023 recommended the company sell part of its ad services to ensure fair competition.

Google, a subsidiary of US tech giant Alphabet, criticised the EU decision and said it would challenge it in court.

Lee-Anne Mulholland, the firm’s global head of regulatory affairs, said it required “changes that will hurt thousands of European businesses by making it harder for them to make money”.

“There’s nothing anticompetitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before,” she added.

Ribera said Google had to come forward with a “serious remedy to address its conflicts of interest”, warning that failure to do so would invite “strong remedies”.

The company has 60 days to inform the Commission how it plans to comply with this order.

The fine was the third imposed on the giant in a week. A US federal jury on Wednesday ordered Google to pay about $425m for gathering information from smartphone app use, even when people opted for privacy settings.

The same day, France’s data protection authority fined the search giant 325 million euros ($378m) for failing to respect the law on internet cookies.

Seoul, South Korea – Go Kyoung-min, 34, a nurse at Severance Hospital in Seoul, found a new sense of balance in her life during the first half of this year.

As the mother of twin daughters born in 2021, Go often felt guilty about not spending enough time with her children because of work.

But after opting into the four-day workweek offered by her workplace, Go was able to spend more time with her family, attending daycare events she had previously missed and relying less on her in-laws for childcare.

Severance is the first hospital in South Korea to trial a four-day workweek, aiming to improve the work-life balance of its staff.

Under the program, introduced in 2023 following an agreement between labour and management, some hospital employees are allowed to take three days off per week in exchange for a 10 percent reduction in salary.

Staff take turns participating in six-month rotations, after which they return to a five-day week.

The program appears to have improved nurses’ health and wellbeing, enhanced the quality of medical services, boosted organisational efficiency, and reduced turnover rates, the Korea Worker Institute-Union Center said in a report about the trial released last month.

According to the report, turnover among participating nurses with less than three years’ experience fell from 19.5 percent to 7 percent.

Average sick leave per employee also fell by one day during the trial, while it increased by 0.7 days in wards on five-day weeks.

Go said the four-day workweek not only improved her work-life balance but helped her be more focused and kinder to her patients.

“I work in the pancreatobiliary ward, where many patients face critical situations. This makes the workload heavier. With a four-day workweek, I feel I can take more time to listen to patients and care for them with greater responsibility,” she told Al Jazeera.

“My children used to be happy when their grandparents picked them up from daycare, taking it for granted. But once I did it more often, they expected me to be there.”

Go’s experience is unusual in South Korea, a country notorious for its long working hours, where staying late is often seen as a mark of a good employee.

South Korean workers logged an average of 1,865 hours in 2024, according to the Organisation for Economic Co-operation and Development (OECD), the sixth-highest among developed countries and well above the OECD average of 1,736 hours.

They worked 248 hours more than their counterparts in neighbouring Japan.

While long workdays are still the norm, shorter work arrangements are gradually spreading in the private sector.

Some companies, particularly IT firms and startups, have been experimenting with four-day or four-and-a-half-day workweeks for several years.

South Korea’s major conglomerates have also shown interest in more flexible work arrangements, with Samsung Electronics, SK Group, and Kakao introducing programmes offering employees periodic breaks of a full or half-day.

Lee Jae-ho, 42, a father of two who works at sports and health technology company Kakao VX, has benefitted from one such program, getting one Friday off each month and working 1.5 hours less on the remaining Fridays.

Lee said working fewer days does not necessarily reduce efficiency.

“When I have a Friday off or shorter hours, I adjust my schedule in advance, so the reduced workdays have little impact on productivity,” Lee told Al Jazeera.

“I have more time to have dinner with my family, recharge, and pursue my hobbies and growth.”

The push to reform South Korea’s work culture has gained momentum since the election of left-leaning President Lee Jae-myung in June.

During his campaign, Lee pledged to cut working hours below the OECD average by 2030 and introduce a four-and-a-half-day workweek.

At a July news conference, Lee reiterated that South Koreans needed to work less, suggesting that a system of long hours with low productivity was unsustainable.

“We have competed more on quantity than on quality,” Lee said.

Cafe24, South Korea’s leading e-commerce solutions provider, implemented a full four-day workweek in July, after previously offering workers every other Friday off, while maintaining employees’ salaries and overall hours.

In June, Gyeonggi Province, which surrounds Seoul, launched the country’s first pilot project of a four-and-a-half-day workweek without wage cuts among local governments, set to run until 2027.

The programme, running until 2027, encourages small and midsize businesses and public institutions in the province to experiment with reduced working hours by providing financial support to cover the increased labour costs.

Some experts and business leaders have expressed concerns about the moves to cut the working week.

Kwon Young-sik, director of human resources at Yonsei University Health System, the parent organisation of Severance, has said permanently shifting to a four-day workweek would cost about 100 million won ($720) per ward in labour costs alone.

“Over the past three years, about 1.2 billion won has been spent on labour costs,” Kwon said last month at an event where Severance’s labour union presented the results of the pilot programme.

At the same event, Lee Kang-young, general director of Severance, said institutional and financial support would be “absolutely necessary” for a four-day workweek to be sustainable.

Park Nam-gyoo, a business professor at Seoul National University, said he would be concerned about productivity and disparities in the labour market if a four-and-a-half-day workweek became the norm.

“South Korea is an export-led economy. It faces an uncertain future if it fails to remain competitive globally,” Park told Al Jazeera.

He said the country needed to consider its low birthrate, sluggish economy, and challenges to its global competitiveness.

But workers like Go and Lee hope more people can experience the benefits they have enjoyed.

“There were absolutely no drawbacks. The only downside in my case was that, as it is a pilot programme, only a few could participate, so I feel sorry for my colleagues who couldn’t. Other than that, it ran smoothly without any operational issues,” Go said.

“Just as the five-day workweek was initially met with concern but eventually settled in, a four-day workweek is expected to gradually bring positive changes to society,” Lee said.

US tech giant says jury decision misunderstands its products and it will appeal.

Google has been told by a US jury to pay $425m for violating the privacy of tens of millions of users who opted out of a feature tracking app use.

The jury in San Francisco handed down the verdict on Wednesday after a group of Google users accused the tech giant of continuing to collect data from third-party apps even when they changed their account settings to prevent the practice.

Google said the decision misunderstood how its products work and that it planned to appeal.

“Our privacy tools give people control over their data, and when they turn off personalization, we honor that choice,” Google spokesperson Jose Castaneda said in a statement.

