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President Donald Trump will issue a broad trade memo on Monday that stops short of imposing new tariffs on his first day in office but directs federal agencies to evaluate U.S. trade relationships with China, Canada and Mexico, a Trump administration official said.

After weeks of intense global speculation over which duties Trump would impose immediately after being sworn in as U.S. president, news that Trump would take more time on tariffs drove a relief rally in global stocks and a dive in the dollar against major currencies.

Trump mentioned no specific tariff plans in his inaugural address but repeated his intention to create the External Revenue Service, a new agency to collect “massive amounts” of tariffs, duties and other revenues from foreign sources.  

“I will immediately begin the overhaul of our trade system to protect American workers and families,” Trump said. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”

Trump added that his policies would make America “a manufacturing nation once again.”

During his election campaign, Trump vowed to impose steep tariffs of 10% to 20% on global imports into the U.S. and 60% on goods from China to help reduce a trade deficit that now tops $1 trillion annually.

He said after his November election that he would sign “all necessary documents” upon taking office to impose an immediate 25% import surcharge on imports from Canada and Mexico if they failed to clamp down on the flow of illicit drugs and migrants entering the U.S. illegally.

Such duties would tear up long-standing trade agreements, upend supply chains and raise costs, according to trade experts.  

The official, confirming a Wall Street Journal report that cited a summary of Trump’s memo, said the new president will instead direct agencies to investigate and remedy persistent trade deficits and address unfair trade and currency policies by other nations.  

The memo will single out China, Canada and Mexico for scrutiny but will not announce new tariffs, the official said. It will direct agencies to assess Beijing’s compliance with its 2020 trade deal with the U.S., as well as the status of the U.S.-Mexico-Canada Agreement, the official said.

Relief rally

The U.S. dollar slumped broadly on the news against a basket of major trading partners’ currencies, with particularly large upswings in the euro, Canadian dollar, Mexican peso and Chinese yuan. MSCI’s measure of global stock markets rose. U.S. financial markets are closed for the Martin Luther King Jr. Day holiday.

Some industry groups and trade lawyers in Washington had speculated that Trump would invoke the International Emergency Economic Powers Act, a law with sweeping powers to control imports in times of national emergency, to impose immediate tariffs.

But the forthcoming trade memo signals a more methodical approach that would likely involve trade investigations under other legal authorities such as the Section 232 national security trade law and the Section 301 unfair trade practices statute. Trump invoked these laws during his first term, and probes on steel and aluminum and Chinese imports took months to complete.

“It sounds like maybe he’s been listening to the people telling him that immediate tariffs would really hurt the financial markets,” said William Reinsch, a trade expert at the Center for Strategic and International Studies.

But Reinsch and other trade analysts say they still expect Trump to press ahead with a global tariff early in his administration.

“The universal tariff was a core part of the economic plan he ran on, and I think he’s going to do what he said he would,” said Kelly Ann Shaw, a former White House trade adviser during Trump’s first term.

“This is an idea he’s supported for a long time,” Shaw, now with the Hogan Lovells law firm, said in an interview last week.

Past trade playbook  

In his 2017-2021 first term, Trump’s administration used investigations to impose tariffs on steel and aluminum imports and launch duties on some $370 billion worth of Chinese imports, igniting a tit-for-tat tariff war between the world’s two largest economies.

The U.S. and China ended the conflict in 2020 with a deal for Beijing to boost its purchases of U.S. exports from farm goods to aircraft by $200 billion annually but never followed through as the pandemic hit. The forthcoming memo indicates that Trump’s administration will try to push China to keep those commitments.

Trump also had threatened to quit the 1994 North American Free Trade Agreement, blaming it for draining U.S. manufacturing jobs to Mexico and prompting a renegotiation of the trade pact with tighter rules of origin for autos and stronger labor and environmental standards.

Trump won a sunset provision in USMCA that will allow him to renegotiate it again in 2026, and the tariff threats against Mexico and Canada are seen by some trade analysts as a gambit to open those talks early. 
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BEIJING — China recorded one of its slowest rates of economic growth in decades last year, data showed Friday, as leaders nervously eye a potential trade standoff with incoming U.S. President-elect Donald Trump.

Beijing has in recent months announced its most aggressive support measures in years in a bid to reignite an economy that has suffered on multiple fronts, including a prolonged property market debt crisis and sluggish consumer spending.

But the economy grew 5% last year, official data from Beijing’s National Bureau of Statistics (NBS) showed Friday, slightly above the 4.9% forecast in an AFP survey of analysts.

Still, the figure was lower than the 5.2% recorded in 2023.

The growth took place in the face of a “complicated and severe environment with increasing external pressures and internal difficulties,” the NBS said.

The economy was still facing “difficulties and challenges,” officials admitted.

Retail sales, a key gauge of consumer sentiment, rose 3.5% — a major slump from the 7.2% growth seen in 2023 — though industrial output increased 5.8%, from 4.6% the previous year.

However, the 5.4% jump in economic growth seen in the final four months far outpaced the 5% forecast in a Bloomberg survey and was much better than the same period in 2023.

The data provided “mixed messages,” Zhiwei Zhang, president of Pinpoint Asset Management, said.

Beijing’s recent policy shift had “helped the economy to stabilize in (the fourth quarter), but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery,” he said.

Zichun Huang, China economist at Capital Economics, said she expected growth to “continue accelerating in the coming months.”

“The government’s property support measures seem to be providing some relief, with the pace of house price falls slowing and new home sales showing some recovery,” she said.

Trouble ahead?

The GDP growth rate is the lowest recorded by China since 1990, excluding the financially tumultuous years of the COVID-19 pandemic.

