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Judges ask if Trump tariffs authorized by emergency powers
On Thursday, U.S. appellate court judges questioned whether President Donald Trump’s tariffs could be justified by his emergency powers after a lower federal court ruled that he had exceeded his authority in imposing sweeping duties on imported goods. The U.S. Court of Appeals, Federal Circuit, in Washington, D.C., examines the legality of the "reciprocal tariffs" that Trump imposed against a wide range of U.S. trade partners in April, and tariffs imposed by Trump in February on China, Canada, and Mexico. Judges pressed Brett Shumate, the government's lawyer, to explain the International Emergency Economic Powers Act, a 1977 law that was historically used to sanction enemies or freeze their assets. Trump is the first President to use IEEPA for tariffs. The judges often interrupted Shumate and hurled a barrage of questions at his arguments. One of the judges stated that "IEEPA does not even mention tariffs." Shumate stated that the law gives "extraordinary" powers in an emergency. This includes the power to completely stop imports. He said IEEPA allows tariffs to be imposed because it gives a president the ability to "regulate imports" in a time of crisis. The states and companies that challenged the tariffs argued they were not allowed under IEEPA, and that Congress and not the President has the authority to impose tariffs and taxes. Neal Katyal is a lawyer representing the businesses. He said that the government's argument claiming the word "regulate", includes the power of taxation, would be a vast extension of presidential powers. These arguments, which come just one day before Trump is planning to raise tariffs on imports from almost all U.S. partners, are the first time that a U.S. court has tested the extent of Trump's tariff authority. The president's foreign policy has been centered around tariffs, which he uses aggressively during his second term to leverage trade negotiations and push back on what he calls unfair practices. Trump said that the tariffs in April were a reaction to persistent trade imbalances between the United States and a declining manufacturing power. He said that the tariffs on China, Canada and Mexico are justified because these countries do not do enough to prevent illegal fentanyl from entering U.S. border. These countries deny this claim. Shumate cited an appeals court ruling from 1975 that authorized President Richard Nixon to impose a 10% surcharge on all imported goods in order to slow inflation. The decision also stated that the president was not authorized to impose "whatever rates of tariff he considers desirable." Shumate said that courts could not review a president’s actions under IEEPA, or impose any additional limitations that were not in the law. Several judges stated that this argument would essentially allow IEEPA to overwrite other U.S. law related to imports and tariffs. Katyal said that the Trump administration's arguments ignored the limited nature of Nixon’s tariffs as well as changes in the law since 1970s. Katyal stated that "no trade law has ever been interpreted in the past 200 years to give this power to the president." A panel consisting of eight judges appointed by Democratic Presidents and three by former Republican Presidents is hearing the case. The court's decision will not be made for some time, but the losing party is likely to appeal immediately to the U.S. Supreme Court. TRADE NEGOTIATIONS Tariffs have become a major source of revenue for the federal government. In June, customs duties quadrupled to $27 billion. This was a record. Through June, they had topped $100 billion in the current fiscal. This income could be vital to offset the lost revenue due to Trump's tax law, which was passed earlier this month. Economists warn that the duties could increase prices for U.S. customers and decrease corporate profits. Trump's intermittent tariff threats have disrupted financial markets, and U.S. businesses' ability to manage their supply chains, production and staffing, and set prices. A three-judge panel of U.S. Court of International Trade on May 28 sided with Democratic states and small business that challenged Trump. The court ruled that the IEEPA didn't authorize tariffs based on long-standing trade deficits. Federal Circuit allowed tariffs to be in place until it considered the appeal of the administration. The case won't affect tariffs imposed under traditional legal authority such as steel and aluminum import duties. Following smaller agreements with Britain and Indonesia, the president announced recent trade deals which set tariff rates for goods imported from Japan and the European Union. Trump's Department of Justice argued that limiting Trump's tariff authority would undermine ongoing trade talks, while other Trump representatives have stated that negotiations continued without much change following the initial setback at court. Trump has set a date of August 1, 2018 for the introduction of higher tariffs against countries that refuse to negotiate new trade agreements. At least seven other lawsuits have been filed against Trump's IEEPA citation, including those brought by small businesses in California and other states. In one of these cases, a federal judge in Washington, D.C., found against Trump. No judge has so far backed Trump's claim to unlimited emergency tariff authority. Dietrich Knauth, Noeleen Walder, Leslie Adler and Deepa Babington edited the article.
