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U.S. Commerce Secretary Gina Raimondo said on Sunday that President Joe Biden has asked his team to look at the option of lifting some tariffs on China that were put into place by former President Donald Trump, to combat the current high inflation.

“We are looking at it. In fact, the president has asked us on his team to analyze that. And so we are in the process of doing that for him and he will have to make that decision,” Raimondo told CNN in an interview on Sunday when asked about whether the Biden administration was weighing lifting tariffs on China to ease inflation.

“There are other products — household goods, bicycles, etc. — and it may make sense” to weigh lifting tariffs on those, she said, adding the administration had decided to keep some of the tariffs on steel and aluminum to protect U.S. workers and the steel industry.

Biden has said he is considering removing some of the tariffs imposed on hundreds of billions of dollars’ worth of Chinese goods by his predecessor in 2018 and 2019 amid a bitter trade war between the world’s two largest economies.  

China has also been arguing that tariff reductions would cut costs for American consumers.

Raimondo also told CNN she felt the ongoing semiconductor chip shortage could likely continue until 2024.

“There is one solution (to the semiconductor chip shortage),” she added. “Congress needs to act and pass the Chips Bill. I don’t know why they are delaying.”

The legislation aims to ramp up U.S. semiconductor manufacturing to give the United States more of a competitive punch against China.  

Raimondo said she disagreed with the characterization that Biden’s $1.9 trillion American Rescue Plan had contributed to the current high inflation. Congress passed the COVID-19 relief package a year ago before it was signed into law, marking a signature achievement of Biden’s first year in office. 
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U.S. President Joe Biden Friday used the May jobs report to promote his efforts to boost the economy and fight inflation by lowering the cost of goods and the federal deficit.

The latest U.S. Labor Department jobs report for last month showed the U.S. economy added 390,000 jobs in the month with the unemployment rate at 3.6%, a near historic low.

Speaking to reporters at the White House, the president said the numbers from May brings the total number of new jobs added in the U.S. economy to 8.7 million since he took office. He said these numbers reflect the significant economic recovery from pandemic-driven recession two years ago, which he said was “the most robust in modern history.”

Biden said the job numbers and other factors reflect an economic foundation that is historically strong, allowing the U.S. to fight inflation from a position of strength. He introduced two additional elements for fighting inflation: lowering costs of “everyday goods,” and lowering the deficit.

The president said higher costs for the two primary goods on the minds of U.S. consumers —gasoline and food — are directly related to “[Russian President Vladimir] Putin’s war in Ukraine.”

“Ukraine has 20 million tons of grain in storage right now, and it’s been in storage since the last harvest,” said Biden. “Normally, that would have already been exported into the world market. But because of Putin’s invasion and a blockade of the port at which they could take that grain out for the rest of the world, it’s not.”

Biden said he has offered proposals to lower inflation that have stalled in Congress, such as clean energy investment proposal that would lower energy costs, as well as plans to lower prescription drug costs, rent and mortgages, and high-speed internet. He called on Congress to move on these and other proposals.

The president said lowering the federal deficit is another effective way to lower inflation. He said, according to the Congressional budget office says the U.S. is on track to lower the federal deficit by $1.7 trillion this year and credited his economic strategies to driving than decline.

Biden was also asked about a recent announcement by Tesla CEO Elon Musk saying he had a “super bad” feeling about the U.S. economy and wants to cut 10% jobs at his electric vehicle company.

The president responded by noting Ford Motor company was adding six thousand new jobs, as are other U.S. car makers, and the computer chip maker Intel was adding 20,000 new jobs. He added, to Musk, “Lots a’ luck on his trip to the moon.”

The president also would not comment on reports that he plans to travel to Saudi Arabia later this month, though he did say he say there is a possibility he would be making a Mideast and meeting with regional leaders that could include representatives from Saudi Arabia.

Some information for this report was provided by the Associated Press.
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President Joe Biden publicly acknowledged on Friday that he may travel to Saudi Arabia soon, a trip that multiple sources say is expected and could include talks with Saudi Crown Prince Mohammed bin Salman.

Biden told reporters that he does not yet have direct plans to make a trip to Saudi Arabia but if he does it would be to try to advance Middle East peace prospects.

Sources familiar with the process say Biden is planning a trip to Saudi Arabia in conjunction with a trip to Europe and Israel in late June.

As recently as Wednesday, the White House said Biden still felt bin Salman was a “pariah” for what U.S. intelligence says was his role in the killing and dismembering of a political opponent, Washington Post journalist Jamal Khashoggi, in Turkey in 2018.

Khashoggi’s murder at the Saudi consulate in Istanbul tainted the crown prince’s image as a reformist. The Saudi government has denied any involvement by him.

“Look, I’m not going to change my view on human rights but as president of the United States my job is to bring peace if I can and that’s what I’m going to try to do,” Biden said in explaining his reasoning for why he may make the trip.

The visit would be aimed at bolstering relations with Saudi Arabia at a time when Biden is trying to find ways to lower gasoline prices in the United States.

Biden would participate in a Riyadh summit of the Gulf Cooperation Council, a regional union whose members are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, sources said.  

“There is a possibility that I would be going to meet with both the Israelis and some Arab countries at the time, including I expect … Saudi Arabia. … But I have no direct plans at the moment,” he said.

Prospects for a Biden visit improved on Thursday when OPEC+ agreed to increase oil output by 200,000 barrels in July and August and a ceasefire in the Yemen war was extended.

The White House took the rare step of recognizing the role played by bin Salman in extending the Yemen ceasefire.
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Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker, he said in an email to executives seen by Reuters.

The message, sent on Thursday and titled “pause all hiring worldwide,” came two days after the billionaire told staff to return to the workplace or leave, and adds to a growing chorus of warnings from business leaders about the risks of recession.

Tesla employed almost 100,000 people at the company and its subsidiaries at the end of 2021, according to its annual SEC filing.

The company was not immediately available for comment.

Tesla shares fell nearly 3% in U.S. pre-market trade on Friday and its Frankfurt-listed stock was down 3.6% after the Reuters report. U.S. Nasdaq futures NQcv1 turned negative and were trading 0.6% lower.

Musk has warned in recent weeks about the risk of a recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of an automaker.

So far, demand for Tesla cars and other electric vehicles has remained strong and many of the traditional indicators of a downturn – including increasing dealer inventories and incentives in the United States – have not materialized.

But Tesla has struggled to restart production at its Shanghai factory after COVID-19 lockdowns forced costly outages at the plant.

