Manufacturing

The White House has launched an aggressive public relations campaign promoting a narrative of economic strength during the first six months of United States President Donald Trump, with claims of his policies fueling “America’s golden age”.

But an Al Jazeera analysis of economic data shows the reality is more mixed.

Trump’s claims of his policies boosting the US economy suffered a blow on Friday when the latest jobs report revealed that the country had added a mere 73,000 jobs last month, well below the 115,000 forecasters had expected. The only additions were in the healthcare sector, which added 55,000 jobs, and the social services sector added 18,000.

US employers also cut 62,075 jobs in July — up 29 percent from cuts in the month before, and 140 percent higher than this time last year, according to the firm Challenger, Gray and Christmas, which tracks monthly job cuts. Government, tech, and retail sectors are the industries that saw the biggest declines so far this year.

It comes as this month’s jobs and labour turnover report showed an economic slowdown. There were 7.4 million open jobs in the US, down from 7.7 million a month before.

The Department of Labour on Friday released downward revisions to both the May and June jobs reports, significantly changing the picture the White House had previously painted.

“For the FOURTH month in a row, jobs numbers have beat market expectations with nearly 150,000 good jobs created in June,” the White House said in a July 3 release following the initial June report.

The Labor Department had reported an addition of 147,000 jobs in June. On Friday, it sharply revised down that number to just 14,000. May’s report also saw a big downgrade from 144,000 to only 19,000 jobs gained. Trump has since fired the head of the agency that produces the monthly jobs data, alleging that the data had been manipulated to make him look bad.

Even before the revisions, June’s report was the first to reflect early signs of economic strain tied to the administration’s tariff threats, as it revealed that job growth was concentrated in areas such as state and local government and healthcare. Sectors more exposed to trade policy – including construction, wholesale trade, and manufacturing – were flat. Meanwhile, leisure and hospitality showed weak growth, even in peak summer, reflecting falling travel demand both at home and abroad.

The administration also claimed that native-born workers accounted for all job gains since January. That assertion is misleading as it implies that no naturalised citizens or legally present foreign workers gained employment.

However, it is true that employment among foreign-born workers has declined – by over half a million jobs – claims that native-born workers are replacing foreign-born labour, are not supported by the jobs data.

Jobs lost in sectors with high foreign-born employment, including tech, have been abundant, driven by tariffs and automation, particularly AI. In fact, recent layoffs in tech have been explicitly attributed to AI advancements, not labour displacement by other groups.

Companies including Recruit Holdings — the parent company of Indeed and Glassdoor, Axel Springer, IBM, Duolingo and others have already made headcount reductions directly attributed to AI advancements.

Wage growth

The pace of rise of wage growth, an indicator of economic success, has slowed in recent months. That is partly due to the Federal Reserve keeping interest rates steady in hopes of keeping inflation stable.

According to the Bureau of Labor Statistics, wages have been outpacing inflation since 2023, after a period of declining real wages following the COVID pandemic.

Wage growth ticked up by 0.3 percent in July from a month prior. Compared with this time last year, wage growth is 3.9 percent, according to Friday’s Labor Department jobs report.

Earlier this year, the White House painted a picture that wage growth differed between the era of former President Joe Biden and now under Trump because of policy.

“Blue-collar workers have seen real wages grow almost two percent in the first five months of President Trump’s second term — a stark contrast from the negative wage growth seen during the first five months of the Biden Administration,” the White House said in a release.

However, Biden and Trump inherited two very different economies when they took office. Biden has to deal with a massive global economic downturn driven by the onset of the COVID-19 pandemic.

Trump, on the other hand, during his second term, inherited “unquestionably the strongest economy” in more than two decades, per the Economic Policy Institute, particularly because of the US economy’s rebound compared with peer nations.

Inflation

Inflation peaked in mid-2022 during Biden’s term at 9 percent, before falling steadily because of the Federal Reserve’s efforts to manage a soft landing.

A July 21 White House statement claimed, “Since President Trump took office, core inflation has tracked at just 2.1 percent.” On Wednesday, Treasury Secretary Scott Bessett said “inflation is cooling” in a post on X.

However, the Consumer Price Index report, which tracks core inflation – a measure that excludes the price of volatile items such as food and energy – was 2.9 percent in the most recent report and overall inflation was at 2.7 percent in June.

Prices

The most recent Consumer Price Index report, published July 15, shows that on a monthly basis, prices on all goods went up in June by 0.3 ,percent which is 2.7 percent higher from this time last year.

Grocery prices in particular are up 2.4 percent from this time last year and 0.3 percent from the prior month. The cost of fruits and vegetables went up 0.9 percent, the price of coffee increased by 2.2 percent and the cost of beef went up 2 percent.

New pending tariffs on Brazil, as Al Jazeera previously reported, could further drive up the cost of beef in the months to come.

Trump has pointed to falling egg prices in particular as evidence of economic success, after Democrats attacked his administration over their price in March. He has even gone so far as to claim that prices are down by 400 percent. That figure is mathematically impossible – a 100 percent decrease would mean eggs are free.

During the first few months of Trump’s term egg prices surged, and then dropped due to an outbreak of, and then recovery from, a severe avian flue outbreak, which had been hindering supply – not because of any specific policy intervention.

In January, when Trump took office egg prices were $4.95 per dozen as supply was constrained by the virus. By March, the average egg price was $6.23.  But outbreak and high prices drove away consumers, allowing farmers with healthier flocks to catch up on the supply side. As a result, prices fell to an average of $3.38. That would be a 32 percent drop since the beginning of his term and a 46 percent drop from their peak price – far from the 400 percent Trump claimed.

Trump also recently said petrol prices are at $1.98 per gallon ($0.52 per litre) in some states. He doubled down on that again on Wednesday. That is untrue. There is not a single state that has those petrol prices.

According to Gasbuddy, a platform that helps consumers find the lowest prices on petrol, Mississippi at $2.70 a gallon ($0.71 per litre) has the cheapest gas, and the cheapest petrol station in that state is currently selling gas at $2.37 ($0.62 per litre).

AAA, which tracks the average petrol price, has it at $3.15 per gallon ($0.83 per litre) nationwide, this is up from the end of January when it was $3.11 ($0.82 per litre).

While petrol prices have gone down since Trump took office, they are nowhere close to the rate he has continually suggested. In July 2024, for instance, the average price for a gallon of petrol nationwide was $3.50 ($0.93 per litre).

GDP

On Wednesday, the White House said that “President Trump has reduced America’s reliance on foreign products, boosted investment in the US”, citing the positive GDP data that had come out that morning.

That is misleading. While the US economy grew at a 3 percent annualised rate in the second quarter, surpassing expectations, that was a combination of a rebound after a weak first quarter, a drop in imports – which boosted GDP, and a modest rise in consumer spending.

The data beneath the headline showed that private sector investment fell sharply by 15.6 percent and inventories of goods and services declined by 3.2 percent, indicating a slowdown.

Manufacturing

The administration recently highlighted gains in industrial production, pointing to a boost in domestic manufacturing. Overall, there was a 0.3 percent increase in US industrial production in June. That was after stagnating for two months.

There have been isolated gains, such as increases in aerospace and petroleum-related sectors—1.6 percent and 2.9 percent, respectively.

But production of durable goods — items that are not necessarily for immediate consumption— remained flat, and auto manufacturing fell by 2.6 percent last month as tariffs dampened demand. Mining output also decreased by 0.3 percent.

According to the Department of Commerce’s gross domestic product report, manufacturing growth among non-durable goods has slowed. While there was a 1.3 percent increase, that’s a decline from 2.3 percent in the previous quarter.

This could change in the future, as several companies across a range of sectors have pledged to increase US production, including carmaker Hyundai and pharmaceutical giant AstraZeneca, which just pledged a $50bn investment over the next five years.

Trade deals and tariffs

In April, the White House replaced country-specific tariffs with a 10-percent blanket tariff while maintaining additional levies on steel, cars, and some other items. It then promised to deliver “90 trade deals in 90 days.” That benchmark was not met. By the deadline, only one loosely fleshed out deal — with the United Kingdom — had been announced. As of 113 days later, the US has announced comparable deals with just a handful more countries and the European Union. The EU deal still needs parliamentary approval.

Contrary to the administration’s claims, tariffs do not pressure foreign exporters — they are paid by US importers and ultimately are likely to be passed on to US consumers. Companies, including big box retailer Walmart and toymaker Mattel, have announced price hikes as a direct result. Ford, for example, raised prices on three Mexico-assembled models due to tariff pressures.

To protect their own economies, many countries have pivoted their trade policies away from the US. Brazil and Mexico recently announced a new trade pact.