And the analysts surveyed by AFP estimated growth could fall to just 4.4% in 2025, and even drop below 4% the following year.

China has so far failed to rebound from the pandemic, with domestic spending mired in a slump and indebted local governments dragging on growth.

In a rare bright spot, official data showed earlier this week that exports reached a historic high last year.

But gathering storm clouds over the country’s massive trade surplus mean Beijing may not be able to count on overseas shipments to boost an otherwise lackluster economy.

Trump, who will begin his second term next week, has promised to unleash heavy sanctions on China.

“We still expect growth to slow for 2025 as a whole, with Trump likely to follow through on his tariff threats soon and persistent structural imbalances still weighing on the economy,” Huang said.

Beijing has introduced a series of measures in recent months to bolster the economy, including cutting key interest rates, easing local government debt and expanding subsidy programs for household goods.

Confidence ‘crisis’

Observers were closely watching Friday’s data release for signs those measures succeeded in reviving activity.

“With a package of incremental policies being timely rolled out … social confidence was effectively bolstered and the economy recovered remarkably,” the NBS said.

China’s central bank has indicated in recent weeks that 2025 will see it implement further rate cuts, part of a key shift characterized by a “moderately loose” monetary policy stance.

But analysts warn more efforts are needed to boost domestic consumption as the outlook for Chinese exports becomes more uncertain.

“Monetary policy support alone is unlikely to right the economy,” Harry Murphy Cruise of Moody’s Analytics told AFP.

“China is suffering from a crisis of confidence, not one of credit; families and firms do not have the confidence in the economy to warrant borrowing, regardless of how cheap it is to do so,” he wrote.

“To that end, fiscal supports are needed to grease the economy’s wheels.”

One component of Beijing’s newest policy toolbox is a subsidy scheme — now expanded to include more household items including rice cookers and microwave ovens — that it hopes will encourage spending.

But recent data shows that government efforts have not yet achieved a full rebound in consumer activity.

China narrowly avoided a slip into deflation in December, statistics authorities said last week, with prices rising at their slowest pace in nine months.

China emerged from a four-month period of deflation in February, a month after suffering the sharpest fall in prices for 14 years.

Deflation can pose a threat to the broader economy as consumers tend to postpone purchases under such conditions, hoping for further reductions. 
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ISLAMABAD — Pakistan confirmed on Wednesday that the World Bank has pledged to lend $20 billion over the next decade, commencing in 2026 under its Country Partnership Framework, to help address the impoverished country’s acute development challenges.

Prime Minister Shehbaz Sharif applauded what he described as the lender’s “first-ever” pledge of its kind, saying the program is intended to develop child nutrition, education, clean energy and climate resilience to boost private sector growth.

The Country Partnership Framework “reflects the World Bank’s confidence in Pakistan’s economic resilience and potential,” Sharif said on the social media platform X. “We look forward to strengthening our partnership as we align our efforts for creating lasting opportunities for our people.”

The cash-strapped South Asian nation has been struggling to tackle serious economic challenges for several years and is currently relying on a $7 billion bailout loan program from the International Monetary Fund. Persistent political instability in Pakistan, rising militant attacks, and devastating flooding in 2022 have further strained the troubled economy.

“Our new decadelong partnership framework for Pakistan represents a long-term anchor for our joint commitment with the government to address some of the most acute development challenges facing the country,” said World Bank Country Director Najy Benhassine.

The U.S.-based lender stated that the country’s annual commitments under the partnership “are expected to remain in the $1.5 billion to $2 billion range” from 2026 onward. It added that the loans will depend on available funding and the fulfillment of project requirements.

“The pace of economic growth and structural transformation has been long stunted by distortive policies that benefit only a few, who have historically coalesced to oppose growth-oriented reforms as well as increases in progressive public spending in human capital and basic services for the poorest,” the World Bank partnership documented stated.

It added that Pakistan must change its current development model to reduce poverty and achieve shared prosperity on a livable planet.

“We are focused on prioritizing investment and advisory interventions that will help crowd in much-needed private investment in sectors critical for Pakistan’s sustainable growth and job creation,” said Zeeshan Sheikh, International Finance Corporation country manager for Pakistan and Afghanistan.

The ouster of Prime Minister Imran Khan from power in 2022 and his subsequent imprisonment over contested corruption charges have plunged Pakistan into a political crisis that experts say is hampering government attempts to attract domestic and foreign investments.

The World Bank’s document highlights that the South Asian nation, home to over 240 million people, ranks among the top 10 countries most affected by climate change and natural disasters worldwide.

It noted that climate change will increasingly strain livelihoods, food security, productivity, and growth caused by rising extreme heat, air pollution, and altered water availability and precipitation.

“These risks can significantly compromise development in an already fiscally constrained environment and make sustained progress in poverty reduction and human development even more challenging than it is today,” the World Bank stated.
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Washington — President-elect Donald Trump on Tuesday announced plans to create a new agency called the External Revenue Service to collect tariffs and other revenues from foreign nations.

“We will begin charging those that make money off of us with Trade, and they will start paying,” Trump said Tuesday on his social media site, Truth Social. He compared his planned creation to the Internal Revenue Service, which is the nation’s domestic tax collector.

The creation of a new agency requires an act of Congress, and Republicans hold the majority of both the House and the Senate.

Trump, who has vowed to shrink the size of government, would be creating a new agency to perform functions already handled by existing agencies, including the Commerce Department and the Customs and Border Patrol, which collect duties and revenues from other nations.

The president-elect has tapped two business titans to lead his Department of Government Efficiency, or DOGE, a nongovernmental task force assigned to find ways to fire federal workers, cut programs and slash federal regulations, all part of what he calls his “Save America” agenda for a second term in the White House.