“Musk’s bad feeling is shared by many people,” said Carsten Brzeski, global head of macroeconomic research at Dutch bank ING. “But we are not talking about global recession. We expect a cooling of the global economy towards the end of the year. The U.S. will cool off, while China and Europe are not going to rebound.”

Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase & Co JPM.N CEO Jamie Dimon and Goldman Sachs President John Waldron.

A “hurricane is right out there down the road coming our way,” Dimon said this week.

Inflation in the United States is hovering at 40-year highs and has caused a jump in the cost of living for Americans, while the Federal Reserve faces the difficult task of dampening demand enough to curb inflation while not causing a recession.

Musk, the world’s richest man according to Forbes, did not elaborate on the reasons for his “super bad feeling” about the economic outlook in the brief email seen by Reuters.

A number of analysts have cut price targets for Tesla recently, forecasting slower deliveries due to Chinese lockdowns and lost output at its Shanghai plant, a hub supplying electric vehicles to China and for export.

China accounted for just over a third of Tesla’s global deliveries in 2021, according to company disclosures and data released on sales there.

Wedbush Securities analyst Daniel Ives said in a tweet it appeared Musk and Tesla were “trying to be ahead of a slower delivery ramp this year and preserve margins ahead of an economic slowdown.”

‘Pause all hiring’

Before Musk’s warning, Tesla had about 5,000 job postings on LinkedIn from sales in Tokyo and engineers at its new Berlin gigafactory to deep learning scientists in Palo Alto. It had scheduled an online hiring event for Shanghai on June 9 on its WeChat channel.

Musk’s demand that staff return to the office has already faced pushback in Germany.

“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” Musk wrote in his Tuesday email. “If you don’t show up, we will assume you have resigned.”

Musk has referred to the risk of a recession repeatedly in recent comments.

Remotely addressing a conference in mid-May in Miami Beach, Musk said: “I think we are probably in a recession and that recession will get worse.” He added: “It’ll probably be some tough going for, I don’t know, a year, maybe 12 to 18 months, is usually the amount of time that it takes for a correction to happen.”

In late May, when asked by a Twitter user whether the economy was approaching a recession, Musk said: “Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”

Musk also engaged on Thursday in a Twitter spat with Australia tech billionaire and Atlassian Plc TEAM.O co-founder Scott Farquhar, who ridiculed the back-to-office directive as “like something out of the 1950s.”

Musk tweeted: “recessions serve a vital economic cleansing function,” in response to a tweet by Farquhar who encouraged Tesla employees to look into its remote work positions.

Jason Stomel, founder of tech talent agency Cadre said of the return-to-work directive: “I think there’s potential that this is just a disguised layoff, meaning they’re able to get rid of people with attrition, or without having to actually have a layoff.”

“(Musk) knows there’s a percentage of workers who are just not going to come back,” which he said would be cheaper because no severance would be needed.
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As China’s COVID-containment lockdowns stall goods en route to price-conscious U.S. consumers, New Jersey manufacturer Mitch Cahn is finding traces of gold in the snapped links of the global supply chain.

Eleven miles from Manhattan, business is surging at Cahn’s textile company, which boasts a 100% local supply chain.

“We manufacture everything from scratch right here in north Newark. We have been in business for 30 years, we now have about 155 workers, and we are hoping to hire another 25 immediately,” said Cahn, founder and president of Unionwear.

Established in 1992, Unionwear manufactures customized baseball hats, scarves and backpacks in the North Ward of New Jersey’s most populous city.

“Business is very solid this year. We’ve seen a surge in business from companies that are no longer able to import goods, and now they are buying products domestically,” Cahn told VOA Mandarin.

For his customers, the “Made in USA” price is right after decades in which American stores were filled with less costly Chinese-made products.

His buyers are not alone in their support for U.S.-made goods. In a 2020 survey by the Reshoring Institute, which advocates the return of manufacturing to the U.S., about 70% of the American respondents said they preferred U.S.-made products. Among them, 83% said they would pay up to 20% more for products made domestically.

COVID snaps supply chain

China has imposed strict COVID-containment lockdowns that are disrupting the supply chain. Export goods are going nowhere as shipping companies increase freight charges and pandemic-related labor shortages worsen delays.

According to the BR Logistics website, container rates for China-U.S. routes are now between $15,000 and $18,000 dollars per 40-foot container, or two to three times higher than pre-pandemic prices.

In addition, the Ukraine crisis has disrupted the global energy supply, pushing oil prices, and therefore shipping costs, higher. Cahn’s baseball caps and other products gain an edge because his products travel shorter distances to reach U.S. buyers, a cost saving that helps counter China’s lower labor costs.

Cahn said that before the pandemic, his baseball caps cost about 30% to 40% more than imports from China.

Currently a baseball cap bought for $2.50 in China will end up being $8 to $9 dollars a unit when it gets to the U.S., he said, once tariffs, shipping costs, packaging and the cost of meeting testing requirements for goods manufactured overseas are added in. The 10% to 15% U.S. tariff imposed on textile products accounts for some of that price differential, according to just-style.com, an industry website.

On average, Unionwear’s baseball caps cost around $8 to $10 per unit wholesale.

“Now we are competitive,” Cahn said.

Now focused on supply chain resiliency because of the pandemic, companies bigger than his are seeing the benefits of using suppliers closer to their customers. “Many U.S. companies are realizing that keeping processes closer to home can be much more reliable and secure,” according to an April Thomasnet.com article.

General Motors announced on January 25 that it would invest $7 billion in its plant in the U.S. state of Michigan to advance production of electric and autonomous vehicles through 2025, according to a news release from the Michigan Economic Development Corporation.

Although the announcement made no mention of China, it said the investment would solidify and strengthen the supply chain throughout Michigan, long known for its concentration of automotive-related manufacturers and suppliers. As Governor Gretchen Whitmer boasted, it’s “the place that put the world on wheels.”

Some non-U.S. companies have also pledged to invest in the U.S. to serve their customers in the North American market. South Korea’s Samsung announced in November that it would invest $17 billion in a new facility in Texas to produce advanced semiconductors and ensure the “stability of the global semiconductor supply chain.” The plant is expected to become operational in late 2024.

Samsung, which has operated a memory chip plant in China since 2014, is part of a larger trend. According to the most recent Kearney Reshoring Index released in 2022, “79 percent of executives who have manufacturing operations in China have either already moved part of their operations to the United States or plan to do so in the next three years, and another 15 percent are evaluating similar moves.”