The White House and its allies continue to defend tariffs by highlighting the increased revenue they bring to the federal government, which is true. Since Trump took office, the US has brought in more than $100bn in revenue, compared with $77bn in the entire fiscal year 2024. The price of imports for consumers has only risen about 3 percent, but many expect that will change as the import taxes are passed on to consumers.

The White House did not respond to Al Jazeera’s request for comment.

As United States President Donald Trump blasts his way through tariff announcements, one thing is clear, experts say: Some level of duties is here to stay.

In the past few weeks, Trump has announced a string of deals – with the European Union, Japan, Indonesia, Vietnam and the Philippines – with tariffs ranging from 15 percent to 20 percent.

He has also threatened Brazil with a 50 percent tariff, unveiled duties of 30 percent and 35 percent for major trading partners Mexico and Canada, and indicated that deals with China and India are close.

How many of Trump’s tariff rates will shake out is anybody’s guess, but one thing is clear, according to Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada: “No one is getting zero tariffs. There’s no going back.”

Trump’s various announcements have spelled months of chaos for industry, leaving businesses in limbo and forcing them to pause investment and hiring decisions.

The World Bank has slashed its growth forecasts for nearly 70 percent of economies – including the US, China and Europe, and six emerging market regions – and cut its global growth estimate to 2.3 percent, down from 2.7 percent in January.

Oxford Economics has forecast a shallow recession in capital spending in the Group of Seven (G7) countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the US – lasting from the second quarter to the third quarter of this year.

“What we’re seeing is the Donald Trump business style: There’s lots of commotion, lots of claim, lots of activity and lots of b*******,” Robert Rogowsky, professor of international trade at the Middlebury Institute of International Studies, told Al Jazeera.

“That’s his business model, and that’s how he operates. That’s why he’s driven so many of his businesses into bankruptcy. It’s not strategic or tactical. It’s instinctive.”

Rogowsky said he expects Trump to push back his tariff deadline again, after delaying it from April to July, and then to August 1.

“It’s going to be a series of TACO tariffs,” Rogowsky said, referring to the acronym for “Trump Always Chickens Out”, a phrase coined by Financial Times columnist Robert Armstrong in early May to describe the US president’s backpedalling on tariffs in the face of stock market turmoil.

“He will bump them again,” Rogowsky said. “He’s just exerting the image of power.”

Trump’s back-and-forth policy moves have characterised his dealings with some of the US’s biggest trade partners, including China and the EU.

China’s tariff rate has gone from 20 percent to 54 percent, to 104 percent, to 145 percent, and then 30 percent, while the deadline for implementation has shifted repeatedly.

The proposed tariff rates for the EU have followed a similar pattern, going from 20 percent to 50 percent to 30 percent, and then 15 percent following the latest trade deal.

The EU’s current tariff rate only applies to 70 percent of goods, with a zero rate applying to a limited range of exports, including semiconductor equipment and some chemicals.

European steel exports will continue to be taxed at 50 percent, and Trump has indicated that new tariffs could be on the way for pharmaceutical products.

Despite the trade deals, many details of how Trump’s tariffs will work in practice remain unclear.

Whether Trump announces more changes down the track, analysts agree that the world has entered a new phase in which countries are seeking to become less reliant on the US.

“Now that the initial shock and anger [at Trump policies] has subsided, there is a quiet determination to build resilience and become less reliant on the US,” Nadjibulla said, adding that Trump was pushing countries to address longstanding issues that had been untouchable before.

Canada, for instance, is tackling inter-provincial trade barriers, a politically sensitive issue historically, even as it looks elsewhere to increase exports, said Tony Stillo, director of Canada Economics at Oxford Economics.

“It would be foolhardy not to provide to the US, seeing as it’s our largest market, but it also makes us more resilient to provide to other markets as well,” Stillo told Al Jazeera.

Canadian Prime Minister Mark Carney has reached out to the EU and Mexico and indicated his wish to improve his country’s strained relations with China and India.

This month, Canada expanded its exports of liquified natural gas beyond the US market, with its first shipment of cargoes to Asia.

To mitigate the fallout of Trump’s tariffs, Ottawa has been offering relief to Canadian businesses, including automakers, and has instituted a six-month pause on tariffs on some imports from the US to give firms time to re-adjust their supply chains.

There is also “some relief” in the fact that other countries “don’t seem to be imitating the Trump show [by levying their own tariffs]. They’re witnessing this attempt to strong-arm the rest of the world, but it doesn’t seem to be working,” Mary Lovely, the Anthony M Solomon senior fellow at the Peterson Institute for International Economics (PIIE), told Al Jazeera.

But the world is watching how the tariffs will affect the US economy, as “that will also be instructive to other countries”, Lovely said.

“If we see a slowdown, as we expect, it becomes a cautionary tale for others.”

Although the US stock market is near an all-time high, it is heavily weighted towards the “magnificent seven”, said Lovely, referring to the largest tech companies, and that reflects just one part of the economy.

Re-emergence of industrial policy

Trump’s tariffs come on top of other growing challenges for exporters the world over, including China’s subsidy-heavy industrial policy that allows its businesses to undercut its competitors.

“We’ve entered a period of global economic alignment with the reintroduction of industrial policies,” Nadjibulla said, explaining that more and more governments are likely to roll out support for their domestic industries.

“Each country will have to navigate these and find ways to de-risk and reduce overreliance on the US and China.”

Still, countries seeking to support their homegrown industries will have to do so while reckoning with the World Trade Organization and rules-based trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Nadjibulla said.

“It will take some tremendous leadership around the world to corral this wild mustang [Trump] before he breaks up the world order,” Rogowsky said.

“But it will break because I do think Donald Trump will drive us into a recession.”

GM’s profit tumble in second quarter comes a day after Jeep maker Stellantis says it expected a $2.7bn loss in the first six months of the year.

Auto giant General Motors has reported a 35 percent drop in second-quarter profits, including a $1.1bn hit from United States-imposed tariffs but confirmed its full-year forecast.

GM’s results released on Tuesday still topped analyst estimates, but the US carmaker cautioned that profits in the second half of 2025 would be lower than in the first.

The company pointed to sales growth in North America, where new and revamped trucks and sport utility vehicles sold briskly with solid pricing. GM was among the carmakers that benefitted from a surge in demand this spring from consumers who wanted to beat the US tariffs and their higher prices.

Profits overall fell 35.4 percent to $1.9bn year-on-year while revenues dipped 1.8 percent to $47.1bn.

The US imposed 25 percent tariffs on imported finished cars in early April, a move that affected major GM manufacturing operations in Mexico, Canada and South Korea. Car companies have also faced tariffs on imported steel, aluminium and auto parts.

The tariff hit in the second quarter reflected that there were “minimal mitigation offsets”, GM said in a slide presentation.

The Detroit, Michigan-based company’s outlook for a weaker second half of 2025 reflects “seasonally lower” volumes, increased spending on vehicle launches and the presence of two quarters with a tariff hit compared with just one in the first half of the year.

GM expected annual operating income of $10bn to $12.5bn after notching $6.5bn in the first half of the year.

Chief Financial Officer Paul Jacobson described the hit to profitability in the first quarter as “the peak of the tariff impact for us”, telling CNBC in an interview that mitigation efforts should enable a partial recovery in profit margins later in the year.

Shifting manufacturing

GM expected to mitigate “at least” 30 percent of the tariff hit through “manufacturing adjustments, targeted cost initiatives and consistent pricing”, according to a slide.

Jacobson said it would take 18 to 24 months to implement capital projects to adjust GM’s manufacturing footprint.

In June, GM announced spending of $4bn over two years to expand production at plants in Michigan, Kansas and Tennessee, making use of unused capacity in its home market as President Donald Trump’s tariffs penalise imports of finished vehicles.

The June announcement included steps to produce the Chevrolet Equinox and Chevrolet Blazer in the US. The two vehicles are currently assembled in Mexico.

GM has so far not shifted manufacturing from South Korea, home to production for the Chevrolet Trax, a popular compact SUV that is priced affordably.

Jacobson told CNBC the Trax has stayed profitable even with the hit from the tariff on imported autos.

“We haven’t made any long-term decisions about Korea yet, mainly because there is a lot of uncertainty about that,” Jacobson said.

Trump has set an August 1 deadline to reach broad trade deals with numerous countries, including South Korea, which faces a 25 percent tariff if there is no deal.

“We’re optimistic that the US and Korea can find common ground,” Jacobson said. “We know the auto industry is important to both sides in those conversations.”

GM’s stock tumbled on the lacklustre earnings report. It is down 6.6 percent for the day as of 11:30am in New York (15:30 GMT).

GM’s newly reported hit comes a day after carmaker Stellantis announced it expected a $2.7bn loss in the first six months of the year because of Trump’s imposed tariffs. Stellantis, the owner of brands including Fiat and Jeep, will disclose its final results for the first half of the year on July 29.

