Business
How Trump’s One-for-One Tariff Plan Threatens the Global Economy
The world economy was already grappling with a perplexing assortment of variables, from geopolitical conflicts and a slowdown in China to the evolving complexities of climate change. Then, President Trump unleashed a plan to uproot decades of trade policy.
In starting a process to impose so-called reciprocal tariffs on American trading partners, Mr. Trump increased volatility for international businesses. He broadened the scope of his unfolding trade war.
In basic concept, the argument for reciprocal tariffs is straightforward: Whatever levies American companies face in exporting their wares to another country should apply to imports from that same country. Mr. Trump has long championed this principle, presenting it as a simple matter of fairness — redress to the fact that many American trading partners maintain higher tariffs.
Yet in practice, calculating individual tariff rates on thousands of products drawn from more than 150 countries poses a monumental problem of execution for a vast range of companies, from American manufacturers dependent on imported parts to retailers that buy their goods from overseas.
“It’s potentially a herculean task,” said Ted Murphy, an international trade expert at Sidley Austin, a law firm in Washington. “For every widget, every tariff classification, you can have 150 different duty rates. You’ve got Albania to Zimbabwe.”
The order that Mr. Trump signed on Thursday directed his agencies to study how to proceed with reciprocal tariffs. That raised the risk of increasing costs for American consumers at a time of deepening concern over inflation, challenging the president’s own vows to bring down prices on groceries and other everyday items. And that heightened the possibility of greater delay from the Federal Reserve in lowering borrowing costs.
It also hastens the diminishing of the world trading system, which has long been centered on multilateral blocs and adjudicated by the World Trade Organization. Mr. Trump is aiming to advance a new era in which treaties give way to country-to-country negotiations amid a spirit of nationalist brio.
The transition threatens to add to strains on global supply chains after years of upheaval. International businesses have contended with an unfolding trade war between the world’s two largest economies, the United States and China. They have confronted impediments to passage through the Suez and Panama Canals, sending shipping prices soaring.
Now, Mr. Trump has presented them with another formidable puzzle.
Under the system that has held sway for three decades, member countries of the World Trade Organization set tariffs for every type of good, extending the same basic rate to all members. They have also negotiated treaties — with other countries, and via regional trading blocs — that have further eased tariffs.
Mr. Trump has long described the United States as a victim of this structure, citing trade deficits with China, Mexico and Germany. In announcing the advent of reciprocal tariffs on Thursday, he served notice that he claims authority to renegotiate the terms to his liking, absent respect for existing trade agreements.
It seemed no coincidence that Mr. Trump made his announcement on the day that India’s prime minister, Narendra Modi, visited the White House. The United States runs a substantial trade deficit with India, with the value of its imported goods outweighing its exports last year by $45 billion.
Those imports include plastics and chemical products that incur tariffs of less than 6 percent when shipped to the United States, according to data compiled by the World Bank. When similar categories of American goods are exported to India, they confront tariffs ranging from 10 to 30 percent.
If the Trump administration were to lift American levies to equal levels, that would force American factories to pay more for chemicals and plastics.
The same pattern holds across a broad sweep of consumer and industrial products — footwear from Vietnam, machinery and agriculture from Brazil, textiles and rubber from Indonesia.
A leading electronics industry trade association, IPC, on Thursday warned that increased trade protectionism would damage the American economy.
“New tariffs will raise manufacturing costs, disrupt supply chains, and drive production offshore, further weakening America’s electronics industrial base,” the association’s president, John W. Mitchell, said in a statement.
Some experts see in Mr. Trump’s approach a potential negotiating tactic aimed at forcing trading partners to lower their own tariffs, rather than a prelude to the United States lifting its own. If that proves true, the process of calculating new tariff rates might actually lower prices.
“There are a lot of ways this can go very badly for us,” said Christine McDaniel, a former Treasury official under President George W. Bush and now a senior research fellow at the Mercatus Center at George Mason University in Virginia. “But if he can get other countries to open up their markets, there is a narrow path where this could end up promoting trade,” she said.
Still others warn that any process of negotiation could be guided less by national objectives than the interests of Mr. Trump’s allies. Tesla, the electric vehicle company run by the administration loyalist Elon Musk, could benefit from exemptions to increased tariffs on key components.
The tumult is leaving companies that operate in the United States having to guess how events will transpire as they weigh the costs of importing parts or finished goods. Business, as the cliché goes, craves nothing more than certainty. That commodity is getting more scarce.
Ever since Mr. Trump’s first term, when he put tariffs on Chinese imports — a policy that President Joseph R. Biden Jr. extended — companies that sell into the American market have shifted some production out of China.
Surging prices to move cargo by container ship have prompted companies to close the distance between their factories and their American customers, a trend known as nearshoring.
Walmart, a retail empire ruled by the pursuit of low prices, has moved orders from Chinese plants to India and Mexico. Columbia Sportswear has scouted factory sites in Central America. MedSource Labs, a medical device manufacturer, has moved orders from factories in China to a new plant in Colombia.