‘Triple bottom-line mindset’

William Reinsch, an expert in international trade at the Center for Strategic and International Studies, a Washington think tank, said that many U.S. companies have been considering localizing their supply chains for quite some time.

“This is not a new thing. This is at least [a] 10-year trend. [The companies] want to have shorter supply chains. They want to be near their customers. They are concerned about volatile energy prices and rising shipping costs, both ocean freight and air freight,” he told VOA Mandarin.

The tariffs imposed during the Trump administration on most Chinese imports have created price spikes that have made it more expensive to import those goods, Reinsch said, and COVID-19 has revealed supply chain flaws to companies.

Harry Moser is the founder and president of the Reshoring Initiative, a nonprofit group focused on bringing manufacturing back to the U.S. Moser told VOA Mandarin that “20% to 30% of the companies can be brought back without raising prices to their customers, without reducing their profit margin, by recognizing all the costs that they previously ignored.”

Some examples of products ripe for reshoring, Moser said, include those that incur high freight charges or involve frequent design changes, or those with volatile demand, such as seasonal clothing.

“The idea here would be to shorten supply chains,” said Nick Vyas, an associate professor of operations and a supply chain expert at the University of Southern California Marshall School of Business.

The customer-centric supply chain would benefit companies in multiple ways, Vyas told VOA Mandarin. “It will be much more resilient, and it certainly would be a lot more sustainable. We will have a lot less carbon footprint than what we have produced over the last 30 years.”

Vyas said that for the past three decades, business leaders ran companies with a bottom-line mindset that considered only the cost of manufacturing.

“We need to get into the triple bottom-line mindset: Cost is one variable, but we also need to think about resiliency and sustainability,” he said.

Unionwear’s Cahn is optimistic about reshoring. He thinks the era of cheap imports is over and has some advice for companies looking to strengthen their supply chains: “I think it makes sense to develop a relationship with domestic source of supply … and also develop relationships with suppliers” in places such as the Caribbean Basin, South America and Canada. With tighter links, manufacturers can “insulate [themselves] from the ever-increasing costs of getting goods across the oceans.”
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The Chinese Foreign Ministry reacted angrily on Thursday to the announcement that, later this month, the Biden administration will begin enforcing a new law barring products made with forced labor in China’s Xinjiang province from being imported to the United States.

The Uyghur Forced Labor Prevention Act (UFLPA), which President Joe Biden signed into law in December, is set to take effect June 21. Under the law, U.S. Customs and Border Protection will treat any goods that are made in Xinjiang, either wholly or in part, as the product of forced labor unless the importer can show “clear and convincing evidence” that they are not.

The law passed with strong bipartisan support, as lawmakers from both parties joined to condemn China’s treatment of its Uyghur Muslim minority. The U.S., Canada, the United Kingdom, the Netherlands and an array of human rights groups have accused China of perpetrating genocide against Uyghurs, with a regime that includes mass imprisonment and forced labor, vast “reeducation” camps, forced sterilization, blanket surveillance and the separation of children from families.

China reacts

China has denied the allegations against it in forceful terms, and Foreign Ministry spokesperson Zhao Lijian repeated those denials Thursday when he condemned the U.S. announcement that the UFLPA would soon come into force.

“We have rebuked U.S. lies on Xinjiang many times,” he said at a news conference. “The so-called Uyghur Forced Labor Prevention Act, in disregard of facts, maliciously smears the human rights conditions in China’s Xinjiang, grossly interferes in China’s internal affairs, gravely violates international law and basic norms governing international relations, and violates market rules and commercial ethics.”

Zhao warned of dire consequences that, he said, would follow from the law’s being allowed to take effect.

“If implemented, the act will seriously disrupt normal cooperation between Chinese and American businesses, undermine the stability of global supply chains and eventually hurt the U.S.’s own interests,” he said. “We urge the U.S. to refrain from enforcing the act, stop using Xinjiang-related issues to interfere in China’s internal affairs and contain China’s development. If the U.S. is bent on doing so, China will take forceful measures to firmly defend its own interests and dignity.”

China’s potential response

The Biden administration has given no indication that it would consider seeing the law go unenforced. On Wednesday, in a webinar about the new law, a Customs and Border Protection official said, “The expectation is that we will be ready to implement the Uyghur Act on June 21, and that we have the resources.”

How China will respond is not immediately obvious, but some sort of reaction is almost certain, said Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics.

“The Chinese play hardball,” Noland told VOA. “They use what you might call legal means, they abuse legal means, and they use extralegal means in terms of economic coercion or retaliation, oftentimes linked to noneconomic issues.”

In the past, he said, Beijing has used “anti-dumping” sanctions to retaliate for what it has seen as political slights. For example, it imposed sanctions on Australian barley, beef and wine in what was widely seen as retaliation over an Australian call to probe the origins of COVID-19 on mainland China. Beijing restricted imports of Norwegian salmon after the Nobel Committee gave the Nobel Peace Prize to Chinese dissident Liu Xiao Bao.

Noland said the U.S. might see those types of retaliatory sanctions. However, he said, Beijing might resort to something more complex, such as demanding that Chinese firms break the embargoes the U.S. and its allies have imposed on Russia for the invasion of Ukraine.

US businesses concerned

U.S. companies that do business in China are concerned about the looming implementation of the UFLPA, said Doug Barry, a vice president with the U.S.-China Business Council, in an email exchange with VOA.

The law creates what is known as a “rebuttable presumption” that goods with ties to Xinjiang were produced with forced labor. This means that unless an importer can prove to the satisfaction of Customs and Border Protection that the goods are not made with forced labor, they will be subject to seizure, forfeiture, fines and other penalties.

This creates “a high bar” for importers to clear, Barry said, and the rules importers must observe remain in question.

“The specifics of what must be proven and how have not been announced, leaving American companies to worry that cargo may be seized for unspecified reasons,” he said. “Companies insist that they take every reasonable action to ensure supply chains don’t involve forced labor. The worry is that the law is so broad that it can apply to many categories of goods regardless of proximity to Xinjiang.”

The uncertainty is made worse by what Barry described as the “amped-up rhetoric” coming from both Washington and Beijing.

“In the absence of official dialogue, [it] makes it difficult to put a floor under the downward trajectory of the bilateral relationship.”

Labor investigation demanded

Also on Thursday, the United States, Canada, the U.K., Australia and the European Union asked the International Labor Organization, an arm of the United Nations, to launch a probe into whether China is abiding by its commitments to international labor conventions that Beijing has ratified.

