Category World News

United States inflation rose last month to its highest level since February as President Donald Trump’s sweeping tariffs push up the cost of a range of goods, including furniture, clothing, and large appliances.

Consumer prices rose 2.7 percent in June from a year earlier, the Labor Department said on Tuesday, up from an annual increase of 2.4 percent in May. On a monthly basis, prices climbed 0.3 percent from May to June, after rising just 0.1 percent the previous month.

Worsening inflation poses a political challenge for Trump, who promised during last year’s presidential campaign to immediately lower costs. The sharp inflation spike after the pandemic was the worst in four decades and soured most Americans on former President Joe Biden’s handling of the economy. Higher inflation will also likely heighten the US Federal Reserve’s reluctance to cut its short-term interest rate, as Trump is loudly demanding.

The central bank is expected to leave its benchmark overnight interest rate in the 4.25 percent to 4.5 percent range at a policy meeting later this month.

Trump has insisted repeatedly that there is “no inflation”, and because of that, the central bank should swiftly reduce its key interest rate from its current level. Yet Fed Chair Jerome Powell has said that he wants to see how the economy reacts to Trump’s duties before reducing borrowing costs. Minutes of the central bank’s June 17-18 meeting, which were published last week, showed only “a couple” of officials said they felt rates could fall as soon as the July 29-30 meeting.

Excluding the volatile food and energy categories, core inflation increased 2.9 percent in June from a year earlier, up from 2.8 percent in May. On a monthly basis, it picked up 0.2 percent from May to June. Economists closely watch core prices because they typically provide a better sense of where inflation is headed.

The uptick in inflation was driven by a range of higher prices. The cost of gasoline rose 1 percent just from May to June, while grocery prices increased 0.3 percent. Appliance prices jumped for the third straight month. Toys, clothes, audio equipment, shoes, and sporting goods all got more expensive, and are all heavily imported.

“You are starting to see scattered bits of the tariff inflation regime filter in,” said Eric Winograd, chief economist at asset management firm AllianceBernstein, who added that the cost of long-lasting goods rose last month, compared with a year ago, for the first time in about three years.

Winograd also noted that housing costs, one of the biggest drivers of inflation since the pandemic, have continued to cool, which is holding down broader inflation. The cost of rent rose 3.8 percent in June compared with a year ago, the smallest yearly increase since late 2021.

“Were it not for the tariff uncertainty, the Fed would already be cutting rates,” Winograd said. “The question is whether there is more to come, and the Fed clearly thinks there is,” along with most economists.

Trump has imposed sweeping duties of 10 percent on all imports, plus 50-percent levies on steel and aluminium, 30 percent on goods from China, and 25 percent on imported cars. Just last week, the president threatened to hit the European Union with a new 30 percent tariff starting August 1.

He has also threatened to slap 50 percent duties on Brazil, which would push up the cost of orange juice and coffee. Orange prices leapt 3.5 percent just from May to June, and are 3.4 percent higher than a year ago.

Overall, grocery prices rose 0.3 percent last month and are up 2.4 percent from a year earlier. While that is a much smaller annual increase than before the pandemic, it is slightly bigger than the pre-pandemic pace of food price increases. The Trump administration has also placed a 17-percent duty on Mexican tomatoes.

Powell under fire

The acceleration in inflation could provide a respite of sorts for Powell, who has come under increasingly heavy fire from the White House for not cutting the benchmark interest rate.

The Fed chair has said that the duties could both push up prices and slow the economy, a tricky combination for the central bank since higher costs would typically lead the Fed to hike rates while a weaker economy often spurs it to reduce them.

Trump on Monday said that Powell has been “terrible” and “doesn’t know what the hell he’s doing.” The president added that the economy was doing well despite Powell’s refusal to reduce rates, but it would be “nice” if there were rate cuts, because people would be able to buy housing a lot easier.”

Last week, White House officials also attacked Powell for cost overruns on the years-long renovation of two Fed buildings, which are now slated to cost $2.5bn, roughly one-third more than originally budgeted. While Trump legally cannot fire Powell just because he disagrees with his interest rate decisions, the Supreme Court has signalled, he may be able to do so “for cause,” such as misconduct or mismanagement.

Some companies have said they have or plan to raise prices as a result of the tariffs, including Walmart, the world’s largest retailer. Carmaker Mitsubishi said last month that it was lifting prices by an average of 2.1 percent in response to the duties, and Nike has said it would implement “surgical” price hikes to offset tariff costs.

Ten years ago, on July 14, I joined my counterparts from China, France, Germany, Russia, the United Kingdom, the United States and the European Union to announce the conclusion of a unique achievement of diplomacy, bringing a peaceful end to an unnecessary crisis founded on lies and a blatant policy of securitisation to divert global attention from the real nuclear threat to peace in West Asia. The entire world celebrated the conclusion of the Iran nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), except for Israeli Prime Minister Benjamin Netanyahu and other leaders in the Israeli nuclear apartheid regime, who saw – and continue to see – peace and stability as the only real “existential threat”, and who publicly pledged to destroy the deal.

Today, some of our successors are clamouring to deal with the aftermath of an aggression against Iran, right in the middle of new nuclear negotiations. This aggression came from the rogue, non-NPT (the Treaty on the Non-Proliferation of Nuclear Weapons) possessor of nuclear weapons in West Asia – Israel. It targeted safeguarded nuclear facilities of an NPT member and coupled the act with other war crimes by targeting civilian quarters, childcare centres, scientists, and off-duty military commanders. The butcher of Gaza went even further with Israel’s latest aggression and broke a millennia-old tradition by targeting national leaders. This indicated a clear and publicly stated attempt to bring chaos and instability to the entire region.

