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Businesses Plan to Pass Half of Trump Tariff Costs to CustomersMost companies will not be absorbing expenses from import taxes, according to the Federal Reserve.


  OpenAI recently hit $10 billion in annual recurring revenue, nearly doubling from $5.5 billion last year and serving over 500 million weekly active users along with 3 million paying business customers, according to CNBC. This explosive growth, just two and a half years after launching ChatGPT, showcases how mainstream AI adoption has become in both consumer and enterprise settings. Yet, OpenAI is still investing heavily—burning billions annually to hire talent and maintain the infrastructure needed to support these AI breakthroughs. Their ambitious goal is to reach $125 billion in revenue by 2029, highlighting just how fast the AI ecosystem is expanding and monetizing.


What stands out is how scaling these advanced AI services requires balancing rapid growth with staggering operational costs, a challenge many startups in AI and cloud infrastructure will face. This isn’t just about building a great product; it’s about maintaining the capacity and quality at enormous scale while paving the way to profitability.


How are you approaching the tension between growth and sustainability in your AI or tech ventures? What strategies have proven effective to manage the costs and infrastructure demands of scaling cutting-edge technology?
Disney has agreed to pay Comcast an additional $438.7 million to complete its acquisition of Hulu, and finally close a deal years in the making. Disney has already paid $8.61 billion toward a one-third stake in the streamer, and the companies have been locked in an arbitration process to determine the remaining value. Comcast's NBCUniversal originally had it appraised for as much as $5 billion. The deal is set to be finalized by July 24.
Huawei Technologies' (HWT.UL) chips are one generation behind those of U.S. peers, but the firm is finding ways to improve performance through methods such as cluster computing, Chinese state media quoted CEO Ren Zhengfei as saying on Tuesday.
The chipmaker invests 180 billion yuan ($25.07 billion) in research annually and sees promise in compound chips - chips made from multiple elements - Ren said in an interview with the People's Daily newspaper of the governing Communist Party.
There is "no need to worry about the chip problem", Ren said, addressing concerns stemming from U.S. export controls.
The article, published on the front page of the newspaper, comes as top U.S. and Chinese officials are set to resume trade talks for a second day in London, where topics such as U.S. tech restrictions on China are expected to be discussed.
Since 2019, a slew of U.S. export curbs, aimed at curbing China's technological and military advancements, have restricted Huawei and other Chinese firms from accessing high-end chips and the equipment needed to produce them from abroad.
Ren's comments are the first ever from him or Huawei about the company's advanced chipmaking efforts, which have become a flashpoint in U.S.-China tensions.
Huawei is just one of many Chinese chipmakers, Ren said in the interview, adding: "The United States has exaggerated Huawei's achievements. Huawei is not that great. We have to work hard to reach their evaluation."
"Our single chip is still behind the U.S. by a generation. We use mathematics to supplement physics, non-Moore's law to supplement Moore's law, and cluster computing to supplement single chips, and the results can also achieve practical conditions. Software is not a bottleneck for us," he said.
Cluster computing is when multiple computers work together. Moore's law refers to the speed of chip advancement.

HUAWEI'S LAUNCHES

Huawei's Ascend series of AI chips compete in China with offerings from Nvidia (NVDA.O), opens new tab, the global leader in AI chips.
The U.S. Commerce Department last month said the use of Ascend chips would be a violation of export controls.
Nvidia's AI chips are more powerful than Huawei's, but the company has been barred by Washington from selling its most sophisticated chips to China, causing it to lose significant market share to Huawei.


In April, Huawei launched "AI CloudMatrix 384", a system that links 384 Ascend 910C chips in a cluster that companies can use to train AI models, which has been described by analysts as able to outperform Nvidia's GB200 NVL72 system on some metrics.
Dylan Patel, founder of semiconductor research group SemiAnalysis, said in an article that month that it meant that Huawei and China now had AI system capabilities that could beat Nvidia.
Nvidia and the U.S. Commerce Department did not immediately respond to a request for comment on Ren's remarks.
Ren also said that about a third of Huawei's annual research spending went to theoretical research, while the rest was spent on product research and development.
"Without theory, there will be no breakthroughs, and we will not catch up with the United States."

Health Secretary Robert F. Kennedy Jr. has taken the extraordinary step of firing the expert panel that advises the Centers for Disease Control and Prevention on immunizations, saying the action is needed to restore faith in vaccines.