The countries cited reports of mistreatment of Uyghurs in Xinjiang in general, and of prisoners being subject to forced labor in particular.

“We call on the PRC to immediately end its discriminatory policies and abuses against minority groups,” U.S. Ambassador to the U.N. in Geneva Sheba Crocker said in a statement.

Crocker called on China to “provide full and unhindered access, including meaningful, unrestricted and unsupervised access to all relevant organizations, individuals and locations implicated in the system of detention.”

A Chinese representative to the U.N. in Geneva denied the allegations, calling them “a political show.”
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India has allowed wheat shipments of 469,202 tons since banning most exports last month, but at least 1.7 million tons is lying at ports and could be damaged by looming monsoon rains, government and industry officials told Reuters. 

Shipments that have been allowed moved mainly to Bangladesh, the Philippines, Tanzania and Malaysia, said a senior government official, who also stated the total quantity. 

The ban pulled Indian wheat exports down to 1.13 million tons in May from a record 1.46 million tons in April, the official said, declining to be named. 

India, the world’s second-biggest wheat producer, imposed a general ban on exports on May 14 as a scorching heat wave curtailed output and pushed domestic prices to record highs. 

Exceptions were allowed for shipments backed by letters of credit that had already been issued and those to countries that requested supplies to meet their food security needs. 

But even after the departure of some wheat, at least 1.7 million tons remained piled up at various ports, three dealers with global trading firms told Reuters. 

Before the ban, exporters moved unusually large quantities to ports, because the crop was then expected to be strong and the government was encouraging them to replace Black Sea supply lost because of the war in Ukraine. 

They expected New Delhi to authorize shipments this year of 8 million to 10 million tons or even more, compared with 7.2 million tons last year. 

“Kandla and Mundra ports have maximum wheat stocks,” said a Mumbai-based dealer with a global trading firm. “Together they are holding more than 1.3 million tons.” 

The government needed to issue export permits promptly, because wheat at the ports was in loose form and therefore vulnerable to monsoon rains, said a New Delhi based dealer with a global trading firm. 

India receives heavy rainfall during the monsoon season, from June to September. 

“The government banned wheat exports to ensure food security, but if stocks get damaged by rains, then it will not serve any purpose,” the dealer said. 

Moving the wheat back out of ports and into interior towns for local consumption was unfeasible, as traders would incur additional losses on loading and transportation fees, said the Mumbai-based dealer. 

“The government should allow exports of wheat lying at ports for government-to-government deals,” he said. 

India has received requests to supply more than 1.5 million tons of wheat from several countries facing shortages. Read full story 

Reporting by Rajendra Jadhav, Aftab Ahmed; Additional reporting by Mayank Bhardwaj; editing by Gavin Maguire and Bradley Perrett 
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U.S. President Joe Biden met with major manufacturers of infant formula on Wednesday, and suggested their ranks should grow, as his administration presses ahead with efforts to boost imported supplies to help ease a nationwide shortage. 

“We need more new entrants in the infant formula market,” Biden said during a virtual meeting with executives from ByHeart, Bubs Australia, Reckitt Benckiser Group, Perrigo Company and Nestles Gerber. 

Multiple global suppliers are seeking U.S. approval to ship critical baby formula as Biden’s administration accelerates what it has dubbed “Operation Fly Formula” to help fill store shelves and calm frustrated parents. 

With about $4 billion in annual sales, the U.S. baby formula market has historically been dominated by domestic producers, with imports limited and subject to high tariffs. 

But U.S. parents have struggled to find baby formula in recent months after a February recall of some formulas by one of the nation’s main manufacturers, Abbott Laboratories, coupled with pandemic-related supply chain issues. 

The latest administration effort to solve the problem includes an announcement on Wednesday that United Airlines has agreed to transport U.K.-made Kendamil formula free of charge from Heathrow Airport in London to multiple airports across the United States over a three-week period. 

This first shipment, which includes Kendamil Classic and Kendamil Organic formula, will be available at Target stores across the country in the coming weeks. 

The administration also secured two flights totaling 380,000 pounds of baby formula from Bubs Australia that will be delivered to California and Pennsylvania on June 9 and June 11, respectively. 

Biden said on Wednesday he first learned of the severity of the U.S. baby formula shortage in early April. The White House said it had been working around the clock since February to address the problem. 

U.S. lawmakers have criticized the Food and Drug Administration (FDA) for not acting promptly to address the problems that caused the recall at Abbott’s Michigan plant, which is set to reopen June 4. 

The Biden administration has relaxed its import policy and invoked the Defense Production Act to help increase available U.S. supplies, which is still expected to take weeks. It has also said it could use federal resources to help transport supplies to retailers. 

Two million cans of formula have been sent from the U.K., and Australian manufacturers are also preparing to send in more product. 

Thorben Nilewski of Organic Family, which makes the popular Holle infant formulas, said in an email that the German company applied for the FDA’s temporary approval but has not yet received any feedback. 

Many U.S. parents rely on baby formula. Fewer than half the babies born in the United States were exclusively breast-fed through their first three months, according to the Centers for Disease Control and Prevention’s 2020 Breastfeeding Report Card. 
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The U.S. launched a new trade pact with Taiwan on Wednesday, hoping to forge closer economic ties with the island territory that China claims as its own, while blunting Beijing’s economic clout in the region.

Biden administration officials said the U.S.-Taiwan deal would boost bilateral digital and clean energy trade and that the two partners would open talks to further technology trade and investments. 

In announcing the pact, Commerce Secretary Gina Raimondo said economic relations between the U.S. and Taiwan were especially important because Taiwan is a leading supplier of advanced semiconductors needed in an array of consumer technology products. Senior administration officials said controls on the export of sensitive technologies would be addressed in talks between the U.S. and Taiwan. 

“Taiwan is an incredibly important partner to us, especially as it relates to semiconductors,” Raimondo told reporters. “We look forward to continuing to deepen our economic ties with Taiwan, and we are in active conversations with Taiwan.” 

The U.S.-Taiwan pact comes days after President Joe Biden announced a new economic cooperation agreement with a dozen Asia-Pacific countries during his trip to South Korea and Japan.

Taiwan was not invited to join the Indo-Pacific Economic Framework out of concerns from some countries that the country’s participation might anger China.

But a senior administration official said, “The Biden-Harris administration sees Taiwan as a leading democracy, a technological powerhouse and a key economic and security partner.” 

