TikTok loses challenge against law requiring sale or ban

(WASHINGTON) — Former President Donald Trump has proposed tariffs as the solution for a host of perceived ills: the decline of U.S. manufacturing, the arrival of undocumented immigrants and the costs of childcare, among others.

“To me, the most beautiful word in the dictionary is ‘tariff,'” Trump said this week during an appearance at the Economic Club of Chicago.

On the campaign trail, Trump has rarely mentioned the threat of a potential trade war, in which foreign nations could respond to tariffs by slapping U.S. imports with taxes of their own.

Economists who spoke to ABC News said Trump’s tariff proposals would all but certainly trigger a global trade war, diminishing sales for U.S. exporters, which account for about 10% of the nation’s economy. The disruption would likely trigger job cuts and slow the nation’s economic performance, economists added.

On the other hand, the move would bring more of the supply chain back to U.S. soil, economists said, and it would likely spur growth and hiring at some firms by protecting them from foreign competition. But the same experts cautioned that such benefits would be far outweighed by the consequences.

“The essence of a trade war is you impose tariffs and other countries respond by putting high tariffs on your exports. It’s tit for tat,” Douglas Irwin, a professor of economics at Dartmouth College who specializes in the history of U.S. trade policy, told ABC News.

“Tariffs are easy to impose but hard to remove,” Irwin added.

In response to ABC News’ request for comment, the Trump campaign pointed to a series of statements about tariffs made by Trump and his allies, including remarks from Trump Campaign Senior Advisor Brian Hughes.

“Time warp alert! Just like 2016, Wall Street and so-called expert forecasts said that Trump policies would result in lower growth and higher inflation, the media took these forecasts at face value, and the record was never corrected when actual growth and job gains widely outperformed these opinions,” Hughes said.

“These Wall Street elites would be wise to review the record and acknowledge the shortcomings of their past work if they’d like their new forecasts to be seen as credible,” he added.

On the campaign trail, Trump has promised a sharp escalation of tariffs during his first term. He has proposed tariffs of between 60% and 100% on Chinese goods.

Envisioning a far-reaching policy, Trump has proposed a tax of between 10% and 20% on all imported products. On Tuesday, he told the audience at the Economic Club of Chicago that such a tariff could reach as high as 50%.

Economists widely expect that tariffs of this magnitude would increase prices paid by U.S. shoppers, since importers typically pass along the cost of higher taxes to consumers. Trump’s tariffs would cost the typical U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.

Meanwhile, there could be a second wave of consequences if foreign countries were to impose retaliatory tariffs, economists said.

“You might see a dramatic decrease in U.S. exports, which could then have employment effects for people working in those sectors,” Kara Reynolds, an economist at American University, told ABC News. She pointed to the manufacturing and farming as industries especially vulnerable to a trade war.

For evidence of such an outcome, one need look no further than Trump’s first term, during which a slew of tariffs often induced a retaliatory response.

Tariffs imposed during Trump’s first term often induced retaliatory tariffs. The European Union and Canada responded to tariffs on steel and aluminum with tariffs of their own. Trump slapped tariffs on about $360 billion worth of Chinese goods, but China responded with tariffs on tens of billions of dollars worth of U.S exports.

Chinese tariffs on U.S. soybean exports caused a steep decline in sales to Chinese customers, dropping exports from $12.3 billion in 2017 to $3.1 billion in 2018, according to the Georgetown University Journal of International Affairs. In response, the Trump administration paid billions of dollars in direct aid to farmers to make up for the losses.

“He felt obligated to bail out the farmers,” Robert Lawrence, a professor of trade and investment at Harvard University’s Kennedy School of Government, told ABC News. “Now, we’re talking about potential actions on a much grander scale.”

Alongside retaliatory tariffs, many countries would seek suppliers in places where such tariffs are not on the books, Lawrence added.

“Trump is likely to isolate the U.S. and drive other countries to do business with each other,” Lawrence said. “This would have a very adverse effect.”

On the campaign trail, Trump has sharply disagreed with such fears, saying large-scale tariffs would rejuvenate U.S. manufacturing and propel economic growth.

At the Chicago Economic Club on Tuesday, Trump said tariffs would force companies to locate factories in the U.S. as a way of circumventing the tariffs, which in turn would boost domestic production and employment.

“We’re going to have thousands of companies coming into this country,” Trump said. “We’re going to grow it like it’s never grown before, and we’re going to protect them when they come in because we’re not going to have somebody undercut them.”

Economists said higher tariffs could expand certain areas of U.S. manufacturing that face stiff competition from abroad, but the policy also risks raising input costs and slowing output at U.S. producers that import their raw materials.