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Saudi Arabia's budget deficit falls to $9.21 billion due to oil and other revenues rising
Saudi Arabia's second-quarter budget deficit shrank to 34.534 billion Saudi riyals (9.21 billion dollars), a 41.1% decrease from the first quarter as revenues, including oil, rose. The ministry reported that oil income increased by 1.28%, reaching 151.734 billion Riyals. In the quarter from April to June, Saudi Arabia, the world's largest oil exporter, saw its total revenue rise by 14.4%, to 301.595 riyals. Of this, 149.861 riyals were derived from non-oil sectors, while spending on public services rose 4.28%, or 336.129 riyals, to be a quarterly increase of 4.28%. Data from the Joint Organizations Data Initiative showed that the kingdom's oil output in May was the highest in three-months. The OPEC+ group, which includes OPEC, Russia, and other allies, began unwinding cuts of 2,17 million barrels a day (bpd), in April, with a boost in production of 138,000 bpd. This was followed by more increases in the recent months despite the falling price of oil. The kingdom's first-quarter budget deficit increased significantly year-on year to $15.65bn from $3.30bn in the same period last year, due to a drop of 18% in oil revenues. Saudi Arabia is expected to have a budget deficit of $27 billion in this year due to lower oil prices. The country is still pushing ahead with a massive transformation programme called Vision 2030, which aims to diversify revenue sources and wean the economy off its dependency on oil. The 12-day war between Israel and Iran, which began in June, increased geopolitical risks in the Gulf region and raised concerns about regional stability. This could threaten foreign investment and tourism to the Kingdom. However oil prices briefly rose by as much as 7% when the war broke out on June 14. The International Monetary Fund increased its GDP growth forecast of Saudi Arabia for 2025 to 3.5% in June from 3%. This was partly due to the demand for government-led initiatives and the OPEC+ plan to gradually end oil production cuts. The Saudi finance ministry released a statement that stated the country's public debt was 1.38 trillion riyals at the end of second quarter. $1 = 3.7511 Riyals (Reporting and writing by Yomna Alashray and Enas Ehab in Cairo; editing by Andrew Cawthorne, Susan Fenton and Nayera Abdallah)
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Zimbabwe economy on track to grow by 6% as it recovers from the drought
Mthuli Ncube, Zimbabwe's Finance Minister, said that the country is on course to achieve its 6% forecasted economic growth by 2025. This will be aided by a good agricultural production and high commodity prices. In the first half of this year, the economy of Southern Africa has begun to show signs of recovery following a severe currency crisis and drought in 2024 which pushed the GDP growth down below 2%. Ncube, in his mid-year review of the budget, told the parliament that "given the positive developments in the economy during the period from January to June we are confident the projected growth of 6% in the National Budget 2025 is achievable." He said that "all sectors of the economy will record positive growth by 2025. This is mainly due to a favorable agriculture season, increased electricity generation, a stable exchange rate, and lowered inflation rates." He didn't give any updates on the budget, which was projected to be 0.4% of the gross domestic product by 2025 in the budget forecast made last November. Zimbabwe's fiscal situation remains under pressure due to grain imports and drought relief expenditures. The public sector wage bill is also a factor. Analysts say that while the government has collected more revenues than it did in the same time period last year they believe it will be difficult to contain the deficit without new fiscal measures. The ZiG currency was launched in April 2024 as a replacement for the Zimbabwe dollar. It has been largely stable in relation to the U.S. Dollar, but it is still overshadowed due to the widespread use of dollars in daily transactions. Ncube reaffirmed the government's commitment towards the gold-backed currency and said that the currency has benefited from strict monetary and fiscal policy. (Reporting and editing by Nellie Pettison; Chris Takudzwa Muronzi)
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What's the significance of Russia claiming to have captured the Ukrainian town Chasiv Yar?