Stellantis stock is down 0.3 percent since the market opened on Tuesday and had increased more than 2.4 percent over the past five days.

Prime Minister Mark Carney also introduced a fund to invest in domestic steel projects.

Canadian Prime Minister Mark Carney has said that Canada will introduce a tariff rate quota on countries it has free trade agreements with, excluding the United States, in order to protect its domestic steel industry.

Carney announced the new measures on Wednesday.

The plan includes a 50 percent tariff that will apply to imports from relevant countries that surpass the 2024 volumes, though Canada will honour existing arrangements with its United States-Mexico-Canada Agreement (USMCA) trade partners, Carney said.

Canada will implement additional tariffs of 25 percent on steel imports from all countries containing steel melted and poured in China before the end of July.

Carney is responding to complaints from the domestic industry, which had said that other countries are diverting steel to Canada and making the domestic industry uncompetitive due to US tariffs. The Canadian steel industry had asked the government to introduce tougher anti-dumping measures to protect the domestic industry.

US President Donald Trump increased import duties on steel and aluminium to 50 percent from 25 percent earlier this month. Canada is the top seller of steel to the US.

Carney also said domestic steel companies would be prioritised in government procurement, and he introduced a fund of one billion Canadian dollars ($730m) to help steel companies advance projects in industries such as defence.

“These measures will ensure Canadian steel producers are more competitive by protecting them against trade diversion resulting from a fast-changing global environment for steel,” Carney said on Wednesday.

For countries without free trade agreements with Canada, the government lowered the tariff-free quota to 50 percent of 2024 volumes from 100 percent previously. Above the quota, imports will also face a 50 percent tariff.

Catherine Cobden, president and CEO of the Canadian Steel Producers Association, in an interview with broadcaster CBC, said the timing wasn’t sufficient for domestic steelmakers confronting a crisis.

“This is something we should have been doing all along, but it’s fantastic to see that we are making progress,” Cobden said.

In a separate statement, Canadian steel maker Evraz said it has filed a complaint against steel imports from Mexico, the Philippines, South Korea, Turkiye and the US, against unfairly priced imports of oil country tubular goods.

The US imports roughly half of its copper needs each year, which is used in construction, transportation and electronics.

United States President Donald Trump has said he will announce a 50 percent tariff on copper, hoping to boost domestic production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.

Trump told reporters at a White House cabinet meeting that he planned to make the copper tariff announcement later in the day, but did not say when the tariff would take effect.

“I believe the tariff on copper, we’re going to make 50 percent,” Trump said.

US Comex copper futures jumped more than 12 percent to a record high after Trump announced the planned tariff, which came earlier than the industry had expected, with the rate steeper.

After Trump spoke, Secretary of Commerce Howard Lutnick said in an interview on CNBC that the tariff would likely be put in place by the end of July or August 1. He said Trump would post details on his Truth Social media account sometime on Tuesday.

In February, the administration announced a so-called Section 232 investigation into US imports of the red metal. Such an investigation allows the US Department of Commerce to analyse the impact of an import on national security. The deadline for the investigation to conclude was November, but Lutnick said the review was already complete.

“The idea is to bring copper home, bring copper production home, bring the ability to make copper, which is key to the industrial sector, back home to America,” Lutnick said.

The National Mining Association declined to comment, saying it preferred to wait until details were released. The American Critical Minerals Association did not immediately respond to requests for comment.

Copper is used in construction, transportation, electronics and many other industries. The US imports roughly half of its copper needs each year.

Copper supplies

Major copper mining projects across the US have faced strong opposition in recent years due to a variety of reasons, including Rio Tinto and BHP’s Resolution Copper project in Arizona and Northern Dynasty Minerals’s Pebble Mine project in Alaska.

Shares of the world’s largest copper producer, Phoenix-based Freeport-McMoRan, shot up nearly 5 percent in Tuesday afternoon trading. The company, which produced 1.26 billion pounds of copper in the US last year, did not immediately respond to a request for comment.

Freeport, which would benefit from US copper tariffs but worries that the duties would hurt the global economy, has advised Trump to focus on boosting US copper production.

Countries set to be most affected by any new US copper tariff would be Chile, Canada and Mexico, which were the top suppliers to the US of refined copper, copper alloys and copper products in 2024, according to US Census Bureau data.

Chile, Canada and Peru, three of the largest copper suppliers to the US, have told the Trump administration that imports from their countries do not threaten US interests and should not face tariffs. All three have free trade deals with the US.

Mexico’s Secretariat of Economy, Chile’s Ministry of Foreign Affairs and Canada’s Department of Finance did not immediately respond to requests for comment. Chile’s Mining Ministry and Codelco, the country’s leading copper miner, declined to comment.

A 50 percent tariff on copper imports would affect US companies that use the metal because the country is years away from meeting its needs, said Ole Hansen, the head of commodity strategy at Saxo Bank.

“The US has imported a whole year of demand over the past six months, so the local storage levels are ample,” Hansen said. “I see a correction in copper prices following the initial jump.”

The global economy is on edge as United States President Donald Trump’s July 9 deadline looms for the imposition of double-digit tariffs on most trading partners.

On Monday, Trump announced tariffs on 14 countries, ranging from 25 to 40 percent. The targeted countries include close US allies like Japan and South Korea, as well as Laos, Myanmar, Bangladesh, Cambodia, Tunisia, South Africa, Malaysia, Kazakhstan, Thailand, Indonesia, Serbia and Bosnia and Herzegovina.

And with only a few trade deals in place, his administration is expected to announce the imposition of new levies on many more countries. Trump and Treasury Secretary Scott Bessent on Sunday said those new tariffs would come into effect on August 1.

Trump’s initial April 2 “Liberation Day” announcement of across-the-board tariffs on countries around the world sent markets into a tailspin. Trump relented – temporarily – announcing a 90-day cessation on higher tariffs, while imposing a 10 percent baseline levy on all trading partners.

Now, some experts fear that higher tariffs, if imposed after July 9, could push the global economy into a recession.

Along with reducing the trade deficit, Trump’s argument for tariffs is that they will boost US manufacturing and protect jobs. He says tariffs will encourage US consumers to buy more US-made goods, increase the taxes raised and enhance investment in the US.

But what is the current state of manufacturing in the US, and how has it fared in recent months amid the economic churn stirred by Trump’s policies?

Where are we now?

In a bid to revitalise US industry, Trump announced a $14bn investment on May 30, brokering a partnership between US Steel and Nippon Steel tipped to create 70,000 jobs, according to the White House.

The Trump administration has also highlighted investments announced by automakers, tech firms and chocolate companies, among others, as evidence of the return of manufacturing to US soil.

According to the US Bureau of Economic Analysis, manufacturing contributed $2.9 trillion to the economy in the first quarter of 2025, a 0.6 percent increase from the corresponding period in 2024. That places it behind only finance, professional and business services, and government as the largest sectors contributing to the US economy.

However, building that manufacturing base back to the heydays of the sector, when it dominated the US economy, will not be easy, caution many experts. They point out that the US is today missing many of the essential elements of a robust manufacturing framework, including skilled labour, government support and technology.

Manufacturing accounted for more than 25 percent of gross domestic product (GDP) in the 1970s, but that came down to 13 percent by 2005. Its share has since dropped further, to about 9.7 percent in 2024.

Finance, insurance, real estate, rental and leasing value added as a percentage of GDP was 21 percent in 2024, followed by professional and business services (13 percent) and government (11 percent).

US manufacturing falls for a fourth month

The Institute for Supply Management (ISM) Manufacturing Index, also known as the purchasing managers’ index (PMI), is a monthly indicator of economic activity based on a survey of purchasing managers at manufacturing firms nationwide. It serves as a primary indicator of the condition of the US economy.

The PMI measures the change in production levels across the economy from month to month. A PMI above 50 indicates expansion, while a reading below 50 indicates contraction.

In June, it registered 49 percent, marking a fourth consecutive month of contraction, though the rate of decline has slowed.

At the start of 2025, the PMI was in expansion territory – 50.9 percent in January and 50.3 percent in February, before slipping below 50 in March.

Nine manufacturing industries reported growth in June, while six industries reported contraction.

According to the Reuters news agency, economists say the lack of clarity on what happens after July 9 has left businesses unable to make long-term plans.

How many people does manufacturing employ?

According to the US Bureau of Labor Statistics, in June 2025 there were some 12.75 million people employed in the manufacturing sector in the US.

Employment in manufacturing has increased from five years ago – in June 2020, some 11.95 million people were employed.

However, current employment levels are still far below the peak of nearly 20 million people hired in manufacturing jobs in the late 1970s, reflecting the long-term decline in the sector’s contribution to employment in the US.