The latest U.S.-Taiwan connection could further strain Washington-Beijing relations. In Asia last week, Biden said the U.S. would defend Taiwan militarily if China were to attack the democratic, self-governed island, a statement seemingly at odds with the U.S.’s long-standing “one China” policy recognizing Taiwan as part of mainland China. 

While the White House later said there was no change in U.S. policy, the U.S. does ship weaponry to Taiwan. 

Biden’s comment drew a rebuke from China, with Chinese Foreign Ministry spokesman Wang Wenbin saying that “no forces, the U.S. included, can hold back the Chinese people’s endeavor to reunify the nation.”
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In the spring of 2020, as COVID-19 spread throughout the world in ways not fully understood, the United States faced a critical shortage of protective masks. 

Dozens of manufacturing startups attempted to meet the demand for what was then a confusing array of grades and types — N95, KN95, full-face respirators.  

Now, after a short respite from many COVID-19 precautions, the U.S. is weeks into a new surge in cases that may foreshadow a greater one this fall, and those same small companies that make masks are hurting.  

John Bielamowicz is a co-founder of United States Mask. The Fort Worth, Texas, company is among those struggling.  

Bielamowicz launched his mask-making mission after reading social media posts about medical professionals not having N95 masks in the pandemic’s terrifying early months. It was caregivers like them who had helped his family in 2016, when his son Matthew was born missing 80% of his diaphragm on the left side. 

Bielamowicz and his business partner ​David Baillargeon put their commercial real estate business on hold to start the mask company. 

“This was our way of paying it back … for the gift that they gave us for sending us home with our son,” Bielamowicz told VOA Mandarin in a virtual interview. “It was a debt that I never thought that I’d be able to pay back.” 

The partners began reading and experimenting in February 2020, and by late October of that year, their N95 masks carried a National Institute for Occupational Safety and Health certification. At its peak in early 2021, the company produced millions of N95 masks a month and employed close to 50 people. 

“For me and my family, this was a mission, and we were going to do it or fail trying,” Bielamowicz said. “And we didn’t fail. We did it.”  

Masks and jobs

The American Mask Manufacturers Association (AMMA) represents small companies that started making masks during the pandemic.  

“During the pandemic, we created just over 8,000 new manufacturing jobs. And this was at a time where most businesses were laying people off or furloughing people,” Lloyd Armbrust, president of the association, told VOA in a virtual interview.  

But attitudes toward mask wearing have varied widely across the U.S. since 2020, and on April 18, a federal judge in Florida voided the national mask mandate covering airplanes and other public transportation. This came a day before the Biden administration said it would no longer enforce a U.S. mask mandate.  

Armbrust American, Armbrust’s mask company in Pflugerville, Texas, staggered from the twin blows.  

“That day, we saw our online sales be cut at half or even more,” said Armbrust, who added that he and other mask-makers had already been competing with cheap masks from China before the one-two punch.  

China and masks 

According to research published last year by the Peterson Institute for International Economics, a Washington-based think tank, 72% of the masks and respirators imported by the U.S. in 2019 came from China. 

When the coronavirus that causes COVID-19 was first identified in humans in Wuhan, China, in late 2019, U.S. imports of protective masks from China plunged. 

When China resumed exporting government-subsidized masks in 2020, it attempted to create “a monopoly within the PPE (personal protective equipment) market,” the AMMA charged, and manufacturers such as Armbrust American found themselves in difficulty. 

“Our raw material costs me about $0.015 per mask,” Armbrust said. “And yet China can deliver it to the United States for less than $0.01. They say that they’re more efficient, but how is that possible when the cost of their finished products is cheaper than I buy the raw materials for? It’s just not possible. The answer is, the Chinese government is subsidizing it because they don’t want to lose this business.”  

In response to VOA Mandarin questions about China’s mask exports to the U.S., Liu Pengyu, the spokesman for the Chinese embassy in Washington, said, “I would like to point out that as a market economy, China has earnestly fulfilled its WTO (World Trade Organization) commitments and abides by multilateral economic and trade rules. Chinese merchandise is cheap and good because of the good supply chain, sufficient competition and economies of scale, not non-market behavior.” 

“I can be very competitive, but I can’t be competitive against the whole government. … In 2021, we laid off about 70% of our staff,” Armbrust said. 

Bielamowicz’s United States Mask laid off people as well. 

“It was the worst day of my career,” he said.   

An uncertain future 

Nationwide, the AMMA, which peaked with almost 30 members in 2021, now includes fewer than 10 enterprises still producing masks. 

Facing masks’ uncertain future, Armbrust American shifted to producing home air filters. 

Bielamowicz has been traveling to Washington to lobby the federal government. 

“We’re asking for free competition,” Bielamowicz said. “We know the free market works.” 

That said, Armbrust hopes the government can subsidize small companies that make masks, as it does farmers, to preserve production capability so that when the next pandemic hits, small producers can jump back into mask making. 

“If I could just have a base,” Armbrust said, “… where I could mothball these machines and … I could afford to pay the rent for the space instead of actually shutting it down and scrapping the machines, that would be another solution.”  
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With inflation in the United States at levels not seen in decades, President Joe Biden on Tuesday met with Jerome Powell, the chairman of the Federal Reserve, to discuss the ongoing effort to tame rising prices.

Over the 12 months ending in April, the Consumer Price Index, which tracks what average Americans pay for a broad array of goods and services, increased by 8.3%, down slightly from the month before, but still at a level not seen in 40 years.

The issue is a vital one for Biden, whose party is facing serious challenges in the run-up to November’s midterm elections. Public opinion polling indicates that rising prices are among voters’ biggest concerns at the moment, and high inflation appears to be driving down the president’s approval rating.

Political concerns

Despite political pressures, Biden approached his conversation with Powell cautiously, reluctant to appear to be meddling in the affairs of the central bank, which is meant to operate independently.

In advance of the meeting with Powell, Biden used an op-ed published in the Wall Street Journal to signal that he does not want to be seen as pressuring the Fed, contrasting himself with former President Trump, who frequently made public statements critical of Powell and the central bank.

“First, the Federal Reserve has a primary responsibility to control inflation,” Biden wrote. “My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”

Responding to inflation

As the central bank of the United States, the Federal Reserve is currently engaged in a very delicate process, attempting to slow price increases without tipping the United States economy into a damaging recession.

The Fed’s main tool in the effort is the ability of the Federal Open Market Committee, a body within the broader central bank, to set benchmark interest rates that affect borrowing costs across the economy.