In their lawsuit, the plaintiffs alleged that Google collected and sold users’ mobile app activity data in breach of privacy assurances contained in its Web & App Activity settings.

The suit, which was filed in July 2020, covered some 98 million Google users.

During the trial, Google had argued that collected data was “nonpersonal” and “pseudonymous” and stored in “segregated, secured, and encrypted locations”.

Google has faced a number of other recent privacy-related lawsuits.

In May, the tech giant agreed to pay $1.375bn to the state of Texas over claims it had collected residents’ face geometry and voiceprints without proper consent, and tracked users’ locations even when they opted out of the feature.

Salesforce has slashed another 4,000 jobs from its customer support workforce as the tech giant doubles down on artificial intelligence, even as the company reports strong financial results.

The latest layoffs gutted Salesforce’s customer service division, reducing its headcount from 9,000 to 5,000. AI agents now reportedly handle about one million customer conversations.

In a recent episode of The Logan Bartlett Show, CEO Marc Benioff justified the cuts by saying he “needs less heads” as Salesforce invests heavily in AI across its operations.

Earlier this year, Benioff boasted that AI was already doing 30 to 50 percent of the work, which he framed as efficiency gains – a 17 percent cost reduction achieved after shedding 1,000 people in February.

On Wednesday, the Slack owner reported revenue topped $10.2bn for the quarter ending July 31, up 10 percent from the same period last year. The company also announced a $20bn increase in its share buyback plan.

“These results reflect the success of our customers – like Pfizer, Marriott and the US Army – who are transforming into agentic enterprises, where humans and AI agents work side by side to reimagine workflows, accelerate productivity, and deliver customer success,” Benioff said.

“We exceeded all our financial targets while achieving our 10th consecutive quarter of operating margin expansion, delivering strong returns and maximising value for our customers and shareholders.”

But the business software provider also forecast that the current quarter revenue would be below Wall Street estimates, as clients dial back spending on its enterprise cloud products due to macroeconomic uncertainty.

Shares of the San Francisco, California-based company fell more than 4 percent in trading after the bell.

Benioff, whose annual compensation package was valued at $55m, has openly embraced automation as a central pillar of Salesforce’s future even as thousands lose their jobs. He insists the aggressive replacement of people with machines is worth celebrating, calling the past year of AI expansion “the eight most exciting months of my career”.

This is not new for Salesforce. In early 2023, Benioff oversaw a mass layoff of 7,000 workers, roughly 10 percent of the company’s global workforce, although later in the year, the cloud computing giant hired 3,000 workers.

A mixed message

“Just months ago, they [Salesforce] downplayed AI’s threat to jobs. The latest action raises important questions on trust in the sector. It’s very damaging and gives rise to a climate of fear among the industry’s wider workforce,” tech consultant Waseem Mirza told Al Jazeera.

In July, Benioff echoed that softer line, insisting AI would “augment” rather than replace people. Just a day before announcing the layoffs, he doubled down on that reassurance in a post on X.

“Our agentic future is not preordained. If AI replaces human judgment, creativity, empathy, we diminish ourselves,” he wrote.

“This is quite an important signal that this says to the tech sector with the biggest AI-driven layoffs thus far and could lead to a copycat effect across the sector,” Mirza said.

“The disruption is growing day by day, and we are going to see it continue.”

Salesforce is not alone. Recruit Holdings, the parent company of Indeed and Glassdoor, cut 1,300 jobs amid its AI shift in July. Klarna laid off 40 percent of its workforce earlier this year. Duolingo announced in April it would stop hiring contractors and replace them with AI.

“Internally [at Salesforce], these cuts can be read as a way to maximise efficiency and ultimately shareholder value. But there’s a risk when companies cut too deeply in junior positions; they may be undermining their own future talent pipeline, which could hurt them strategically in the long run,” Fabian Stephany, assistant professor for AI and Work at the University of Oxford, told Al Jazeera.

That concern is widely shared across the industry. Dario Amodei, the CEO of Anthropic, told the outlet Axios earlier this year that AI could eliminate half of all entry-level white-collar jobs.

“Highly exposed” fields have seen a 13 percent relative decline in opportunities for workers aged 22-25 between October 2022 and July 2025. In tech specifically, the effect is even more amplified. Opportunities for software engineers have fallen 20 percent, according to new research from Stanford University.

Salesforce did not respond to Al Jazeera’s request for comment.

Analysts say the cuts in the Goods and Services Tax is aimed at boosting demand in the wake of 50 percent tariffs on Indian goods.

India has announced tax cuts on hundreds of consumer items ranging from soaps to small cars to spur domestic demand in the face of economic headwinds from punishing tariffs imposed by US President Donald Trump.

The measures come as the 50 percent US tariffs took effect last month, raising fears of an economic slowdown.

The Goods and Services Tax (GST) has been overhauled to simplify India’s complex four-tier system into two slabs and cut levies across sectors, in some cases by more than half, announced Finance Minister Nirmala Sitharaman.

Sitharaman said a panel, which looked into the GST reforms, approved cuts in consumer items such as toothpaste and shampoo to 5 percent from 18 percent, and on small cars, air conditioners, and televisions to 18 percent from 28 percent.

The panel, which is headed by Sitharaman, approved the two-rate structure of 5 percent and 18 percent, instead of the four rates currently.

The new tax regime makes insurance premiums, including life and health coverage, tax-free.

The finance minister insisted the GST cuts were not linked to the “tariff turmoil”, saying they were part of long-planned reforms.

Federal and state governments are estimated to lose 480 billion Indian rupees ($5.49bn) due to the cuts that will be implemented from September 22, the first day of the Hindu festival of Navratri.

40 percent tax on ‘super luxury and ‘sin’ goods

Coupled with cuts in personal tax unveiled in February, the GST reductions are expected to boost consumption in the South Asian nation, whose economy grew at an unexpectedly higher pace of 7.8 percent in the quarter to June.

“The consumption boost in lieu of the GST rate rationalisation will more than neutralise any possible revenue impact,” said Soumya Kanti Ghosh, chief economist at SBI.

“The impact on fiscal deficit will be almost insignificant or even positive.”

The panel approved a tax of 40 percent on “super luxury” and “sin” goods such as cigarettes, cars with engine capacity exceeding 1,500 cubic centimetres (91.5cu inches), and carbonated beverages, the minister said.

The move is expected to boost sales of fast-moving consumer goods firms such as Hindustan Unilever and Godrej Industries, and consumer electronics companies such as Samsung Electronics, LG Electronics, and Sony.

