US trade deficit narrowed significantly amid Trump’s tariff escalation
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(NEW YORK) — The U.S. trade deficit narrowed significantly in April as President Donald Trump sharply escalated tariffs before pausing a large swath of the levies, U.S. Commerce Department data on Thursday showed.
Trump touted the tariffs as an effort to slash the nation’s trade deficit, which the president has said he considers a threat to the nation’s economic prosperity. Many economists disagree, however, saying the trade deficit reflects the consumer-driven engine of the U.S. economy.
The trade gap fell by more than half in April as imports plunged, the data showed. The U.S. registered a trade deficit of about $61 billion in April, marking a sharp decline from a $140 billion trade gap a month earlier.
Imports dropped by 16% in April as some trade barriers took effect, the data showed. Imports had ticked upward a month earlier as some firms rushed to stockpile supply before the levies saddled them with additional costs.
The nation’s trade gap stands well below the $131 billion deficit recorded in January, the month Trump took office.
The outlook is murky for the Trump’s tariff policy and the wider economy.
Trump’s on-again, off-again approach to tariffs leaves in doubt their ultimate level. A pair of court rulings last week thrust Trump’s steepest tariffs into limbo, adding another layer of uncertainty as federal appeals court judges determine whether a significant number of the policies pass legal muster.
The uncertain policy environment facing businesses has coincided with an anxious moment for consumers. Consumer attitudes have soured for four consecutive months as tariffs have taken hold, according to a survey conducted by the University of Michigan.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper appetites diminish and import prices rise.
So far, key measures of the economy have largely defied fears of a downturn. The unemployment rate stands at a historically low level and job growth remains robust, though it has slowed from previous highs. In recent months, inflation has cooled, reaching its lowest level since 2021.
The Organization for Economic Co-operation and Development, or OECD, forecast on Tuesday continued growth for the U.S. economy in 2025 and 2026, albeit at a slower pace than last year. Additionally, recession forecasts on Wall Street faded in recent weeks after Trump rolled back some tariffs.
(WASHINGTON) — President Donald Trump has disrupted global trade and roiled markets in an effort to bring manufacturing jobs back to the U.S. Some of his top tech allies, however, have backed ventures that replace human workers with robots.
Elon Musk, a top donor and adviser to Trump, has touted humanoid robots as a future growth area for electric-carmaker Tesla. “You can produce any product,” Musk said of the robots’ potential capacity during a February interview with Dubai’s World Governments Summit.
Amazon founder Jeff Bezos, who Trump last month called “terrific,” has invested in several advanced robotics firms.
Bezos last year poured funds into Figure, a humanoid robot company that says its initial rollout will focus on manufacturers and warehouses, among other business applications. “We believe humanoids will revolutionize a variety of industries,” the company says on its website.
Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman – both of whom joined Trump on his recent trip to the Middle East – helmed their respective companies as each invested in Figure. OpenAI ended its partnership with Figure last year.
“Trump is talking about bringing back the jobs, and he’s not understanding the tension between that goal and automation, which the tech bros have enthusiasm for,” Harry Holzer, a professor of public policy at Georgetown University and a former chief economist at the U.S. Department of Labor, told ABC News. “There’s a fundamental conflict between those goals.”
Musk did not immediately respond to ABC News’ request for comment made through Musk-owned firm SpaceX. Neither Bezos, Huang nor Altman responded to ABC News’ request.
Speaking at a conference in April, Huang said the onset of artificial intelligence would fuel “new types of factories,” which in turn would create jobs in construction and steelmaking, as well as in trades such as plumbing and electricity.
Even more, Huang said, AI is set to trigger a surge in productivity at companies that adopt the new technology, allowing them to add employees as the firms increase output and revenue.
“New jobs will be created, some jobs will be lost, every job will be changed,” Huang said. “Remember, it’s not AI that’s going to take your job. It’s not AI that’s going to destroy your company. It’s the company and the person who uses AI that’s going to take your job. And so that’s something to internalize.”
Even after a rollback of some levies, consumers face the highest overall average effective tariff rate since 1934, the Yale Budget Lab found earlier this month.
A key reason for the tariffs, White House officials say: Reshoring factories and rejuvenating employment in the manufacturing industry.
Commerce Secretary Howard Lutnick said this month in an interview with Fox News that Trump’s vision for ushering in a “golden age” for America involved enticing manufacturers to open factories and build in the United States.
“We’re going to have huge jobs in manufacturing. You’ve heard the president talk about trillions and trillions of factories being built in America,” he said in the interview on May 11.
In response to ABC News’ request for comment, White House Spokesperson Kush Desai said “the importance of President Trump’s push to reinvigorate American industry goes beyond creating good-paying jobs for everyday Americans.”
“Supply chain shocks of critical pharmaceuticals, medical equipment, and semiconductors during the COVID era prove that America cannot rely on foreign imports. The Trump administration remains committed to reshoring manufacturing that’s critical to our national and economic security with a multifaceted approach of tariffs, tax cuts, rapid deregulation, and domestic energy production,” Desai added.
The share of U.S. workers in manufacturing has plummeted for decades. Roughly 8% of U.S. workers currently hold positions in manufacturing, which marks a steep decline from about a quarter of all employees as recently as 1970.
Researchers attribute such decline to overlapping trends, including the offshoring of manufacturing to low-wage markets overseas and the adoption of labor-saving technology throughout the sector.
Long before current advances, automation significantly increased productivity in U.S. factories, meaning the same number of workers could produce many more goods, researchers at Ball State University found in 2015. As a result, they said, manufacturing employment stagnated for decades even as output climbed.
“Automation is something we’ve seen for a long time,” Philipp Kircher, a professor of industrial and labor relations at Cornell University, told ABC News.