“A clean sweep is needed to re-establish public confidence in vaccine science,” Kennedy said in an op-ed published Monday afternoon in the Wall Street Journal.

Proponents of vaccines have feared that Kennedy, who is openly skeptical of vaccines and has long been critical of the Advisory Committee on Immunization Practices, might take such a step. ACIP studies vaccines in the regulatory pipeline and ones that have recently been licensed by the Food and Drug Administration, advising the CDC on who they should be offered to once they have been approved.

Appointing replacement members to the advisory panel would give Kennedy broad latitude to reshape the government’s childhood immunization schedule and other vaccine advice. New members haven’t yet been named, but it would appear they may have been selected, because a statement from Kennedy’s department said that a meeting scheduled for late June will take place. In normal times, ACIP candidates go through a vetting process that can take upwards of a year.



“We have just demonstrated that politics will overrun science in this administration. It scares me to think of what’s ahead,” said Michael Osterholm, director of the University of Minnesota’s Center for Infectious Disease Research and Policy.

One of the members of the committee, who spoke on condition of anonymity for fear of reprisals, was floored by the move. The committee members were not informed in advance, the individual said. Later in the day, they received an unsigned email informing them of their immediate termination. “We appreciate your prior service and commitment,” it concluded.

The committee member predicted upheaval in vaccination policy going forward.

“Providers are no longer going to follow the CDC [vaccination] schedule,” the individual predicted. “The CDC has lost credibility in the vaccination space…. It adds a lot of uncertainty for care for children and adults.”

Bill Cassidy, the Republican chair of the Senate’s health committee, expressed grave concerns about Kennedy’s anti-vaccine positions during his confirmation hearing, before ultimately voting to confirm him. He said on the social media site X that he’d spoken with Kennedy on Monday and is working to ensure the panel won’t be filled with people “who know nothing about vaccines except suspicion.”



Sen. Susan Collins (R-Maine) called the decision to purge ACIP “excessive.”

“I think these vaccines and other advisory committees are very helpful to the public in providing guidance,” she said. “So to cancel all of the people… that raises serious questions.”

The ACIP meets three times a year — more often during emergencies like the Covid pandemic — to review data on vaccines and recommend how they should be used. Their recommendations must be approved by the CDC director — the position is currently unfilled — or the HHS secretary to go into practice. Kennedy has not signed on to three recommendations the ACIP made at its last meeting in April.

Richard Hughes, a lawyer with the firm Epstein Becker Green, warned that a science-based vaccination policy appears to be on the verge of becoming a thing of the past.

“This upends 64 years of thoughtful, evidence-based decision-making,” Hughes, who worked for a time at the vaccine manufacturer Moderna, told STAT in an email. “At a minimum, it means the involvement of new members will introduce misinformation into what has been a science-based forum.”

Bruce Gellin, a former director of the HHS Vaccines Program Office, shared that concern.

“What we learned in Epidemiology 101 about confirmation bias was better said by John Steinbeck in “The Winter of Our Discontent” — ‘You know how advice is — you only want it if it agrees with what you wanted to do anyways,’” Gellin said. “All eyes will be on the advice the new advisory committee members provide.”

Paul Offit, a former member of the committee and one of the developers of a vaccine that protects against rotavirus infection, said the committee’s work over the decades has markedly improved the health of children and adults in this country. “They should be given an award, not fired,” said Offit, an infectious diseases pediatrician at Children’s Hospital of Philadelphia.

“RFK Jr. has for 20 years shown you who he is. And nothing has happened since he’s been secretary of HHS to make you feel any differently,” Offit added.

Many public health officials expressed deep concern about what ACIP will become and what the decision will mean for the credibility of vaccine recommendations that emerge from the CDC. Tom Frieden, a former director of the CDC, was among them. “We’ll look back at this as a grave mistake that sacrificed decades of scientific rigor, undermined public trust, and opened the door for fringe theories rather than facts to guide the recommendations that doctors rely on to protect patients,” he said in a statement.

The step followed reporting from STAT on Sunday that revealed that four members of the 19-person panel had received termination notices because their special government employee contracts had lapsed.

Kennedy’s move appears to fly in the face of commitments he made to Cassidy when being confirmed to lead HHS. At the time, Kennedy promised to maintain ACIP recommendations without creating a new safety system, Cassidy said then.

“If confirmed, he will maintain the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices without changes,” Cassidy said in a floor speech.



Asked by a reporter on Monday about this commitment, Cassidy responded that Kennedy promised not to touch “the process” of vaccine approval.