Billionaire Elon Musk and fellow entrepreneur Vivek Ramaswamy are leading the DOGE’s ambitious efforts to reduce the size and scope of the federal government.

Tariffs, with the threat of a potential 25% levy on all goods from allies like Canada and Mexico and 60% on goods from China, have become a benchmark of Trump’s economic agenda as he heads into his second term.

Economists have said the cost of the tariffs will be passed on to consumers, and are generally skeptical of them, considering them a mostly inefficient way for governments to raise money and promote prosperity.

Democratic lawmakers were quick to criticize the External Revenue Service plan.

“No amount of silly rebranding will hide the fact that Trump is planning a multi-trillion-dollar tax hike on American families and small businesses to pay for another round of tax handouts to the rich,” Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said in a statement.
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— U.S. President Joe Biden issued an executive order Tuesday directing the development of artificial intelligence data centers on six federal land sites, with a special focus on powering them with clean energy and upholding high labor standards. 

Biden said in a statement that the United States is the world leader in AI, but cannot take that lead for granted. 

“We will not let America be out-built when it comes to the technology that will define the future, nor should we sacrifice critical environmental standards and our shared efforts to protect clean air and clean water,” Biden said. 

The order calls for the Department of Defense and Department of Energy to each identify three suitable sites where private companies will lease the land, pay for the construction and operation of the data centers and ensure the supply of enough clean energy to fully power the sites. 

The developers will also have to buy “an appropriate share” of semiconductors produced in the United States to help ensure there is a “robust domestic semiconductor supply chain,” the White House said. 

In addition to identifying the sites, the federal government will also commit under the order to expedite the permitting process for the data center construction. 

Senior administration officials, in a phone call with journalists previewing the order, highlighted the national security need for the United States to have its own powerful AI infrastructure, both to protect it for its own use but also to prevent adversaries such as China from possessing those capabilities. 

“From the national security standpoint, it’s really critical to find a pathway for building the data centers and power infrastructure to support frontier AI operations here in the United States to ensure that the most powerful AI models continue to be trained and stored securely here in the United States,” an official said. 

A senior administration official cited the priority of making sure the AI industry had an anchor in the United States to avoid repeating the history of other technologies that moved offshore to areas with lower labor and environmental standards as well. 

AI chip restrictions 

Tuesday’s order comes a day after the Biden administration announced new restrictions on the export of the most advanced artificial intelligence chips and proprietary parameters used to govern the interactions of users with AI systems.    

The rule, which will undergo a 120-day period for public comments, comes in response to what administration officials described as a need to protect national security while also clarifying the rules under which companies in trusted partner countries could access the emerging technology in order to promote innovation.   

“Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, health care and economic benefits,” Commerce Secretary Gina Raimondo told reporters. “That being said, as AI becomes more powerful, the risks to our national security become even more intense.”   

A senior administration official said the new rule will not include any restrictions on chip sales to Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, the United Kingdom or the United States.   

The rules build on 2023 curbs limiting the export of certain AI chips to China, a strategic competitor in the production of advanced semiconductors. Beijing attacked the new U.S. AI edict as a “flagrant violation” of international trade rules.  

China’s Ministry of Commerce said the Biden administration announcement “is another example of the generalization of the concept of national security and the abuse of export control, and a flagrant violation of international multilateral economic and trade rules.”  

Beijing said it would “take necessary measures to firmly safeguard its legitimate rights and interests.” 

Countries that are under U.S. arms embargoes are already subject to export restrictions on advanced AI chips, but a senior administration official said they will now be under restrictions for the transfer of the most powerful closed weight AI models.    

The weights in an AI model determine how it processes the inputs from a user and determines what to provide the user as a response, according to the National Telecommunications and Information Administration. In a closed weight system, those parameters are secret, unlike with an open weight system in which users could see the settings the model is using to make its decisions.    

Most countries — those not included in the closed partner or arms embargo lists — will not face licensing requirements for obtaining the equivalent of 1,700 of the most advanced AI chips currently available, nor for any less advanced chips.   

Companies in the United States and allied countries will not face restrictions in using the most powerful closed weight AI systems, provided they are stored under adequate security, a senior administration official said. 

 
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A new industry report released Monday shows China made big strides last year toward an EV-driven future, as domestic sales of all types of electric vehicles rose by 40% in 2024. Sales of gasoline powered cars tumbled, including foreign imports.

In 2024, a total of 31.4 million total vehicles were sold in the world’s largest automobile market by sales, according to the China Association of Automobile Manufacturers. That marked a 4.5% rise compared with the previous year.

Despite the uptick in sales, foreign automobile importers are increasingly finding it hard to compete with local brands in China who have been offering a wide variety of affordable EVs and intensified market competition.

One example is German luxury car maker Porsche, who closed several of its physical stores in China in 2024. Porsche sales in China were down 29% year on year which marked the third consecutive year of decline.

In addition to Porsche, luxury carmakers BMW, Mercedes, and Audi each saw a drop in their vehicle sales in China in 2024 with BMW sales falling 13.4%, Mercedes sales by 7%, and Audi sales by 11%. 

Tai Chih-yen, an associate researcher at the Chung-Hua Institution for Economic Research in Taipei told VOA’s Mandarin service that a sense of patriotism and support for national brands has created additional pressures that have contributed to the struggles international automakers are facing. 

“Higher-end consumers have started to abandon foreign brands and are turning to comparatively better priced high-end domestic cars,” Tai told VOA. “This is not a so-called consumption downgrade, but more a reflection of the current situation, where many are choosing to be more discreet [in the kinds of cars they drive] and show their patriotism by driving domestic luxury brands.”