Carmakers such as Maruti, Toyota Motor, and Suzuki Motor are expected to be big winners. The rush to cut the tax was triggered by Prime Minister Narendra Modi’s call for greater self-reliance in India, pledging last month to lower the GST by October to counter the US tariffs of up to 50 percent.

After the tax cuts announced on Wednesday, Modi said, “The wide-ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses.”

The United States and Europe have long used unilateral sanctions as a tool of imperial power, to discipline and even destroy Global South governments that seek to shake off Western domination, chart an independent path, and establish any kind of meaningful sovereignty.

During the 1970s, there were, on average, about 15 countries under Western unilateral sanctions in any given year. In many cases, these sanctions sought to strangle access to finance and international trade, destabilise industries, and inflame crises to provoke state collapse.

For instance, when the popular socialist Salvador Allende was elected to power in Chile in 1970, the US government imposed brutal sanctions on the country. At a September 1970 meeting at the White House, US President Richard Nixon explained the objective was to “make [Chile’s] economy scream”. The historian Peter Kornbluh describes the sanctions as an “invisible blockade” that cut Chile off from international finance, created social unrest, and paved the way for the US-backed coup that installed the brutal right-wing dictatorship of Augusto Pinochet.

Since then, the US and Europe have dramatically increased their use of sanctions. During the 1990s and 2000s, an average of 30 countries were under Western unilateral sanctions in any given year.  And now, as of the 2020s, it is more than 60 – a strikingly high proportion of the countries of the Global South.

Sanctions often have a huge human toll.  Scholars have demonstrated this in several well-known cases, such as the US sanctions against Iraq in the 1990s that led to widespread malnutrition, lack of clean water, and shortages of medicine and electricity. More recently, US economic warfare against Venezuela has resulted in a severe economic crisis, with one study estimating that sanctions caused 40,000 excess deaths in just one year, from 2017 to 2018.

Until now, researchers have sought to understand the human toll of sanctions on a case-by-case basis. This is difficult work and can only ever give us a partial picture. But that has changed with new research published this year in The Lancet Global Health, which gives us a global view for the first time. Led by the economist Francisco Rodriguez at the University of Denver, the study calculates the total number of excess deaths associated with international sanctions from 1970 to 2021.

The results are staggering. In their central estimate, the authors find that unilateral sanctions imposed by the US and EU since 1970 are associated with 38 million deaths. In some years, during the 1990s, more than a million people were killed. In 2021, the most recent year of data, sanctions caused more than 800,000 deaths.

According to these results, several times more people are killed by sanctions each year than are killed as direct casualties of war (on average, about 100,000 people per year). More than half of the victims are children and the elderly, people who are most vulnerable to malnutrition. The study finds that, since 2012 alone, sanctions have killed more than one million children.

Hunger and deprivation are not an accidental by-product of Western sanctions; they are a key objective. This is clear from a State Department memo written in April 1960, which explains the purpose of US sanctions against Cuba. The memo noted that Fidel Castro – and the revolution more broadly – enjoyed widespread popularity in Cuba. It argued that “every possible means should be undertaken promptly to weaken the economic life of Cuba,” by “denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government”.

The power of Western sanctions hinges on their control over the world’s reserve currencies (the US dollar and the Euro), their control over international payment systems (SWIFT), and their monopoly over essential technologies (eg satellites, cloud computation, software). If countries in the Global South wish to chart a more independent path towards a multipolar world, they will need to take steps to limit their dependence in these respects and thus insulate themselves from backlash. The recent experience of Russia shows that such an approach can succeed.

Governments can achieve greater independence by building South-South trade and swap lines outside the core currencies, using regional planning to develop necessary technologies, and establishing new payment systems outside Western control. Indeed, several countries are already taking steps in this direction. Importantly, new systems that have been developed in China (eg CIPS for international payments, BeiDou for satellites, Huawei for telecom) now provide other global South countries alternative options that can become a pathway out of Western dependence and the sanctions net.

These steps are necessary for countries that wish to achieve sovereign development, but they are also a moral imperative. We cannot accept a world where half a million people are killed each year to prop up Western hegemony. An international order that relies on this kind of violence must be dismantled and replaced.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

More than 20 leaders from non-Western nations gathered in Tianjin, China over the weekend for the Shanghai Cooperation Organisation (SCO) summit, which concluded on Monday, and at which President Xi Jinping set out his vision for a global economic order with the Global South at its centre.

Against the backdrop of new global tariffs imposed by United States President Donald Trump, Xi told delegates: “We must continue to take a clear stand against hegemonism and power politics, and practise true multilateralism.”

The summit brought together some of the strongest emerging economies, including India and Russia, which, along with China, account for more than one-fifth of the world’s gross domestic product (GDP).

Trilateral trade between China, India and Russia accounted for $452bn in 2023, up from $351bn in 2022, according to the Observatory of Economic Complexity (OEC).

Seen as an alternative power structure to most US-led international institutions, the 10-member SCO includes much of Central Asia, Russia, China, India, Iran, Pakistan and Belarus, and represents about 43 percent of the world’s population and 23 percent of global GDP.

Beijing’s push for multilateralism is coming at a time of rising grievances with Washington, whose trade tariff policies have provided SCO members with common ground to work on.

Which countries buy the most from China?

China has a diverse range of trading partners.

Its largest buyer is the US, which imported $442bn or 12.9 percent of China’s total exports in 2023 – mainly consisting of electronics, machinery, consumer goods and telecommunications equipment.

Regionally, Asia is the main destination for China’s exports, accounting for $1.6 trillion of goods, with India alone receiving $120bn, or 3.1 percent of China’s total exports.

In Europe, China exported $819bn worth of goods, with the main destinations being Germany ($151bn), Russia ($110bn) and the UK ($95.3bn).

Which countries buy the most from India?

The US is also the largest buyer of Indian goods.

In 2023, the US bought goods worth $81.4bn, or 17.9 percent of India’s total exports, mostly medications and pharmaceutical products, followed by precious stones, machinery and textiles.

Regionally, Asia is also the main destination for India’s exports, accounting for $178bn of goods, with the UAE being India’s second largest destination for exports, at $31.4bn, or 6.9 percent of India’s total exports, mainly jewellery and refined petroleum.

The Netherlands is India’s third-biggest export market at $22.5bn, with refined petroleum being the largest export item, worth $15bn. China is India’s fourth-largest export market and second-largest in the Asia region.

On August 6, US President Donald Trump announced a 50 percent tariff on Indian imports, citing India’s continued purchase of discounted Russian crude oil as the primary reason.