Writing in the Journal, Kennedy argued that he was acting to restore confidence in America’s public health leadership, saying the Biden administration stacked the committee and portrayed the group as a rubber stamp for approvals riddled with conflicts of interest.

The Biden administration approved eight new candidates to the committee just before leaving office, with some former officials saying the move was intended to keep the Trump administration from removing mainstream scientific expertise. The HHS statement about Kennedy’s decision cited that aim as a reason for firing all sitting members.

And though some outside experts say ACIP could have stronger conflict of interest policies, they have said Kennedy’s assessment is incomplete at best. In announcing the ACIP firings, Kennedy said the committee members aren’t necessarily corrupt. “The problem is their immersion in a system of industry-aligned incentives and paradigms that enforce a narrow pro-industry orthodoxy,” he wrote.

Kennedy’s critics have pointed to the conflicts he brings to the discussion about vaccines. He’s spent years leading a nonprofit that argued — without evidence — that vaccines are linked to autism, signed book deals to question the safety and efficacy of shots, and received fees for referring plaintiffs who say they were injured by vaccines. (Kennedy pledged to withdraw from his previous business dealings when taking the helm of HHS, though he refused to promise to not sue vaccine manufacturers after his tenure.)

His history could make boosting trust in the CDC difficult. Even Kennedy’s allies have acknowledged that trust can only be restored if the vast majority of Americans, including those who disagree with him, believe the systems are not being changed for political reasons. The move to remake ACIP will weaken trust in the system, public health leaders said.

The president of the American Medical Association, Bruce Scott, said the action “undermines that trust and upends a transparent process that has saved countless lives. With an ongoing measles outbreak and routine child vaccination rates declining, this move will further fuel the spread of vaccine-preventable illnesses.”

The MAHA PAC run by Kennedy allies, which is pouring money into state races and issues, tweeted, “The MAHA Revolution is finally here…The truth about vaccines is about to be EXPOSED.”

Children’s Health Defense, the vaccine-criticizing nonprofit Kennedy founded, and the anti-vaccine activist Sherri Tenpenny were similarly upbeat about the news. “This is unprecedented. And long overdue. The foundation is shaking. Keep your eyes open,” Tenpenny posted on X, alongside a link to a news article.

“Hope the good news continues,” CHD responded. The group has for years alleged that conflicts of interest, such as grant funding from companies that make vaccines, skewed ACIP recommendations toward approving certain shots. Tenpenny, an osteopathic physician who had her license revoked and then reinstated during the pandemic, has been named in at least one of Kennedy’s books as a hero for “medical freedom.” She, like others, pushed back on vaccination mandates and alleged that COVID-19 vaccines make people magnetic (they do not).

Critics of Kennedy’s aggressive anti-vaccine stands have been readying themselves for something of this nature. Osterholm’s center, CIDRAP, recently launched what it has called the Vaccine Integrity Project, led by high-level figures including former Food and Drug Administration commissioner Margaret Hamburg and Harvey Fineberg, a former president of the Institute of Medicine (now the National Academy of Medicine).

“We take up the Vaccine Integrity Project as a precautionary step,” the two wrote in an opinion piece published in STAT in April. “Should ACIP or FDA processes or scientific evaluation become compromised, America cannot afford to be left without any organized systems to ensure that evidence grounded in science continues to guide decisions about the use of vaccines.”

Plans to divide Warner Bros. Discovery into two separate companies could have big implications for entertainment and represent a moment of truth for CEO David Zaslav. He orchestrated the mega-merger that created WBD in 2022, and since then, the company's market value has declined by $40 billion amid several strategic reversals. Zaslav is set to lead the streaming and theatrical entity, which Bloomberg notes could be "an opportunity, perhaps even a final chance" to transform the company.