As a result of the coronavirus pandemic, the U.S. economy was plunged into a recession in 2020, and the Fed lowered interest rates to just above zero in order to provide economic stimulus. A recession is typically defined as two or more consecutive quarters in which a nation’s gross domestic product shrinks. However, the National Bureau of Economic Research ruled that a two-month economic downturn at the beginning of the pandemic counted as a recession, making it the shortest on record.

However, low interest rates combined with other government stimulus programs and supply shortages related to the pandemic as well as Russia’s invasion of Ukraine snowballed to bring higher prices that have strained many Americans’ budgets.

In March of this year, the Fed began raising rates, and it continued with another rate increase in early May. With the “target” interest rate currently between 0.75% and 1%, the Fed has signaled that it will raise rates several more times before the end of the year, probably in increments of one half of a percentage point.

How it works

“Raising interest rates works by restraining demand in the economy and restraining spending,” Kenneth N. Kuttner, a professor of economics at Williams College and a former assistant vice president of research at the Federal Reserve Bank of New York, told VOA. “It’s only through restraining spending that inflationary pressures can be brought down.

“In order to get inflation down, the Fed would have to slow the economy until the level of desired spending can be accommodated by the supply side of the economy, or maybe a little bit lower,” Kuttner said. “The problem is, if it restrains spending too much, then the economy is going to go into a … recession.”

The trouble is that there is a significant lag between the Fed’s decision to raise interest rates and the effect that the increase has on economic activity, Greg McBride, senior vice president and chief financial analyst for Bankrate.com, told VOA.

“By the time today’s actions take effect, the economy may look a lot different than it did,” McBride said. “That’s what makes this complicated and what brings about the risk of the Fed tipping the economy into a recession. They may be raising interest rates at a point where the economy is already slowing, and those rate hikes only serve to slow the economy further.”

McBride said he does not see a recession as likely in the immediate term. “The U.S. economy is growing this year, and the labor market is very strong,” he said. “Yes, growth will certainly slow through the balance of the year, but in terms of outright contraction, I see that more as a 2023 likelihood than 2022.”

Fed’s abilities limited

On Tuesday afternoon, in remarks at the start of his meeting with Powell, Biden reiterated his promise not to pressure the central bank over inflation.

“I’m not going to interfere with their critically important work,” the president said. “They have a laser focus on addressing inflation, just like I am.”

But while Biden may be counting on the Fed to bring down consumer prices, experts warn that many of the factors contributing to higher prices are well beyond the central bank’s control.

“The Fed has a very difficult task at hand,” said McBride. “A lot of that is tied to issues on the supply side, not just the demand side. The Fed cannot fix the supply chain. They can’t open ports in China that are closed. They can’t broker peace in Eastern Europe.”

He added, “What they can do is address the demand side in the U.S. … But without substantive healing of the supply chain, raising interest rates is not likely to be the panacea that it has been in the past, in terms of putting inflation to bed.”
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Nigerian manufacturers say they are struggling with rising grain prices, especially for wheat, sparked by Russia’s war on Ukraine. But even before the war started in February, Nigeria had been dealing with fuel and power shortages and high inflation. Timothy Obiezu reports from Abuja, Nigeria.
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Salah Chelab crushed a husk of wheat plucked from his sprawling farmland south of Baghdad and inspected its seeds in the palm of one hand. They were several grams lighter than he hoped.

“It’s because of the water shortages,” he said, the farm machine roaring behind him, cutting and gathering his year’s wheat harvest.

Chelab had planted most of his 10 acres (4 hectares) of land, but he was only able to irrigate a quarter of it after the Agriculture Ministry introduced strict water quotas during the growing season, he said. The produce he was growing on the rest of it, he fears, “will die without water.”

At a time when worldwide prices for wheat have soared due to Russia’s invasion of Ukraine, Iraqi farmers say they are paying the price for a government decision to cut irrigation for agricultural areas by 50%.

The government took the step in the face of severe water shortages arising from high temperatures and drought — believed to be fueled by climate change — and ongoing water extraction by neighboring countries from the Tigris and Euphrates rivers. All those factors have heavily strained wheat production.

Wrestling with the water shortage, Iraq’s government has been unable to tackle other long-neglected issues.

Desertification has been blamed as a factor behind this year’s relentless spate of sandstorms. At least 10 have hit the country in the past few months, covering cities with a thick blanket of orange dust, grounding flights and sending thousands to hospitals.

“We need water to solve the problem of desertification, but we also need water to secure our food supplies,” said Essa Fayadh, a senior official at the Environment Ministry. “We don’t have enough for both.”

Iraq relies on the Tigris and Euphrates rivers for nearly all of its water needs. Both flow into Iraq from Turkey and Iran. Those countries have constructed dams that have either blocked or diverted water, creating major shortages in Iraq.

Water Resources Minister Mahdi Rasheed told The Associated Press that river levels were down 60% compared to last year.

For Chelab, less water has meant a smaller grain size and lower crop yields.

In 2021, Chelab produced 30,000 tons of wheat, the year before that 32,000, receipts from Trade Ministry silos show. This year, he expects no more than 10,000.

His crops are both rain-fed and irrigated via a channel from the Euphrates. Due to low precipitation levels, he has had to rely on the river water during the growing season, he said.

Government officials say change is necessary.

The current system has been inefficient and unsustainable for decades. Water scarcity is leaving them no choice but to push to modernize antiquated and wasteful farming techniques.

“We have a strategic plan to face drought considering the lack of rain, global warming, and the lack of irrigation coming from neighboring countries as we did not get our share of water entitlements,” said Hamid al-Naif, spokesman at the Agriculture Ministry.

The ministry took measures to devise new types of drought-resistant wheat and introduce methods to increase crop yields.

“We are still dealing with irrigation systems of the 1950s. It has nothing to do with the farmers,” he said. “The state must make it efficient, we must force the farmer to accept it.”

Iraqi farmers have historically been heavily dependent on the state in the production of food, a reliance that policymakers and experts said drains government funds.

The Agriculture Ministry supports farmers by providing everything from harvesting tools, seeds, fertilizers and pesticides at a subsidized rate or for free. Water diverted from rivers for irrigation is given at no cost. The Trade Ministry then stores or buys produce from farmers and distributes it to markets.

Wheat is a key strategic crop, accounting for 70% of total cereal production in the country.

Planting starts in October and harvest typically begins in April and extends to June in some areas. Last year, the Agriculture Ministry slashed subsidies for fertilizers, seeds and pesticides, a move that has angered farmers.

Local demand for the staple is between 5-6 million tons a year. But local production is shrinking with each passing year. In 2021, Iraq produced 4.2 million tons of wheat, according to the Agriculture Ministry. In 2020, it was 6.2 million tons.

