2025-07-31 14:30

Businesses shipped more goods to US ahead of tariffs Companies are holding about 4 months of inventory Big stockpiles have helped delay price hikes Price hikes may be felt beyond U.S. LONDON, July 31 (Reuters) - Tariff-related price hikes may start to bite at the end of the third quarter as companies may by then have sold off U.S. stockpiles built up ahead of the new duties, according to the International Chamber of Commerce. Businesses making everything from cars to drugs and cheese and wine have expedited deliveries to the United States this year to get ahead of U.S. President Donald Trump's tariffs. Sign up here. They have about four months of inventory, about one month more than average, Andrew Wilson, International Chamber of Commerce deputy secretary general, estimated on Thursday, helping some delay hiking prices. "You could expect it to bite at the end of Q3," he told Reuters once they have sold off that inventory. Wilson previously forecast tariff-related price hikes would show up in U.S. inflation in the fourth quarter or early next year. Data on Thursday showed U.S. inflation increased in June as tariffs started raising the cost of some goods, supporting economists' expectations that price pressures would pick up in the second half. Some of the world's biggest companies have warned for months that they would be squeezed by duties. They have now started to outline how they plan to pass on the costs and change their businesses to try to cushion the blow of rising costs, uncertainty over U.S. trade policy, and waning consumer confidence. Companies are testing how much they can pass tariffs onto U.S. customers. But global retailers including sandal maker Birkenstock (BIRK.N) , opens new tab and jeweller Pandora (PNDORA.CO) , opens new tab have also looked at raising prices across multiple markets to avoid hurting U.S. sales. "There's a logic taking hold that (price hikes) won't be just borne by the U.S. consumer," he said. https://www.reuters.com/world/china/price-hikes-may-soon-bite-firms-sell-off-pre-tariff-inventory-says-global-2025-07-31/

2025-07-31 13:41

Economy shrinks 0.1% in May, likely expanded 0.1% in June May GDP falls due to output drop in retail trade, mining Q2 GDP likely to be 0.1% on an annualized basis, StatsCan says But Bank of Canada sees GDP contracting annualized 1.5% in Q2 OTTAWA, July 31 (Reuters) - Canada's Gross Domestic Product shrank 0.1% in May on a monthly basis as expected but is likely to regain the lost ground in June as some sectors rebound, data showed on Thursday. An advanced estimate showed GDP is likely to have expanded by 0.1% in June, and on an annualized basis it could also post growth of 0.1% for the second quarter, Statistics Canada said. Sign up here. That is in contrast to the more widely held expectation for a second-quarter contraction, and could change when the final June numbers are released next month. In May, the biggest hit to growth came from the retail trade sector which contracted 1.2%, StatsCan said, adding that activity across seven subsectors out of 12 shrank. Retail trade is part of the larger services-producing industries that contribute up to 75% of total GDP. Overall, output from the services-producing group was flat in May as the drop in retail trade was offset by real estate and transportation. Amongst goods-producing industries, which account for 25% of GDP, the mining, quarrying, and oil and gas extraction sector was the main laggard with activity shrinking 1% in the month. Manufacturing expanded 0.7% on a monthly basis, after a 1.8% decline in April, largely as a result of higher inventory accumulation, the statistics agency said. Canada's first quarter GDP expanded 2.2% on an annualized basis as exporters advanced their sales to the United States to beat a barrage of incoming tariffs. But as tariffs took effect from March, exports and industrial output took a hit. The Bank of Canada, after announcing that it would keep rates on hold at 2.75% on Wednesday, said that it expected the economy to contract by 1.5% in the second quarter due to a 25% drop in exports. StatsCan's forecast of even slim Q2 growth could take away the incentive for a rate cut in September, though data on inflation and job growth before the BoC's next meeting will be crucial. Economists expressed doubt on a prospective growth in the second quarter as the data is calculated based on expenditure and income of people, unlike monthly GDP which is based on industry output. "We will need to wait and see next month's quarterly GDP release to know whether the economy is really outperforming the Bank's expectations," Andrew Grantham, senior economist at CIBC Capital Markets wrote in a note. Royce Mendes, head of macro strategy for Desjardins Group noted that there was lingering uncertainty about trade policy and domestic headwinds, which will continue to weigh on activity, forcing the central bank to restart cutting rates by September. Money markets are betting around an 89% chance of the BoC holding rates on September 17, up three percentage points from before the GDP data was released . The Canadian dollar dropped 0.11% to 1.3842 to the U.S. dollar, or 72.24 U.S. cents. The U.S. and Canada are currently locked in negotiations to hash out a trade deal by Friday in a bid to reduce tariffs, but negotiators have admitted that it may not happen by the deadline. https://www.reuters.com/world/americas/canadas-gdp-shrinks-may-could-avoid-contraction-second-quarter-2025-07-31/