In response, India expressed strong disapproval, calling the tariffs “unfair, unjustified, and unreasonable”, and reaffirmed its sovereign right to determine its energy policies independently. Despite the US pressure, India continued to import Russian oil, attracted by substantial discounts offered by Moscow.

Which countries buy the most from Russia?

Before the Ukraine war, Russia’s trading partners were much more diversified.

While China was its largest trading partner, accounting for 14.6 percent ($72.1bn) of Russian exports in 2021, according to the Observatory of Economic Complexity (OEC), Russia also had a broad range of European partners. The Netherlands was Russia’s second-largest partner, with 8 percent ($39.5bn) of total exports, followed by the US at 5.5 percent ($27.3bn).

After Russia’s invasion of Ukraine in February 2022, heavy sanctions sharply reduced trade with many Western nations.

By 2023, China accounted for about one-third ($129bn) of Russia’s exports, followed by India at 16.8 percent ($66.1bn) and Turkiye at 7.9 percent ($31bn), according to the OEC, making the Asia region the bulk recipient of Russian goods, with more than three-quarters of Russia’s exports heading there.

What do China and Russia trade most?

In 2023, China exported $110bn worth of goods to Russia, led by machinery and transport equipment. According to the OEC, the top export items from China to Russia were cars.

That same year, Russia sold $129bn worth of goods to China – mostly mineral products, including oil and natural gas.

In recent years, Russia has run a trade surplus with China, mostly due to energy products, which make up nearly three-quarters of its exports.

What do India and Russia trade most?

India runs a major trade deficit with Russia, importing far more than it exports.

In 2023, Russia sold $66.1bn worth of goods to India, with energy products – primarily crude oil and natural gas – making up about 88 percent of these imports, much of which India buys at a discounted rate.

India’s exports to Russia are more diversified, totalling $4.1bn in 2023, with significant contributions from chemical products, machinery and metals.

What do China and India trade most?

India runs a major trade deficit with China, importing about seven times more goods by dollar value than it exports.

In 2023, China exported $125bn worth of goods to India, mainly machinery and chemical products, while India exported $18.1bn worth of goods to China, with oil and fuel-related products comprising the largest share of its exports.

Nestle has fired CEO Laurent Freixe after just one year in the job following an investigation into an undisclosed “romantic relationship”, ousting its second chief executive in a year and throwing the Swiss food giant into its deepest leadership chaos in decades.

Freixe’s sudden dismissal followed an investigation into an undisclosed romantic relationship with a direct subordinate that breached Nestle’s code of business conduct, Nestle said late on Monday.

Freixe was replaced by Nespresso chief Philipp Navratil, a rising star at the world’s largest food company as it battles slowing sales, the impact of United States tariffs and eroding investor confidence after years of underperformance.

The Frenchman’s predecessor Mark Schneider failed to cope with the challenge, and it cost him his job in August 2024. Paul Bulcke, CEO from 2008 to 2016, will step down as chairman in April and will be replaced by Pablo Isla, a former CEO of Spanish fashion retailer Inditex.

“The loss of two CEOs and a chairman in a year is of historic proportions for Nestle,” said Ingo Speich, head of corporate governance and sustainability at Deka, a top 30 Nestle investor.

“The new CEO needs to fix the business model and bring volumes back. He needs to do better M&A [mergers and acquisitions] and focus more on emerging markets.”

The upheaval underscores the struggle not only at Nestle but also other consumer goods companies to reignite sales and recover stock values as the post-pandemic cost-of-living crisis drives consumers towards cheaper alternatives. Meanwhile, US tariffs threaten to further inflate prices and alienate already price-sensitive shoppers.

Shares in the maker of Nescafe and KitKat chocolate bars were down 0.8 percent in Zurich by 1:18pm (11:18 GMT).

Speak Up

The company said concerns about a possible relationship were raised by staff via the company’s internal reporting channel, Speak Up, although an initial investigation was unsubstantiated. Freixe had initially denied the relationship to the board, a company spokesperson said.

When staff concerns persisted, Nestle said it ordered an investigation overseen by Bulcke and Lead Independent Director Isla with the support of independent outside counsel. Swiss media reported that Swiss lawyers from the Baer & Karrer law firm helped with the inquiry.

Freixe, who spent 39 years with Nestle, will receive no exit package, the company told the Reuters news agency.

In a short statement, Bulcke thanked Freixe for his years of service at Nestle but said the dismissal was a “necessary decision”.

His dismissal adds to a list of top executives forced to resign after investigations into their relationships with colleagues.

Energy giant BP’s former CEO Bernard Looney and McDonald’s CEO Steve Easterbrook were both removed for failing to disclose relationships with colleagues.

The Swiss financial news website Inside Paradeplatz reported that Freixe met the woman in 2022 before he became CEO and when he was head of Nestle’s Latin America business.

Freixe was not immediately available to comment when contacted via email. The identity of the female subordinate has not been made public.

Swiss law does not prohibit relationships between senior executives nor does it require disclosure although most large companies have internal codes of conduct that require they are disclosed.

Corporate governance expert Peter V Kunz from the University of Bern said he was not familiar with Nestle’s rules but said requirements at most public companies were broadly similar.

“In this respect, Mr Freixe’s behaviour – regardless of whether it was legal or not – seems to me to be simply stupid and incomprehensible in this day and age,” Kunz told Reuters, adding that he did not think investors had grounds for legal action against Nestle.

Opportunity for overhaul

Nestle’s shares, a bedrock of the Swiss stock exchange, have lost almost a third of their value over the past five years, underperforming their European peers.

Freixe’s appointment failed to halt the slide, and the company’s shares shed 17 percent of their value during his leadership, disappointing investors.

One top 20 Nestle investor welcomed news of the change, saying Freixe had been a disappointment and bringing in Navratil was an opportunity for a more ambitious overhaul.

The new CEO needs to slim down the company, cut costs and above all reduce the headcount, the investor, who declined to be named due to the sensitivity of the matter, said, adding that it is also crucial for the company to raise organic growth to boost volumes.

“The cash flow must cover the dividend,” the investor said. “That’s an absolute priority.”

In July, Nestle launched a review of its underperforming vitamins business, which could lead to the divestment of some brands after first-half sales volumes missed expectations.

Freixe’s dismissal was featured on the front page of Swiss newspapers with Neue Zuercher Zeitung noting that Nestle had lost its “legendary stability” during which CEOs stayed on for years before eventually becoming chairmen.

AJ Bell investment director Russ Mould said the company would likely face a period of uncertainty over whether Navratil will follow the same path as his predecessor.

