MARY REICHARD, HOST: Today is Monday, June 18th. Thank you for turning to WORLD Radio to help start your day. Good morning. I’m Mary Reichard.
NICK EICHER, HOST: And I’m Nick Eicher. Coming next on The World and Everything in It, the Monday Moneybeat.
Trade-war fireworks begin two days after Fourth of July fireworks end.
President Trump on Friday announced plans to levy tariffs on $50 billion worth of Chinese goods. Beijing responded promptly and in-kind, with tariff plans of its own.
U.S. tariffs target largely industrial goods and shy away from specific products.
So American consumers might have a more difficult time perceiving the direct cause-and-effect between tariffs and higher prices.
But consumers eventually will bear the increased costs — they always do. Manufacturers will pass on to consumers the higher prices they have to pay to account for tariffs on goods they purchase. The proposed Trump tariffs are for products ranging from X-ray tubes to incinerators.
In response, China announced it’s striking back with retaliatory tariffs. Beijing plans to target $50 billion worth of U.S. soybeans, beef, seafood, and other products.
REICHARD: Well, she was once said to be the next Steve Jobs. High-tech entrepreneur Elizabeth Holmes even used to go around in entirely black turtleneck sweaters.
She founded what was thought to be a promising startup, Theranos. And it was supposed to revolutionize the way we do blood testing, promising a system able to do dozens of tests with just a prick of a finger and few droplets of blood.
She’s now under indictment for multiple counts of criminal fraud and conspiracy to commit wire fraud — both Holmes and her chief operating officer. She’s 34 years old, and if she’s convicted on all counts, she could spend the rest of her life in prison.
Federal prosecutors accuse her and her business partner of deliberately misleading investors, policymakers, and the public about the accuracy of the company’s blood-testing technologies: fraud they say that goes back at least to 2013.
It all came to light two years ago after The Wall Street Journal investigated, and found the technology was inaccurate at best, and that the company was using routine blood-testing equipment for the vast majority of its tests.
EICHER: Here’s an example of how a single event can move government economic statistics: On May 2nd, a fire broke out at Meridian Magnesium Products of America, the company’s factory in Eaton Rapids, Michigan. Meridian makes parts for cars and trucks.
The fire was a major one. The losses were so great that Ford had to cut production of the top-selling vehicle in America, the F-Series pickup truck. The result of that was the temporary layoff of 7,600 workers.
That single event and the cascading effects caused the manufacturing component of industrial production to fall seven-tenths of a percent in May. That dragged overall production down for the month.
Because the economy is otherwise humming along, though, economists expect a big rebound in June.
REICHARD: Tariffs and rumors of trade wars sent a shiver down Wall Street spines at the Friday close. All the major indexes fell slightly. Gains for the week were modest overall, though the Nasdaq picked up 1.3 percent.
The Dow Jones Industrial Average fell more than 200 points on the week, losing almost a full percentage point in value. All the indexes remain up on the year, and again only the tech-heavy Nasdaq has posted double-digit percentage gains. It’s up more than 12 percent.
EICHER: And that’s today’s Monday Moneybeat.