The industry report also noted that sales of traditional gasoline and diesel-powered vehicles in China sank 17% in 2024, from 14 million to 11.6 million, a slide that coincides with Beijing’s focus on transitioning to electric vehicles.

At the same time, Chinese vehicle exports were up 19.3% in 2024, according to the report. However, export growth is expected to cool with the report estimating only a 5.8% increase in 2025.

China faced a backlash in 2024 as it moved to expand EV sales overseas, with the U.S., Canada and EU unveiling steep tariffs to stop a flood of cheap electric vehicles into their markets. The U.S., Canada and EU have raised concerns about subsidies that the Chinese government provides EV makers that allows them to sell their cars for lower prices.

They have also voiced concerned that China has too much production of EVs and that cars are being dumped into foreign markets, allegations that Beijing has repeatedly denied. 

China argues that its EV subsidies are similar to those of other countries and that sales of electric vehicles help with climate change. China has filed a complaint at the World Trade Organization over the EU’s tariff decision.

Michael Baturin and VOA Mandarin Service reporter Nai-chuan Lin contributed to this report. Some information came from Reuters. 
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— The Biden administration announced Monday new restrictions on the export of the most advanced artificial intelligence chips and proprietary parameters used to govern the interactions of users with AI systems.

The rule, which will undergo a 120-day period for public comments, comes in response to what administration officials described as a need to protect national security while also clarifying the rules under which companies in trusted partner countries could access the emerging technology in order to promote innovation.

“Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, healthcare and economic benefits,” Commerce Secretary Gina Raimondo told reporters. “That being said, as AI becomes more powerful, the risks to our national security become even more intense.”

A senior administration official said the new rule will not include any restrictions on chip sales to Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, United Kingdom or the United States.

Countries that are under U.S. arms embargoes are already subject to export restrictions on advanced AI chips, but a senior administration official said they will now be under restrictions for the transfer of the most powerful closed weight AI models.

The weights in an AI model determine how it processes the inputs from a user and determines what to provide the user as a response, according to the National Telecommunications and Information Administration. In a closed weight system, those parameters are secret, unlike with an open weight system in which users could see the settings the model is using to make its decisions.

The majority of countries — those not included in the close partner or arms embargo lists — will not face licensing requirements for obtaining the equivalent of 1,700 of the most advanced AI chips currently available, nor for any less advanced chips.

Companies in the United States and allied countries will not face restrictions in using the most powerful closed weight AI systems, provided they are stored under adequate security, a senior administration official said.

“I think the key point I would underscore is that we identified really some of the closest security allies of the United States that have effectively implemented and have a well-documented record of upholding a robust AI technology protection regime, and generally have technology ecosystems that promote the use of AI and other advanced technologies consistent with our national security and foreign policy interests,” a senior administration official said.
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Ethiopia relaunched its stock exchange, the Ethiopian Securities Exchange, on Friday after a 50-year absence.

The operations of the Ethiopia Securities Exchange were stopped in 1974 following the takeover by a communist military government.

Prime Minister Abiy Ahmed described the relaunch as an “historic milestone” for Ethiopia’s economic and financial landscape.

“We have officially rung the bell to launch the Ethiopian Securities Exchange — the first stock exchange for our country. Invest in Ethiopia — a fast-growing economy with immense potential and a dynamic trajectory toward prosperity,” he posted on X.

The launch of the stock exchange means the government initiated a domestic stock market, starting with the state-owned Ethio Telecom, which is yet to commence an initial public offering of shares despite announcing the move in October.

Ethiopian officials announced Friday that Wegagen Bank, a private bank, was the first company to list on the exchange.

Ethiopian Insurance Corporation, Ethiopian Shipping and Logistics Services Enterprise, and Berhanena Selam Printing joined Ethiopia Telecom as founding members of the exchange, although they are not yet listed.

The list of investors also included foreign strategic investors, along with 16 domestic private commercial banks, 12 private insurance companies, and 17 other private domestic investors, according to a newsletter distributed during the event.

Based on the shareholding structure of the Ethiopian Securities Exchange, 75% of it is allocated to private investors and 25% is capped for public shareholding. This means the share company is a private-government partnership.

Abiy assured investors that all the necessary preparations had been made. Speaking in Amharic, Abiy said the government did extensive research, passed legislation and built more institutions and human capital over the past 2½ to “avoid failure.”

He also praised the country’s economy.

“Ethiopian economy means an economy that operates the biggest airline in Africa. Ethiopian economy means an economy that operates the largest telecom operator in Africa. Ethiopian economy means an economy that built the largest hydroelectric power plant in Africa,” he said touting Africa’s largest airline and the Grand Renaissance Dam, which is considered the biggest project of its type on the continent.

In July 2021, the Parliament established the Ethiopian Capital Market Authority and tasked it with ensuring the existence of an environment in which securities could be issued and traded in an “orderly, fair, efficient and transparent manner.”

Ethiopia’s economy heavily relies on agriculture, with coffee, oilseed, flowers and gold being the main export items. Last year, the government introduced financial reforms that included floating the Ethiopian currency, a move backed by international financial institutions.

But the market-based currency policy increased inflation and led to skyrocketing prices for imported food and fuel.

This week, the government announced an increase in the price of benzene from 73 cents to 82 cents per liter. Similarly, the price of white diesel jumped from 72 cents to 78 cents per liter, with corresponding increases applied to other fuel types, a move residents said will worsen the cost of living and transportation challenges.

Ethiopian economist and the executive director of Initiative Africa Kibur Gena said the Ethiopian stock exchange should align with the broader development goals of the country.

Ethiopia’s government “should approach the establishment of a stock exchange gradually and strategically,” he told VOA.

He argued that the government should also build strong institutions and a regulatory framework “so that it can attract foreign direct investment.”

