ZURICH (Reuters) -Switzerland’s ABB is “very confident” about future demand from data centers that power artificial intelligence, its CEO Morten Wierod told Reuters.

The engineering company has seen double-digit percentage growth this year in orders for electrification products from data centers being built to meet AI and cloud computing demand.

CEO CONFIDENT IN DATA CENTRE DEMAND

“Over the next five years I am very confident about demand from data centers,” Wierod said on Thursday.

“I don’t think there is a bubble, but we do see do see some constraints in terms of construction capacity not keeping up with all the new investments,” he added.

“We are talking about trillions in investment,” he said, adding: “That will take a few years to implement because there is not enough people and resources to build all this.”

AI is only in its early stages, leaving room for growth in data center demand, while many newcomers are joining large tech companies in the sector, Wierod said.

ABB generated some 7% of its revenue from data center business this year, up from 6% in 2024, selling electrification systems, including medium and low voltage switchgear and uninterruptible power solutions to keep servers online.

ABB STRIKES PARTNERSHIP WITH NVIDIA

ABB announced a partnership agreement with chip maker Nvidia earlier this week to develop electrification products for the next generation of chips used in data centers.

“That’s not for 2025 or 2026, it’s more of a long term investment,” Wierod said. “It’s very important to be part of the future technology developments.”

While the majority of ABB’s business is for new-build sites, Wierod also saw opportunities in retro-fitting and upgrading.

“For some of the older, smaller size data centres, you will need to upgrade the racks with equipment, and you also need to have more power coming in,” he said.

“That is a big opportunity,” he added.

Oil held steady near a five-month low amid mixed signals on US President Donald Trump’s push to stop India’s purchases of Russian crude.

West Texas Intermediate was little changed to trade near $58 a barrel after earlier rising by as much as 1.4%. India’s oil refiners said they expect to reduce — not stop — the purchase of Russian crude, a move that could squeeze global supply, following remarks by Trump that the South Asian nation would halt all buying. Still, the market is awaiting clarification on the situation from the government in New Delhi, which didn’t officially confirm or deny Trump’s remarks.

The development took some air out of the earlier rally, with traders newly assured that the halt to India’s imports of Moscow’s crude won’t be immediate. The South Asian country, along with neighbor China, has made the most of discounted Russian supplies accessible under a Group of Seven price cap mechanism that was designed to keep oil flowing while limiting Moscow’s access to funds for its war in Ukraine.

However, senior US officials have accused Indian businesses of profiteering and the purchases have been a main sticking point as New Delhi seeks to fast-track trade talks. Its trade secretary on Wednesday said his nation has the capacity to purchase an additional $15 billion of oil from the US.

Meanwhile, the UK slapped sanctions on Russia’s biggest oil producers, two Chinese energy firms and Indian refiner Nayara Energy Ltd. because of their handling of Russian fuel. Western nations are turning the screws on Russia’s energy sector in a bid to curb the flow of petrodollars to the Kremlin and limit President Vladimir Putin’s ability to finance the war in Ukraine.

Crude has fallen this month as increased trade tensions between the US and China raised concerns about demand in the two biggest crude consumers, and as major trading houses said a long-anticipated oversupply is already starting to emerge.

U.S. cargo ships built in China won’t have to pay new fees to dock in that country.

While the U.S. and China began collecting the reciprocal charges Tuesday, state broadcaster CCTV said American-flagged, owned, and operated ships built in China would be exempt from the fees, Reuters reported.

The trade partners are charging vessels around $50 per net ton on each voyage calling the other’s ports, as relations have deteriorated over the past two weeks.

Matson (NYSE: MATX) and APL, a unit of France’s CMA CGM, operate China-built ships under the U.S. flag.

At the same time, Matson’s Manukai, an 11,149-ton container ship built in Philadelphia, became the first U.S.-flag vessel to be billed — a total of more than $600,000 when it called Ningbo on Tuesday, according to Xinde Marine News of China, citing industry sources.

China also exempted empty ships entering shipyards for repairs.

The Chinese charges also extend to vessel operators with 25% or more U.S. ownership. Bulker and tanker operators Norden, DHT, Star Bulk and 2020 Bulkers released statements clarifying their status below that threshold.

The sentiment among maritime executives meeting at a conference in Norfolk, Va. is that the U.S. and China will come to a broad trade agreement soon, a source told FreightWaves.

