Economics

The EU has notified Beijing that it intends to impose tariffs of up to 38% on imports of Chinese electric vehicles, triggering duties of more than €2bn (£1.7bn) a year and a potential trade war with China.

The tariffs will be applied provisionally from next month in line with World Trade Organization rules, which give China four weeks to challenge any evidence the EU provides to justify the levies on imported EVs.

The move follows a nine-month investigation into alleged unfair state subsidies into Chinese battery electric vehicles (BEVs) including top brands such as BYD and Geely, which part owns the Swedish brand Polestar, and Shanghai’s SAIC, which owns the British brand MG.

“The provisional findings of the EU anti-subsidy investigation indicate that the entire BEV value chain benefits heavily from unfair subsidies in China, and that the influx of subsidised Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the EU said in a statement.

Gas prices are once again on the decline across the U.S., bringing some relief to drivers now paying a little less to fill up their tanks.

The national average for gas prices on Monday stood around $3.44, according to AAA. That’s down about 9 cents from a week ago — marking the largest one-week drop recorded by the motor club so far in 2024. Monday’s average was also more than 19 cents less than it was a month ago and over 14 cents below the level seen this time last year.

Why the recent fall in prices at the pump? Industry analysts point to a blend of lackluster demand and strong supply — as well as relatively mild oil prices worldwide.

Waffle House is increasing pay for its U.S. workers after a year-long push from labor advocates.

In a video message to employees late last month, Waffle House CEO Joe Rogers III said base pay would rise to at least $3 per hour in June and then gradually rise to at least $5.25 per hour by June 2026. Base pay doesn’t include workers’ tips, and will be higher in some states depending on minimum wage laws, Rogers said.

Rogers said wage increases will be paid for by higher menu prices, and that wages will rise more slowly in some rural markets than in urban ones. The company is also adding tenure bonuses and premiums for working later shifts.

Agricultural equipment company plans to move production out of the country in move condemned by workers

US workers at John Deere plants have accused the company of acting on “greed” as America’s most famous agricultural equipment company plans to shift more production to Mexico.

The company – famous for its green tractors and leaping deer logo – has announced layoffs of several hundred workers over the last several months with more layoffs planned for later this year.

“We get wind of more layoffs daily, it seems, and it’s causing uncertainty all over,” said a longtime John Deere worker at the Harvester Works plant in East Moline, Illinois, who requested to remain anonymous for fear of retaliation. “The only reason for Deere to do this is greed.”

Nvidia's market value has surged past $3tn (£2.3tn), lifting the chip giant ahead of Apple to become the second most valuable publicly listed company in the world.

The firm's share price rose more than 5% on Wednesday, to more than $1,224. 

It extended a breathtakingly rapid climb that started last year, powered by bets that the US firm is positioned to be a major winner from a wave of investment in artificial intelligence (AI).

Its market value now sits just behind Microsoft, another key player in the industry thanks to its investments in Chat GPT-maker OpenAI.

The world has never had so many rich people, according to the World Wealth Report. And they are richer than ever, thanks to their investments in the stock market boom.

Last year's bullish stock markets boosted the fortunes of the world's richest, adding more members to the club of dollar millionaires, the World Wealth Report says.

The number of people worldwide with investable assets of at least $1 million ("high net worth individuals," or HNWI) rose by 5.1% last year to an estimated 22.8 million, according to a study by consulting firm Capgemini.

This is the highest level since the first annual study was conducted in 1997. The total wealth of the richest rose 4.7% to a record $86.8 trillion (€79.64 trillion).

Their fortunes have risen as stock markets have soared: New York's tech-heavy Nasdaq rose 43% in 2023, while the broad-based S&P 500 gained 24%. Meanwhile, the Paris CAC 40 rose 16% and the Frankfurt DAX 20%.

The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 13% last year, easily surpassing the gains for workers at a time when inflation was putting considerable pressure on Americans' budgets. 

The median pay package for CEOs rose to $16.3 million, up 12.6%, according to data analyzed for The Associated Press by Equilar. Meanwhile, wages and benefits netted by private-sector workers rose 4.1% through 2023. At half the companies in AP's annual pay survey, it would take the worker at the middle of the company’s pay scale almost 200 years to make what their CEO did.

Census says 126,340 people left Canada for the U.S. in 2022, a 70 per cent increase over a decade ago

Tens of thousands of Canadians are emigrating from Canada to the United States and the number of people packing up and moving south has hit a level not seen in 10 years or more, according to data compiled by CBC News.

There's nothing new about Canadians moving south of the 49th parallel for love, work or warmer weather, but the latest figures from the American Community Survey (ACS) suggest it's now happening at a much higher rate than the historical average.