The relaunch also comes at a time when the country is facing security challenges in the Amhara and Oromia regions.

Kibur said to attract foreign investors, there needs to be peace throughout the country.

“I suppose this government will sort of realize that if it wants to achieve its objectives, it will certainly address the peace issues,” he said.
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WASHINGTON — U.S. hiring picked up unexpectedly in December as employers added a strong 256,000 jobs, another sign of the economy’s resilience in the face of high interest rates. 

Job growth rose 212,000 last month from November, the Labor Department reported Friday. 

For all of 2024, the economy added 2.2 million jobs, a solid number but down from 3 million in 2023, 4.5 million in 2022 and a record 6.4 million in 2021 as the economy bounded back from massive pandemic layoffs. 

The monthly numbers beat forecasters’ expectations of around 155,000 new jobs and 4.2% unemployment. Health care companies added 46,000 jobs, retailers 43,000 and government agencies at the federal, state and local 33,000. But manufacturers cut 13,000 jobs. 

Labor Department revisions shaved 8,000 jobs from October and November payrolls. 

Average hourly wages rose 0.3% from November and 3.9% from a year earlier. The year-over-year wage gain was slightly less than economists had forecast. 

Stocks fell Friday morning on the expectations that the strong jobs report will make the Federal Reserve less likely to cut interest rates. The economy doesn’t seem to need help. “It seems pretty certain that the pace of Fed rate cuts is now going to slow down,” said Brian Coulton, chief economist at Fitch Ratings. 

Getting a clear view of the U.S. job market hasn’t been easy over the past few months. 

Hurricanes and a big strike at Boeing threw off the October jobs numbers, pushing them down and setting up a payback rebound in November that likely exaggerated the strength of hiring. 

Thomas Simons, chief U.S. economist at Jefferies, said that seasonal adjustments around the holidays may have affected the December numbers, but he added that nonetheless “it is hard to say anything negative about the details of this report.” 

Over the past few years, the economy and the job market have shown surprising resilience. Responding to inflation that hit a four-decade high two and a half years ago, the Fed raised its benchmark interest rate — the fed funds rate — 11 times in 2022 and 2023, taking it to the highest level in more than two decades. 

The higher borrowing costs were widely expected to cause a recession but didn’t. Companies kept hiring, consumers kept spending, and the economy kept rolling along. In fact, U.S. gross domestic product — the nation’s output of goods and services — has expanded at a robust annual pace of 3% or more in four of the last five quarters. 

Layoffs are running below the pre-pandemic trend. On Thursday, the Labor Department reported that 211,000 people applied for unemployment benefits last week, the fewest in nearly a year. 

Inflation has come down, too, from a peak of 9.1% in June 2022 to 2.7% in November. The drop in year-over-year price increases gave the Fed enough confidence to cut rates three times in the last four months of 2024. 

But Fed officials signaled at their December meeting that they planned to be more cautious about rate cuts this year. They now project just two rate reductions in 2025, down from the four they envisioned back in September. Progress against inflation has stalled in recent months, and it remains stuck above the Fed’s 2% target.
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London — Britain’s Treasury chief is travelling to China this weekend to discuss economic and financial cooperation between the countries, as the U.K.’s Labour government seeks to reset strained ties with Beijing.

The Treasury said Friday that Rachel Reeves will travel to Beijing and Shanghai and will meet with her Chinese government counterpart, Vice Premier He Lifeng.

Reeves’ trip is expected to revive the China-U.K. Economic and Financial Dialogue — annual bilateral talks that have been suspended since 2019 due to the COVID-19 pandemic and deteriorating relations in recent years.

A series of spying allegations from both sides, China’s support for Russia in the Ukraine war and a crackdown on civil liberties in Hong Kong, a former British colony, have soured ties.

Bank of England Governor Andrew Bailey and the U.K. Financial Conduct Authority’s chief executive, Nikhil Rathi, are also in the delegation, according to the Treasury. Representatives from some of Britain’s biggest financial services firms will join the trip.

Officials did not provide details, but media reports have said senior executives from HSBC Holdings and Standard Chartered were included.

Reeves’ visit comes after Foreign Secretary David Lammy travelled to China in October and Prime Minister Keir Starmer met with Chinese President Xi Jinping on the sidelines of the G20 summit in Brazil in November.

The meetings form part of a bid by Starmer, who was elected as leader in July, to strengthen political and economic ties with China, the U.K.’s fifth-largest trading partner.

Officials said Starmer wanted a “pragmatic” approach to working with Beijing on global stability, climate change and the transition to clean energy.

But some in the opposition Conservative Party have criticized his stance and said trade ties should not come at the expense of national security and human rights concerns.

British political leaders and intelligence chiefs have warned repeatedly of the security threats that China poses. Calls to tackle the challenge grew louder last month when it emerged that an alleged Chinese spy had cultivated close ties with Prince Andrew and carried out “covert and deceptive activity” for China’s ruling Communist Party, according to officials.

Nevertheless, Lammy told reporters in London on Thursday that “there are many areas of trade that don’t impact on national security.”

He said Reeves “will repeat many of the messages that I took to China.”

“What we’ve said is in this complex relationship with a global superpower, we are guided by three Cs”: challenge, compete and cooperate, for example in areas including health and climate challenges, Lammy added.
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Beijing — China said Thursday that an investigation had found the European Union imposed unfair “trade and investment barriers” on Beijing, marking the latest salvo in long-running commercial tensions between the two economic powers. 

Officials announced the probe in July after Brussels began looking into whether Chinese government subsidies were undermining European competition. 

Beijing has consistently denied its industrial policies are unfair and has threatened to take action against the EU to protect Chinese companies’ legal rights and interests. 