US manufacturing job openings increased in May – 414,000, up from 392,000 in April – but actual hiring declined, hinting at uncertainties in the labour market over the Trump administration’s tariff policies.

US manufacturing compared to the rest of the world

The US has seen a decline in its share of global manufacturing, while China has taken over as the largest manufacturing country by value-added.

China contributed $4.8 trillion to the global GDP through manufacturing in 2022, followed by the US at $2.7 trillion that year.

Still, the US remains a major player and adds more manufacturing value than the third-, fourth-, fifth- and sixth-largest countries combined. And it does so with far fewer workers than its competitors.

Musk’s political ambition has spooked investors as the auto company reports a decrease in sales in the second quarter.

Tesla shares have tumbled after CEO Elon Musk announced plans to launch a new US political party amid his ongoing feud with his longtime ally, United States President Donald Trump.

Shares of the electric automaker are down 7 percent as of 12pm in New York (16:00 GMT) on Monday. Musk announced his plans on Friday to launch a new political party after disagreements with the president over the tax legislation signed into law the same day. Trump has called the idea “ridiculous”.

Musk’s announcement has fuelled further concerns amongst analysts about his dedication to the automaker after it reported a sales decline in the second quarter driven by Musk’s political involvement.

Trump-Musk conflict weighs on investors 

“Very simply, Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Dan Ives, analyst at Wedbush Securities, said in a note. “While the core Musk supporters will back Musk at every turn no matter what, there is a broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.”

“After leaving the Trump Administration and DOGE [the US Department of Government Efficiency], there was initial relief from Tesla shareholders and big supporters of the name that Tesla just got back its biggest asset, Musk. That relief lasted a very short time and now has taken a turn for the worse with this latest announcement.”

Last week, Trump had threatened to cut off the billions of dollars in subsidies that Musk’s companies receive from the federal government after their feud erupted into an all-out social media brawl in early June.

“I, and every other Tesla investor, would prefer to be out of the business of politics. The sooner this distraction can be removed and Tesla gets back to actual business, the better,” Camelthorn Investments adviser Shawn Campbell, who owns Tesla shares, told the Reuters news agency.

Tesla is set to lose more than $80bn in market valuation if current losses hold, while traders are set to make about $1.4bn in paper profits from their short positions in Tesla shares on Monday.

Musk’s latest move also raises questions around the Tesla board’s course of action. Its chair, Robyn Denholm, in May denied a Wall Street Journal report that said board members were looking to replace the CEO.

Tesla’s board, which has been criticised for failing to provide oversight of its combative, headline-making CEO, faces a dilemma managing him as he oversees five other companies and his personal political ambitions.

“This is exactly the kind of thing a board of directors would curtail – removing the CEO if he refused to curtail these kinds of activities,” said Ann Lipton, a professor at the University of Colorado Law School and an expert in business law.

The company’s shares and its future are seen as inextricably tied to Musk, the world’s richest man, whose wealth is constituted significantly of Tesla stock. He is Tesla’s single largest shareholder, according to data from the London Stock Exchange Group (LSEG).

“The Tesla board has been fairly supine; they have not, at least not in any demonstrable way, taken any action to force Musk to limit his outside ventures, and it’s difficult to imagine they would begin now,” Lipton added.

Other companies tied to Musk – including X Corp, formerly Twitter, and SpaceX – are not publicly traded.

Kolkata, India — For the past several years, the United States has been a major market for Aditya Garodia to export more than 100 items of steel derivatives like fasteners from his factory in West Bengal state in eastern India.

But ever since US President Donald Trump took office and unleashed a range of tariffs – 25 percent on steel and aluminium initially, as well as standalone country tariffs – global markets have been on edge, creating significant uncertainty for businesses across sectors.

Garodia, director of Corona Steel Industry Pvt Ltd, told Al Jazeera that as a result of the tariffs, clients have slowed picking up their orders, delaying payments by a month on average, while business in general has slowed as customers adopted a wait-and-watch policy.

When Trump announced that he was doubling tariffs on steel and aluminium to 50 percent from June 4, it was “like a nail in a coffin”, Garodia said, as nearly 30 percent of orders were cancelled. “It is difficult for the market to absorb such high tariffs.”

Demand in the domestic market has also been low because of competition from cheaper Chinese products, he said, adding their future depends on India negotiating a lower tariff for its exports to the US than its competitors.

Last year, India exported $4.56bn worth of iron, steel and aluminium products to the US.

Tariffs ‘play well in politics’

During his first term, Trump in 2018 imposed tariffs of 25 percent on steel and 10 percent on aluminium under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. But certain businesses had managed to escape, as there were no tariffs on finished products.

But on February 10, 2025, he announced 25 percent tariffs on steel and aluminium, including derivatives – or finished products – and removed all exemptions.

Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), a trade research group, told Al Jazeera that higher tariffs imposed in 2018 have so far failed to revive the US steel industry.

“Since the tariffs were first implemented in 2018, [US] steel imports have increased,” rising from $98.6bn to $114bn in 2024, he said, and they “haven’t cut imports or boosted production, but they’ve mostly stuck around because they play well in politics”.

As a result, prices in the US are far higher than in Europe or China, “making cars, buildings, and machines more expensive to produce. India now needs a clear strategy to protect its trade interests, push for fair deals and strengthen domestic manufacturing,” Srivastava said.

Foundries also affected

In the so-called reciprocal tariffs that President Trump announced on April 2, he set a rate of 26 percent for goods from India. He put that on hold on April 9 for 90 days and introduced a 10 percent base tariff on all countries for the interim, giving them breathing room to strike individual trade deals with the US.

While the 10 percent is hard enough on the businesses, foundries – where metals are melted to cast into shape – say 26 percent is too high for any business to absorb.

India has approximately 5,000 foundries, of which 400 cater to both domestic and international markets and a further 100 are exclusively for exports. Several Micro, Small and Medium Enterprises (MSMEs), in turn, supply pig iron, scrap and other items to the exporters.

Indian foundries export products worth about $4bn globally, out of which the US market is $1.2bn, Ravi Sehgal, chairman of National Centre for Export Promotion (NCEP), said. In the US, they compete not only with local foundries but also with Chinese and Turkish suppliers.

The latest set of tariffs will be a considerable blow to Indian foundries. More than 65 percent of these, and their suppliers of raw materials, are MSMEs that will “face the brunt of tariffs due to lower orders”, Sehgal said. Tariffs beyond 10-14 percent “would [make it] difficult for us to survive,” he added.

Pradeep Kumar Madhogaria, partner in Yashi Castings, which makes moulding boxes and pallet cars for foundries, said that several foundry projects have been either deferred or shelved, particularly those aligned to export-driven demand, due to the uncertainty in the US market.

Smaller units badly hit

Sumit Agarwal, 44, a Kolkata-based manufacturer of clamps, brackets and other items used in industrial goods, told Al Jazeera that his business has been hit hard by the tariffs and he is thinking of laying off some of his 15 employees.

“We are a small unit. The orders have practically dried up after the introduction of tariffs, which has made it difficult for us to continue with our existing staff. I am thinking about cutting at least 30-40 percent of my manpower. Business from the domestic market is just average, and the drop in the export market has added to our woes.”

Shyam Kumar Poddar, 70, who runs a small unit of sheet metal fabrication in Kolkata, recently invested about 800,000 rupees ($9,400) to buy a hydraulic press with an aim to expand his business. But the drop in orders has affected him badly.

“I bought the machine just four months ago to expand my business, but there have been absolutely no orders for the past two months.”

“We depend on exporters for our business as there is already an intense competition in the domestic market, but the present scenario is harming small entrepreneurs like us.”

Pankaj Chadha, chairman of Engineering Export Promotion Council of India (EEPC), an industry body, told Al Jazeera that diversification to countries like Peru and Chile, who would then export their finished products to the US, is the only way for survival as it was “not possible to do business with such high tariffs”.

Even as the 90-day pause on tariffs is set to expire soon, it’s not clear yet what the final number will be as India and the US are yet to finalise a deal. On Friday, Piyush Goyal, India’s minister of trade and industry, told reporters that while India was ready to make a trade deal, “National interest will always be supreme“, and it would not be driven by any deadlines.

For now, Garodia is hoping a solution will be found fast. “No industry can survive in isolation,” he said, listing US problems, including a manpower shortage as well as higher production and raw material costs. “India offers them a good substitute with cheap labour and low cost of production,” he said.

The United States will place a lower-than-promised 20 percent tariff on many Vietnamese exports, President Donald Trump has said, cooling tensions with its 10th-biggest trading partner days before he could raise levies on most imports.

Vietnamese goods will now face a 20 percent tariff, and any transshipments from third countries through Vietnam will face a 40 percent levy, Trump said, announcing the trade deal on Wednesday. Vietnam would accept US products with a zero percent tariff, he added.