Some of Trump’s tech allies have backed firms that seek to further automate manufacturing, touting a new wave of artificial-intelligence equipped robots as a replacement for some workers and salve for labor shortages.
Robotics outfit Vicarious boasts $250 million in investments from a set of backers that includes Bezos, Musk and Meta CEO Mark Zuckerberg – all of whom flanked Trump during his inauguration.
On a webpage displaying photos of robots for use in warehouse settings, Vicarious tells potential clients that the products can “reduce both your costs and person-hour needs.”
In 2022, Vicarious was acquired by Alphabet-backed robotics software firm Intrinsic. Alphabet CEO Sundar Pichai also sat alongside tech leaders at Trump’s inauguration.
Alphabet did not respond to ABC News’ request for comment. Meta declined to comment.
Yong Suk Lee, a professor of economics and technology at the University of Notre Dame, described the views on automation among Trump’s tech allies and some of his trade advisers as “opposed.”
The tech position, Lee said, would likely win out, even if some firms do open plants in the U.S.
“If you want to reshore, are you going to pay the same wages as Vietnam? Probably not,” Lee said. “Companies are faced with higher labor costs. In that case, they’ll probably automate.”
Discordant views among some tech leaders and White House officials surfaced in April, when Musk sharply criticized tariff-advocate Peter Navarro, Trump’s senior counselor for trade and manufacturing. Navarro, Musk said, is “truly a moron.”
In an interview with CNBC, Navarro responded, saying Musk “isn’t a car manufacturer — he’s a car assembler.”
To be sure, analysts said, automation in manufacturing would likely continue regardless of support from Trump’s tech allies, since producers are locked in a competition to lower costs and increase output. The precise outlook for manufacturing employment is unclear, they added, since additional technology may add jobs for those maintaining and optimizing the machinery.
“Whether it’s the companies that currently support the U.S. president or not, somebody would be doing this innovation, maybe slightly slower,” Kircher said.
Even at current employment levels, a labor shortage bedevils U.S. manufacturers. Roughly one of every five U.S. factories that failed to produce at full capacity cited a shortage of workers, Jason Miller, a professor of supply chain management at Michigan State University, found in a January study analyzing government data.
Agility Robots, an Amazon-backed firm building humanoid robots, identifies the current push for rejuvenated U.S. manufacturing as an opportunity for greater adoption of technology.
“Manufacturing companies are seeing a massive reshoring movement spanning various industries,” Agility Robots says on its website. “Adding a humanoid robot to your manufacturing facility is a great way to stay on the leading edge of automation.”
In response to ABC News’ request for comment, an Amazon spokesperson pointed to previous remarks about robotics made by a company executive.
“Our goal is to ensure these systems improve safety and productivity. Technology should be used to help us retain and grow our talent through skill development and reimagining how we make our workplace better, both in productivity and safety. If we do this well, we’re certain to always innovate for our customers,” Tye Brady, chief technologist at Amazon Robotics, said in a September blog post.
Amazon has “created more U.S. jobs in the last decade than any other company,” Amazon said this month.
(NEW YORK) — U.S. stocks opened muted on Tuesday, a day after President Donald Trump signaled a willingness to ease some tariffs but also impose new ones.
The Dow Jones Industrial Average ticked up 71 points, or 0.1%. The S&P 500 climbed 0.1%, while the tech-heavy Nasdaq increased 0.05%.
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also signaled a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
(NEW YORK) — Tesla’s profits fell 71% over the first three months of this year, a company earnings release on Tuesday showed. The company’s performance fell short of analysts’ expectations.
The decline coincided with a sales slump and stock woes at the electric carmaker, and comes amid worldwide protests against CEO Elon Musk over his role in the Trump administration
Total revenue decreased by 9% from one year earlier, to $19.3 billion, while revenue derived from car sales plunged 20% over the first three months of 2025 compared to a year ago, the earnings showed.
In a statement, Tesla cautioned about business impacts as result of the “current tariff landscape,” saying the company is “taking actions to stabilize the business in the medium to long-term and focus on maintaining its health.”
“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” Tesla added.
The announcement holds implications for Musk, the world’s richest person, who derives much of his wealth from his Tesla holdings.
The new financial details arrive as some shareholders have called on Musk to step down from his White House role and return full-time to the helm of Tesla.
Musk, whose temporary status as a government employee expires next month, will likely face questions about his plans during a conference call with analysts after the earnings release.
“We view this as a fork-in-the-road time,” Dan Ives, a managing director of equity research at the investment firm Wedbush and a longtime Tesla booster, said in a memo to investors on Sunday.
Tesla shares have dropped in value by roughly half from an all-time high in December. Most of those losses have come since President Donald Trump took office and Musk began his controversial governmental cost-cutting efforts as the head of the newly created Department of Government Efficiency (DOGE).
Tesla remains a top electric carmaker but the company faces growing competition, especially from Chinese firms such as BYD.
Deliveries of Tesla vehicles over the first three months of 2025 dropped about 13% compared to the same period a year ago, the company said earlier this month.
When Tesla announced the decline in deliveries, the company made no mention of its CEO but did say that a “changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1,” but added that “the ramp of the New Model Y continues to go well.”
Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed.
As rivals have challenged Tesla’s dominance in the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.
Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600.
Tesla boasts a more complete domestic supply chain than its rival U.S. carmakers but the company remains vulnerable to auto tariffs of the type President Trump imposed earlier this month, according to Musk.
“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial,” Musk said in a post on X in late March.
Gordon Johnson, CEO and founder of data firm GLJ Research, who is bearish on Tesla, voiced concerns about the company in a memo to investors on Monday, saying that the automaker faces a mix of “operational, financial, and reputational challenges.”
“Is Tesla facing an existential crisis?” Johnson added.