Warner Bros Discovery (WBD.O), opens new tab, said it would split into two publicly traded companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era.
The breakup is the latest unraveling of decades of media consolidation that created global conglomerates spanning content creation, distribution, and in some cases, telecommunications.
It unwinds WarnerMedia and Discovery's 2022 merger, aiming to grow the streaming and studios business without the drag of the declining networks unit.
The new streaming-and-studios company will include Warner Bros, DC Studios, and HBO Max - the crown jewels of WBD's entertainment library.
The networks unit, which will hold up to a 20% stake in its counterpart, will house CNN, TNT Sports, and Bleacher Report.
CEO David Zaslav will lead the streaming and studios unit, while CFO Gunnar Wiedenfels will head the networks unit. The separation will be structured as a tax-free transaction and is expected to be completed by mid-2026.
"We've continued to analyze how our industry is evolving," Zaslav told investors. "The right path forward became increasingly clear ... to separate global networks and streaming and studios into two independent, publicly traded companies."
Most of the company's debt would be held by the global network company. WBD had gross debt of $38 billion as of March. The company said it secured a $17.5 billion bridge loan from J.P. Morgan that it would use to restructure its debt.
Creditors of WBD are consulting advisers after the entertainment company proposed banning investor cooperation pacts as part of its plan to split, the Wall Street Journal reported on Monday.
Law firm Akin Gump Strauss Hauer & Feld is organizing bondholders to push back against WBD's proposal and negotiate better terms, the WSJ report added, citing people familiar with the matter. Reuters could not immediately confirm the report.
Shares fell almost 3% at midday, reversing the 13% gain that came in the hours after the announcement.
WBD's stock has remained down nearly 60% since the merger, hurt by cable subscriber loss, tough streaming competition, and investor concerns over the debt-laden company's direction.
Brian Wieser, CEO of Madison and Wall, an advisory firm for media, technology, and other companies, said the split will not fix WBD's underlying weakness.
"If anything, (it) could make them worse off by favoring financial engineering over focusing on improving existing operations or pursuing new growth opportunities...a deal like this can hamstring both sides of the company until the transactions are closed," said Wieser.
Media executives had initially anticipated a wave of consolidation under President Donald Trump's administration, though that has not come to pass.
"For a series of reasons, that proved harder than anyone thought," said Jonathan Miller, a veteran media executive who now serves as chief executive of Integrated Media. "It looks like the characteristic of this year will be how do we get our house in order, and do what we can that's under our control."
The exterior of the Warner Bros. Discovery Atlanta campus in Atlanta
The exterior of the Warner Bros. Discovery Atlanta campus in Atlanta, Georgia, U.S. May 2, 2023. REUTERS/Alyssa Pointer/File Photo Purchase Licensing Rights, opens new tab
Comcast is spinning off most of its NBCUniversal cable networks portfolio into a separate company, Versant. Lionsgate Entertainment (LION.N), opens new tab completed the separation of its Starz cable network from its film and television studio in May.
Last week, about 59% of WBD shareholders at the annual meeting voted against executive pay packages, including Zaslav's $51.9 million 2024 compensation, in an advisory vote that signaled dissatisfaction.
Like other entertainment companies, WBD is struggling with declining ratings and revenue at its cable networks. Consumers have been dropping pay-television subscriptions in favor of streaming services.
"WBD is a hotchpotch of businesses which have failed to win over the market," said AJ Bell analyst Dan Coatsworth. The split gives Warner Bros "a better chance to gain broader investor interest and focus management on fewer things."
In December, WBD announced a separation of streaming and studio operations. The company has been positioning its streaming service as a premium destination with titles such as
"The Last of Us" and "Hacks" initially bet that a blend of HBO dramas and Discovery's lifestyle content would broaden its appeal.
It revived the HBO Max branding last month to drive a renewed emphasis on premium content and aid global expansion. The streaming service had about 122 million subscribers as of March. It expects its subscriber base to exceed 150 million by the end of 2026, which would still trail Netflix's more than 300 million subscribers and the combined 181 million subscribers of Disney+ and Hulu.

MORE DEALS

Some analysts now expect more deals in the media sector, pointing to Comcast's plan to spin off most of its cable networks, including MSNBC and CNBC.
"The outlook for the cable network business broadly is pretty ugly and I assume there will be consolidation there," said Jeff Wlodarczak, analyst at Pivotal Research Group.
He said WBD's cable networks could be a logical fit for Comcast's upcoming cable spinoff, while its streaming and studios business might combine with another player such as Comcast's Peacock.
Any merger will require approval from U.S. antitrust regulators who have signaled they intend to focus on mergers that reduce competition in ways that harm consumers or workers.
Industry observers say consolidation would likely increase consumer prices. The trend has already begun, as streaming services look to turn a profit.
Zaslav has said he expects a more deal-friendly environment under Trump. During his first term, Trump repeatedly attacked CNN, and his Department of Justice moved to block the AT&T–Time Warner merger.
The pending Paramount Global(PARA.O), opens new tab-Skydance Media merger has yet to gain regulatory approval, as Trump presses his civil suit against Paramount's CBS News for its "60 Minutes" interview last October with his Democratic rival for the White House, former Vice President Kamala Harris.