“It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,” Trump said on Truth Social after speaking with Vietnam’s top leader, To Lam.

Trump’s announcement comes just days before a July 9 deadline he set to resolve negotiations before he ramps up tariffs on most imports, one of the Republican’s signature economic policies.

Under that plan announced in April, US importers of Vietnamese goods would have had to pay a 46 percent tariff.

The Vietnamese government said in a statement that the two countries agreed on a joint statement about a trade framework. It did not confirm the specific tariff levels mentioned by Trump.

Vietnam would commit to “providing preferential market access for US goods, including large-engine cars”, the government in Hanoi said.

A deal between the two countries would be a political boost for Trump, whose team has struggled to quickly close deals with Washington’s biggest trading partners ahead of the deadline.

While the administration has teased a forthcoming deal with India, truces reached earlier with the United Kingdom and China were limited in scope. Talks with Japan, the sixth-largest trading partner for the US and closest ally in Asia, appeared deadlocked.

“Vietnam has been very keen to get out from under this,’’ said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “This is forcing a smaller country to eat it, basically. We can do that. It’s the big countries that everybody’s keeping their eyes on.’’

She said she doubts that Trump will be able to impose such a lopsided agreement on big trading partners such as the European Union and Japan.

The US is Vietnam’s largest export market, and the two countries’ growing economic, diplomatic and military ties are a hedge against Washington’s biggest strategic rival, China. Vietnam has worked to retain close relations with both superpowers.

Shares of major US apparel and sportswear makers, including Nike, Under Armour and North Face maker VF Corp, rose on the news.

Lam also asked Trump for the US to recognise Vietnam as a market economy and remove restrictions on the exports of high-tech products to the country, Vietnam said. Those changes have long been sought by Hanoi and dismissed by Washington.

The White House and the Vietnamese Ministry of Industry and Trade did not respond to requests for additional comment.

Growing trade ties

Since Trump imposed tariffs on hundreds of billions of dollars in Chinese goods in his 2017-2021 term, US trade with Vietnam has exploded.

Since 2018, Vietnam’s exports have gone up nearly threefold, from less than $50bn that year to about $137bn in 2024, Census Bureau data shows. US exports to Vietnam are up only about 30 percent in that time – to just over $13bn last year from less than $10bn in 2018.

Washington complains that Chinese goods have been dodging higher US tariffs by transiting through Vietnam.

William Reinsch, a former US trade official now with the Center for Strategic and International Studies, said the significance of the transshipment crackdown will depend on “how the term is defined and enforced. Some transshipment is outright fraud – simply changing the label; some is a legitimate substantial transformation in Vietnam into a new product; and there is a lot in between. Enforcement is always complicated”.

Details were scarce, and it was not immediately clear how any transshipment provision aimed at products largely made in China and then finished in Vietnam would be implemented.

Trump announced a wave of tariffs for countries around the world on April 2, before pausing the implementation of most duties until July 9. More than a dozen countries are actively negotiating with the Trump administration to avoid a steep spike in tariffs on their exports.

The UK accepted a 10 percent US tariff on many goods, including autos, in exchange for special access for aircraft engines and British beef.

Like the agreement struck with the UK in May, the one with Vietnam resembles more a framework than a finalised trade pact.

China and the US also came to a truce in a tit-for-tat tariff battle in which Beijing restored American access to some rare earth minerals, but the two sides left most of their disagreements to later negotiations.

June 26 (UPI) — Tesla CEO Elon Musk fired the carmaker’s vice president of manufacturing and operations following a falloff in auto sales in the nation’s largest markets this year.

Omead Afshar oversaw more than six upper-level employees in the company, including Troy Jones, Tesla’s vice president of sales in North America, and Joe Ward, vice president of the Europe, Middle East and Africa region.

The firing was first reported by Bloomberg News.

Afshar is the second high-level employee to leave the company recently. His termination follows the resignation of Milan Kovac, who was the company’s head of its Optimus humanoid robotics program.

Kovac said in a post on X that he was leaving Tesla to spend more time with his family. Musk later thanked Kovac publicly for his time with the company.

In 2022, Afshar was the subject of an internal investigation at Tesla that focused on his involvement in trying to secure construction materials for a secret project for Musk that included hard-to-get glass.

Prior to his job as Tesla vice president, Afshar worked for SpaceX, Musk’s aerospace company. Afshar’s X account, which had not been updated, said he still works for Tesla, and he praised Musk for his leadership and work ethic following the launch of the company’s Robotaxi service in Austin, Texas.

“Thank you, Elon, for pushing us all,” Afshar wrote.

Tesla’s stock price has dropped 19% this year, and took an especially hard hit following Musk’s association with President Donald Trump, who appointed Musk to oversee the Department of Government Efficiency.

DOGE took a broad and aggressive approach to eliminating federal employees, downsizing federal agencies and ending diversity, equity and inclusion programs at some of the nation’s largest companies and universities.

The company sold fewer cars in 2024 than it did in 2023, the first time sales dropped since Tesla began mass producing EVs. Its profits fell 71% in the first quarter of 2025. European sales dropped 28%, and dropped for a fifth straight month in May.

The European Automobile Manufacturers Association said buyers are shifting to cheaper Chinese models.

On June 22, American warplanes crossed into Iranian airspace and dropped 14 massive bombs. The attack was not in response to a provocation; it came on the heels of illegal Israeli aggression that took the lives of 600 Iranians. This was a return to something familiar and well-practised: an empire bombing innocents across the orientalist abstraction called “the Middle East”. That night, US President Donald Trump, flanked by his vice president and two secretaries, told the world “Iran, the bully of the Middle East, must now make peace”.

There is something chilling about how bombs are baptised with the language of diplomacy and how destruction is dressed in the garments of stability. To call that peace is not merely a misnomer; it is a criminal distortion. But what is peace in this world, if not submission to the West? And what is diplomacy, if not the insistence that the attacked plead with their attackers?

In the 12 days that Israel’s illegal assault on Iran lasted, images of Iranian children pulled from the wreckage remained absent from the front pages of Western media. In their place were lengthy features about Israelis hiding in fortified bunkers. Western media, fluent in the language of erasure, broadcasts only the victimhood that serves the war narrative.

And that is not just in its coverage of Iran. For 20 months now, the people of Gaza have been starved and incinerated. By the official count, more than 55,000 lives have been taken; realistic estimates put the number at hundreds of thousands. Every hospital in Gaza has been bombed. Most schools have been attacked and destroyed.

Leading human rights groups like Amnesty International and Human Rights Watch have already declared that Israel is committing genocide, and yet, most Western media would not utter that word and would add elaborate caveats when someone does dare say it live on TV. Presenters and editors would do anything but recognise Israel’s unending violence in an active voice.

Despite detailed evidence of war crimes, the Israeli military has faced no media censure, no criticism or scrutiny. Its generals hold war meetings near civilian buildings, and yet, there are no media cries of Israelis being used as “human shields”. Israeli army and government officials are regularly caught lying or making genocidal statements, and yet, their words are still reported as the truth.

A recent study found that on the BBC, Israeli deaths received 33 times more coverage per fatality than Palestinian deaths, despite Palestinians dying at a rate of 34 to 1 compared with Israelis. Such bias is no exception, it is the rule for Western media.

Like Palestine, Iran is described in carefully chosen language. Iran is never framed as a nation, only as a regime. Iran is not a government, but a threat —not a people, but a problem. The word “Islamic” is affixed to it like a slur in every report. This is instrumental in quietly signalling that Muslim resistance to Western domination must be extinguished.

Iran does not possess nuclear weapons; Israel and the United States do. And yet only Iran is cast as an existential threat to world order. Because the problem is not what Iran holds, but what it refuses to surrender. It has survived coups, sanctions, assassinations, and sabotage. It has outlived every attempt to starve, coerce, or isolate it into submission. It is a state that, despite the violence hurled at it, has not yet been broken.

And so the myth of the threat of weapons of mass destruction becomes indispensable. It is the same myth that was used to justify the illegal invasion of Iraq. For three decades, American headlines have whispered that Iran is just “weeks away” from the bomb, three decades of deadlines that never arrive, of predictions that never materialise.

But fear, even when unfounded, is useful. If you can keep people afraid, you can keep them quiet. Say “nuclear threat” often enough, and no one will think to ask about the children killed in the name of “keeping the world safe”.

This is the modus operandi of Western media: a media architecture not built to illuminate truth, but to manufacture permission for violence, to dress state aggression in technical language and animated graphics, to anaesthetise the public with euphemisms.

Time Magazine does not write about the crushed bones of innocents under the rubble in Tehran or Rafah, it writes about “The New Middle East” with a cover strikingly similar to the one it used to propagandise regime change in Iraq 22 years ago.