“While Navratil is also an internal appointment, he will want to put his own mark on strategy, and that suggests the clock could be reset when it comes to the turnaround plan,” Mould said.

The number of foreign visitors to the United States continues to decline, as a range of policies put forth by the administration of US President Donald Trump has made tourists wary of travelling to the country.

In July, foreign visits to the US decreased by 3 percent year-over-year, according to recently released preliminary government data.

That decrease follows a trend that has been seen almost every month since Trump took office in late January. For five out of six months, the US has experienced a drop in foreign visitors.

“Everyone is afraid, scared – there’s too much politics about immigration,” Luise Francine, a Brazilian tourist visiting Washington, DC, told Al Jazeera.

Experts and some local officials say Trump’s tariffs, immigration crackdown and repeated jabs about the US acquiring Canada and Greenland have alienated travellers from other parts of the world.

Ryan Bourne, an economist at the Cato Institute, told Al Jazeera that the decline in tourism was tied to both Trump’s rhetoric and policies.

“[The decrease] can be put down to the president’s trade wars and some of the fallout about fears about getting ensnared in immigration enforcement.”

Travel research firm Tourism Economics predicted last week that the US would see 8.2 percent fewer international arrivals in 2025 – an improvement from its earlier forecast of a 9.4 percent decline, but well below the numbers of foreign visitors to the country before the COVID-19 pandemic.

“The sentiment drag has proven to be severe,” the firm said, noting that airline bookings indicate “the sharp inbound travel slowdown” of May, June, and July would likely persist in the months ahead.

While the July 2025 figures don’t account for neighbouring Canada and Mexico, Canadian visitors in particular have been plummeting in number. One-quarter fewer Canadians have visited the US this year compared to the same period in 2024, according to Tourism Economics.

In a major U-turn, more US residents drove into Canada in June and July than Canadians made the reverse trip, according to Canada’s national statistical agency.

Statistics Canada stated that this was the first time this had occurred in nearly two decades, except for two months during the pandemic.

‘Visa integrity fee’

Mexico, by contrast, has been one of the few countries to see tourism to the US increase. Overall, US government figures show that travel from Central America grew 3 percent through May and from South America 0.7 percent, compared with a decline of 2.3 percent from Western Europe.

But countries that have typically sent huge numbers of visitors to the US have seen major dips.

Of the top 10 overseas tourist-generating countries, only two – Japan and Italy – saw a year-over-year increase in July. Visitors from India, which ranks second, dipped by 5.5 percent, while those from China dropped nearly 14 percent.

India has seen previously warm relations sour under the Trump administration, amid steep tariffs and geopolitical tensions, while a trade war and Trump’s (since-reversed) broadsides against Chinese students have raised concerns among Chinese tourists.

Deborah Friedland, managing director at the financial services firm Eisner Advisory Group, said the US travel industry faced multiple headwinds – rising travel costs, political uncertainty and ongoing geopolitical tensions.

Since returning to office for a second term in January, Trump has doubled down on some of the hard-line policies that defined his first term, reviving a travel ban targeting mainly African and Middle Eastern countries, tightening rules around visa approvals, and ramping up mass immigration raids.

At the same time, the push for tariffs on foreign goods that quickly became a defining feature of his second term gave some citizens elsewhere a sense that they were unwanted.

A new $250 “visa integrity fee”, set to go into effect on October 1, adds a hurdle for travellers from non-visa waiver countries like Mexico, Argentina, India, Brazil and China. The extra charge raises the total visa cost to $442, one of the highest visitor fees in the world, according to the US Travel Association.

“Any friction we add to the traveller experience is going to cut travel volumes by some amount,” said Gabe Rizzi, president of Altour, a global travel management company. “As the summer ends, this will become a more pressing issue, and we’ll have to factor the fees into travel budgets and documentation.”

International visitor spending in the US is projected to fall below $169bn this year, down from $181bn in 2024, according to the World Travel & Tourism Council.

In May, the group projected that the US would be the only country among the 184 it studied where foreign visitor spending would fall in 2025. The finding was “a clear indicator that the global appeal of the US is slipping”, the group said.

WASHINGTON — President Trump’s attempt to fire a member of the Federal Reserve’s governing board has raised alarms among economists and legal experts who see it as the biggest threat to the central bank’s independence in decades.

The consequences could affect most Americans’ everyday lives: Economists worry that if Trump gets what he wants — a loyal Fed that sharply cuts short-term interest rates — the result would likely be higher inflation and, over time, higher borrowing costs for things like mortgages, car loans and business loans.

Trump on Monday sought to fire Lisa Cook, the first Black woman appointed to the Fed’s seven-member Board of Governors. It was the first time in the Fed’s 112-year history that a president has tried to fire a governor.

Fed independence ‘hangs by a thread’

Trump and members of his administration have made no secret about their desire to exert more control over the Fed. Trump has repeatedly demanded that the central bank cut its key rate to as low as 1.3%, from its current level of 4.3%.

Before trying to fire Cook, Trump repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting the short-term interest rate and threatened to fire him as well.

“We’ll have a majority very shortly, so that’ll be good,” Trump said Tuesday, a reference to the fact that if he is able to replace Cook, his appointees will control the Fed’s board by a 4-3 vote.

“The particular case of Governor Cook is not as important as what this latest move shows about the escalation in the assaults on the Fed,” said Jon Faust, an economist at Johns Hopkins and former advisor to Powell. “In my view, Fed independence really now hangs by a thread.”

Some economists do think the Fed should cut more quickly, though virtually none agrees with Trump that it should do so by 3 percentage points. Powell has signaled the Fed is likely to cut by a quarter point in September.

Why economists prefer independent central banks

The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls — which it typically does when the economy falters — the Fed can make borrowing cheaper and encourage more spending, growth and hiring. When it raises the rate to combat the higher prices that come with inflation, it can weaken the economy and cause job losses.

Most economists have long preferred independent central banks because they can take unpopular steps that elected officials are more likely to avoid. Economic research has shown that nations with independent central banks typically have lower inflation over time.

Elected officials like Trump, however, have much greater incentives to push for lower interest rates, which make it easier for Americans to buy homes and cars and would boost the economy in the short run.

A political Fed could boost inflation

Douglas Elmendorf, an economist at Harvard and former director of the nonpartisan Congressional Budget Office, said that Trump’s demand for the Fed to cut its key rate by 3 percentage points would overstimulate the economy, lifting consumer demand above what the economy can produce and boosting inflation — similar to what happened during the COVID-19 pandemic emergency.