2025-07-31 13:15

LONDON, July 31 (Reuters) - A British government agency is providing a 1 billion pound export development guarantee to the UK arm of U.S. carmaker Ford (F.N) , opens new tab, supporting the company's long-term growth targets around the world. "This £1 billion loan guarantee is a major boost for Britain’s auto sector. It will help develop world-leading products, open new export markets, and secure jobs," finance minister Rachel Reeves said in the statement released by UK Export Finance (UKEF). Sign up here. https://www.reuters.com/business/autos-transportation/uk-export-finance-guarantees-1-billion-pound-loan-ford-uk-2025-07-31/

2025-07-31 13:13

WASHINGTON, July 31 (Reuters) - U.S. Treasury Secretary Scott Bessent said on Thursday he is pulling together a list of potential candidates to lead the U.S. Federal Reserve and that he expects an announcement by the end of the year. "We are putting together a very good list of candidates" to replace Fed Chair Jerome Powell and another seat that will become vacant on the Fed board, Bessent said in an interview with CNBC. Sign up here. Powell's term as chairman ends in May. The Fed has faced steady and often aggressive pressure from President Donald Trump to cut rates. The president has said a large move down in rates is justified by a number of factors, but part of his critique centers on the elevated interest costs the government faces as it sells bonds to cover oceans of red ink. "So there'll be two seats opening up. I'm putting together a list for president, chief of staff to review. We'll be interviewing people. So, you know, I would expect that we could have an announcement by the end of the year," he said. https://www.reuters.com/world/us/us-treasury-chief-says-he-expects-fed-chair-announcement-by-years-end-2025-07-31/

2025-07-31 12:55

Economy shrinks 0.1% in May, likely expanded 0.1% in June May GDP falls due to output drop in retail trade, mining Q2 GDP likely to be 0.1% on an annualized basis, StatsCan says But Bank of Canada sees GDP contracting annualized 1.5% in Q2 OTTAWA, July 31 (Reuters) - Canada's Gross Domestic Product shrank 0.1% in May on a monthly basis as expected but is likely to regain the lost ground in June as some sectors rebound, data showed on Thursday. An advanced estimate showed GDP is likely to have expanded by 0.1% in June, and on an annualized basis it could also post growth of 0.1% for the second quarter, Statistics Canada said. Sign up here. That is in contrast to the more widely held expectation for a second-quarter contraction, and could change when the final June numbers are released next month. In May, the biggest hit to growth came from the retail trade sector which contracted 1.2%, StatsCan said, adding that activity across seven subsectors out of 12 shrank. Retail trade is part of the larger services-producing industries that contribute up to 75% of total GDP. Overall, output from the services-producing group was flat in May as the drop in retail trade was offset by real estate and transportation. Amongst goods-producing industries, which account for 25% of GDP, the mining, quarrying, and oil and gas extraction sector was the main laggard with activity shrinking 1% in the month. Manufacturing expanded 0.7% on a monthly basis, after a 1.8% decline in April, largely as a result of higher inventory accumulation, the statistics agency said. Canada's first quarter GDP expanded 2.2% on an annualized basis as exporters advanced their sales to the United States to beat a barrage of incoming tariffs. But as tariffs took effect from March, exports and industrial output took a hit. The Bank of Canada, after announcing that it would keep rates on hold at 2.75% on Wednesday, said that it expected the economy to contract by 1.5% in the second quarter due to a 25% drop in exports. StatsCan's forecast of even slim Q2 growth could take away the incentive for a rate cut in September, though data on inflation and job growth before the BoC's next meeting will be crucial. Money markets are betting around an 89% chance of the BoC holding rates on September 17, up three percentage points from before the GDP data was released . The Canadian dollar dropped 0.11% to 1.3842 to the U.S. dollar, or 72.24 U.S. cents. The U.S. and Canada are currently locked in negotiations to hash out a trade deal by Friday in a bid to reduce tariffs, but negotiators have admitted that it may not happen by the deadline. https://www.reuters.com/world/americas/canadas-gdp-shrinks-may-likely-avoid-contraction-second-quarter-2025-07-31/