But this is not 2003. After decades of war, and livestreamed genocide, most Americans no longer buy into the old slogans and distortions. When Israel attacked Iran, a poll showed that only 16 percent of US respondents supported the US joining the war. After Trump ordered the air strikes, another poll confirmed this resistance to manufactured consent: only 36 percent of respondents supported the move, and only 32 percent supported continuing the bombardment

The failure to manufacture consent for war with Iran reveals a profound shift in the American consciousness. Americans remember the invasions of Afghanistan and Iraq that left hundreds of thousands of Afghans and Iraqis dead and an entire region in flames. They remember the lies about weapons of mass destruction and democracy and the result: the thousands of American soldiers dead and the tens of thousands maimed. They remember the humiliating retreat from Afghanistan after 20 years of war and the never-ending bloody entanglement in Iraq.

At home, Americans are told there is no money for housing, healthcare, or education, but there is always money for bombs, for foreign occupations, for further militarisation. More than 700,000 Americans are homeless, more than 40 million live under the official poverty line and more than 27 million have no health insurance. And yet, the US government maintains by far the highest defence budget in the world.

Americans know the precarity they face at home, but they are also increasingly aware of the impact US imperial adventurism has abroad. For 20 months now, they have watched a US-sponsored genocide broadcast live.

They have seen countless times on their phones bloodied Palestinian children pulled from rubble while mainstream media insists, this is Israeli self-defence. The old alchemy of dehumanising victims to excuse their murder has lost its power. The digital age has shattered the monopoly on narrative that once made distant wars feel abstract and necessary. Americans are now increasingly refusing to be moved by the familiar war drumbeat.

The growing fractures in public consent have not gone unnoticed in Washington. Trump, ever the opportunist, understands that the American public has no appetite for another war. And so, on June 24, he took to social media to announce, “the ceasefire is in effect”, telling Israel to “DO NOT DROP THOSE BOMBS,” after the Israeli army continued to attack Iran.

Trump, like so many in the US and Israeli political elites, wants to call himself a peacemaker while waging war. To leaders like him, peace has come to mean something altogether different: the unimpeded freedom to commit genocide and other atrocities while the world watches on.

But they have failed to manufacture our consent. We know what peace is, and it does not come dressed in war. It is not dropped from the sky. Peace can only be achieved where there is freedom. And no matter how many times they strike, the people remain, from Palestine to Iran — unbroken, unbought, and unwilling to kneel to terror.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Looming trade deal as prices rise

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

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

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

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

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

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

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

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

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

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

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

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

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

What do we know about the US-China deal?

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

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

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

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

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

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

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

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

Why are Chinese rare earth minerals so vital?

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

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

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

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

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

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

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

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

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

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

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

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

Which deals is the US still struggling to strike?

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

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

Talks which have been particularly tricky include:

European Union

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

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

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

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

Japan

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

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

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

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

Could the US extend its tariffs deadline past July?

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

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

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

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

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

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

June 26 (UPI) — Tesla CEO Elon Musk has fired the carmaker’s vice president of manufacturing and operations following a falloff in auto sales in the nation’s largest markets this year.

Omead Afshar oversaw more than a half dozen upper-level employees in the company, including Troy Jones, Tesla’s vice president of sales in North America, and Joe Ward, vice president of the Europe, Middle East and Africa region.

The firing was first reported by Bloomberg News.

Afshar is the second high-level employee to leave the company recently. His termination follows the resignation of Milan Kovac, who was the company’s head of its Optimus humanoid robotics program.

Kovac said in a post on X that he was leaving Tesla to spend more time with his family. Musk later thanked Kovac publicly for his time with the company.

In 2022, Afshar was the subject of an internal investigation at Tesla that focused on his involvement in trying to secure construction materials for a secret project for Musk that included hard-to-get glass.

Prior to his job as Tesla vice president, Afshar worked for SpaceX, Musk’s aerospace company. Afshar’s X account, which had not been updated, said he still works for Tesla, and he praised Musk for his leadership and work ethic following the launch of the company’s Robotaxi service in Austin, Texas.

“Thank you, Elon, for pushing us all,” Afshar wrote.

Tesla’s stock price has dropped 19% this year, and took an especially hard hit following Musk’s association with President Donald Trump, who appointed Musk to oversee the Department of Government Efficiency.

DOGE took a broad and aggressive approach to eliminating federal employees, downsizing federal agencies and ending diversity, equity and inclusion programs at some of the nation’s largest companies and universities.

The company sold fewer cars in 2024 than it did in 2023, the first time sales dropped since Tesla began mass producing EVs. Its profits fell 71% in the first quarter of 2025. European sales dropped 28%, and dropped for a fifth straight month in May.

The European Automobile Manufacturers Association said buyers are shifting to cheaper Chinese models.

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

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

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

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

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

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

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

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

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

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

Damaged reputation

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

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

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

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

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

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

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

Nippon Steel’s $14.9bn acquisition of US Steel has conferred an unusual degree of power for United States President Donald Trump after the Japanese company’s 18-month struggle to close the purchase.

The deal closed on Wednesday, the companies said.

Under the deal terms, Nippon bought 100 percent of US Steel shares at $55 per share which was first used in December 2023. A news release on the filing also discloses details of a national security agreement inked with the Trump administration, which gives Trump the authority to name a board member, as well as a non-economic golden share.

Eiji Hashimoto, Nippon Steel’s chairman and CEO, thanked the president for his role. He said that Nippon Steel agreed to represent an unusual level of control conceded by the companies to the government to save the deal, after a rocky path to approval spurred by high-level political opposition.

The golden share gives the US  government veto authority over a host of corporate decisions, from idling plants to cutting production capacity and moving jobs overseas, as previewed in a weekend social media post by Commerce Secretary Howard Lutnick.

The share also gives the government a veto over a potential relocation of US Steel’s headquarters from Pittsburgh, Pennsylvania, a transfer of jobs overseas, a name change, and any potential future acquisition of a rival business, the release shows.

The inclusion of the golden share to win approval from the Committee on Foreign Investment in the US, which scrutinises foreign investment for national security risks, could drive overseas investors away from US companies, national security lawyers said on Monday.

The acquisition will give US Steel $11bn in investment through 2028, including $1bn for a new US mill that will increase by $3bn in later years.

It will also allow Nippon Steel, which is the world’s fourth-largest steel company, to capitalise on a host of American infrastructure projects while its foreign competitors face steel tariffs of 50 percent.

The Japanese firm also avoids the $565m in breakup fees it would have had to pay if the companies had failed to secure approvals.

Nippon Steel said on Wednesday that its annual crude steel production capacity is expected to reach 86 million tonnes, bringing it closer to Nippon Steel’s global strategic goal of 100 million tonnes of capacity.

The president described Nippon Steel as a “great partner”. After the United Steelworkers union came out against the deal last year, both then-President Joe Biden, a Democrat, and Trump, a Republican, expressed their opposition as they sought to woo voters in Pennsylvania, a key swing state, in the presidential election campaign.

Shortly before leaving office in January, Biden blocked the deal on national security grounds, prompting lawsuits by the companies, which argued the national security review they received was biased. The Biden White House disputed the charge. The steel companies saw a new opportunity in the Trump administration, which opened a new 45-day national security review into the proposed merger in April.

But Trump’s public comments, ranging from welcoming a simple “investment” in US Steel by the Japanese firm to floating a minority stake for Nippon Steel, spurred confusion.

Trump’s May 30 rally spurred hopes of approval, and sign-off finally came on Friday with an executive order permitting the companies to combine if they signed an NSA giving the US  government a golden share, which they did.

The markets responded positively to the news. Nippon Steel, which is traded under the ticker NPSCY, is up 2.7 percent from the market open as of 11:00am in New York (15:00 GMT).

The fatal crash of a 787 Dreamliner that was being operated by Air India from Ahmedabad in northwestern India to London Gatwick Airport has once again fueled scrutiny of both Boeing and the airline, as the two companies have been trying to emerge from years of crises and poor reputations.

The nearly 12-year-old Dreamliner crashed on a densely populated part of the city soon after takeoff, killing 241 of the 242 people on board on Thursday. The total death toll is expected to rise as the plane fell on a medical college hostel and rescue operations are still under way.

The crash raises new concerns for Boeing, which continues to face mounting safety issues that have undermined public trust in its aircraft. These challenges come as the Seattle-based aerospace giant grapples with economic pressures from tariffs imposed by United States President Donald Trump, as well as increased regulatory attention that followed its recent safety issues.

The reason behind the crash is not yet clear.

But it is yet another fatal accident involving a Boeing aircraft, adding to a string of public relations crises that have made many travellers wary of flying on its planes.