“If the Federal Reserve falls under control of the president, then we’ll end up with higher inflation in this country probably for years to come,” Elmendorf said.

And while the Fed controls a short-term rate, financial markets determine longer-term borrowing costs for mortgages and other loans. And if investors worry that inflation will stay high, they will demand higher yields on government bonds, pushing up borrowing costs across the economy.

In Turkey, for example, President Recep Tayyip Erdogan forced the central bank to keep interest rates low in the early 2020s, even as inflation spiked to 85%. In 2023, Erdogan allowed the central bank more independence, which has helped bring down inflation, but short-term interest rates rose to 50% to fight inflation, and are still 46%.

Other U.S. presidents have badgered the Fed. President Johnson harassed then-Fed Chair William McChesney Martin in the mid-1960s to keep rates low as Johnson ramped up government spending on the Vietnam War and antipoverty programs. And President Nixon pressured then-Chair Arthur Burns to avoid rate hikes in the run-up to the 1972 election. Both episodes are widely blamed for leading to the stubbornly high inflation of the 1960s and ‘70s.

Trump has also argued that the Fed should lower its rate to make it easier for the federal government to finance its tremendous $37-trillion debt load. Yet that threatens to distract the Fed from its congressional mandates of keeping inflation and unemployment low.

Independence vs. accountability

Presidents do have some influence over the Fed through their ability to appoint members of the board, subject to Senate approval. But the Fed was created to be insulated from short-term political pressures. Fed governors are appointed to staggered, 14-year terms to ensure that no single president can appoint too many.

Jane Manners, a law professor at Fordham University, said there is a reason that Congress decided to create independent agencies like the Fed: Lawmakers preferred “decisions that are made from a kind of objective, neutral vantage point grounded in expertise rather than decisions are that are wholly subject to political pressure.”

Yet some Trump administration officials say they want more democratic accountability at the Fed.

In an interview with USA Today, Vice President JD Vance said, “What people who are saying the president has no authority here are effectively saying is that seven economists and lawyers should be able to make an incredibly critical decision for the American people with no democratic input.”

Stephen Miran, a top White House economic advisor, wrote a paper last year advocating for a restructuring of the Fed, including making it much easier for a president to fire governors.

The “overall goal of this design is delivering the economic benefits” of an independent central bank, Miran wrote, “while maintaining a level of accountability that a democratic society must demand.” Trump has nominated Miran to the Fed’s board to replace Adriana Kugler, who stepped down unexpectedly Aug. 1.

There could be more turmoil ahead

Trump said he wants to oust Cook from the Board of Governors because of allegations raised by one of his advisors that she has committed mortgage fraud.

Cook has argued in a lawsuit seeking to block her firing that the claims are a pretext for Trump’s desire to assert more control over the Fed. A court may decide this week whether to temporarily block Cook’s firing while the case makes its way through the legal process.

Cook is accused of claiming two homes as primary residences in July 2021, before she joined the board, which could have led to a lower mortgage rate than if one had been classified as a second home or an investment property. She has suggested in her lawsuit that it may have been a clerical error but hasn’t directly responded to the accusations.

Trump also has personally insulted Powell for months, but his administration now appears much more focused on the Fed’s broader structure.

The Fed makes its interest rate decisions through a committee that consists of the seven governors, including Powell, as well as the 12 presidents of regional Fed banks in cities such as New York, Kansas City and Atlanta. Five of those presidents vote on rates at each meeting. The New York Fed president has a permanent vote, while four others vote on a rotating basis.

While the reserve banks’ boards choose their presidents, the Fed board in Washington can vote to reject them. All 12 presidents will need to be reappointed and approved by the board in February, which could become more contentious if the board votes down one or more of the 12 presidents.

Reappointing the reserve bank presidents and upending that structure would be “the nuclear scenario,” said Adam Posen, president of the Peterson Institute for International Economics.

That, he said, “would be the signal that things are truly going off the rails.”

Rugaber writes for the Associated Press.

A United States appeals court has declared President Donald Trump’s blanket tariff policy illegal, but it stopped short of pausing the wide-ranging import taxes altogether.

On Friday, the Court of Appeals for the Federal Circuit in Washington, DC, largely upheld a decision in May that found Trump had overstepped his authority in imposing universal tariffs on all US trading partners.

Trump had invoked the International Emergency Economic Powers Act (IEEPA) to justify the move, claiming that trade deficits with other countries constituted a “national emergency”.

But the appeals court questioned that logic in Friday’s ruling, ruling seven to four against the blanket tariffs.

“The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency,” the court wrote.

“But none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.”

The Trump administration is expected to appeal to the Supreme Court, and the appeals court therefore said his tariff policy could remain in place until October 14.

That was a departure from the May ruling, which included an injunction to immediately halt the tariffs from taking effect.

What is this case about?

The initial May decision was rendered by the New York-based US Court of International Trade, a specialised court that looks exclusively at civil actions pertaining to cross-border trade.

That case was one of at least eight challenges against Trump’s sweeping tariff policies.

Trump has long maintained that the US’s trading partners have taken advantage of the world’s largest economy, and he has depicted trade deficits – when the US imports more than it exports – as an existential threat to the economy.

But experts have warned that trade deficits are not necessarily a bad thing: They could be a sign of a strong consumer base, or the result of differences in currency values.

Still, on April 2, Trump invoked the IEEPA to impose 10-percent tariffs on all countries, plus individualised “reciprocal” tariffs on specific trading partners.

He called the occasion “Liberation Day“, but critics noted that the global markets responded to the tariff announcements by stumbling downward.

A few days later, as the “reciprocal” tariffs were slated to take effect, the Trump administration announced a pause for nearly every country, save China. In the meantime, Trump and his officials said they would seek to negotiate trade deals with global partners.

A new slate of individualised, country-specific tariffs was unveiled in July in the form of letters Trump posted to his social media account. Many of them took effect on August 1, including a 50-percent tariff on Brazil for its prosecution of a Trump ally, former President Jair Bolsonaro.

Just this week, on August 27, India was also slapped with a 50-percent tariff as a result of its purchase of oil from Russia.

Mexico, Canada and China, meanwhile, have faced Trump’s tariff threats since February, with Trump leveraging the import taxes to ensure compliance with his policies on border security and the drug fentanyl.

What are the arguments?

US presidents do have limited power to issue tariffs in order to protect specific domestic industries, and Trump has exercised that power in the case of imported steel, aluminium and automobile products.