“Today we might get 2.5 million tons at best,” said al-Naif. That would require Iraq to drive up imports.

Most of the wheat harvest is usually sold to the Trade Ministry. In a sign of the low harvest, so far there are currently only 373,000 tons of wheat available in Trade Ministry storehouses, al-Naif said.

To meet demands amid the recent global crisis in the grain market, the government recently changed a policy to allow all Iraqi farmers to sell their produce to the Trade Ministry silos. Previously, this was limited to farmers who operated within the government plan.

Back in Chelab’s farm, the wheat is ready to be transported to the silo.

“It’s true we need to develop ourselves,” he said. “But the change should be gradual, not immediate.”
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Louis Bloomsfield inspects the kegs of beer at his brewery in north London, eagerly awaiting June, when he will get an extra day off every week.

The 36-year-old brewer plans to use the time to get involved in charity work, start a long-overdue course in particle physics and spend more time with family.

He and colleagues at the Pressure Drop brewery are taking part in a six-month trial of a four-day working week, with 3,000 others from 60 U.K. companies.

The pilot — touted as the world’s biggest so far — aims to help companies shorten their working hours without cutting salaries or sacrificing revenues.

Similar trials have also taken place in Spain, Iceland, the United States and Canada. Australia and New Zealand are scheduled to start theirs in August.

Alex Soojung-Kim Pang, a program manager at 4 Day Week Global, the campaign group behind the trial, said it will give firms “more time” to work through challenges, experiment with new practices and gather data.

Smaller organizations should find it easier to adapt, as they can make big changes more readily, he told AFP.

Pressure Drop, based in Tottenham Hale, is hoping the experiment will not only improve their employees’ productivity but also their well-being.

At the same time, it will reduce their carbon footprint.

The Royal Society of Biology, another participant in the trial, says it wants to give employees “more autonomy over their time and working patterns.”

Both hope a shorter working week could help them retain employees, at a time when U.K. businesses are confronted with severe staff shortages, and job vacancies hitting a record 1.3 million.

Not all rosy

Pressure Drop brewery’s co-founder Sam Smith said the new way of working would be a learning process.

“It will be difficult for a company like us which needs to be kept running all the time, but that’s what we will experiment with in this trial,” he said.

Smith is mulling giving different days off in the week to his employees and deploying them into two teams to keep the brewery functioning throughout.

When Unilever trialed a shorter working week for its 81 employees in New Zealand, it was able to do so only because no manufacturing takes place in its Auckland office and all staff work in sales or marketing.

The service industry plays a huge role in the UK economy, contributing 80% to the country’s GDP.

A shorter working week is therefore easier to adopt, said Jonathan Boys, a labor economist at the Chartered Institute of Personnel and Development.

But for sectors such as retail, food and beverage, health care and education, it’s more problematic.

Boys said the biggest challenge will be how to measure productivity, especially in an economy where a lot of work is qualitative, as opposed to that in a factory.

Indeed, since salaries will stay the same in this trial, for a company to not lose out, employees will have to be as productive in four days as they are five.

Yet Aidan Harper, author of The Case for a Four Day Week, said countries working fewer hours tend to have higher productivity.

“Denmark, Sweden, the Netherlands work fewer hours than the U.K., yet have higher levels of productivity,” he told AFP.

“Within Europe, Greece works more hours than anyone, and yet have the lowest levels of productivity.”

‘Hiring superpower’

Employees in the U.K. work roughly 36.5 hours every week, against counterparts in Greece who clock in upward of 40 hours, according to database company Statista.

Phil McParlane, founder of Glasgow-based recruitment company 4dayweek.io, says offering a shorter workweek is a win-win, and even calls it “a hiring superpower.”

His company only advertises four-day week and flexible jobs.

They have seen the number of companies looking to hire through the platform rise from 30 to 120 in the past two years, as many workers reconsidered their priorities and work-life balance in the pandemic.
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More than 12 million immigrants moved through Ellis Island, a primary U.S. federal immigration station in New York, between 1892 and 1954. The assimilation of these newcomers into the great U.S. “melting pot” in their pursuit of the American dream is a key part of the nation’s story.

Many Americans have come to idealize those early immigrants, mostly Europeans, as somehow more desirable than today’s immigrants, who primarily hail from Latin America and Asia and are more likely to be viewed by some as slow to assimilate, potential criminals, a financial drain on the system, and as stealing jobs from the American-born.

Economic historians Leah Boustan and Ran Abramitzky are using cutting-edge data collection and analytics to separate immigrant fact from fiction while comparing modern-day migrants to those who came to America a century ago.

Successful children

“One big surprise was how well the children of immigrants are doing, and how (children of) immigrants from nearly every sending country are more upwardly mobile than the children of the U.S.-born. And how that stays constant over 100 years, regardless of the sending country,” says Abramitzky, a professor of economics at Stanford University.

The reason many children of immigrants do better than their American-born counterparts can come down to location, said Boustan, a professor of economics at Princeton University.

“They’re locating in very dynamic cities with a lot of good job opportunities, and that’s helping set up their kids for success,” Boustan says. “We find that the children of the internal migrants — the U.S.-born families that move somewhere else — actually look a lot like the children of immigrants. And so, what’s really happening is that immigrants are willing to move to good places, and a lot of U.S.-born families stay in the location where they were born.

Another less-apparent advantage for children of immigrants in low-paying jobs, is that their parents might have college degrees and professional skills honed in their home countries that they cannot apply in the U.S., but they instill a drive for education and professional success in their children.

The data suggests that the children of today’s immigrants from the Dominican Republic, Mexico or Guatemala who grew up in relatively poor families are doing just as well as the children of Norwegian, German and Italian immigrants of the past. Like them, they are more likely than the children of equally poor U.S.-born parents to make it into the middle class or beyond.

The duo’s findings are laid out in their book, “Streets of Gold: America’s Untold Story of Immigrant Success.”

Disputing existing narratives

The data also dispels the notion that today’s immigrants are a financial burden, Boustan said.

“Even if immigrant parents are low paid, their children are able to move up very quickly into higher paid, more productive jobs,” she says. “So, at this timescale of a generation, we see that immigrants are able to pay more into the system than they take out.”

Abramitzky and Boustan extrapolated that today’s immigrants assimilate as quickly as immigrants did a century ago. They used markers like learning English, living outside an ethnic neighborhood, intermarriage and giving children American-sounding names to conclude that today’s immigrants are no more likely than past immigrants to retain their native culture.