“Boeing has become notorious and infamous with flyers at this moment, regardless of the model of the plane. Even the word ‘Boeing’ triggers a lot of people,” Adnan Bashir, an independent global communications and corporate affairs consultant who specialises in crisis communications, told Al Jazeera.

The company’s safety reputation began to unravel in October 2018 when a Lion Air flight operating a 737 MAX crashed due to a malfunction in the Maneuvering Characteristics Augmentation System (MCAS), a programme designed to prevent stalls. That crash killed all 189 people on board.

Just months later, in March 2019, an Ethiopian Airlines flight using the same aircraft model crashed for the same reason, killing all 157 people aboard.

Turmoil resurfaced in January 2024, when a door panel detached mid-flight on an Alaska Airlines route between Ontario, California, and Portland, Oregon.

But until now, the 787 Dreamliner aircraft had maintained a relatively strong safety record.

“This is the first fatal crash of the 787, so despite all of its problems in the early days and all the production issues that Boeing had with the aeroplane, this has had a perfect safety record up to this point,” aviation expert Scott Hamilton told Al Jazeera.

First launched in 2011, Boeing has sold more than 2,500 of the model globally. Air India bought 47 of them, and to date, Boeing has delivered 1,189 Dreamliners.

The model has faced years of safety-related scrutiny. In 2024, John Barnett, a former Boeing quality manager, was found dead under suspicious circumstances after long voicing concerns about the 787. Barnett had alleged that Boeing cut corners to meet production deadlines, including installing inadequate parts. He also claimed that testing revealed a 25-percent failure rate in the aircraft’s emergency oxygen systems.

In 2019, The New York Times published an expose that revealed Boeing had pressured workers not to report safety violations, citing internal emails, documents, and employee interviews.

More recently, another whistleblower, Sam Salehpour, told lawmakers he was threatened for raising safety concerns about Boeing aircraft.

Today’s crash is the latest fatal incident to occur under the leadership of Boeing CEO Kelly Ortberg, who returned from retirement in 2024 to replace Dave Calhoun. Ortberg had pledged to restore the company’s safety reputation.

Previously, the last fatal Boeing incident occurred in December, when a Jeju Airlines flight crashed after a bird strike, killing 179 of the 181 people on board.

Earlier this month, the US Department of Justice reached a settlement with Boeing that allowed the company to avoid prosecution for previous crashes. The deal required Boeing to pay $1.1bn, including investments to improve safety standards and compensation to victims’ families.

On Wall Street, Boeing’s stock dropped nearly 5 percent from the previous day’s market close.

At this point, experts believe that ultimately, Boeing executives will be careful with their words because of the looming legal challenges they may face if an investigation finds the fault lies with the plane-maker.

“You can almost guarantee there’s going to be lawsuits of some sort. Right now, they’re likely triaging internal and external communication plans with their legal team. Because anything they say in public right now could be used as evidence. And so what they’re going to be doing right now is staying quiet, most likely until more facts come out,” Amanda Orr, founder of the legal and policy communications consultancy firm Orr Strategy Group, told Al Jazeera.

In response to today’s crash, Boeing said, “We are in contact with Air India regarding Flight 171 and stand ready to support them … Our thoughts are with the passengers, crew, first responders and all affected.” Boeing did not respond to Al Jazeera’s request for comment.

Air India turnaround setback

For Air India, which has been undergoing a major reinvention in the last few years, today’s crash is a major setback in its efforts to rebrand and modernise.

Founded in 1932, the airline was nationalised in 1953. After years of financial struggles and mounting debt, Tata Group acquired the airline for $2.2bn in 2022.

As India’s only long-haul international carrier to Europe and North America, Air India has a strong hold on global travel from across the country. In 2023, the carrier ordered 220 Boeing aircraft, including 20 Dreamliners, 10 777x jets, and 190 of the embattled 737 MAX.

For now, Air India is focused on its response to the crash.

“At this moment, our primary focus is on supporting all the affected people and their families. We are doing everything in our power to assist the emergency response teams at the site and to provide all necessary support and care to those impacted,” said N Chandrasekaran, chairperson of Tata Sons, the holding company of Tata Group, in a statement provided to Al Jazeera.

“I express our deep sorrow about this incident. This is a difficult day for all of us at Air India. Our efforts now are focused entirely on the needs of our passengers, crew members, their families and loved ones,” Craig Wilson, the airline’s CEO, said in a video statement.

The airline has experienced a few fatal accidents in recent years. In 2020, an Air India Express flight skidded off the runway in Kozhikode in India, killing 20. A similar accident in Mangalore involving a 737-800 claimed 156 lives.

Despite the shock of today’s crash, flying remains one of the safest modes of travel. According to a 2024 study by the Massachusetts Institute of Technology, the risk of dying in a commercial airline accident is one in every 13.7 million passengers. This continues to be the safest decade in aviation history.

The mandate that the DoT challenged was a key part of former US President Joe Biden’s plan to address climate change.

The United States Department of Transportation (DoT) has declared that former President Joe Biden’s administration exceeded its authority by assuming a high uptake of electric vehicles in calculating fuel economy rules.

With that declaration on Friday, the DoT paved the way for looser fuel standards and published the “Resetting the Corporate Average Fuel Economy Program” (CAFE) rule. A future separate rule from the administration of President Donald Trump will revise the fuel economy requirements.

“We are making vehicles more affordable and easier to manufacture in the United States. The previous administration illegally used CAFE standards as an electric vehicle mandate,” Transportation Secretary Sean Duffy said in a statement.

The department’s National Highway Traffic Safety Administration (NHTSA), in writing its rule last year under Biden, had “assumed significant numbers of EVs would continue to be produced regardless of the standards set by the agency, in turn increasing the level of standards that could be considered maximum feasible,” it said Friday.

A shift away from Biden policies 

In January, Duffy signed an order directing NHTSA to rescind fuel economy standards issued under Biden for the 2022-2031 model years that had aimed to drastically reduce fuel use for cars and trucks.

In a release last year, the DoT, then led by Pete Buttigieg, put in place a required fuel economy to increase by 2 percent for cars made between 2027 and 2031.

At the time, the DoT said it would help save consumers upwards of $600 on gas every year. It was also part of the Biden administration’s plan to address climate change.

“These new fuel economy standards will save our nation billions of dollars, help reduce our dependence on fossil fuels, and make our air cleaner for everyone. Americans will enjoy the benefits of this rule for decades to come,” then NHTSA Deputy Administrator Sophie Shulman said at the time.

In June 2024, the NHTSA said it would hike CAFE requirements to about 50.4 miles per gallon (4.67 litres per 100km) by 2031 from 39.1mpg currently for light-duty vehicles.

The agency last year said the rule for passenger cars and trucks would reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons, cutting fuel costs with net benefits estimated at $35.2bn.

Late on Thursday, Senate Republicans proposed eliminating fines for failures to meet CAFE rules as part of a wide-ranging tax bill, the latest move aimed at making it easier for automakers to build gas-powered vehicles.

Last year, Chrysler-parent Stellantis paid $190.7m in civil penalties for failing to meet US fuel economy requirements for 2019 and 2020 after paying nearly $400m for penalties from 2016 through 2019. GM previously paid $128.2m in penalties for 2016 and 2017.

Stellantis said it supported the Senate Republican proposal “to provide relief while DoT develops its proposal to reset the CAFE standards … The standards are out of sync with the current market reality, and immediate relief is necessary to preserve affordability and freedom of choice.”

GM declined to comment.

Employers in the United States have slowed hiring even though they added a solid 139,000 jobs in May.

While that was higher than the forecast of 133,000 jobs, it was lower than the 147,000 hires in April,  Labor Department data released on Friday showed. It also sharply revised downward the data for March and April by 95,000 jobs.

The US Labor Department said the biggest gains were in the healthcare industry which added 62,000 jobs; followed by the leisure and hospitality sector which added 48,000, 30,000 of which were in food services.

The social services sector followed suit, adding about 16,000 jobs. The federal government contracted 22,000 jobs.

Industries including manufacturing, wholesale trade, retail trade, transportation and warehousing showed little change as tariff anticipation spending slowed.

The unemployment rate held steady at 4.2 percent. Wages ticked up slightly. The average wage grew by 15 cents or 0.4 percent.

“The job market is steadily but surely throttling back. Monthly job gains are moderating, and most telling, the gains are being consistently revised lower, and not by a little bit. Indeed, after revision, monthly job gains appear to be closing in on 100,000,” Mark Zandi, chief economist at Moody’s Analytics, told Al Jazeera.

“It [the jobs report] does signal the job market and economy are increasingly fragile as the fallout from the global trade war intensifies.”

Private payrolls also tumbled this month, according to payroll firm ADP in a report on Wednesday, which showed the US economy added only 37,000 jobs, the lowest in two years. Unlike the Labor Department report which lags by a few weeks, this report is more immediate.