President Donald Trump and Chinese leader Xi Jinping are scheduled to talk on the sidelines of a meeting of Asian trade nations late this month.

CVS has finished buying customer prescription files from hundreds of closed Rite Aid drugstores and is now running 63 of the defunct chain’s locations.

The company said Wednesday that it is operating former Rite Aid and Bartell Drugs stores in Idaho, Oregon and Washington. It also has transferred customer prescription files from 626 pharmacies in 15 states to nearby CVS locations.

CVS Health did not say how much it spent on the stores and prescription files.

Rite Aid recently announced on its website that its stores have closed. The company said in May that it was seeking bankruptcy protection and would look to sell substantially all of its assets.

Philadelphia-based Rite Aid once ran more than 4,000 stores mostly on the East Coast. It initially filed for bankruptcy protection in October 2023 after struggling with debt and posting annual losses for several years.

The chain emerged from that Chapter 11 reorganization in 2024 as a private company. It said then that it had less debt, was more efficient and now operated a “rightsized store footprint.”

But the recovery didn’t stick with Rite Aid down to around 1,200 stores. The chain was attempting to turn around its business in a tough environment.

Major chains and independent pharmacies have been closing stores and struggling with challenges like increased theft and customers who are drifting more to online shopping and discount retailers.

Walgreens, which has more than six times as many stores as Rite Aid, agreed in March to be acquired by the private equity firm Sycamore Partners.

Woonsocket, Rhode Island-based CVS Health Corp. runs several thousand drugstores. It also operates a large pharmacy benefits management business, and its Aetna health insurance segment covers nearly 27 million people.

Treasury Secretary Scott Bessent indicated his department is shuffling the flow of money through its system in order to allow for US military staff to get paid — a maneuver that his predecessor had suggested might not be possible. “We’re having to prioritize payments,” Bessent said on Fox Business Monday. “We are having to hold back on some payments so that our brave men and women in the US military can get paid. So we are having to shuffle things around.” The failure of Congress to pass appropriations bills for the fiscal year that began Oct. 1 has led to a shutdown of swaths of the federal government. That’s raised questions about paychecks due to US troops Oct. 15. President Donald Trump said in a Truth Social post Saturday that he had directed Defense Secretary Pete Hegseth to use “all available funds” to get the troops paid on time. Currently, the Treasury is still making some payments, for example to Social Security beneficiaries and interest payments to bondholders, for which Congress does not need to approve annual funding. The issue of prioritizing payments is a sensitive one with bearing on the periodic debt-limit showdowns in Washington — times when lawmakers fail to increase or suspend the ceiling for federal borrowing in a timely manner. Bondholders have long assumed that, in a worst-case scenario, the government would prioritize making interest and principal payments on Treasury securities. But during debt-limit impasses, former Treasury Secretary Janet Yellen and some of her predecessors cast doubt over whether prioritization was possible. They pressed Congress to set aside such notions and instead accelerate an increase or suspension of the debt ceiling.

Previous Arguments

Yellen said in January 2023 that “Treasury systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another.” In February that year, she said that if Congress failed to act on the debt ceiling in time, “It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security.” In a September 2021 letter, a number of former Treasury chiefs backed the assertion that the department could not prioritize payments. Unlike with debt-limit standoffs, the issue for the federal government right now isn’t the risk of running out of cash, said Lou Crandall, senior economist at Wrightson ICAP. “The question now seems to be whether the administration can find a legal basis for making some payroll disbursements but not others in the absence of spending authority from Congress,” Crandall said in an emailed response to questions. “But the general message is that the Administration’s hands are not tied,” Crandall said. With regard to implications in a debt-ceiling context, he said Bessent’s comment would “absolutely” reinforce Wall Street’s view that the Treasury would prioritize principal and interest payments.

‘Non-Conventional’

Bessent on Monday cited remarks the previous day by Vice President JD Vance about prioritization. Vance, speaking on Fox News’ Sunday Morning Futures program, said the administration is “doing some pretty non-conventional things.” “We are confident we have identified the legal pathways in order to do this,” Vance said of the maneuvering. Asked whether the money for military paychecks would come from revenue from Trump’s tariff hikes, the vice president said, “Some of it will come from tightening the belts in other areas.” Vance added, “A lot of this will come from incoming revenues to the Internal Revenue Service — tariff revenue, but also income-tax revenue. That is going to make it possible for us to pay our troops.”

