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A millennial is building America’s first nickel-cobalt refinery

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Kaleigh Long believed there had to be an American fix. As an Oklahoman working on political campaigns in the Democratic Republic of Congo she saw all too closely the bloodiness of the critical-mineral trade. Militias killed her flatmate’s siblings, burnt homes on resource-rich land and forced children to dig in the mines—as Chinese companies tolerated the abuses.

Back home the 28-year-old single mother reckoned that getting into the mineral business was the best way to clean up the supply chain and ease China’s chokehold on cobalt and other minerals vital to a greener economy. America had no nickel-cobalt refineries of its own. In early 2022 Ms Long set out to build its first. She raised $50m for her startup, Westwin Elements, and recruited oil-and-gas tycoons, a former intelligence officer and the longtime boss of Boeing, an aerospace company, to sit on her board. In her Oklahoma City headquarters the self-described libertarian touched her necklace, the pendant a silhouette of Africa, as she spoke about the $185m grant Westwin next hopes to win from the Department of Energy.

Westwin’s ambitions show the promise of the largesse doled out by the Inflation Reduction Act (IRA), Joe Biden’s signature bill to catalyse America’s clean-energy transition. Subsidies for electric cars attracted $110bn in investments in green manufacturing and battery-making within a year of the IRA’s passage in 2022. But as firms boosted production it became clear that China’s grip on the world’s mineral mines and refineries could prove perilous for its political foes. If China decides not to export refined metals tomorrow, as it has threatened to do, dozens of brand-new American gigafactories could soon sit idle.

Even with subsidies, mining and refining in America are not for the faint of heart. Regulations can make both activities uncompetitive. But the maths flipped in refiners’ favour in December 2023 when the tax agencies charged with implementing the IRA made it more protectionist. Their new rules clarified that companies selling electric cars made with materials processed by firms with at least 25% Chinese ownership are ineligible for subsidies. For makers of batteries and cars this was bad news—their inputs got pricier overnight. But for Ms Long it meant that her higher-cost product would have a market.

Drive 90 miles south-west of Oklahoma City through fields of cotton and cattle and you will find yourself at the construction site of Westwin’s pilot plant in Lawton. A steel skeleton of the refinery sits on a 40-acre plot framing the Wichita mountain-range; on a February morning engineers buzzed around it in hard hats. By 2030 Westwin plans to produce 64,000 metric tonnes of processed nickel and—if it can find ethical suppliers and sell the refined product without crashing the price—20,000 tonnes of cobalt. According to calculations by Daniel Quiggin of Chatham House, a British think-tank, that would meet roughly half of America’s demand for electric-car batteries. For building the supply chain “projects like this are indispensable,” says Bentley Allan, a professor at Johns Hopkins University.

Blood, sweat and fears

But in leaving Congo for America’s prairies Ms Long finds herself still haunted by ethical problems. By building in Oklahoma she inserted her project in the middle of a bitter row over indigenous rights. Leaders of the Apache, Comanche and Kiowa nations say the plant comes too close to their sovereign land and that the firm’s failure to consult them before building shows the same disrespect as settlers past. They fear that contamination from the refinery will give their babies cancer and dirty their sacred land and air. Having lost countless kin to covid-19 they refuse to back it without a guarantee that it will not make their people sick. Westwin cannot make that promise.

The protests echo those mounted against the Keystone XL oil pipeline in the Dakotas. At a sweat ceremony on a recent winter evening, between prayers for locked-up loved ones and addicted brothers, native residents pleaded for Westwin to stop construction. As an elder poured water on embers the hut filled with steam and became so hot your correspondent struggled to breathe. In darkness they sang and passed a tobacco pipe between them, the smoke a vehicle to lift their anti-industrial supplications “to the spirits”.

The next day the tribal chairmen met with Westwin executives. Lawton locals who attended had no patience for Ms Long’s tearful tale of child-slaves in the Congolese cobalt mines—indigenous people, she noted, just on a different continent—and no interest in what her project means for American national security.

Because they lack the muscle of richer tribes to the east who lobby more, their objections are probably for naught. But the distress of it all may in the end convince Ms Long not to build the commercial plant in her home state, especially if Texas or Louisiana offer better tax breaks.