The only power to have ever used nuclear weapons – the US – rushed to the aid of this rogue aggressor as its campaign began to falter. In a reckless and unlawful move, it targeted Iran’s nuclear facilities in a futile attempt to halt the country’s peaceful nuclear progress – much of which, ironically, was achieved after the US unilaterally withdrew from the JCPOA.

At the same time, the successors of my E3/EU counterparts – the representatives of France, Germany, and the UK, along with the EU, have been simultaneously boasting about “Netanyahu doing their dirty work”, and threatening, in absolute bad faith, to invoke the “dispute resolution mechanism” in the JCPOA and United Nations Security Council (UNSC) Resolution 2231, which legally endorsed the nuclear deal. They do so while they have, in words and deeds, terminated their status as JCPOA participants by disavowing the most fundamental pillar of the JCPOA, in calling for the dismantlement of Iran’s peaceful enrichment program – while embarrassingly failing to fulfil, even minimally, their own economic and financial obligations towards Iran through at least seven of the past 10 years.

On July 20, 2021, I argued against the ability of the E3/EU to invoke the JCPOA “dispute resolution mechanism” – erroneously and self-servingly called “snapback”, a term that was never used in the JCPOA or UNSC Resolution 2231 – in my 140-page letter to the Secretary-General of the UN, which was circulated as UN General Assembly (UNGA) document A/75/968 and Security Council document S/2021/669. My well-documented legal arguments have now been further strengthened by the more recent statements and actions of the E3/EU, in which they have clearly terminated their status as “JCPOA Participants”.

The Iranian armed forces, relying on home-grown military capability, have once again destroyed the myth of Israeli invincibility, exposing the thin skin of the bully. At the same time, the brave and proud Iranian people thwarted the delusion of Netanyahu and his cohorts to dismember Iran. Once again, Iran proved that even two nuclear powers, combined, cannot bring a millennia-old civilisation state to its knees.

Nevertheless, it is now evident that Israel’s illusion of regional supremacy and “aggression at will” is founded on destabilising Iran, followed by other regional powers – resulting in instability, division, and chaos in Muslim West Asia. This is neither in the interest of the countries in the region nor of our friends in China and Russia, whose national interests are founded on stability; nor is it compatible with the US and Europe’s global pivot agenda. Yet Netanyahu and his hypocritical “Bibi-Firsters” in the West have shown that they are callous enough to engulf the world in “forever wars” to prolong their corrupt political careers and expansionist delusions – founded on apartheid, genocide, and aggression against Arab neighbours in the region – coupled with blackmail, never-ending scandals, and extortion in the West.

The international community needs to immediately address this fundamental threat to regional and global peace and security, which also endangers the national interests of almost all countries and the prosperity and welfare of the people of the region and beyond. I have personally witnessed, in more than four decades of diplomacy – including well-documented Israeli obstructions in the negotiations for the exchange of American hostages in Lebanon with Lebanese and Palestinian hostages in Israel in 1991 – that the Israeli political establishment has been, and always will be, willing to sacrifice the treasure, freedom, and blood of its closest allies for even the most trivial gains. Anyone harbouring the illusion that Israel will provide them with help and security will one day wake up to the ugly reality that they have been ruthlessly erected as Israel’s first line of defence, without any reciprocity.

The essential pillar of Netanyahu’s policy is chaos, discord, and instability. The only real “existential threat” – to him – is regional cooperation: Be it the establishment of a zone free from nuclear and other weapons of mass destruction in the Middle East – called for by the UNGA consistently since 1974 – or the establishment of a regional security and cooperation scheme in the Strait of Hormuz region, called for in paragraph 8 of Security Council Resolution 598 in 1987.

As Hamad bin Jassim bin Jaber Al Thani, the former prime minister of Qatar, has warned, our region – and indeed the entire world, including the permanent members of the Security Council – cannot prosper under the persistent shadow of Israeli domestic politics driving regional adventurism. It is high time for the UNSC to take practical measures to create a regional framework for dialogue, confidence-building, and cooperation among countries of the Hormuz region or Muslim West Asia, with a proper umbrella of global guarantees from the UNSC and its permanent members.

Iran has offered ideas such as the Hormuz Peace Endeavour (HOPE) in 2019 or the Muslim West Asian Dialogue Association (MWADA) in 2024. Everyone in our region and beyond has a very high stake in thwarting the agenda of regional destabilisation. Other countries in the HOPE or MWADA region, including Bahrain, Egypt, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Syria, Turkiye, the United Arab Emirates and Yemen, who have now seen some of the horrifying realities of Israel’s concocted dangerous future, should take the matter in their own hands, present individual or joint initiatives, improve Iranian proposals or provide plans of their own, and collectively and without further delay ask the UNSC to adopt a resolution for regional arrangements drafted primarily by the countries of this region.

The lesson of the past 10 years since the conclusion of JCPOA must have illustrated to everyone that coercion will ultimately harm even its initiators. Diplomacy for a future of common vision, hope and positive-sum outcome is, has always been, and will forever remain the only reasonable way. Time is of the essence.

Israel’s military has carried out air attacks against Syrian forces sent to a southern region where sectarian fighting has left dozens of people dead. Israel says it was acting to protect the Druze community after gun battles in Suwayda. On Tuesday, the Syrian defence minister announced a ceasefire.