(Bloomberg) — US President Donald Trump and Chinese leader Xi Jinping’s latest tit-for-tat showdown has both countries claiming the ball is now in the other’s court, with the clock ticking toward another escalation in import tariffs. After Trump signaled openness to doing a deal with Beijing, US Vice President JD Vance on Sunday declared the outcome would “depend on how the Chinese respond.” Hours later, China’s Foreign Ministry made clear Beijing would take its cues from Washington’s next steps, after having already unleashed what it saw as retaliatory actions. “If the US continues on its wrong course, China will firmly take necessary measures to safeguard its legitimate rights and interests,” Foreign Ministry spokesman Lin Jian said at a regular briefing in Beijing. Chinese authorities haven’t yet retaliated to Trump’s threat to impose 100% tariffs over their latest rare-earth curbs, while saying there could be “exemptions” in order to facilitate trade. Treasury Secretary Scott Bessent said Monday that he believes the Trump-Xi meeting “will still be on,” noting there had been “substantial communication over the weekend.” In the meantime, he expected US-China staff-level meetings this week, along with moves by the Trump administration to mobilize US allies to put pressure on Beijing, while also threatening “straight brute force countermeasures” if Beijing doesn’t act. “This is China versus the world,” Bessent said. “They have pointed a bazooka at the supply chains and the industrial base of the entire free world. And you know, we’re not going to have it.” The question now is which side blinks first. The S&P 500 closed 1.6% higher Monday, its best showing since May, as investors saw the back-and-forth as strategic posturing. China’s markets showed resilience to the turmoil, with the CSI 300 benchmark for onshore shares ending Monday down just 0.5%. While it’s hard to gauge who exactly has more leverage, what’s abundantly clear is China’s export sector can withstand US tariffs of around 50%, said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “Beijing does care if the tariffs go past 100%, but as long as that scenario doesn’t materialize, tariffs are a lesser priority,” he added. “The rare-earth actions are intended to extract US concessions on tech export controls, but it’s also not in either side’s interest to completely derail the negotiations.” Trade data on Monday showed China’s shipments overseas growing at their fastest pace in six months, blunting the impact of any tariff hike from the US. Trump has other tools to inflict pain: He’s already threatened to thwart Beijing’s access to jet parts and stop selling China critical software. Bessent, speaking on Fox Business Monday, said he expects to meet with his counterpart, Vice Premier He Lifeng, “in Asia” ahead of the Trump-Xi sitdown. Last month, before the current flap, he had indicated Frankfurt for the next round of talks aimed at extending a rolling 90-day truce that’s set to expire in early November. The conversations will likely lay the groundwork for concessions to resolve the latest flare up. Ultimately, China believes it has the upper hand, said Josef Gregory Mahoney, a professor of international relations at Shanghai’s East China Normal University. “China is confident it’s better positioned than the US to absorb any shocks from the trade war,” he said. “Trump needs a deal before the holiday shopping and maybe even before the Supreme Court rules against him,” he added, referring to a pending decision on whether his tariffs are legal. When a trade truce between the US and China fell apart in May after Washington took fresh steps against Chinese national chip champion Huawei Technologies Co., Beijing imposed a blockade on its rare earth magnets critical to manufacturing everything from mobile phones to missiles. Trump responded by relenting on some export controls, marking a seismic change in Washington’s approach. If the US doesn’t make similar concessions in this round then Xi could once again jam the flow of rare earths to the US, by slowing the license approval system it imposed earlier this year. Unwinding US curbs imposed for national security reasons would likely face opposition from China hawks in Washington, who — though not as prominent as in Trump’s first term — are still pushing for pursuing a harder line on Beijing. Adding to the incentive to keep talks on track, the Republican leader is under pressure from farmers in key voting states to find markets for US soybeans that Beijing won’t buy. Meanwhile, losing a deal previously agreed with Xi’s team to keep Chinese app TikTok online in the US would hinder his ability to connect with voters on the platform ahead of the 2026-midterms. Xi’s framework for controlling its rare earths — which applies even to shipments by foreign firms overseas, under the latest rules — mirrors measures Washington has for years had in place on its cutting-edge semiconductors. While China once condemned those tactics as “long-arm jurisdiction,” now it appears to be playing the US at its own game. “Beijing might also be incorporating some of Trump’s signature negotiation tactics,” said Ting Lu, chief China economist at Nomura. That includes “extreme opening offers, exploiting leverage and opponents’ weaknesses and credible walk-away threats.” Wu Xinbo, director at Fudan University’s Center for American Studies in Shanghai, said the US would need to scale back actions it took after last month’s phone call between Trump and Xi for the two men to hold their first meeting since 2019. In recent weeks, the US has moved ahead with a deadline for imposing US port fees on Chinese ships and removed a Biden-era waiver allowing some of the world’s biggest chipmakers to keep operations in China. “If you want to go ahead with summit meeting, then you have to adjust your regulations, your policies,” said Wu. “If not — fine. We don’t beg for a summit meeting.”