The permitting process could be long and litigious in any of those places and the delay may undermine climate goals. As long as domestic refineries are not yet up and running and China’s mineral stash is still on offer, the IRA’s protectionist rules could slow progress towards decarbonisation, says Tom Moerenhout of Columbia University who advises the State Department and White House on energy policy.

Since hawkishness towards China is trendy in both parties, and most of the investments have gone to Republican districts, it is a fair bet that any future president will keep the subsidies in place. That comforts Ms Long, who says she worries about the risks facing her business “almost every day, most of the day”. Though many are cheering her on, Westwin has already shown just how hard it is to bring critical-mineral refining to America, never mind an ethical model for the world.

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Economics

U.S. tariff rates under Trump will be higher than the Smoot-Hawley levels from Great Depression era

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U.S. President Donald Trump holds a chart next to U.S. Secretary of Commerce Howard Lutnick as Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025.

Carlos Barria | Reuters

The tariff policy outlined by President Donald Trump on Wednesday appears set to raise the level of U.S. import duties to the highest in more than 100 years.

The U.S. introduced a baseline 10% tariff on imports, but also steep country-by-country rates on some major trading partners, including China. The country-by-country rates appear to be related to the trade deficit the U.S. has with each trading partner.

Sarah Bianchi, Evercore ISI chief strategist of international political affairs and public policy, said in a note to clients late Wednesday that the new policies put the effective tariff rate above the level of around 20% set by 1930’s Smoot-Hawley Tariff Act, which is often cited by economists as a contributing factor to the Great Depression.

“A very tough and more bearish announcement that pushes the overall U.S. weighted average tariff rate to 24%, the highest in over 100 years – and likely headed to as high as 27% once anticipated 232s are complete,” Bianchi wrote. The “232s” is a reference to some sector-specific tariffs that could be added soon.

JPMorgan’s chief U.S. economist Michael Feroli came up with similar results when his team crunched the numbers.

“By our calculations this takes the average effective tariff rate from what had been prior to today’s announcement around 10% to just over 23%. … A White House official mentioned that other section 232 tariffs (e.g. chips, pharma, critical minerals) are still in the works, so the average effective rate could go even higher. Moreover, the executive order states that retaliation by US trading partners could result in even higher US tariffs,” Feroli said in a note to clients.

More downside risk for the economy going forward, says Apollo Global's Torsten Slok

An estimate from Fitch Ratings was in the same range, with a report saying the tariff rate would hit its highest level since 1909.

Trump referenced the Smoot-Hawley Act in his Rose Garden remarks on Wednesday. The president said the issue was not the tariffs imposed in 1930 but the previous decision to remove the higher tariffs that existed earlier in the 20th century.

“It would have never happened if they had stayed with the tariff policy. It would have been a much different story. They tried to bring back tariffs to save our country, but it was gone. It was gone. It was too late,” Trump said.

The full economic impact of the new tariffs will likely depend on how long they are in place and if other countries retaliate. Trump and Treasury Secretary Scott Bessent have indicated that the country-by-country tariffs could come down if those trade partners change their policies.

JPMorgan global economist Nora Szentivanyi warned that Trump’s tariffs were likely to push the U.S. and global economy into a recession this year if they are sustained.

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Economics

The Federal Reserve is not likely to rescue markets and economy from tariff turmoil anytime soon

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U.S. Federal Reserve Chair Jerome Powell and U.S. President Donald Trump.

Craig Hudson | Evelyn Hockstein | Reuters

Now that President Donald Trump has set out his landmark tariff plans, the Federal Reserve finds itself in a potential policy box to choose between fighting inflation, boosting growth — or simply avoiding the fray and letting events take their course without intervention.

Should the president hold fast to his tougher-than-expected trade policy, there’s a material risk of at least near-term costs, namely the potential for higher prices and a slowdown in growth that could turn into a recession.

For the Fed, that presents a potential no-win situation.

The central bank is tasked with using its policy levers to ensure full employment and low prices, the so-called dual mandate of which policymakers speak. If tariffs present challenges to both, choosing whether to ease to support growth or tighten to fight inflation won’t be easy, as each courts its own peril.

“The problem for the Fed is that they’re going to have to be very reactive,” said Jonathan Pingle, chief U.S. economist at UBS. “They’re going to be watching prices rise, which might make them hesitant to respond to any growth weakness that materializes. I think it’s certainly going to make it very hard for them to be preemptive.”

Under normal conditions, the Fed likes to get ahead of things.

