US economy contracts in 1Q on pre-tariff stocking

: Crude oil, Metals
25/04/30

The US economy contracted in the first quarter for the first time in three years, on less government spending and a surge in imports as companies stocked up on inventories before tariffs take effect.

Gross domestic product (GDP) contracted at an annual 0.3pc pace following growth of 2.4pc in the fourth quarter, the Bureau of Economic Analysis said today. GDP last fell by 1pc in the first quarter of 2022. Economists surveyed by Trading Economics had forecast 0.3pc GDP growth for the first quarter.

Businesses stocked up on imports to get ahead of tariffs that President Donald Trump has wielded to restructure the global trading system. A monthly employment report in two days may show the impacts of Trump's mass federal firings, while Federal Reserve policymakers will meet next week to consider the effects of Trump's policies on prices.

Imports, which detract from GDP growth, expanded by 41.3pc after falling by 1.9pc in the fourth quarter. Exports grew by 1.8pc after declining by 0.2pc.

Consumer spending rose by an annual 1.8pc in the first quarter following 4pc growth in the fourth quarter. Domestic investment, which includes inventory builds, rose by an annual 21.9pc following a decline of 5.6pc in the prior quarter. Spending on equipment rose by 22.5pc following an 8.7pc decline in the fourth quarter.

Government spending fell by 1.4pc after growth of 3.1pc. Federal spending fell by 5.1pc after growth of 4pc. Defense spending was down by an annual 8pc.

By Bob Willis

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25/05/16

US House panel votes down Republican megabill

Washington, 16 May (Argus) — A key committee in the US House of Representatives voted today to reject a massive budget bill backed by President Donald Trump, as far-right conservatives demanded deeper cuts to clean energy tax credits and social spending programs. The House Budget Committee failed to pass the budget reconciliation bill in a 16-21 vote, with four House Freedom Caucus members — Ralph Norman (R-South Carolina), Chip Roy (R-Texas), Josh Brecheen (R-Oklahoma) and Andrew Clyde (R-Georgia) — voting no alongside Democrats. A fifth Republican voted no for procedural reasons. The failed vote will force Republicans to consider major changes to the bill before it comes up for a vote on the House floor as early as next week. Republican holdouts say the bill would fall short of their party's promises to cut the deficit, particularly because it would front-load increased spending and back-load cuts. The bill is set to add $3.3 trillion to the deficit, or $5.2 trillion if temporary provisions were permanent, according to estimates from the nonpartisan Committee for a Responsible Federal Budget. Some critics of the bill said the proposed cut of $560bn in clean energy tax credits is not enough, because the bill would retain some tax credits for new wind and solar projects. "A lot of these credits have been in existence for 30 or 40 years, and you talk about giveaways, we want to help those who really need help," Norman said ahead of his no vote. "That's the heart of this. Sadly, I'm a no until we get this ironed out." Negotiations will fall to House speaker Mike Johnson (R-Louisiana), who can only lose three votes when the bill comes up for a vote by the full House. But stripping away more of the energy tax credits enacted in the Inflation Reduction Act could end up costing Johnson votes among moderates. More than a dozen Republicans on 14 May asked to pare back newly proposed restrictions on the remaining clean energy tax credits. Ahead of the failed vote, Trump had pushed Republicans to support what he calls the "Big Beautiful Bill". In a social media post, he said "Republicans MUST UNITE" in support of the bill and said the party did not need "GRANDSTANDERS". The failed vote has parallels to the struggles that Democrats had in 2021 before the implosion of their push to pass their sprawling "Build Back Better" bill, which was later revived as the Inflation Reduction Act. Republicans say they will work over the weekend on a compromise. The House Budget Committee has scheduled another hearing at 10pm on 18 May to attempt to vote again on the budget package, but any changes to the measure would occur later, through an amendment released before the bill comes up for a vote on the House floor. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Deere sees paying $500mn in US tariffs through Oct

25/05/16

Deere sees paying $500mn in US tariffs through Oct

Houston, 16 May (Argus) — Heavy equipment manufacturer John Deere expects US import tariffs to cost the company $500mn in the fiscal year that ends in October. The Illinois-based company paid roughly $100mn in tariffs in its fiscal second quarter, which ended 27 April. It expects to pay the US government another $400mn in tariffs during the second half of its fiscal year, executives said Thursday on an earnings call. Deere plans to recoup its tariff costs through a combination of charging higher prices and reducing its costs, chief financial officer Joshua Jepsen said. Tariffs also are expected to contribute to lower demand for tractors and other farm equipment produced by Deere. Large agricultural equipment sales across the industry are projected to fall by 30pc in the US and Canada in 2025 due to trade uncertainty and high interest rates, Deere said. Deere domestically produces 79pc of the completed goods it sells in the US, and 76pc of the components used at its domestic facilities are sourced from US-based suppliers. The company is prepared to invest $20bn to expand its domestic manufacturing over the next decade, chief executive John May said. The company imports 10pc of the components used in its US plants from Mexico and has begun qualifying its products for exemptions under the US-Mexico-Canada free trade agreement (USMCA) to mitigate the impact of tariffs. US sales of the company's roadbuilding machinery are subject to the US' 10pc global import tariff rate, as the equipment is predominantly made in Germany. The company reduced the low end of its profit forecast for the fiscal year to $4.75bn-$5.5bn, down from $5bn-$5.5bn. John Deere's second-quarter profit fell to $1.8bn, down by 24pc compared with the year-prior period. By Jenna Baer Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump says US will soon set new tariff rates