The ACS, which is conducted by the U.S. Census Bureau, says the number of people moving from Canada to the U.S. hit 126,340 in 2022. That's an increase of nearly 70 per cent over the 75,752 people who made the move in 2012.

The number of people traveling by plane is set to hit a new high this year, as the airline industry bounces back from the COVID-19 pandemic with record revenues for airlines, an industry group has said.

Airlines are set to fly almost 5 billion passengers in 2024, according to the International Air Transport Association (IATA).

The announcement by the trade industry body on Monday marks a new record for the aviation sector, beating a pre-pandemic high.

In its outlook for 2024, IATA said airlines were expected to post $30.5 billion (€28 billion) in net earnings this year, up from its previous estimate in December of $25.7 billion.

The industry's total revenues were forecast to rise nearly 10%, to a record $996 billion (€918 billion).

The expected profit "is a great achievement considering the recent deep pandemic losses," IATA Director General Willie Walsh told the trade association's annual general meeting in Dubai.

More than 300 airlines, accounting for 83% of global air traffic, are members of IATA.

The body said around half of global profits in 2024 were expected to come from airlines in North America. IATA predictions suggest they will log a surplus of $14.8 billion, while airlines in Europe are expected to increase their profits by between $8.6 billion and $9 billion.

Inflation in the 20-nation eurozone has risen faster than expected in May. But the European Central Bank is still expected to cut interest rates at a June 6 meeting.

Consumer prices in the eurozone rose 2.6% in May year on year compared to 2.4% in April, according to European Union statistics, a figure that surpasses the 2% target aspired to by the European Central Bank (ECB).

Despite the higher-than-expected rise announced by the EU's statistics agency, Eurostat, the ECB is still expected to cut interest rates next week.

The central bank aggressively hiked rates starting in July 2022 as inflation soared after Russia cut gas supplies to Europe amid tensions over Moscow's invasion of Ukraine, and lingering consequences of the coronavirus pandemic continued to clog supply chains of parts and raw materials.

As inflation gradually slows from those peaks, the bank is looking to encourage economic growth once more with rate cuts, though observers say these are likely to be very gradual, particularly in light of the latest figures.

Key Points

• Older workers who are still carrying student loan debt may have a harder time saving toward retirement.
• The bottom 50% of older earners owe the highest average student loan debts, research finds.

For most Americans, living well in retirement depends on how much they can save in their working years.

But for millions of older individuals, unpaid student loan debts may put that goal out of reach, according to new research from the Schwartz Center for Economic Policy Analysis at the New School for Social Research.

The research evaluated more than 2.2 million people over age 55 with outstanding student loans, according to the Federal Reserve Board’s 2022 Survey of Consumer Finance.

Hopes for interest rate cuts this year by the Federal Reserve are steadily fading, with a stream of recent remarks by Fed officials underscoring their intention to keep borrowing costs high as long as needed to curb persistently elevated inflation. 

A key reason for the delay in rate cuts is that the inflation pressures that are bedeviling the economy are being driven largely by lingering forces from the pandemic — for items ranging from apartment rents to auto insurance to hospital prices. Though Fed officials say they expect inflation in those areas to eventually cool, they’ve signaled that they’re prepared to wait as long as it takes.

Yet the policymakers’ willingness to keep their key rate at a two-decade peak — thereby keeping costs painfully high for mortgages, auto loans and other forms of consumer borrowing — carries its own risks.

T-Mobile is buying U.S. Cellular’s wireless operations and certain spectrum assets in a deal valued at $4.4 billion, and further consolidating the industry.

T-Mobile would get more than 4 million new customers and control of U.S. Cellular’s wireless operations and about 30% of spectrum assets across several spectrum bands. T-Mobile will also enter into a new master license agreement on more than 2,000 towers and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant.

A 35-year-old Brooklyn resident gave up buying new clothes. A 22-year old in San Diego swore off retail therapy at Target. A 26-year old in England banned carbonated drinks from her shopping list. 

These three women, who don’t know each other, all started the year resolving to spend money only on necessary purchases, or what is popularly known as engaging in a no-buy challenge. The self-imposed rules of the challenge are simple: participants pledge to stop buying non-essential items, be they unneeded shoes, additional beauty products or other impulse buys for a set amount of time, usually 12 months. 

What started several years ago as a blogged-about experiment in budgeting and mindful spending has become a popular trend on social media. A Reddit group where people share their experiences has 51,000 members. The challenge primarily gained popularity on TikTok, where some videos of users seeking to hold themselves accountable get hundreds of thousands of views.