After nearly 16 months, Russia claimed to have taken control of the devastated town of Chasiv Yar (in eastern Ukraine), an assertion that Kyiv branded "propaganda". Here are some key facts about Chasiv Yar (also known as Chasov Yar by Russians) and the long struggle for its control that began in March/April of 2024. What is chasive yar? Chasiv Yar, a quiet ravine with a population of over 12,000 before the war, is located in the industrial Donbas region in Ukraine's Donetsk Region, one of four areas that Moscow claims to have annexed by 2022. Kyiv has called this annexation an illegal land grab. The town's economy pre-war was centered on an industrial complex that produced bricks and reinforced concrete products. It was located on higher ground and served as an artillery forward base as well as a point of regrouping for the Ukrainian Army. The Russian military considered it one of Ukraine’s strongest strongholds because of its location, elevation, terrain, and the factories and apartment buildings where Ukrainian forces had been able to dig into. Why does Russia want it? If confirmed, the Russian capture of the town would help Moscow in its effort to surround the "fortress-city" of Kostiantynivka, which it's trying to envelop with a pincer move, and remove an obstacle that had become an obstruction to the army's westward advance across the rest Donetsk. Sloviansk and Kramatorsk are listed by Russian analysts as "fortress cities" that can be reached from Chasiv Yar, if Moscow is able to get there. Kyiv, however, is determined not to allow this. Analysts in Russia say that their military will use Chasiv Yar to attack Ukrainian forces in Donetsk's northern region with artillery fire and drones and to disrupt Ukrainian supply lines. Rybar, a war blogger, said that holding the ground and moving northwards would not be an easy task. What was the battle for chasiv yar like? Both sides have military analysts who say that the battle is one of longest and most grinding of the war with many but not disclosed casualties. The Russian Defence Ministry announced on Thursday that its paratroopers have cleared over 4,200 structures and buildings in the push to take town. They had also covered more than 12 miles of distance under Ukrainian artillery fire and drones. Could not confirm this assertion. Ukraine claims that its fierce and long-lasting resistance at Chasiv Yar demonstrates how it was able to slow down and inflict severe casualties on an numerically superior force, with the aid of its drone units. How important would its fall be? Ukrainian analysts have downplayed the importance of Chasiv Yar and suggested that Russia taking it would only be a Pyrrhic win given the high price Kyiv forced Moscow to pay and the length of time it was able to resist Russian forces. Some Russian analysts claim that the capture of the town would be more of a tactical than strategic victory. Sergei Markov said that the battle has been going on so long, Chasiv Yar's strategic importance had diminished. Markov wrote in Telegram that "the capture of the city is symbolic: this could be how the war will continue for many more years - slowly and slowly the Russian army advances." What does CHASIV Yar look like now? The town is a shambles and has been pulverized by Russian forces after heavy shelling and air strikes, glide bombs and drone attacks. Ukraine claims that a Russian airstrike on a residential building in the city in 2022 resulted in at least 43 deaths. Russia claims that the dead were Ukrainian soldiers. Most of the residents of the town were evacuated when its utilities, such as power, water and gas, were destroyed. According to Serhii Chus, head of the town’s Ukrainian military administration, only 304 residents were still in the area in November of last year. They were sheltering in their basements. The Russian military announced on Thursday that it had evacuated 65 civilians. Andrew Osborn, Andrew Heavens and Andrew Osborn contributed to the reporting.
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Gold as a safe-haven amid tariff uncertainty before August 1 deadline
Gold prices increased 1% on Friday as traders sought out the safe-haven asset amid continued tariff uncertainty as President Donald Trump's deadline of August 1, to conclude negotiations, approaches. As of 855 a.m., spot gold rose 1% to $3,308.07 an ounce. ET (12:55 GMT). U.S. Gold Futures rose 0.3% to $3.306,10. We've seen a rise in trade uncertainty, as we near the August 1st tariff deadline... a slight revival of safe haven bids," said Peter Grant. The midpoint is around $3,312/oz. We tested this level today. I would probably be more optimistic if the week's highs were to surpass those of last week. Trump announced a series of tariffs on Wednesday on the import of goods and copper from Brazil and South Korea. The deadline for increased tariffs in the U.S. is August 1. Inflation in the United States increased in June, as import tariffs began to increase the price of certain goods. The PCE Index rose by 0.3% in June after a 0.2% increase that was upwardly revised in May. Fed Chair Jerome Powell made comments following the decision that undermined confidence in the idea that borrowing costs will begin to drop in September. In a low interest rate environment, gold is an asset that does not yield any income. Investors are now waiting for the U.S. Non-Farm Payrolls Data on Friday to get more clues about the Fed's interest rate path. Silver spot fell by 1.3% to $36.66 an ounce, the lowest level since July 7. Platinum dropped 0.5% to 1,306.98 while palladium rose about 0.9% to 1 215.7. Jim Wyckoff said that it would not surprise him if the strong selling pressure on silver futures was partly due to the sympathy selling that occurred amid the massive copper market collapse seen in the last two days. Trump shocked the market by announcing on Wednesday that the U.S. will impose a tariff of 50% on copper pipes and wires, which has caused the COMEX copper exchange to drop more than 20%. (Reporting from Sarah Qureshi in Bengaluru and Noel John; editing by Shreya Biwas)