The commerce ministry said Thursday that the implementation of the EU’s Foreign Subsidies Regulation (FSR) discriminated against Chinese firms and “constitutes trade and investment barriers.” 

However, it did not mention whether Beijing planned to take action in response. 

The two are major trade partners but are locked in a wide-ranging standoff, notably over Beijing’s support for its renewables and electric-vehicle sectors. 

EU actions against Chinese firms have come as the 27-nation bloc seeks to expand renewable energy use to meet its target of net-zero greenhouse gas emissions by 2050. 

But Brussels also wants to pivot away from what it views as an overreliance on Chinese technology at a time when many Western governments increasingly consider Beijing a potential national security threat. 

When announcing the probe, the ministry said its national chamber of commerce for importing and exporting machinery and electronics had filed a complaint over the FSR measures. 

The 20-page document detailing the ministry’s conclusions said their “selective enforcement” resulted in “Chinese products being treated more unfavorably during the process of export to the EU than products from third countries.” 

It added that the FSR had “vague” criteria for investigating foreign subsidies, placed a “severe burden” on the targeted companies and had opaque procedures that created “huge uncertainty.” 

EU measures such as surprise inspections “clearly exceeded the necessary limits,” while investigators were “subjective and arbitrary” on issues like market distortion, according to the ministry. 

Companies deemed not to have complied with probes also faced “severe penalties,” which placed “huge pressure” on Chinese firms, it said. 

The European Commission on Thursday defended the FSR, saying it was “fully compliant with all applicable EU and World Trade Organization rules.” 

“All companies, regardless of their seat or nationality, are subject to the rules,” a commission spokesperson said in a statement. 

“This is also the case when applying State aid or antitrust rules.”   

Projects curtailed 

The Chinese commerce ministry said FSR investigations had forced Chinese companies to abandon or curtail projects, causing losses of more than $2.05 billion. 

The measures had “damaged the competitiveness of Chinese enterprises and products in the EU market,” it said, adding that they also hindered the development of European national economies and undermined trade cooperation between Beijing and Brussels. 

The EU’s first probe under the FSR in February targeted a subsidiary of Chinese rail giant CRRC, but closed after the company withdrew from a tender in Bulgaria to supply electric trains. 

A second probe targets Chinese-owned solar panel manufacturers seeking to build and operate a photovoltaic park in Romania, partly financed by European funds. 

In October, Brussels imposed extra tariffs on Chinese-made electric cars after an anti-subsidy investigation under a different set of rules concluded Beijing’s state support was unfairly undercutting European automakers. 

Beijing in response announced provisional tariffs on brandy imported from the EU, and later imposed “temporary anti-dumping measures” on the liquor. 

Last month, China said it would extend the brandy investigation, citing the case’s “complexity.” 

Separately, a report by the European Union Chamber of Commerce in China warned that firms were being forced to drastically localize their operations to suit China’s regulations, driving up costs and reducing efficiency. 

Heightened trade tensions and Beijing’s “self-reliance policies” were causing many multinationals “to separate certain China-based functions, or even entire operations, from those in the rest of the world,” it said. 

It added that governance rules increasingly dominated by national security concerns had heightened uncertainties for local entities in engaging with European clients. 

Some customers are therefore choosing to “err on the side of caution and not take a risk by buying from a foreign service provider,” Chamber head Jens Eskelund said at a media event on Thursday.           
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WASHINGTON/TOKYO — U.S. President Joe Biden’s decision to block Nippon Steel’s $14.9 billion bid for U.S. Steel cast a shadow over Secretary of State Antony Blinken’s visit to Japan on Tuesday for farewell meetings with Washington’s most important ally in Asia.

The rejection, announced on Friday, has jolted U.S. efforts to boost ties with Asian allies just as South Korea’s political crisis potentially complicates a revived relationship between Washington, Seoul and Tokyo. The trilateral alliance is a key plank in the countries’ efforts to counter China’s military buildup.

Investment into the U.S. could also be chilled, but analysts say any damage to the wider U.S.-Japan relationship will likely be limited given shared security concerns about China.

On Monday, Japanese Prime Minister Shigeru Ishiba described Biden’s decision to block the sale of U.S. Steel to Nippon Steel as “perplexing.”

Accompanied by White House National Security Adviser Jake Sullivan, Blinken met Japan’s Foreign Minister Takeshi Iwaya in Tokyo and will hold talks later in the day with Ishiba and other senior Japanese officials

Numerous trips to Japan over the last four years “is evidence, not just of the importance, but of the centrality the United States attaches to our partnership. President Biden asked me to come on this last trip to underscore that,” Blinken told Iwaya.

“We have, between our two countries, a partnership that started out focusing on bilateral issues, that worked on regional issues and that now is genuinely global,” he added.

Ahead of his trip, the State Department said that Blinken wanted to build on the momentum of U.S.-Japan-South Korea trilateral cooperation.

In Seoul on Monday, Blinken reaffirmed confidence in South Korea’s handling of its political turmoil as investigators there sought an extension of a warrant to arrest impeached President Yoon Suk Yeol.

Allies of U.S. President-elect Donald Trump have also reassured Seoul and Tokyo that he will support continuing to improve ties and advance military, economic and diplomatic cooperation to counter China and North Korea, Reuters reported ahead of Trump’s Nov. 5 re-election.

Tension, limited damage from Nippon Steel decision

Nippon Steel and U.S. Steel filed a lawsuit on Monday charging that Biden violated the U.S. Constitution by blocking their $14.9 billion merger through what they termed a sham national security review. They called for the U.S. federal court to overturn the decision.