LONDON (Reuters) -World markets found steadier ground on Monday after being whipsawed by broadsides in the U.S.-China trade war, while gold hit new record highs in a sign that uncertainty remained high. While U.S. President Donald Trump had threatened 100% tariffs on China from November 1 and Beijing said it could take countermeasures, he sounded more conciliatory on Sunday, posting that the U.S. did not want to “hurt” China. European shares were broadly higher, while U.S. stock futures also firmed although trading was subdued by a holiday in Japan and the United States. France remained in the spotlight with reappointed prime minister Sebastien Lecornu facing pressure to get a budget deal across the line. “The stabilisation in markets is encouraging,” said Rory McPherson, chief investment officer at Wren Sterling in London. “Given everything that is going on with the (U.S. government) shutdown, and political turmoil in France and Japan, markets have been strong. A pullback would be healthy.” Beijing defended on Sunday its curbs on exports of rare earth elements and equipment as a response to U.S. aggression, but stopped short of imposing new levies on U.S. products. Goldman Sachs chief economist Jan Hatzius said that while he still expected an extension of the current tariff pause, recent developments suggested a wider range of outcomes was possible.

JAPANESE LEADERSHIP NOW IN DOUBT

Japanese markets had their own problems with the ascension of new LDP leader Sanae Takaichi to prime minister now in doubt, contributing to a sharp rebound in the yen and a 5% dive in Nikkei futures on Friday. Japan’s Nikkei was closed on Monday, while MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled 1.5%. Chinese blue chips fell 0.5%, though the rare earth and semiconductor sectors both firmed. Data pointed to some resilience in trade with exports rising 8.3%, almost twice the forecast, and imports up strongly. And in a sign that global uncertainties remained strong, gold hit fresh record highs above $4,000 an ounce, while Asia stocks fell sharply. BofA commodities analysts said in a note on Monday that they had raise their forecast for gold to $5,000 an ounce for next year from $4,400. U.S. stock futures pointed to a rebound on Wall Street, with S&P 500 and Nasdaq stock futures up more than 1% each. While the New York Stock Exchange and Nasdaq are open for trade on Monday’s Columbus Day holiday, bond markets are closed. Earnings season kicks off this week with major banks reporting, including JPMorgan, Goldman Sachs, Wells Fargo and Citigroup. S&P 500 companies overall are expected to have increased earnings by 8.8% in the third quarter from a year earlier, according to LSEG IBES, and strong results will be needed to justify the market’s high valuations. “Our guess is you might get, at least in the very near term, a more volatile and directionless environment for some of the risky assets. Ultimately, whether or not you go against the market in this environment depends on your conviction,” said Homin Lee, senior macro strategist at Lombard Odier.