“After a strong start to the year, hiring is losing momentum,” Nela Richardson, chief economist at ADP, said in a release.

What was particularly notable about the ADP report was the set of industries with net job losses. The manufacturing sector recorded a net loss of 3,000. Natural resources and the mining industry lost 5,000. Those losses in the goods-producing sectors were offset by a job gain of 6,000 in construction.

The only substantive gains were in the leisure and hospitality sector, a notoriously low-paying sector, which added 38,000, according to ADP. Financial services followed in the gains, adding 18,000 jobs. However, those gains were offset by losses, including in education and health, which cut 13,000 jobs. The trade and transportation and utilities sector cut 4,000 jobs.

Last month, the ADP report showed 62,000 jobs were added, in stark contrast to the Labor Department’s 147,000, because it is considered a more immediate measure.

Job openings and labour turnover 

On Tuesday, the job openings and labour turnover survey or JOLTS report, which captures data at a significant lag to the Labor Department and ADP, showed there were 7.4 million open jobs in April, up roughly 191,000 from the month before.

But just because jobs are open does not mean they are being filled, according to Elise Gould, senior economist at the Economic Policy Institute.

“I think that reflects some cautiousness on the part of both employers and workers,” Gould told Al Jazeera.

While job openings in sectors like trade, transportation and utilities increased, hiring actually decreased.

This comes as major employers have implemented hiring slowdowns and freezes across sectors.

American Airlines reportedly put in place a hiring freeze for flight attendants in April amid uncertainty in the travel market. The financial services company T Rowe Price slowed down its hiring. And amid a slowdown in research grants, universities have put in place hiring freezes, most recently Johns Hopkins University, which currently has 600 National Institutes of Health-funded medical research projects under way.

As Al Jazeera has previously reported, small businesses said because of the looming tariffs, they’ve had to implement hiring freezes.

Hiring for small businesses declined in May by 4.4 percent compared with this time last year, according to Homebase, a payroll service provider for more than 150,000 small businesses accounting for roughly 3.8 million workers.

To forecast what to expect in the jobs market moving forward, EPI’s Gould suggests a close watch on key indicators including housing starts and factory orders, which indicate that manufacturers and construction companies will need to cut jobs if trends continue.

“Some of the government data [like the jobs and JOLTS report] takes a lot longer to sort of see trouble to catch that turning point and you might see it in the other measures a little bit faster, but there’s also a lot of volatility in them,” Gould said.

In April, residential home construction declined by 0.9 percent, the third straight month of declines, suggesting a pullback that indicates both builders and consumers are wary about building new homes and making improvements. At the same time, orders for goods made in US factories fell by 3.7 percent in April, according to the Census Bureau.

The United Kingdom has announced a major investment in defence in response to a “new era of threats” driven by “growing Russian aggression”.

The UK’s Strategic Defence Review (SDR), unveiled on Monday, includes new investments in nuclear warheads, a fleet of new submarines and new munitions factories. Prime Minister Keir Starmer said the SDR would bring the country to “war-fighting readiness”.

“The threat we now face is more serious, more immediate and more unpredictable than at any time since the Cold War,” Starmer said as he delivered the review in Glasgow, Scotland.

The SDR described Russia as an “immediate and pressing” threat, and referred to China as a “sophisticated and persistent challenge”.

European nations have rushed to strengthen their armed forces in recent months, following Trump’s repeated demands that Europe must shoulder more responsibility for its security.

What are the key features of the UK’s Strategic Defence Review?

The defence review, the UK’s first since 2021, was led by former NATO Secretary-General George Robertson. Among the 62 recommendations in the SDR, all have been accepted by the government.

Starmer said the measures recommended in the review would bring “fundamental changes” to the armed forces, including “moving to war-fighting readiness”, re-centring a “NATO first” defence posture and accelerating innovation.

“Every part of society, every citizen of this country, has a role to play because we have to recognise that things have changed in the world of today,” he said. “The front line, if you like, is here.”

Boosting weapons production and stockpiles

Based on the recommendations in the review, the government said it would boost stockpiles and weapons production capacity, which could be scaled up if needed.

A total of 1.5 billion pounds ($2bn) will be dedicated to building “at least six munitions and energetics factories”, with plans to produce 7,000 long-range weapons.

In turn, UK ammunitions spending – just one component of overall military spending – is expected to hit 6 billion pounds ($8.1bn) over the current parliamentary term, which ends in 2029.

New attack submarines

There are also plans to build up to 12 new attack submarines by the late 2030s as part of the AUKUS military alliance with Australia and the United States – equivalent to a new submarine every 18 months.

This accounts for nearly half the projected spending outlined in the SDR.

Meanwhile, the Ministry of Defence (MoD) also said it would invest 15 billion pounds ($20.3bn) in its own nuclear warhead programme.

New F-35 fighter jets

The SDR recommended procuring new F-35 fighter jets and the Global Combat Aircraft Programme, a sixth-generation fighter produced jointly with Japan and Italy.

Use of technology to improve the army

The target size of the army will remain roughly the same, but the SDR recommended a slight increase in the number of regular soldiers “if funding allows”. There are currently about 71,000.

Instead of a dramatic increase in troop numbers, the SDR recommends using technology, drones and software to “increase lethality tenfold”.

To do this, the MoD plans to deliver a 1 billion pound ($1.35bn) “digital targeting web”, an AI-driven software tool designed to collect battlefield data and use it to enable faster decision making.

Investment in defence companies

More details about the SDR will be provided in the upcoming Defence Industrial Strategy, expected in the coming weeks, but UK defence companies will be among the big winners from the new SDR.

Though supposedly a 10-year review, past SDRs suggest its shelf life might be more limited.

The last SDR was published in 2021 and recommended “a strategic pivot towards the Indo-Pacific region to counter China’s influence and deepen ties with allies like Australia, India, and Japan”, in line with strategic priorities of the time.

This SDR, undertaken in the wake of Russia’s full-scale invasion of Ukraine, has re-oriented the UK’s geographical priorities. In the coming years, those could change again.

Can the UK afford this defence expansion?

Proposals to prepare the UK’s armed forces to be “battle ready” will cost at least 67.6 billion pounds ($91.4bn) through to the late 2030s, according to costings and estimates provided in the SDR.

Before Monday’s announcement, the government had already pledged to increase spending on defence from 2.3 percent currently to 2.5 percent by 2027, an increase of about 6 billion pounds ($8.1bn) per year. This would raise 60 billion pounds over 10 years – a bit shy of the cost projected by the SDR.

The government has said it will cut overseas aid to fund that 0.2 percent of gross domestic product (GDP) rise in defence spending.

Critics say this will not be enough and that the measures outlined by the SDR will cost more like 3 percent of gross domestic product (GDP).

James Cartlidge, the shadow defence secretary, said the “authors of the strategic defence review were clear that 3 percent [not 2.5 percent] of GDP ‘established the affordability’ of the plan.”

In February, the Labour government said it had “an ambition” to raise defence spending to 3 percent in the next parliament (after 2029), but Cartlidge said: “That commitment cannot be guaranteed ahead of the next general election.”

According to researchers at the Institute for Fiscal Studies – an independent, London-based research organisation – raising defence spending to 3 percent of GDP by 2030 would require an extra 17 billion pounds between now and then, which the government has not yet accounted for.

But the UK could be required to raise spending even more than this. In discussions taking place in advance of the NATO summit in The Hague later this month, NATO Secretary General Mark Rutte is understood to be pushing for member nations to commit 5 percent of GDP towards defence-related spending.

Rutte has proposed that NATO’s 32 members commit to spending 3.5 percent on hard defence and 1.5 percent on broader security, such as cyber, by 2032.

“At this Ministerial, we are going to take a huge leap forward,” Rutte stated before a meeting of defence ministers in Brussels on Thursday this week. “We will strengthen our deterrence and defence by agreeing ambitious new capability targets.” He specified air and missile defence, long-range weapons, logistics, and large land manoeuvre formations as among the alliance’s top priorities, according to a briefing note from NATO on Wednesday.

“We need more resources, forces and capabilities so that we are prepared to face any threat, and to implement our collective defence plans in full,” he said, adding: “We will need significantly higher defence spending. That underpins everything.”

Will taxes have to rise in the UK?

On Monday, Starmer refused to rule out another raid on the aid budget to fund higher military spending, and signalled that he was hopeful the extra investment could be supported by a growing the economy and generating more taxes to pay for defence.

After the SDR’s announcement, Paul Johnson, director of the Institute for Fiscal Studies, warned that the prime minister will need to make “really quite chunky tax increases” to pay for the plans.

Alternatively, increased defence spending could be siphoned off from other parts of the budget – for instance, through reduced state spending on areas like transport and energy infrastructure.