Nicholas Szechenyi, a Japan expert at Washington’s Center for Strategic and International Studies, said Biden’s decision would make Blinken’s Tokyo visit “awkward.”
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DETROIT — U.S. new car sales in 2024 continued to rise from their pandemic lows, bolstered by replenished inventories, higher incentives and surging demand for hybrid vehicles, automakers reported on Friday.

Sales of new vehicles finished at 15.9 million last year, according to Wards Intelligence, up 2.2% from the prior year, and the highest since 2019. Automakers are projecting strong sales will continue into 2025, although President-elect Donald Trump’s proposed automotive policies, such as removing tax credits for EVs, present a wild card.

“We’re carrying significant momentum into 2025,” Rory Harvey, GM’s head of global markets, said in a release. The Detroit automaker defended its 2023 crown as the biggest U.S. carmaker by sales, selling 2.7 million vehicles last year, the company said on Friday, up 4.3% from 2023.

Most automakers recorded solid sales results last year, as they adjusted to slowing demand for EVs and relied on their core business of gasoline-powered trucks and SUVs. Others capitalized on soaring consumer interest in hybrid vehicles.

Sales of traditional hybrids increased 36.7% in 2024 compared with the previous year, Wards reported.

‘Hybrids, we’re sold out’

Toyota notched a 3.7% sales gain year-over-year in the U.S., boosted by steady increases of reliable smaller vehicles such as the Camry and RAV4 SUV, as well as significant gains for hybrid vehicles. Reuters reported last year that the automaker is potentially converting all of its lineup into hybrid-only models.

“For hybrids, we’re sold out — customers want them. We can’t get enough of them,” said David Christ, head of sales and marketing for Toyota in North America. “Battery electric vehicles, even with the huge incentives we’re spending and the federal government’s incentives, are just not as in demand.”

Ford Motor also benefited from an increase in hybrid sales, which helped the automaker’s total vehicle sales rise 4.2% in 2024. The Dearborn, Michigan, company’s total hybrid sales roughly doubled that of its EVs, with 187,426 hybrids sold and 97,865 EVs.

Automakers have axed or changed lofty EV plans laid out when demand seemed much stronger than it turned out to be, but they are still aiming to attract new EV buyers.

Ford said on Friday that to support EV sales, which were up 34.8% for the automaker in 2024, it would extend a program where EV buyers receive free chargers and installation at home through the end of March.

U.S. sales of electric vehicles are expected to approach 1.3 million, or about 8% of all new vehicles purchased, Cox Automotive said. Buyers’ willingness to go electric crept up slightly from 2023, when U.S. drivers bought 1.2 million EVs, making up 7.6% of all sales, Cox said.

The Trump administration’s plans would likely affect auto sales in 2025 and beyond if the incoming president makes good on plans to roll back President Joe Biden’s EV policies, including a $7,500 consumer tax credit on some EVs, as well as increase tariffs on imports from Mexico and Canada.

“If you take true demand for the car and you eliminate the $7,500 benefit … it’s really going to change who wants them and how they buy them. So we’re preparing for that,” Toyota’s Christ said.
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A year after a panel blew out of a Boeing 737 Max during flight, the nation’s top aviation regulator says the company needs “a fundamental cultural shift” to put safety and quality above profits.

Mike Whitaker, chief of the Federal Aviation Administration, said in an online post Friday that his agency also has more work to do in its oversight of Boeing.

Whitaker, who plans to step down in two weeks to let President-elect Donald Trump pick his own FAA administrator, looked back on his decision last January to ground all 737 Max jets with similar panels, called door plugs. Later, the FAA put more inspectors in Boeing factories, limited production of new 737s and required Boeing to come up with a plan to fix manufacturing problems.

“Boeing is working to make progress executing its comprehensive plan in the areas of safety, quality improvement and effective employee engagement and training,” Whitaker said. “But this is not a one-year project. What’s needed is a fundamental cultural shift at Boeing that’s oriented around safety and quality above profits. That will require sustained effort and commitment from Boeing, and unwavering scrutiny on our part.”

Boeing on Friday issued an update on steps it has taken to improve safety and quality, including addressing concerns raised by employees and reinforcing their confidentiality protection.

Boeing, which couldn’t build new 737s during a seven-week strike by machinists last fall, said it has strengthened training for mechanics and quality inspectors. The company said it updated a system to display the names of employees who perform metal-stamping work.

The company also said it has “significantly reduced defects” in 737 fuselages built by Spirit AeroSystems, but it declined to provide numbers. Spirit is a key supplier that Boeing is in the process of buying for $4.7 billion.

The National Transportation Safety Board continues to investigate the door-plug blowout on an Alaska Airlines Max jet. Despite a gaping hole in the side, pilots landed the plane safely in Portland, Oregon, and no serious injuries were reported.

A month after the accident, investigators said in a preliminary report that bolts used to help secure the panel were not replaced after work in a Boeing factory.

Whitaker said the FAA would review any recommendations that the safety board makes to improve FAA’s oversight work. Last summer, he admitted that the FAA’s scrutiny of Boeing wasn’t good enough.
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Washington — President Joe Biden has made good on his months of public opposition to the proposed purchase of American company U.S. Steel by Japan’s Nippon Steel, announcing Friday he is blocking the $14.9 billion takeover.  

The acquisition would “place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” he said in a statement. He did not elaborate on how the deal would jeopardize national security.

The collapse of the proposed acquisition represents a victory for workers of the company based in Pittsburgh, Pennsylvania, an electorally crucial swing state. In March, the powerful United Steelworkers union endorsed Biden, who at that time was still running for reelection in the November election. 

“This was clearly a political decision that President Biden had been chewing over for a long time. He is determined to demonstrate that he’s going to protect American workers, and particularly in the steel sector,” said Matthew Goodman, director of the RealEcon Initiative at the Council on Foreign Relations. 

