The US economy has remained much more solid than critics feared, but pressure is rising in part because of the threat of potential tariffs coming from President Donald Trump.
After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. That bolstered hopes that Trump sees tariffs as merely a tool for negotiation, rather than as a long-term policy.
While discussing Ford Motor’s earnings and financial forecasts, CEO Jim Farley said his company can manage a “few weeks” of tariffs of 25 per cent on Canadian and Mexican imports. But if they’re protracted, they would have “a huge impact on our industry,” resulting in higher prices for customers, losses of US jobs and billions of dollars of industry profits wiped out.
Elsewhere on Wall Street, another company reliant on spending by consumers around the world, Ralph Lauren, leaped 14 per cent after reporting stronger profit and revenue than expected. Growth was particularly strong in China, where the company recently opened stores in Hong Kong and Beijing.
Eli Lilly rallied 4.5 per cent after the drugmaker showed how demand for its hot-selling diabetes and obesity treatments is swelling its profits.
Honeywell fell 5.3 per cent after announcing it will split into three independent, publicly-traded companies, following in the footsteps of other conglomerates such as General Electric.
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The North Carolina company, one of the few US conglomerates still in existence, expects to complete the spin-off of its automation and aerospace technologies businesses sometime in late 2026.
In stock markets abroad, London’s FTSE 100 jumped 1.2 per cent after the Bank of England cut its main interest rate as it slashed its forecast for economic growth. The British economy has barely grown over the past six months, and the Bank of England halved its growth projection for the British economy this year to 0.75 per cent.
Stock indexes also rose 1.5 per cent in Paris, 1.4 per cent in Hong Kong and 0.6 per cent in Tokyo.