2025-07-31 12:50

Refined copper spared from US tariffs, surprising metals market US copper futures slump, unwind premium over global ones Rush to deliver copper to the US ahead of August 1 is over Massive re-exports from the US stockpile unlikely in short term BEIJING/LONDON, July 31 (Reuters) - The once-mighty premium U.S. copper enjoyed over the global benchmark slid on Thursday as markets clawed back months of gains in hours of frenzied trading after President Donald Trump surprised markets with pared-back tariffs. Trump said on Wednesday the United States would impose a 50% tariff on copper pipes and wiring, but the levy fell short of the sweeping restrictions expected and left out copper ores, concentrates and cathodes. Sign up here. The surprise move dragged down U.S. copper prices more than 20% on the Comex exchange and unwound the premium over the London global benchmark that had grown in recent weeks, with shipments diverted into the United States in anticipation of higher domestic prices. "We think the LME flips to a premium in the short term due to excess inventories in the U.S.," Anant Jatia, founder and chief investment officer at Greenland Investment Management, a hedge fund specialising in commodity arbitrage trading, told Reuters. "Over time Comex moves back to a premium as inventories draw and downstream tariffs leave a sustained U.S. premium." U.S. September Comex copper futures were last down 22% at $4.376 a lb or $9,647 a metric ton on Thursday, meaning a premium over LME copper of $27 a ton. This compares with last week's premium of $3,000. Benchmark LME copper fell 0.8% to $9,620.5 a ton. WHAT HAPPENS TO US INVENTORIES Months of hefty premiums had sucked in enormous volumes of copper from around the world since Trump first flagged the possibility of tariffs in February. As recently as a few weeks ago, traders were still redirecting cargoes to the United States in a rush to get copper into the country before the tariffs. Trump first teased the tariff in early July, implying that it would apply to all types of the red metal, ranging from cathodes produced by mines and smelters to wiring and other finished products. Data provider Kpler said that 99,170 tons of copper were delivered by bulk carriers to the U.S. since July 8, when Trump said he would announce a 50% tariff on copper and his team added that the probable deadline would be August 1. This brought U.S. March-July copper imports to more than 550,000 tons. Since the July 8 announcement only one vessel managed to leave its port of origin and deliver the cargo to the U.S. in time, according to Kpler. The vessel brought 14,998 tons of cathodes to a port in Hawaii. Yet in a proclamation released by the White House, the administration said the tariff starting this Friday will apply only to pipes, tubes and other semi-finished copper products, as well as products that copper is heavily used to manufacture, including cable and electrical components. Trump's unexpected pivot now raises the question of whether some of the U.S. stockpile might be re-exported. Macquarie estimated earlier this month it would take nine months of normal consumption just to run down the inventories built up in the first half of the year. Goldman Sachs said in a note on Thursday that Trump's threat to potentially impose tariffs on refined copper in 2027 would keep U.S. and global prices near parity and limit any large scale re-exporting. https://www.reuters.com/markets/commodities/trumps-watered-down-copper-tariffs-crush-comex-premium-2025-07-31/