Trump’s tariffs decreased U.S. employment by 166,000 jobs, according to a study from the nonprofit Tax Foundation, which cited an increase in import costs for U.S. employers. A separate study from the U.S.-China Business Council estimated up to nearly 250,000 lost jobs as a result of the tariffs.

“It certainly would make the U.S. more self-reliant, but it would come with far greater costs,” Lawrence said.

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(NEW YORK) — Tech billionaire Elon Musk, who has vowed to dismantle thousands of federal regulations as the co-head of a new Department of Government Efficiency, or DOGE, says the nation’s financial security depends on it.

The U.S. risks “strangulation by regulation” as it hurtles toward “bankruptcy super fast,” Musk said in a pair of posts on X this month.

Musk’s general concern about the nation’s multi-trillion dollar debt reflects worry among many economists, and his slash-and-burn rhetoric mirrors that of close ally President-elect Donald Trump.

The ambitious cuts championed by Musk, however, could imperil an array of federal protections that safeguard against harm in just about every corner of American life, regulatory experts told ABC News.

Regulations ensure air and water remain free of toxic pollution, workers receive safety gear and overtime pay, drugs undergo rigorous testing and corporations steer clear of ripping off customers.

“Revoking regulations or refusing to endorse them will endanger people’s lives,” Michael Gerrard, a law professor at Columbia University who specializes in environmental regulation, told ABC News. “I’m very worried.”

In response to ABC News’ request for comment, the Trump transition team touted the involvement of Musk and his plans for streamlining U.S. government.

“Elon Musk and President Trump are great friends and brilliant leaders working together to Make America Great Again. Elon Musk is a once in a generation business leader and our federal bureaucracy will certainly benefit from his ideas and efficiency,” Brian Hughes, a transition spokesperson, told ABC News.

DOGE, the commission co-led by Musk and entrepreneur Vivek Ramaswamy, plans to recommend a “vast reduction” of federal regulations, the two leaders said in a joint op-ed in The Wall Street Journal last week.

Such regulatory cuts would diminish the workload of government agencies, allowing for a significant reduction of federal workers and department budgets, the DOGE leaders said. They recommended a mandate that all federal workers come to the office five days a week, which they claimed would trigger a wave of resignations.

“Now is the moment for decisive action,” Musk and Ramaswamy said, but the pair did not identify specific regulations that they would like to cut.

Musk did not immediately respond to ABC News’ request for comment. Neither did Ramaswamy.

The promise of regulatory cuts may prove more compelling as a declaration of war against the status quo than a nitty-gritty elimination of individual rules, experts said. They pointed to significant legal hurdles faced in unwinding government regulations, as well as the lack of direct authority available to DOGE, a non-governmental entity.

Plus, the experts added, many government regulations involve direct protections of importance to a swath of Americans.

Some experts pointed for instance to an air-quality standard put in place by the Biden administration in February. The regulation lowered the amount of particulate matter air pollution — commonly known as soot — allowable in the nation’s air.

The rule would prevent as many as 4,500 premature deaths and 800,000 cases of asthma symptoms, an Environmental Protection Agency study found. Those health benefits could translate into as much as $46 billion in savings by 2032, the agency said.

The Trump administration may seek to undo the rule as part of wider regulatory cuts, Gerrard said. On the campaign trail, Trump vowed to cut environmental regulations in an effort to ease the burden on businesses, but he did not mention this specific rule. Trump rolled back nearly 100 environmental regulations during his first term, including rules governing clean air, a New York Times analysis found.

Darren Riley, co-founder of an air-quality data startup called JustAir, who was diagnosed with asthma six years ago, said air safety should transcend party politics.

“We should take whatever precautions and procedures necessary to protect the air we breathe and the water we drink as a right to life,” Riley told ABC News.

Workplace safety marks another focus of federal regulation that could draw scrutiny from the Trump administration.

In July, the Biden administration formally proposed a heat-safety rule that would require workplaces with elevated heat risks to provide adequate water, rest breaks and control of indoor temperature.

Shae Parker suffered from dizziness and nausea during bouts of heat exhaustion while working this summer at a Speedway gas station in Columbia, South Carolina, she told ABC News. One year prior, record heat in the area caused similar symptoms during Parker’s shifts at Waffle House, but management failed to provide adequate air conditioning, she said.

Parker has traveled to Washington, D.C., to advocate for the heat safety rule, and she worries that the Trump administration may set aside the regulation.

“Trump really needs to set the heat standard, and if he doesn’t, it’s like he doesn’t care about the country,” Parker said. “He needs to take our lives seriously.”