25/05/16

Trump says US will soon set new tariff rates

Washington, 16 May (Argus) — The US will unilaterally set new tariff rates on imports from select trading partners instead of holding negotiations over import tax levels, President Donald Trump said today. In the next 2-3 weeks "we'll be telling people what they will be paying to do business in the US," Trump told a group of US and UAE business executives in Abu Dhabi today. Trump contended that more than 150 US trading partners have expressed interest in negotiating with his administration, adding that "you're not able to see that many countries." Trump's administration since 5 April imposed a 10pc baseline tariff on imports from nearly every US trading partner — with the notable exception of Canada, Mexico and Russia. Trump paused his so-called "reciprocal tariffs" until 8 July, nominally to give his administration time to negotiate with foreign countries subject to those punitive rates. The reciprocal tariffs would have added another 10pc on top of his baseline tariff for imports from the EU, while the cumulative rate would have been as high as 69pc on imports from Vietnam. Trump in April suggested that 200 deals with foreign trade partners were in the works. Treasury secretary Scott Bessent has said the US is only negotiating with the top 18 trading partners. The trade "deals" clinched by the Trump administration so far merely set out terms of negotiations for agreements to be negotiated at a later date. The US-UK preliminary deal would keep the US tariff rate on imports from the UK at 10pc, while providing a quota for UK-manufactured cars and, possibly, for steel and aluminum. The US-UK document, concluded on 9 May, explicitly states that it "does not constitute a legally binding agreement." The US-China understanding, reached on 12 May, went further by rolling back some of the punitive tariff rates but left larger trade issues to be resolved at a later date. The Trump administration would keep in place a 20pc extra tariff imposed on imports from China in February-March and a 10pc baseline reciprocal tariff imposed in April. The US will pause its additional 24pc reciprocal tariff on imports from China until 10 August. Conversely, China will keep in place tariffs of 10-15pc on US energy commodity imports that it imposed on 4 February, and 10-15pc tariffs on US agricultural imports, imposed in March. It will maintain a 10pc tariff on all imports from the US that was imposed in April, but will pause an additional 24pc tariff on all US imports until 10 August. These rates are on top of baseline import tariffs that the US and China were charging before January 2025. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Liberty cancels Speciality Steel restructuring plan

25/05/16

Liberty cancels Speciality Steel restructuring plan

London, 16 May (Argus) — Liberty Steel has cancelled the restructuring plan for its Speciality Steel business in the UK. Liberty axed the plan as it was not going to receive sufficient creditor support to approve it, sources at the company said. Greensill creditors, and a majority of other plan creditors, had voiced their opposition to the restructuring in recent court proceedings. A sanction hearing to approve or reject the plan had been scheduled for 15-16 May, but that has now been cancelled as a result. The winding up petition by major creditor Harsco is scheduled to be heard on 21 May, so there is a risk the company could now be wound up if not placed into administration. In a note to creditors obtained by Argus , Liberty said it will "consult with UK government" and other stakeholders ahead of the petition. "The court's ability to sanction the [restructuring] plan depended on finalisation of an agreement with creditors," a company spokesperson told Argus . "This has not proved possible in an acceptable timeframe and so Liberty decided to withdraw the plan ahead of the sanction hearing on 15 May and will now quickly consider alternative options." The company remains "committed to doing all it can" to maintain the business, he said. The Speciality business has operated at a tiny fraction of its nameplate capacity in recent years, along with all of Liberty's operations in the UK, some of which have been technically mothballed already. Some sources have suggested the government could take control of Speciality Steel, as it has with British Steel, citing synergies between the two plants. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Kuwait's Kufpec gets OK to develop Indonesian gas field

25/05/16

Kuwait's Kufpec gets OK to develop Indonesian gas field

Singapore, 16 May (Argus) — Kuwait's Kufpec, a unit of state-owned KPC, has won approval from the Indonesian government for a plan of development for the Anambas gas field located in the West Natuna Sea offshore Indonesia. The Anambas field is located in the Natuna basin and has an estimated gas output of about 55mn ft³/d. Kufpec will invest around $1.54bn into the development of the field, which is planned to come on stream in 2028. The approved plan of development outlines a phased strategy to unlock the gas and condensate potential of the field, said upstream regulator SKK Migas. The regulator will encourage Kufpec to accelerate efforts and bring the project on stream by the fourth quarter of 2027, said the head of SKK Migas, Djoko Siswanto. The development of the field will include drilling production wells and installing subsea pipelines to transport gas from Anambas to existing facilities in the West Natuna transportation system. Kufpec in 2022 announced the discovery of gas and condensate at the Anambas-2X well in the Anambas block. The Anambas block was awarded to Kufpec Indonesia in 2019 through a bidding process. The company holds a 100pc participating interest in the block and has a 30-year production sharing licence, including a six-year exploration period. The approval of the plan of development marks a step towards the project's final investment decision. It also shows that the upstream oil and gas sector in Indonesia is still attractive to domestic and foreign firms, said Djoko. The field is expected to be able to transport gas to domestic and regional markets, support Indonesia's energy security, and drive economic growth, according to SKK Migas. Indonesia continues to prioritise oil and gas expansion to maintain economic growth. Investment in oil and gas rose from $14.9bn in 2023 to $17.5bn in 2024, according to the country's energy ministry. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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