But in general, the US Constitution places the power to issue taxes, including tariffs, under Congress, not the presidency.

Lawsuits like Friday’s have therefore argued that Trump has exceeded his presidential authority in levying blanket tariffs.

The appeals court decision also pointed out that the IEEPA does not give the presidency unchecked power.

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the ruling said.

The decision came in response to two lawsuits: one filed by the nonpartisan Liberty Justice Center, on behalf of five US small businesses, and the other by 12 US states.

Still, on his social media platform Truth Social, Trump appeared defiant, emphasising that his tariffs would remain in place despite the appeals court’s decision.

“ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” he wrote.

He added that it was his view that tariffs “are the best tool to help our Workers”. He also implied he expected the Supreme Court to back him up in his appeal.

“If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong,” Trump said.

“Tariffs were allowed to be used against us by our uncaring and unwise Politicians. Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation.”

Federal Reserve Governor Lisa Cook has filed a lawsuit arguing that United States President Donald Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms between the president and the central bank.

The lawsuit was filed on Thursday, three days after Trump published a letter saying Cook was removed from her job.

In the lawsuit, Cook argues that Trump violated federal law in attempting to remove her from her position. Under the Federal Reserve Act of 1913, presidents may only remove a Federal Reserve governor “for cause”, a high bar generally understood to mean grave misconduct or dereliction of duty.

As the country’s central banking system, the Federal Reserve is considered independent from political branches of government like the presidency or Congress. In theory, that allows it to set monetary policy without political influence.

But concerns about whether the Fed can maintain its independence from the White House under Trump could have a ripple effect throughout the global economy. The US dollar stumbled against other major currencies after Trump first said he would remove Cook.

“President Trump’s attempt to fire Dr Lisa Cook is continuing to add uncertainty and chaos to the US economy,” Sameera Fazili, the former deputy director of the National Economic Council, told Al Jazeera.

Fazili, who previously served as a staff member at the Federal Reserve Bank of Atlanta, explained that disruptions at the central bank would negatively impact US businesses.

“An economy needs stable and predictable laws to function smoothly. That’s how you earn investor trust and raise capital for your businesses,” she said, adding: “I applaud Dr Cook for standing up and fighting for the rule of law.”

Cook’s lawsuit is likely headed to the Supreme Court, where a conservative majority has at least tentatively allowed Trump to fire officials from other agencies.

But the court recently signalled that the Federal Reserve may qualify for a rare exception.

In its May decision in the case Trump v Wilcox, the Supreme Court argued that Federal Reserve governors are distinct from other federal employees, because the bank “is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States”.

Mortgage allegations

Still, Trump, a Republican president, has argued that he does have cause to remove Cook from her post.

In his August 25 letter, he accused Cook of committing mortgage fraud in 2021, a year before she joined the Federal Reserve’s governing body.

“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” he wrote.

“In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

The Federal Reserve Act does not define what removal “for cause” means, nor does it lay out any standard or procedures for removal.

Trump, however, has argued that Cook’s actions amount to “gross negligence”, though she has denied the allegations.

No president has ever removed a Federal Reserve board member, and the legal standard governing removals from the central bank has never been tested in court.

A Federal Reserve spokesperson said on Tuesday, before the lawsuit was filed, that the bank would abide by any court decision.

Cook was appointed to the Federal Reserve in 2022 by former President Joe Biden, a Democrat, and is the first Black woman to serve on the central bank’s governing body.

Questions about Cook’s mortgages were first raised in August by William Pulte, a Trump appointee who is the director of the Federal Housing Finance Agency.

Pulte referred the matter to Attorney General Pamela Bondi for investigation.

Cook took out the mortgages in Michigan and Georgia in 2021 when she was an academic, researching and teaching economics.

An official financial disclosure form for 2024 lists three mortgages held by Cook, with two listed as personal residences. Loans for primary residences can carry lower rates than mortgages on investment properties, which are considered riskier by banks.

Some experts have questioned whether transactions that preceded Cook’s appointment to the Federal Reserve would be adequate cause to remove her. After all, Cook’s mortgages were in the public record when she was vetted and confirmed by the Senate in 2022.

Trump has made several allegations of mortgage fraud against perceived political adversaries, including Senator Adam Schiff of California and New York Attorney General Letitia James, both Democrats.

Like Cook, Schiff and James have denied wrongdoing.

Pushing for influence on the Federal Reserve

For her part, Cook said in a statement earlier this week that “no causes exist under the law, and [Trump] has no authority” to remove her from her job.

Her lawyers have also said that Trump’s “demands lack any proper process, basis or legal authority”.

Since Trump took office for a second term in January, critics have accused him of seeking broad powers beyond the presidency, across all branches of government.

He has sought to remove inspectors general and the heads of independent agencies he felt were unfriendly to his policies, despite federal laws that protect their employment.

Such laws require the president to clearly define the cause for removing federal employees. Those causes include neglect of duty, malfeasance, and inefficiency.

While the Federal Reserve Act does not identify those causes in its terms, they could be used as a guide for courts to determine if Trump can legally fire Cook.

In Thursday’s lawsuit, Cook’s lawyers said nothing she has done would amount to such “cause”.

“Neither the type of ‘offense’ the President cited nor the threadbare evidence against Governor Cook would constitute ‘cause’ for removal even if the President’s allegations were true – which they are not,” they wrote.

“The President would not have ‘cause’ to remove a Federal Reserve Governor even if he possessed smoking gun evidence that she jaywalked in college.”

The lawsuit also argues that the president violated Cook’s right to due process by attempting to terminate her position without notice.

Trump has faced other lawsuits for attempting to remove federal officials, including in the Trump v Wilcox case.

That case concerned Gwynne Wilcox, the first Black woman to sit on the National Labor Relations Board, which hears private-sector labour disputes.

Cook’s departure from the Federal Reserve, however, would allow Trump to name his fourth pick to the bank’s seven-member board.

The president has repeatedly berated Federal Reserve Chair Jerome Powell for not lowering interest rates and for his alleged mishandling of a multibillion-dollar renovation project.

While Trump has previously threatened to remove Powell before his term ends in May, he has since backed away from those remarks.

A full term for a Federal Reserve governor like Cook, meanwhile, is 14 years.

US tariff exemption on packages worth $800 or less due to end this week.

Mexico says it will suspend package shipments to the United States before the end of a tariff exemption for small-value packages.

The announcement on Wednesday follows similar moves by postal services from several European countries, including Germany, Denmark, Sweden, Italy, and the United Kingdom, as they await  further details from the US government.