FRANCE TURMOIL

Politics cast a cloud over Europe as the French presidency announced Lecornu’s new cabinet line-up on Sunday, reappointing Roland Lescure, a close ally of Emmanuel Macron, as finance minister. Lecornu will face a no-confidence vote most likely on Thursday and it’s unclear if he has the votes needed to survive. France’s 10-year bond yield was little changed at around 3.47% and French stocks rallied 0.5% in a sign that investors were holding on to hopes for some near-term political stability. “Even if, very big if, Lecornu now lasts longer in office than on his first attempt, he will face an uphill struggle to get a budget for 2026 through the divided parliament by the end of the year,” said Holger Schmieding, chief economist at Berenberg. Currency markets also saw some stabilisation after Friday’s rush into the traditional safe havens of the Japanese yen and Swiss franc. The dollar rallied 0.6% to 152 yen, having slid 1.2% on Friday from a top of 153.29. The euro slipped 0.25% to $1.1586, while the dollar gained 0.5% on the Swiss franc to 0.8038. The dollar index was steady, after losing 0.6% on Friday. In bond markets, cash Treasuries were closed for a holiday, while government bond yields in Europe nudged up. U.S. and European bond yields had hit multi-week lows in the wake of Trump’s tariff threat on Friday , while investors had added to wagers on more rate cuts from the Federal Reserve. “Interestingly, the bond market held up on Friday and that was encouraging given the recent selloff in long-dated bonds,” said Wren Sterling’s McPherson. Futures implied around a 98% chance of a quarter-point cut from the Fed later this month, and a similar probability of another move in December. Fed Chair Jerome Powell has a chance to offer his guidance when he speaks on the economic outlook at the NABE annual meeting on Tuesday. A host of other Fed members are appearing this week, along with a who’s who of central bankers attending an IMF-World Bank meeting in Washington. Oil prices also regained some ground on hopes the U.S. and China would find some compromise on trade to avoid fresh tariffs. [O/R] Brent bounced 1.7% to $63.8 a barrel, while U.S. crude rose 1.9% to $60 per barrel.

The next time you see a food robot on wheels navigating its way across a cracked sidewalk or a challenging pedestrian-heavy crosswalk, look harder. There might be some big backers behind that little rolling automaton trying to get a lamb gyro to a hungry customer a few blocks away. Nvidia (NASDAQ: NVDA) and Uber (NYSE: UBER) were early financial backers of Serve Robotics (NASDAQ: SERV), a pioneer in delivery robotics. But it’s not the only player in this niche, and there are other companies with lofty ambitions hoping to nail the last mile in urban delivery with a fleet of high-tech bots. Serve Robotics generated a mere $1.8 million in revenue for all of last year, and it had just 57 daily active robots in service heading into 2025. Still, don’t dismiss Serve Robotics just yet. It has a fun origin story, elite backers, a recurring role in a popular Netflix comedy special last year, and impressive deals that should help it scale quickly.

Hailing a fast ride

Uber’s path to a stake in Serve Robotics is easy to explain: It inherited the platform. When the ride-hailing leader acquired Postmates five years ago in a $2.65 billion all-stock transaction, it was hoping to grow its reach — for both drivers and customers — for its fast-growing Uber Eats business. The popularity of ordering food and groceries through third-party delivery apps spiked in the wake of the pandemic, and Postmates was another weapon in the arms race. Buried in the Postmates portfolio was a fledgling high-tech side bet on driverless deliveries: Serve Robotics. Uber thought it would be more of a distraction, so it spun the company off in 2021. Today, Uber investors have just a 12% stake in Serve Robotics. Nvidia’s entry into Serve Robotics was more conventional. The two were collaborating to incorporate Nvidia’s artificial intelligence tools into Serve’s autonomous delivery machines. Nvidia invested just $12 million in Serve Robotics in 2022, but that was enough for an 8% stake two years later. That’s a small price to pay for what is now the world’s most valuable company by market cap, but Nvidia is known for helping finance companies that will drum up incremental business. And in any event, the stake didn’t last. Nvidia cashed out its entire position — at a healthy return — in the fourth quarter of last year.

Waiter, there’s a robot in my soup

“Why deliver 2-pound burritos in 2-ton cars?” That’s a question Serve Robotics asks on its website’s homepage. “Why invest in a $900 million profitless company that couldn’t break $2 million in revenue last year?” That’s a question investors may be asking. Wall Street has an answer: It thinks Serve Robotics should be worth more. Even after taking a 16% spill in Friday’s market sell-off, Serve Robotics is up nearly 60% over the past year. Nvidia hasn’t appreciated as much since cutting Serve Robotics late last year, but it’s probably not giving that tactical decision a second thought. It locked in a big gain on a small company in a short amount of time. Nvidia will be fine. Uber is making sure its remaining stake will continue to appreciate in value. Remember those 57 Serve Robotics rolling around busy sidewalks at the end of last year? Uber Eats alone has put another 1,000 of them on the road in 2025, including 380 just last month. It expects to have 2,000 of the delivery robots in action by the end of this year. Even Uber rival DoorDash (NASDAQ: DASH) decided to roll with the enemy. Last week it entered into a multiyear partnership with Serve Robotics to start fulfilling deliveries. Profitability may be elusive for Serve for some time, but top-line growth should be explosive through at least the next few years.