“It is an important sector, and it is subject to unfair trade practices, but it’s hard to really understand the national security logic of blocking this transaction,” he told VOA. 

Federal law gives the president power to block a transaction based on the recommendation of the Committee on Foreign Investment in the United States, chaired by Treasury Secretary Janet Yellen and made up of other Cabinet members. Last month, CFIUS failed to reach consensus on the possible national security risks of the deal. 

Biden made the announcement in his remaining days in office, despite some analysts and advisers warning that his rejection of the deal could damage relations with Japan, a key U.S. ally and trade partner. Especially with a looming trade war under the incoming Trump administration who has vowed to slap high tariffs on trading partners. 

“We need allies especially in the war — a potential war against China,” said John Ferrari, nonresident senior fellow at the American Enterprise Institute.  

“Japan is a staunch ally in the Pacific. They have prowess in ship building and in manufacturing, and so we need them,” Ferrari told VOA. “Allowing them to invest in the United States would make us stronger.” 

President-elect Donald Trump, who is set to come to power on Jan. 20, also opposes the acquisition. In a November social media post, he vowed to block the deal and to use tax incentives and tariffs to grow U.S. Steel. 

Both Nippon Steel and U.S. Steel have vowed to pursue legal action, citing that the U.S. government failed to follow proper procedures in considering the acquisition. 

“The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision,” the companies said in a statement. “Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights.” 

The announcement followed other protectionist moves by the administration. Last year, Biden tripled tariffs on steel imports from China. 

“For too long, U.S. steel companies have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, leading to job losses and factory closures in America,” the president said in his statement Friday. 
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Tesla reported its first fall in yearly deliveries on Thursday as lucrative year-end incentives for the Elon Musk-led EV maker’s aging line up and the new Cybertruck pickup failed to lure customers wary of high borrowing costs. 

Shares of the company fell about 6%. Musk had earlier predicted “slight growth” in 2024 deliveries and offered a range of promotions, including interest-free financing and free fast-charging, to boost sales. 

But reduced European subsidies, a shift in the United States toward lower-priced hybrid vehicles and tougher competition, especially from China’s BYD, hurt Tesla. 

Analysts at Morgan Stanley said Tesla’s aging models and the higher availability of cheaper alternatives overshadowed the company’s increased promotional activities. 

Amid the slowdown in demand for EVs, Musk has pivoted his focus to building a self-driving taxi business that is expected to boost Tesla’s value.

He also backed President-elect Donald Trump with millions of dollars in campaign donations, and analysts expect easier regulations from the new administration to help Tesla in the long run. 

But with self-driving technology still under development and years away from commercialization, analysts have said Tesla would have to rely on its promised cheaper versions of current cars and the success of the Cybertruck to achieve Musk’s target of 20% to 30% sales growth in 2025.  

The truck, known for its futuristic design, has been showing signs of weakness in demand.  

Deliveries for 2024 totaled 1.79 million, 1.1% lower than a year ago and below estimates of 1.806 million units, according to 19 analysts polled by LSEG. 

Tesla’s 2024 deliveries were ahead of rival BYD, which reported a 12.1% rise in sales of battery-electric vehicles to 1.76 million in 2023, thanks to competitive prices and a stronger push into Asian and European markets. 

Tesla shares are coming off a strong 2024, in which they rose more than 60% after the election of Trump with strong support from Musk.  

Musk has said he plans to leverage his promised role as a government-efficiency czar under the Trump administration to advocate for a federal approval process for autonomous vehicles to replace the current state-specific laws, which he described as “incredibly painful” to navigate. 

Tesla’s Autopilot and “Full Self-Driving” technologies, which are not yet fully autonomous, have been under scrutiny due to lawsuits, a U.S. traffic safety regulator probe and a Department of Justice criminal investigation. 

The key concern is whether Tesla may have overstated the self-driving abilities of its vehicles. 

Tesla is also under pressure from legacy automakers. Its October registrations in Europe fell 24% because of a tight race with Volkswagen Group, whose Skoda Enyaq SUV dethroned Tesla’s Model Y as the best-selling EV in the region, according to data research firm JATO Dynamics. 

Trump’s team is considering ending the $7,500 tax credit for consumer EV purchases, a move that could worsen the slowing shift to EVs in the U.S., Reuters reported in November. 
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NEW YORK — U.S. oil production rose 260,000 barrels per day month-over-month to a record 13.46 million bpd in October as demand surged to the highest levels since the pandemic, data from the U.S. Energy Information Administration showed on Tuesday.

U.S. oil output has grown rapidly this year as drilling operations became more efficient, even as concerns of oversupply have weighed heavily on prices for the commodity amid weaker-than-expected demand growth, especially in China, the top oil-importing nation.

Year-over-year, U.S. oil production rose 2.3% in October, while West Texas Intermediate crude futures prices CLc1 averaged 16% lower during the month, according to Reuters calculations.

Still, the pace of growth of U.S. oil output is moderating, analysts said. Annual oil production growth in the U.S. is tracking around 300,000 to 400,000 bpd in 2024, versus nearly a million bpd in 2023, said Alex Hodes, energy analyst at brokerage StoneX.

“There have been a few infrastructure constraints that have kept production somewhat muted, but I would expect that we will see a lot of the same in 2025,” Hodes said.

Strong U.S. oil demand in October was the biggest surprise in the EIA’s Petroleum Supply Monthly report, UBS analyst Giovanni Staunovo said.

Total U.S. oil demand rose by about 700,000 bpd from September to 21.01 million bpd in October, the highest since August 2019, EIA data showed. Demand for distillate fuels, which include diesel and heating oil, rose to 4.06 million bpd in October, the highest in a year.
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