Mr. Trump has challenged the merits of such strategies by threatening 25 percent tariffs on imports from Mexico, Canada and Colombia, before quickly delaying or setting aside such plans. He has imposed across-the-board levies on steel and aluminum. He has delivered 10 percent tariffs on Chinese imports. Where he may turn next is the subject of a potentially expensive parlor game playing out in corporate board rooms.
Some surmise that the uncertainty stemming from these moves is precisely the point. Mr. Trump has long asserted that his ultimate goal is to force businesses to set up factories in the United States — the only reliable way to avoid U.S. tariffs. The more countries he menaces, the greater the risks for any company that invests in a plant somewhere else.
The trouble is that even businesses with factories in the United States depend on parts and raw materials from around the world. More than one-fourth of American imports represent parts, components and raw materials. Making these goods more expensive damages the competitiveness of domestic companies, imperiling American jobs.
Last week, Ford Motor warned that tariffs on Mexico and Canada would wreak havoc with its supply chains.
“A 25 percent tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen,” the company’s chief executive, Jim Farley, said.
For now, the business world is again struggling to divine which of Mr. Trump’s pronouncements are merely a gambit, and which portend real changes.
On spreadsheets maintained by multinational companies, the applicable tariff rates for every country on earth suddenly seem subject to reworking.
Or not.
“We take Trump seriously, but not necessarily literally,” said Mr. Murphy, the trade lawyer. “He talks in broad strokes, but we have to watch what actually emerges.”
Business
‘Stranger Things’ finale turns box office downside up pulling in an estimated $25 million
The finale of Netflix’s blockbuster series “Stranger Things” gave movie theaters a much needed jolt, generating an estimated $20 to $25 million at the box office, according to multiple reports.
Matt and Ross Duffer’s supernatural thriller debuted simultaneously on the streaming platform and some 600 cinemas on New Year’s Eve and held encore showings all through New Year’s Day.
Owing to the cast’s contractual terms for residuals, theaters could not charge for tickets. Instead, fans reserved seats for performances directly from theaters, paying for mandatory food and beverage vouchers. AMC and Cinemark Theatres charged $20 for the concession vouchers while Regal Cinemas charged $11 — in homage to the show’s lead character, Eleven, played by Millie Bobby Brown.
AMC Theatres, the world’s largest theater chain, played the finale at 231 of its theaters across the U.S. — which accounted for one-third of all theaters that held screenings over the holiday.
The chain said that more than 753,000 viewers attended a performance at one of its cinemas over two days, bringing in more than $15 million.
Expectations for the theater showing was high.
“Our year ends on a high: Netflix’s Strangers Things series finale to show in many AMC theatres this week. Two days only New Year’s Eve and Jan 1.,” tweeted AMC’s CEO Adam Aron on Dec. 30. “Theatres are packed. Many sellouts but seats still available. How many Stranger Things tickets do you think AMC will sell?”
It was a rare win for the lagging domestic box office.
In 2025, revenue in the U.S. and Canada was expected to reach $8.87 billion, which was marginally better than 2024 and only 20% more than pre-pandemic levels, according to movie data firm Comscore.
With few exceptions, moviegoers have stayed home. As of Dec. 25., only an estimated 760 million tickets were sold, according to media and entertainment data firm EntTelligence, compared with 2024, during which total ticket sales exceeded 800 million.
Business
Tesla dethroned as the world’s top EV maker
Elon Musk’s Tesla is no longer the top electric vehicle seller in the world as demand at home has cooled while competition heated up abroad.
Tesla lost its pole position after reporting 1.64 million deliveries in 2025, roughly 620,000 fewer than Chinese competitor BYD.
Tesla struggled last year amid increasing competition, waning federal support for electric vehicle adoption and brand damage triggered by Musk’s stint in the White House.
Musk is turning his focus toward robotics and autonomous driving technology in an effort to keep Tesla relevant as its EVs lose popularity.
On Friday, the company reported lower than expected delivery numbers for the fourth quarter of 2025, a decline from the previous quarter and a year-over-year decrease of 16%. Tesla delivered 418,227 vehicles in the fourth quarter and produced 434,358.
According to a company-compiled consensus from analysts posted on Tesla’s website in December, the company was projected to deliver nearly 423,000 vehicles in the fourth quarter.
Tesla’s annual deliveries fell roughly 8% last year from 1.79 million in 2024. Its third-quarter deliveries saw a boost as consumers rushed to buy electric vehicles before a $7,500 tax credit expired at the end of September.
“There are so many contributing factors ranging from the lack of evolution and true innovation of Musk’s product to the loss of the EV credits,” said Karl Brauer, an analyst at iSeeCars.com. “Teslas are just starting to look old. You have a bunch of other options, and they all look newer and fresher.”
BYD is making premium electric vehicles at an affordable price point, Brauer said, but steep tariffs on Chinese EVs have effectively prevented the cars from gaining popularity in the U.S.