Waffle House did not immediately respond to ABC News’ request for comment. Neither did 7-11, the parent company of Speedway.

Over three decades ending in the early 2020s, nearly 1,000 workers in the U.S. died from excessive heat exposure, amounting to about 34 deaths per year, an EPA study in June found.

The proposed regulation is in the midst of a public comment period as part of the rule-making process. That phase ends in December, leaving little time for finalization and implementation of the measure before Trump takes office. The Trump administration may very well abandon the rule, experts told ABC News.

“Workers will be on their own when it comes to heat,” Debbie Berkowitz, a former official in the U.S. Occupational Safety and Health Administration under then-President Barack Obama, told ABC News.

For his part, Musk previously said DOGE would incorporate feedback from everyday people about which regulations it would recommend cutting. “Anytime the public thinks we are cutting something important or not cutting something wasteful, just let us know!” Musk said in a post on X earlier this month.

Musk has also said that the nation’s worsening debt will force an increased portion of U.S. tax payments to go to interest payments on such borrowing, rather than to government services.

William Buzbee, a professor of administrative law at Georgetown University who focuses on environmental regulation, said the outcome of Musk’s efforts remains highly unclear. But he will likely face legal pushback as well as backlash from people who would be impacted by the potential rollback of a given regulation.

“The bottom line is, yes, the Trump administration is quite clearly planning to go in a deregulatory direction,” Buzbee said. “It won’t be easy.”

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(NEW YORK) — Americans’ credit card debt has hit a record high, the Federal Reserve of New York said in a report released this week.

Credit card debt climbed $24 billion over a three-month stretch ending in September, soaring to a level 8% higher than where it stood a year ago, the report said.

Debt holders may seek solace in a string of recent interest rate cuts at the Federal Reserve, which typically reduce borrowing rates for credit cards. But credit card interest rates have proven stubborn, leaving borrowers saddled with near record-high average payments even after the rate cuts.

The average credit card interest rate stands at 20.35%, just slightly below a record-high of 20.79% attained in August before the Fed began cutting rates, Bankrate data showed.

Credit card interest rates remain high, in part, because the Fed’s benchmark rate still stands at a historically high level, experts told ABC News. The incremental cuts in recent months have only partially reversed the previous escalation of rates meant to fight the nation’s worst bout of inflation in decades.

That high baseline rate has collided with a rise in the average credit card margin, or the borrowing cost that companies place on top of the benchmark rate to weather default risk, cover overhead costs and recoup profits, experts added.

“Credit card rates are high, and they’re staying high,” Ted Rossman, a senior industry analyst at Bankrate, told ABC News.

To set credit card interest rates, the industry relies on what’s called a “prime rate,” which is the rate paid by the most creditworthy borrowers. That rate is calculated by adding three percentage points to the Fed’s benchmark interest rate. The prime rate, which acts as a baseline for credit card rates faced by all borrowers, currently stands at 7.75%.

The prime rate remains historically high because the Fed has, so far, taken just a few, incremental steps toward dialing back a yearslong series of rate hikes. In recent months, the Fed has cut interest rates by three-quarters of a percentage point, but such relief offers little savings for credit card borrowers, experts said.

Policymakers at the Fed forecast another quarter-point cut next month, and cuts next year totaling one percentage point, but that will still leave interest rates at an elevated level, according to projections released in September.

“I don’t think the Fed wants a rapid fall in rates,” John Sedunov, a finance professor at Villanova University’s School of Business, told ABC News. “It wants to gradually ease rates back.”

The persistence of high interest rates has coincided with a rise in the margin charged by credit companies over and above the prime rate, some experts said.

The average margin charged by credit card firms reached an all-time high of 14.3% last year, according to a U.S. Consumer Financial Protection Bureau analysis of Federal Reserve data. The margin increased sharply from a rate of 9.3% in 2013, the CFPB found.

The rise in credit card delinquency owes, in part, to a decline in personal savings, as Americans have spent down pandemic-era economic stimulus and turned to credit card loans, Sedunov said.

“Banks may view the amount of risk in credit card lending as higher than it was a few years ago, even though the Fed is lowering rates,” Sedunov said.

Growth in credit card margins also stems from old-fashioned profit-taking on the part of credit card companies, some experts said.

Credit card profitability has increased over the past five years, and has outpaced the profitability of other business drivers at the companies that offer them, according to the CFPB report.

“Banks, especially large banks, are trying to make as much profit as they can,” Fariz Huseynov, a professor of corporate finance at North Dakota State University, told ABC News.

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