WASHINGTON (AP) — Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.

Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”

And at a high-profile speech in August, just before the Fed cut its key interest rate for the first time this year, Federal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”

Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2% poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.

The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong — if inflation gets worse or remains elevated for longer than expected — the Fed’s inflation-fighting credibility could take a hit.

That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps — such as demanding sharply higher pay when prices rise — that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.

But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.

“If that proves to be the case, in hindsight it will be that the Fed cuts — and I do expect several more — are going to be seen as a mistake,” Dynan said.

So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1% peak three years ago. Still, consumer prices increased 2.9% in August from a year earlier, up from 2.6% at the same time last year and above the Fed’s 2% target.

The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.

Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2% in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.

The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7% in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21% in the past year, partly because Trump has slapped 50% import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests.

Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.

But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.

“It is a big gamble after what we’ve been going through … to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3% inflation) would have been considered really high.”

Just two weeks ago, Trump slapped new tariffs on a range of products, including 100% on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, and 25% on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.

Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”

Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10% this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45% of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.

Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145% earlier this year. Production resumed after Trump reduced the duties to 30% but at a slower pace.

Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.

“At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”

Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.

“The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”

Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.

“I’m more sanguine about the inflation outlook than a lot of other people are,” he said.

China said the US should stop threatening it with higher tariffs and urged further negotiations to resolve outstanding trade issues, adding it will not hesitate to retaliate should Washington persist in its measures against Beijing.

President Donald Trump on Friday announced an additional 100% tariff on China as well as export controls on “any and all critical software” beginning Nov. 1, hours after threatening to cancel an upcoming meeting with Chinese leader Xi Jinping. That came after China added new port fees on US ships, started an antitrust investigation into Qualcomm Inc., and unveiled sweeping new curbs on its exports of rare earths and other critical materials.

Beijing justified its moves as defensive actions and accused the US of introducing new restrictive measures targeting China since talks between the two in Madrid in September, according to a Ministry of Commerce statement on Sunday. Last month, the US Commerce Department unveiled a dramatic expansion of its export controls, which closed loopholes in current measures to block Beijing from cutting-edge chips.

“Threatening with high tariffs at every turn is not the right way to get along with China,” the Commerce Ministry said. “If the US persists in its own course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”

Last week Beijing unveiled broad new curbs on its exports of rare earths and other critical materials. Overseas exporters of items that use even traces of certain rare earths sourced from China will now need an export license, it announced Thursday, citing national security grounds. Certain equipment and technology for processing rare earths and making magnets will also be subject to controls.

China’s export control is not a ban on exports, and applications that meet the regulations will be approved, the Commerce Ministry said Sunday. Before the measures were announced, China had notified relevant countries and regions through the bilateral export control dialogue mechanism, it added.

China has fully assessed the possible impact of the measures on the industrial and supply chains in advance and is convinced that the relevant impact is very limited, the ministry said. It added that the country is willing to strengthen dialogue and exchanges on export control with other nations to better maintain the security and stability of the global industrial and supply chains.

Beijing’s addition of new port fees on US ships coincides with the date Washington plans to impose new charges on large Chinese vessels calling at American ports.

The US’s implementation of Section 301 measures targeting China’s maritime, logistics and shipbuilding industries has severely harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks, and China is resolutely opposed to them, the Commerce Ministry said.

The actions China took are “aimed at safeguarding the legitimate rights and interests of Chinese industries and enterprises, as well as maintaining a fair competitive environment in the international shipping and shipbuilding markets,” the ministry added.

On Sunday, China’s market regulator said it would proceed with an antitrust probe of tech giant Qualcomm. The State Administration for Market Regulation highlighted exchanges with Qualcomm over its acquisition of Israel’s Autotalks Ltd., according to a statement, following the announcement of the probe last week.

While Qualcomm had told Beijing it would scrap the deal in March 2024, it went on to complete the move without any communication, it said. The probe into Qualcomm is based on clear facts and solid evidence, the agency added.