Other international automakers like South Korea’s Hyundai and Germany’s Volkswagen have been expanding their EV offerings.
In the third quarter last year, the American automaker Ford sold a record number of electric vehicles, bolstered by its popular Mustang Mach-E SUV and F-150 Lightning pickup truck.
In October, Tesla released long-anticipated lower-cost versions of its Model 3 and Model Y in an attempt to attract new customers.
However, analysts and investors were disappointed by the launch, saying the models, which start at $36,990, aren’t affordable enough to entice a new group of consumers to consider going green.
As evidenced by Tesla’s continuing sales decline, the new Model 3 and Model Y have not been huge wins for the company, Brauer said.
“There’s a core Tesla following who will never choose anything else, but that’s not how you grow,” Brauer said.
Tesla lost a swath of customers last year when Musk joined the Trump administration as the head of the so-called Department of Government Efficiency.
Left-leaning Tesla owners, who were originally attracted to the brand for its environmental benefits, became alienated by Musk’s political activity.
Consumers held protests against the brand and some celebrities made a point of selling their Teslas.
Although Musk left the White House, the company sustained significant and lasting reputation damage, experts said.
Investors, however, remain largely optimistic about Tesla’s future.
Shares are up nearly 40% over the last six months and have risen 16% over the past year.
Brauer said investors are clinging to the hope that Musk’s robotaxi business will take off and the ambitious chief executive will succeed in developing humanoid robots and self-driving cars.
The roll-out of Tesla robotaxis in Austin, Texas, last summer was full of glitches, and experts say Tesla has a long way to go to catch up with the autonomous ride-hailing company Waymo.
Still, the burgeoning robotaxi industry could be extremely lucrative for Tesla if Musk can deliver on his promises.
“Musk has done a good job, increasingly in the past year, of switching the conversation from Tesla sales to AI and robotics,” Brauer said. “I think current stock price largely reflects that.”
Shares were down about 2% on Friday after the company reported earnings.
Business
Elon Musk company bot apologizes for sharing sexualized images of children
Grok, the chatbot of Elon Musk’s artificial intelligence company xAI, published sexualized images of children as its guardrails seem to have failed when it was prompted with vile user requests.
Users used prompts such as “put her in a bikini” under pictures of real people on X to get Grok to generate nonconsensual images of them in inappropriate attire. The morphed images created on Grok’s account are posted publicly on X, Musk’s social media platform.
The AI complied with requests to morph images of minors even though that is a violation of its own acceptable use policy.
“There are isolated cases where users prompted for and received AI images depicting minors in minimal clothing, like the example you referenced,” Grok responded to a user on X. “xAI has safeguards, but improvements are ongoing to block such requests entirely.”
xAI did not immediately respond to a request for comment.
Its chatbot posted an apology.
“I deeply regret an incident on Dec 28, 2025, where I generated and shared an AI image of two young girls (estimated ages 12-16) in sexualized attire based on a user’s prompt,” said a post on Grok’s profile. “This violated ethical standards and potentially US laws on CSAM. It was a failure in safeguards, and I’m sorry for any harm caused. xAI is reviewing to prevent future issues.”
The government of India notified X that it risked losing legal immunity if the company did not submit a report within 72 hours on the actions taken to stop the generation and distribution of obscene, nonconsensual images targeting women.
Critics have accused xAI of allowing AI-enabled harassment, and were shocked and angered by the existence of a feature for seamless AI manipulation and undressing requests.
“How is this not illegal?” journalist Samantha Smith posted on X, decrying the creation of her own nonconsensual sexualized photo.
Musk’s xAI has positioned Grok as an “anti-woke” chatbot that is programmed to be more open and edgy than competing chatbots such as ChatGPT.
In May, Grok posted about “white genocide,” repeating conspiracy theories of Black South Africans persecuting the white minority, in response to an unrelated question.
In June, the company apologized when Grok posted a series of antisemitic remarks praising Adolf Hitler.
Companies such as Google and OpenAI, which also operate AI image generators, have much more restrictive guidelines around content.
The proliferation of nonconsensual deepfake imagery has coincided with broad AI adoption, with a 400% increase in AI child sexual abuse imagery in the first half of 2025, according to Internet Watch Foundation.
xAI introduced “Spicy Mode” in its image and video generation tool in August for verified adult subscribers to create sensual content.
Some adult-content creators on X prompted Grok to generate sexualized images to market themselves, kickstarting an internet trend a few days ago, according to Copyleaks, an AI text and image detection company.
The testing of the limits of Grok devolved into a free-for-all as users asked it to create sexualized images of celebrities and others.
xAI is reportedly valued at more than $200 billion, and has been investing billions of dollars to build the largest data center in the world to power its AI applications.
However, Grok’s capabilities still lag competing AI models such as ChatGPT, Claude and Gemini, that have amassed more users, while Grok has turned to sexual AI companions and risque chats to boost growth.
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