Representatives of the three countries are to meet in Arizona to discuss the challenges of North American economic integration against the background of presidential elections and the trade war with China

Mexico, the United States and Canada are preparing the ground for the first six-year review of their free trade agreement, the USMCA, which was signed in 2018 and went into effect in 2020, replacing NAFTA. This week, trade representatives from all three countries will meet in Phoenix, Arizona for the fourth meeting of the agreement’s Free Trade Commission. The meeting between U.S. Trade Representative Katherine Tai, Mexico’s Secretary of the Economy Raquel Buenrostro, and the Canadian Minister of Export Promotion, International Trade and Economic Development, Mary Ng, will be held behind closed doors, but a joint statement is expected afterwards.

Known as ‘Ivan The Terrible’, the risk arbitrage maven fell from glory in one of the biggest insider trading scandals of the 1980s

Ivan Boesky, the financier who gave birth to the “greed is good” mantra before going to prison in one of the biggest Wall Street insider trading scandals of the 1980s, has died at the age of 87, the New York Times reported on Monday.

Boesky, who partly inspired the Gordon Gekko character in the 1987 movie Wall Street, was considered a genius at risk arbitrage – the business of speculating in takeover stocks – and his wealth was estimated at $280m.

“I think greed is healthy. You can be greedy and still feel good about yourself,” he said in a commencement speech to the University of California, Berkeley business school in 1986.

Just a few months later, the man known on Wall Street as “Ivan the Terrible” was indicted on charges that would send him to disgrace, near-bankruptcy and prison.

Red Lobster, which brought affordable shrimp and lobster to middle-class America and grew to become the largest seafood restaurant chain in the world, has filed for bankruptcy.

The company said it had more than $1 billion in debt and less than $30 million in cash on hand. It plans to sell its business to its lenders, and in turn, it will receive financing to stay afloat. It expects to continue to close restaurants in the meantime.

Red Lobster, known for its cheddar bay biscuits, crab legs and shrimp dishes, spread around the country during the 1980s and 1990s. In 2016, Beyoncé mentioned Red Lobster in her song “Formation,” describing bringing a romantic partner to Red Lobster, causing sales to surge.

With 578 restaurants across 44 states and Canada, Red Lobster serves 64 million customers a year, and it brings in $2 billion in annual sales, the company said in its bankruptcy filing. One in five lobster tails purchased in North America is bought by Red Lobster.

But recent mismanagement, competition, inflation and other factors brought down Red Lobster, analysts and former Red Lobster employees say.

Years of underinvestment in Red Lobster’s marketing, food quality, service and restaurant upgrades hurt the chain’s ability to compete with growing fast-casual and quick-service chains.

A 1C increase in global temperature leads to a 12% decline in world gross domestic product, researchers have found

The economic damage wrought by climate change is six times worse than previously thought, with global heating set to shrink wealth at a rate consistent with the level of financial losses of a continuing permanent war, research has found.

A 1C increase in global temperature leads to a 12% decline in world gross domestic product (GDP), the researchers found, a far higher estimate than that of previous analyses. The world has already warmed by more than 1C (1.8F) since pre-industrial times and many climate scientists predict a 3C (5.4F) rise will occur by the end of this century due to the ongoing burning of fossil fuels, a scenario that the new working paper, yet to be peer-reviewed, states will come with an enormous economic cost.

An economist offered an explanation for a paradox that has emerged in recent data showing that spending has remained robust even as consumers report feeling pessimistic.

Joanne Hsu, who is the director of the University of Michigan’s consumer sentiment survey, told CNBC on Friday that she thinks Americans have abandoned plans to save money as they see their financial goals look less attainable and are spending money instead.

“This positive spending is not a reflection of some sort of internalized secret sense of confidence that consumers have,” he explained. “And instead my interpretation is that consumers see that a lot of aspirational goals that we talk about as part of the American Dream—homeownership, paying for college, paying for college for your kids, having a comfortable retirement—with high prices and high interest rates right now, those aspirational goals just feel increasingly out of reach.”

GameStop shares tumbled 19.7% Friday after the video game retailer said it plans to sell additional shares and reported preliminary results that showed a drop in first-quarter sales.

In a new regulatory filing, the video game retailer said it will sell up to 45 million class A common shares in an at-the-market offering. The sale comes after GameStop shares surged earlier this week in a brief revival of the meme stock trade.

Meanwhile, in a separate statement, GameStop said it now expects net first-quarter sales in the range of $872 million to $892 million, down from around $1.24 billion in the same quarter last year. Two analysts polled by FactSet said they expected a first-quarter revenue of around $1 billion.

May CPI release