J.P. Morgan and Evercore are advising WBD on the deal, while Kirkland & Ellis is serving as legal counsel.

The leaders of a sex-focused women’s wellness company that promoted “orgasmic meditation” have been convicted of federal forced labor charges.

A Brooklyn jury on Monday found Nicole Daedone, founder of OneTaste Inc., and Rachel Cherwitz, the California-based company’s former sales director, guilty after deliberating for less than two days following a five-week trial. The two each face up to 20 years in prison when sentenced later.

Prosecutors had argued the two women ran a years-long scheme that groomed adherents, many of them victims of sexual trauma, to do their bidding.

They said Daedone, 57, of New York, and Cherwitz, 44, of California, used economic, sexual, and psychological abuse, intimidation, and indoctrination to force OneTaste members into sexual acts they found uncomfortable or repulsive, such as having sex with prospective investors or clients.

The two told followers the questionable acts were necessary in order to obtain “freedom” and “enlightenment” and demonstrate their commitment to the organization’s principles.

Prosecutors said OneTaste leaders also didn’t pay promised earnings to the members-turned-workers and even forced some of them to take out new credit cards to continue taking the company’s courses.

Assistant U.S. Attorney Nina Gupta, in her closing statement last week, said the defendants “built a business on the backs” of victims who “gave everything” to them, including “their money, their time, their bodies, their dignity, and ultimately their sanity.”

“The jury’s verdict has unmasked Daedone and Cherwitz for who they truly are: grifters who preyed on vulnerable victims by making empty promises of sexual empowerment and wellness only to manipulate them into performing labor and services for the defendants’ benefit,” said Joseph Nocella, U.S. Attorney for the Eastern District of New York.

Daedone’s defense team cast her as a “ceiling-shattering feminist entrepreneur” who created a unique business around women’s sexuality and empowerment.

Cherwitz’s lawyer, Celia Cohen, argued that the witnesses who testified weren’t forced to do anything. When they didn’t like the organization anymore or wanted to try other things, she said, they simply left.

“No matter what you think about OneTaste and what they were doing, they chose it. They knew what it was about,” she said in her closing statement last week. “The fact that they are regretting the actions that they took when they were younger is not evidence of a crime.”

Lawyers for the defendants said their clients maintain their innocence and intend to appeal.

“We are deeply disappointed in today’s verdict,” the lawyers said in a statement Monday. “This case raised numerous novel and complex legal issues that will require review by the Second Circuit.”

Daedone co-founded OneTaste in San Francisco in 2004 as a sort of self-help commune that viewed female orgasms as key to sexual and psychological wellness and interpersonal connection.

A centerpiece was “orgasmic meditation,” or “OM,” which was carried out by men manually stimulating women in a group setting.

The company enjoyed glowing media coverage in the 2010s and quickly opened outposts from Los Angeles to London. Portrayed as a cutting-edge enterprise that prioritized women’s sexual pleasure, it generated revenue by providing courses, coaching, OM events, and other sexual practices for a fee.

Daedone sold her stake in the company in 2017 for $12 million — a year before OneTaste’s marketing and labor practices came under scrutiny.

The company’s current owners, who have rebranded it the Institute of OM Foundation, have said its work has been misconstrued and the charges against its former executives were unjustified.

They maintain sexual consent has always been a cornerstone of the organization. The company didn’t immediately respond to an email seeking comment.

Amazon is continuing its investments in artificial intelligence and cloud computing infrastructure, putting $20 billion toward data centers in Pennsylvania. It plans to build two complexes, one of them next to a nuclear power plant. Amazon and other tech giants have been looking to alternative energy sources to keep up with the demands of AI. The company expects to create 1,250 high-skilled jobs in the state and recently announced a similar investment in North Carolina.

💼 Executive presence.

What does that actually mean — and who gets to define it? 🤔

I had a great conversation recently that got me thinking about how often women are told to “have more executive presence,” but rarely told what that looks like.

Is it about tone? 🗣️ Posture? Confidence? Clothing? Not apologizing when you speak? Is it about being quieter or louder? 🔈🔊

And should men be asking themselves the same questions — or are we just operating inside an outdated playbook 📖 of what leadership “should” look like?

So here's what I'm sitting with:
How do we actually develop executive presence in a way that’s authentic — not performative? 🎭✨

Would love to hear what this means to you — or the moments where you felt like you had it, or maybe when you were told you didn’t. 💬


Second-worst ever. That’s how health conditions for the 2025 U.S. winter wheat crop were described last autumn.