The “de minimis” exemption has allowed packages worth less than $800 to enter the US tariff-free since 2016, but the loophole is set to expire on Friday.

The change is expected to dent the business of Chinese e-commerce platforms like Shein and Temu – which have evaded US tariffs by mailing directly to customers – but it has also created confusion for other US trade partners. Mexico said it will suspend shipments pending more details from Washington about new duties.

“Mexico continues its dialogue with US authorities and international postal organisations to define mechanisms that will allow for the orderly resumption of services, providing certainty to users and avoiding setbacks in the delivery of goods,” the government said.

Shipping giant DHL said “key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the US Customs and Border Protection will be carried out.”

The White House announced plans to suspend the de minimis exemption for all countries on July 30, as part of US President Donald Trump’s wider trade war.

The exemption was previously suspended for China, Hong Kong, Mexico, and Canada due to concerns about the flow of fentanyl and other drugs over the US border.

A White House Fact Sheet released on July 30 said two schemes may be used to calculate tariffs for small packages.

The first is calculated based on the value of the package, while the second scheme sets a tariff of $80 to $200 per item.

Both rates are based on the blanket tariff set by the Trump administration for most US trade partners in August, ranging from 10 to 40 percent.

The White House has also imposed tariffs on individual sectors, such as semiconductors, steel and aluminium, vehicles and auto parts.

Mexico is still negotiating its tariff rate with the US, and has pledged to raise tariffs on Chinese goods and take tougher measures against drug cartels to secure a deal with Trump. Some goods, however, will still be covered by the 2020 free trade US-Mexico-Canada Agreement.

US chipmaker reports revenue of $46.74bn for second quarter, defying fears that AI may be overhyped.

Chip giant Nvidia has set a new sales record, a sign that demand for artificial intelligence remains strong despite fearsthe technology may be overhyped.

Nvidia, the world’s most valuable company, on Wednesday reported revenue of $46.74bn for the three months that ended in July, a rise of 56 percent year-on-year.

Profit for the quarter was $26.42bn, a yearly rise of 59 percent.

Nvidia’s latest earnings report had been hotly anticipated as the tech giant is widely seen as a barometer of the AI boom, which has lifted the US stock market from all-time high to all-time high.

Nvidia CEO Jensen Huang said that production of Blackwell Ultra, Nvidia’s latest platform using its most advanced chips, was ramping up “at full speed” and demand for the company’s products was “extraordinary”.

“The AI race is on, and Blackwell is the platform at its centre,” Jensen said.

Looking ahead, the Santa Clara, California-based tech giant predicted revenue of $54bn, plus or minus 2 percent, for the July-September quarter, which would be slightly above market expectations.

Despite the robust results, Nvidia’s stock price fell more than 3 percent in after-hours trading, an indication of the sky-high expectations attached to the chipmaker, which is valued at more than $4.4 trillion.

Nvidia’s sales notably did not include any shipments to China, whose market is subject to US government export controls intended to blunt Beijing’s ability to develop AI.

US President Donald Trump’s administration earlier this month lifted a ban on sales of Nvidia’s H20 chip, which was designed specifically for the Chinese market, following concerted lobbying by Huang.

As part of its agreement with the Trump administration, Nvidia agreed to pay the US government 15 percent of revenues from chip sales in China.

The lifting of the ban on the H20 raises the possibility that Nvidia could have potentially enormous untapped sales potential in the world’s second-largest economy, though its prospects have been complicated by a recent directive by Beijing urging local firms against doing business with the company.

“Just imagine what will happen to this stock if the China business even comes half back to life,” The Kobeissi Letter, a newsletter following capital markets, said.

“Jensen Huang will undoubtedly be working overtime on the China situation. The AI Revolution is in full swing.”

Fuelled by explosive demand for its AI, Nvidia’s revenue has grown at breakneck speed over the past two years.

The company posted triple-digit revenue growth for five straight quarters between mid-2023 and 2024.

Since the start of 2023, the price of Nvidia shares has multiplied more than 11 times over, with the stock up more than 30 percent so far this year.

The firm’s stellar performance, underpinned by multibillion-dollar AI investments by tech giants including Microsoft, Meta and Amazon, has stoked discussion about whether AI could be in a bubble.

In an interview with The Verge earlier this month, OpenAI CEO Sam Altman, who oversaw the release of the groundbreaking AI model ChatGPT, said he believed that investors were “overexcited” about the technology.

The US has taken a stake in Intel chipmaker as part of a push to secure domestic production and reduce reliance on China. The acquisition is the most significant intervention in private business since the 2008 financial crisis. Supporters call it a smart industrial policy that will protect jobs and national security. But critics warn that this could mark a shift in the relationship between government and private companies, raising concerns about how much control a president should have over business.

Also, Bangladesh warns it can no longer bear the cost of sheltering Rohingya refugees.

Plus, meat prices are at an all-time high.

The AI company’s new council comes a month after the Pentagon signed a deal with several AI companies to develop tools for defence.

The artificial intelligence company Anthropic launched a National Security and Public Sector Advisory Council in efforts to deepen ties with Washington and allied governments as AI becomes increasingly central to defence.

The San Francisco-based start-up announced the new panel on Wednesday.

The council’s launch underscores AI firms’ growing efforts to shape policies and ensure their technology supports democratic interests amid global competition.

Anthropic’s new effort comes as rivals, such as OpenAI and Google DeepMind, step up engagement with governments and regulators on AI safety, though neither has announced a dedicated national security advisory council.

Anthropic’s council brings together former senators and senior officials from the US Department of Defense, intelligence agencies, as well as the Departments of Energy and Justice.

It will advise Anthropic on integrating AI into sensitive government operations while shaping standards for security, ethics and compliance.

Its members include Roy Blunt, a former senator and intelligence committee member, David S Cohen, a former deputy CIA director, and Richard Fontaine, who leads the Center for a New American Security.

Other appointees held top legal and nuclear security roles across Republican and Democratic administrations.

Anthropic said the group will advise on high-impact applications in cybersecurity, intelligence analysis and scientific research, while helping set industry standards for responsible AI use.

The company plans to expand the council as partnerships with public-sector institutions grow.

Last month, the Pentagon established a $200m programme to develop AI tools for defence, highlighting the sector’s push to balance innovation with security risks. The initiative reflects intensifying global competition over AI capabilities, with Washington seeking to maintain an edge against rivals, such as China and Russia.

The effort, which includes Anthropic, OpenAI, Alphabet – Google’s parent company, and xAI – the AI company championed by Elon Musk.