Anti-immigrant forces often point to crime as a reason to limit immigration or build a border wall along the U.S.-Mexico border. However, the data shows immigrants today are less likely to be arrested and imprisoned for a crime than people born in the United States.

Job thieves?

Do immigrants steal jobs and reduce the wages of U.S.-born workers? The data suggests immigrants fill gaps at the opposite ends of the labor market, where there is a lot of demand but not enough workers to fill those roles, according to Boustan.

“These days, immigrants bring a set of skills that are not very widespread in the U.S. today,” Boustan says. “Many immigrants are very highly skilled Ph.D. scientists, tech workers, and those skills often create more jobs than take away jobs.”

On the opposite end of the spectrum, uneducated, poorer immigrants tend to work in manual positions like construction, agriculture and landscaping or in service professions such as helping the elderly or providing child care.

“People who are at the lower tail of the income distribution are doing the kinds of jobs that are hard to find U.S.-born workers to do,” Abramitzky says. “Immigrants and the U.S.-born workers are not perfect substitutes to one another.”

A 2020 Pew Research poll suggests that Americans on both ends of the political spectrum generally agree that immigrants — both the undocumented and those in the U.S. legally — mostly work in jobs that U.S. citizens don’t want.

But Harvard professor George Borjas, a labor economist specializing in immigration issues, says the influx of immigrants can hurt the prospects of the working poor.

People in low-wage jobs that require limited education face significant competition from immigrants, according to Borjas, who writes that an increase in the pool of low-skilled workers drives a drop in overall earnings.

The immigrants themselves, and business owners who use immigrant labor, are the biggest winners from an influx of immigration, he says.

In their book, Abramitzky and Boustan point out that strict immigrant quotas in the 1920s did not result in higher wages for U.S. manufacturing workers, even though immigration had dropped by “hundreds of thousands.”

The co-authors hope lawmakers will examine the data before crafting future immigration laws and policies.

“That immigrants are upwardly mobile from nearly every sending country, regardless of where they come from, suggests that there are more similarities than differences in the immigrant experiences, despite the huge change in sending countries,” Abramitzky says.

“We see that immigrants are doing just as well as immigrants in the past. …Designing the policy (while) having in mind that immigrants aren’t able to assimilate and integrate, is misinformed.”
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The U.S. economy shrank in the first three months of the year even though consumers and businesses kept spending at a solid pace, the government reported Thursday in a slight downgrade of its previous estimate for the January-March quarter.

Last quarter’s drop in the U.S. gross domestic product — the broadest gauge of economic output — does not likely signal the start of a recession. The contraction was caused, in part, by a wider trade gap: The nation spent more on imports than other countries did on U.S. exports. The trade gap slashed first-quarter GDP by 3.2 percentage points.

And a slower restocking of goods in stores and warehouses, which had built up their inventories in the previous quarter for the 2021 holiday shopping season, knocked nearly 1.1 percentage points off the January-March GDP.

Analysts say the economy has likely resumed growing in the current April-June quarter.

The Commerce Department estimated that the economy contracted at a 1.5% annual pace from January through March, a slight downward revision from its first estimate of 1.4%, which it issued last month. It was the first drop in GDP since the second quarter of 2020 — in the depths of the COVID-19 recession — and followed a robust 6.9% expansion in the final three months of 2021.

The nation remains stuck in the painful grip of high inflation, which has caused particularly severe hardships for lower-income households, many of them people of color. Though many U.S. workers have been receiving sizable pay raises, their wages in most cases haven’t kept pace with inflation. In April, consumer prices jumped 8.3% from a year earlier, just below the fastest such rise in four decades, set one month earlier.

High inflation is also posing a political threat to President Joe Biden and Democrats in Congress as midterm elections draw near. A poll this month by The Associated Press-NORC Center for Public Research found that Biden’s approval rating has reached the lowest point of his presidency — just 39% of adults approve of his performance — with inflation a frequently cited contributing factor.

Still, by most measures, the economy as a whole remains healthy, though likely weakening. Consumer spending — the heart of the economy — is still solid: It grew at a 3.1% annual pace from January through March. Business investment in equipment, software and other items that are intended to improve productivity rose at a healthy 6.8% annual rate last quarter.

And a strong job market is giving people the money and confidence to spend. Employers have added more than 400,000 jobs for 12 straight months, and the unemployment rate is near a half-century low. Businesses are advertising so many jobs that there are now roughly two openings, on average, for every unemployed American.

The economy is widely believed to have resumed its growth in the current quarter: In a survey released this month, 34 economists told the Federal Reserve Bank of Philadelphia that they expect GDP to grow at a 2.3% annual pace from April through June and 2.5% for all of 2022. Still, their forecast marked a sharp drop from the 4.2% growth estimate for the current quarter in the Philadelphia Fed’s previous survey in February.

Considerable uncertainties, though, are clouding the outlook for the U.S. and global economies. Russia’s war against Ukraine has disrupted trade in energy, grains and other commodities and driven fuel and food prices dramatically higher. China’s draconian COVID-19 crackdown has also slowed growth in the world’s second-biggest economy and worsened global supply chain bottlenecks. The Federal Reserve has begun aggressively raising interest rates to fight the fastest inflation the United States has suffered since the early 1980s.

The Fed is banking on its ability to engineer a so-called soft landing: Raising borrowing rates enough to slow growth and cool inflation without causing a recession. Many economists, though, are skeptical that the central bank can pull it off. More than half the economists surveyed by the National Association for Business Economics foresee at least a 25% probability that the U.S. economy will sink into recession within a year.

“While we still expect the Fed to steer the economy toward a soft landing, downside risks to the economy and the probability of a recession are increasing,” economists Lydia Boussour and Kathy Bostjancic of Oxford Economics cautioned Thursday in a research note.

“A more aggressive pace of Fed rate hikes, a tightening in financial conditions, the ongoing war in Ukraine and China’s zero-Covid strategy increase the risk of a hard landing in 2023,” they added.

In the meantime, higher borrowing rates appear to be slowing at least one crucial sector of the economy — the housing market. Last month, sales of both existing homes and new homes showed signs of faltering, worsened by sharply higher home prices and a shrunken supply of properties for sale.
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In Ivory Coast, an artisanal chocolatier blends good flavor and good intentions in his work. Axel-Emmanuel Gbaou trains women to get good taste and good profits from the cocoa beans they process, as Yassin Ciyow observes in this report narrated by Carol Guensburg.
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