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BHP and Vale accused by UK law firm of 'cheating out' $1.7 billion in legal fees
BHP and Vale face a London suit from a law firm that represents hundreds of thousands people in relation to Brazil's worst environment disaster. The firm alleges the companies tried to cheat them out of legal fees through settlements. BHP stated that it would contest the allegations and reject them "in their entirety". Vale declined comment. Pogust Goodhead will demand 1.3 billion pounds ($1.7billion) in unpaid fees from BHP, the company that represents claimants in a case against BHP relating to the collapse of the Fundao Dam in Mariana in the southeast Brazil in 2015. In the case before London's High Court, the firm represented more than 600 000 Brazilians. In a June presentation, BHP and Vale joint venture Samarco - which owned the dam and operated it - stated that around 130,000 people settled. In a letter sent by lawyers on behalf of Pogust Goodhead, they claim that BHP, Vale and Samarco pressed claimants to settle their claims "far below their true value". Pogust Goodhead claims that an agreement for compensation of 170 billion reais ($30,3 billion) signed by Brazil with BHP Vale and Samarco on October 20, 2024 prohibited claimants from discussing or paying the legal fees associated with the deal. The company says that it also had to incur an additional $1 billion in loan costs for the English lawsuit over the collapse of the dam. BHP DENIES ALLEGATIONS BHP's spokesperson stated in a press release that they "reject Pogust Goodhead’s claims and accusations in their entirety, and dispute their legal and factual basis." BHP will vigorously contest and reject these allegations and claims. BHP's spokesperson referred to the compensation agreement from last year, saying that: "We still believe Brazil is the best, most effective and efficient place to deliver compensation for the Fundao Dam Failure from Samarco." Pogust Goodhead has threatened legal action in a "letter before action", which is part of the procedure. This is the latest development after the High Court ruled last month that BHP would be held in contempt for funding a parallel lawsuit in Brazil. BHP is still waiting for a verdict following the trial of the lawsuit underlying the dam collapse. In that case, Pogust Goodhead claimed it sought damages up to 36 billion pounds. The dam ruptured in 2015 and released a toxic sludge which killed 19 people. It also left thousands of people homeless, flooded the forests, and polluted all of the Doce River. The trial started in October and ended in March. BHP denies responsibility and claims that the case is a duplicate of legal proceedings, reparation and repair programmes in Brazil. Sam Tobin is the reporter. Clara Denina contributed additional reporting. Mark Potter (Editor)
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Andy Home: Copper market suffers for ignoring its TACO hedge
The copper market has the tariffs right, but the products are wrong. The traders did not expect U.S. president Donald Trump to make a proclamation that "will address the effects of imports of copper on America's National Security". Imports of semi-manufactured copper products, such as wires and tubes, will face a 50% tariff starting Friday. The tariffs will not apply to refined copper until at least January 2027. The tariff trade that has dominated the copper market in February has collapsed. CME's U.S. Contract plummeted more than 20% after the news. This wiped out the high premium that was previously over the London Metal Exchange price. After traders sent huge tonnages of metal through the wide arbitrage gap, the United States now has a surplus of metal that it does not need. The copper market has forgotten Trump's tendency of reversing his most extreme threats. To borrow a popular investor meme, it has been TACOed, which is short for Trump Always Chills Out. Targeted Products for Copper Tariffs on semifinished copper products are applied to between 400,000-500,000 metric tonnes of U.S. imports per year. The United States imports a lot more refined copper. Last year, imports were just under 900,000. Canada is the U.S.'s largest copper supplier, but its supplier base is diverse. Copper tubes were imported from 32 countries last year, for instance. Tariffs will be applied to all copper-intensive products, including cables, connectors, and electrical components. This is likely to include more suppliers. The new tariff wall will be good for domestic processors if they can cover the quality and range of products currently imported. In the next few months, we will know how many exemptions specific to products have been granted. SCRAP WARS GET HOTTER Export restrictions will also be placed on concentrates mined in the United States and recyclable copper. A quarter of domestically-produced "copper input materials" will be required to be sold in the United States from 2027. This rate will increase to 30% in 2020, and then 40% in 2029. Even if Grupo Mexico were to reactivate its inactive Hayden plant, Arizona, it may be necessary to have more capacity available than the three domestic smelters currently operating. To encourage domestic recycling, "high-quality copper scrap" must also meet a minimum requirement of 25%. The exact types of scrap that qualify for the measure are not known, nor is it clear how the measure will work in reality. However, the move represents an escalation