But winter wheat ratings now sit at a six-year high for early June, just as the harvest is kicking off. This is exactly what U.S. exporters need to continue – and potentially expand – their impressive sales into next year.
As of Sunday, the U.S. Department of Agriculture rated 54% of the U.S. winter wheat crop in good or excellent (GE) condition, above trade expectations and up from 50% two weeks earlier.
That is up significantly from 38% GE in late October, which was the crop’s second-worst start in the 39-year dataset. The 16-percentage-point improvement since then is the period’s largest.
U.S. winter wheat at 54% GE is the date’s best rating since 64% in 2019. The crop was 62% GE at this point in 2016, which still holds the record U.S. winter wheat yield. Final yields were about 13% and 7% above the long-term trend in 2016 and 2019, respectively.
For comparison, winter wheat was 47% GE one year ago, and final yields were close to trend.
Analysts expect the USDA on Thursday to make a marginal increase to its 2025-26 U.S. winter wheat harvest forecast, but the trade has already been wrong on this crop. A month ago, USDA’s crop peg was at the very top of market guesses.
USDA a month ago pegged 2025-26 U.S. winter wheat yield at a nine-year high of 53.7 bushels per acre, which would be roughly 3% above trend.

RAIN, RAIN, GO AWAY

Not everything is going perfectly. The U.S. winter wheat harvest was 4% completed as of Sunday, a weekly advancement of just 1 percentage point. The trade was looking for 8%.
In the No. 3 winter wheat state of Oklahoma, only 5% of the crop has been harvested compared with 44% a year ago and a five-year average of 23%. Over the past couple of weeks, top hard red winter wheat (HRW) states like Kansas and Oklahoma have observed more than double their normal rainfall totals.
Some HRW wheat areas may continue experiencing heavier rains over the next several days, mainly in the southern portion. Top grower Kansas should remain on the drier side in the next week or so, favoring harvest pace there.
If excessive rains were to continue, it could be a problem. Not only do they delay harvest, but they could reduce grain quality, clipping both test weights and starch content, and ultimately, the value.
Foreign buyers are counting on that wheat. As of May 29, U.S. wheat export sales for the 2025-26 marketing year that began on June 1 sat at a 12-year high for the date, following a surge in bookings last month.
Some 39% of those bookings were for the HRW variety, the date’s largest portion in five years and up from 24% a year ago. By volume, U.S. HRW export sales for 2025-26 are at a 17-year high.
New-crop U.S. hard red spring wheat also rang in 2025-26 with total sales among the best in decades.
U.S. spring wheat health is trending positively, too. Some 53% of that crop was rated GE as of Sunday, up from the initial 45% two weeks earlier. Ironically, as with winter wheat, that was spring wheat’s second-worst initial health rating on record.
The 53% is still below average for the date, but the big improvement is promising. U.S. spring wheat producers may be able to partly offset their 55-year low in plantings should weather continue its favorable trajectory.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
Enjoying this column? Check out Reuters Open Interest (ROI), opens new tab, your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab

Writing by Karen Braun; Editing by Matthew Lewis

President Trump warned U.S. companies to “eat the tariffs,” but the majority of businesses do not plan on heeding that directive. Companies expect to pass along about half of their increased costs to consumers.

That’s according to new data from the Federal Reserve Bank of Atlanta, which polled 640 businesses as part of its monthly Business Inflation Expectations Survey. Only about 10 percent of businesses indicated they would pass along no cost increases to customers. On average, businesses said they expected to pass through 51.1 percent of a 10 percent cost increase and 47.3 percent of a 25 percent cost increase without hurting current levels of demand. 

Atlanta Fed researchers noted that this marks a significant change from President Trump’s first term, when companies passed along nearly all of the cost increases they incurred from the White House’s tariff policy. “Our results suggest many firms believe their customers are price-sensitive enough this time around (perhaps owing to the recent inflationary surge that isn’t too far in the rearview mirror),” wrote survey director Kevin Foster, economic research analyst Aaron Jalca, and economist Brent Meyer in an online post about the findings published last week.

Still, the survey found 19 percent of companies indicated they planned to pass along all of a 10 percent increase to consumers. How a company decided to respond to cost increases from tariffs seemed to come down to revenue growth. On average, businesses with stronger sales planned to pass along more of the cost increases, compared with businesses reporting weaker than normal sales. 

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