of the simmering scrap battles. To stop "scrap leakage," the European Union also considers export quotas for recyclable copper. China is the primary target, as it is the largest purchaser of secondary raw materials in the world. In 2024, the country imported 2,25 million tons copper scrap, the highest total ever since 2018, when authorities tightened the purity requirements on imported material. Imports are already slowing down this year due to a drop of 42% in shipments coming from the United States because of the high CME premium. The global scrap market is experiencing a growing resource nationalism, which will lead to structural changes in the recycling of materials. Can we have our COPPER back now? Not for refined copper as everyone expected. The United States has now ceased to need the copper that was shipped by large trade houses. It may have been a lucrative trade for those involved, but it is no longer necessary. CME warehouses now hold 232.195 tons of copper. This is the highest amount since 2004. Due to traders' last-minute rush to beat the August 1 deadline, metal is still arriving every day. Tariffs have a huge impact on the supply chain of other countries. China exported nearly 260,000 tons (or 78,800 tons) of refined copper from March to June. This is a significant increase over the previous four-month period. A portion of the copper was delivered to meet a shortfall on the London Market caused by the raid of LME stocks on brands that could be shipped to the United States. It was mostly non-Chinese steel that was shipped to the United States from warehouses under bonded storage. Shanghai Futures Exchange's stocks have plummeted to 73 423 tons, their lowest level since last December, due to China's booming exports. The physical supply chain may take longer to adjust than the futures trade. Analysts have already run the numbers to see if it makes sense to reverse the flow of copper back out of the United States. SAME TIME THE NEXT ANNUAL? What is the end of the copper tariff? Most likely not, as the reference explicitly mentions the option of a stepped tariff on imported refined copper starting at 15% in 2020 and increasing to 30% in 2030. The outcome will be determined by the report on the state and future of the domestic markets that Commerce Secretary Howard Lutnick is scheduled to deliver at the end of next June. It is also dependent on whether Trump decides to change his mind before then. Tariff Man is a great way to find out. These are the opinions of a columnist who writes for.
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Southern Co beats quarterly profit estimates, raises five-year capital plan
Utility Southern Co increased its five-year plan for capital expenditures by $13 billion, to $76 billion, to meet the growing energy demands in the U.S. after exceeding Wall Street's expectations for second-quarter profits. As power demand increases across the nation, utilities add billions of dollars in capital investment plans for upgrades to electrical grid and infrastructure. The U.S. Energy Information Administration predicts that power consumption will reach record levels in 2025 and in 2026, due to data centres dedicated to artificial intelligence, cryptocurrency and the use of electricity by homes and businesses, as well as the reduction in fossil fuels used for transportation and heating. Southern Co, based in Atlanta, Georgia, posted a profit adjusted of 92 cents for the three-month period ended June 30 compared to analysts' average estimates of 90 cents. Profits rose due to an increase in retail sales for commercial and industrial products and a higher demand for electricity. Kilowatt-hours sold in the industrial segment of the company grew 2.8% from the previous year, while sales in the commercial sector grew by 1.3%. Southern Co's operating revenues increased 7.9% in the third quarter to $6.97 Billion. The company's operating costs increased by 15%, to $5.21 Billion. Southern Co, the U.S.'s second largest utility, supplies power to six states: Alabama, Georgia Illinois, Mississippi Tennessee and Virginia. (Reporting from Bengaluru by Sumit S. Saha; editing by Maju Samuel.)
Trump claims that the US and Pakistan have reached a trade agreement
Donald Trump, the U.S. president, said that his administration had struck a deal on Wednesday with Pakistan under which Washington would work with Islamabad to develop South Asia's oil resources.
Trump posted on Twitter: "We just concluded a Deal with the Country of Pakistan whereby Pakistan will work with the United States to develop their massive Oil Reserves."
We are currently in the process to choose the Oil Company who will lead this Partnership.
Trump's post on social media did not give any further details about the deal between Pakistan and the U.S. The Pakistani Embassy in Washington did not immediately respond to a request for comment.
After meeting with Marco Rubio, the Secretary of State, Ishaq Dar, Pakistani foreign minister, said that a deal between the United States, Pakistan and could be reached within days.
Trump has tried to renegotiate with many countries the trade agreements that he had threatened with tariffs due to what he called unfair trade relationships. Many economists disagree with Trump's description.
Separate statements released by the U.S. State Department, and the Pakistani Foreign Ministry, after Rubio met with Dar last week, stated that the two diplomats discussed the importance of expanding the trade and ties between the two countries in the mining and minerals industries.
Dar, speaking last week of U.S. and Pakistan talks, said that "our teams have been here discussing in Washington. We've had virtual meetings. And a committee was tasked by Prime Minister to fine-tune now."
(source: Reuters)