If it sees leading gauges of unemployment perk up, the Fed will cut interest rates to ease financial conditions and give companies more incentive to hire. If it sniffs out a coming rise in inflation, it can raise rates to dampen demand and bring down prices.

So what happens when both things occur at the same time?

Risks to waiting

The Fed hasn’t had to answer that question since the early 1980s, when then-Chair Paul Volcker, faced with such stagflation, chose to uphold the inflation side of the mandate and hike rates dramatically, tilting the economy into a recession.

In the current case, the choice will be tough, particularly coming on the heels of how the Jerome Powell-led central bank was flat-footed when prices started rising in 2021 and he and his colleagues dismissed the move as “transitory.” The word has been resurrected to describe the Fed’s general view on tariff-induced price increases.

“They do risk getting caught offsides with the potential magnitude of this kind of price increase, not unlike what happened in 2022 where, they might might feel the need to respond,” Pingle said. “In order for them to respond to weakening growth, they’re really going to have to wait until the growth does weaken and makes the case for them to move.”

To be sure, the Trump administration sees the tariffs as pro-growth and anti-inflation, though officials have acknowledged the potential for some bumpiness ahead.

“It’s time to change the rules and make the rules be stacked fairly with the United States of America,” Commerce Secretary Howard Lutnick told CNBC in a Thursday interview. ” We need to stop supporting the rest of the world and start supporting American workers.”

However, that could take some time as even Lutnick acknowledged that the administration is seeking a “re-ordering” of the global economic landscape.

Like many other Wall Street economists, Pingle spent the time since Trump announced the new tariffs Wednesday adapting forecasts for the potential impact.

Bracing for inflation and flat growth

The general consensus is that unless the duties are negotiated lower, they will take prospects for economic growth down to near-zero or perhaps even into recession, while putting core inflation in 2025 north of 3% and, according to some forecasts, as high as 5%. With the Fed targeting inflation at 2%, that’s a wide miss for its own policy objective.

“With price stability still not fully achieved, and tariffs threatening to push prices higher, policymakers may not be able to provide as much monetary support as the growth picture requires, and could even bind them from cutting rates at all,” wrote Seema Shah, chief global strategist at Principal Asset Management.

Traders, however, ramped up their bets that the Fed will act to boost growth rather than fight inflation.

As is often the reaction during a market wipeout like Thursday’s, the market raised the implied odds that the Fed will cut aggressively this year, going so far as to put the equivalent of four quarter-percentage-point reductions in play, according to the CME Group’s FedWatch tracker of futures pricing.

Shah, however, noted that “the path to easing has become narrower and more uncertain.”

Fed officials certainly haven’t provided any fodder for the notion of rate cuts anytime soon.

In a speech Thursday, Vice Chair Philip Jefferson stuck to the Fed’s recent script, insisting “there is no need to be in a hurry to make further policy rate adjustments. The current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.”

Taking the cautious tone a step further, Governor Adriana Kugler said Wednesday afternoon — at the same time Trump was delivering his tariff presentation in the Rose Garden — that she expects the Fed to stay put until things clear up.

“I will support maintaining the current policy rate for as long as these upside risks to inflation continue, while economic activity and employment remain stable,” Kugler said, adding she “strongly supported” the decision in March to keep the Fed’s benchmark rate unchanged.

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Economics

Layoff announcements surge to the most since the pandemic as Musk’s DOGE slices Federal labor force

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Employees of the Department of Health and Human Services (HHS) hug each other as they queue outside the Mary E. Switzer Memorial Building, after it was reported that the Trump administration fired staff at the Centers for Disease Control and Prevention and at the Food and Drug Administration, as it embarked on its plan to cut 10,000 jobs at HHS, in Washington, D.C., U.S., April 1, 2025. 

Kevin Lamarque | Reuters

A surge in federal government job cuts contributed to a near record-setting pace for announced layoffs in March, exceeded only by when the country shut down in 2020 for the Covid pandemic, according to a report Thursday from job placement firm Challenger, Gray & Christmas.

Furloughs in the federal government totaled 216,215 for the month, part of a total 275,240 reductions overall in the labor force. Some 280,253 layoffs across 27 agencies in the past two months have been linked to the Elon Musk-led Department of Government Efficiency and its efforts to pare down the federal workforce.

The monthly total was surpassed only by April and May of 2020 in the early days of the pandemic when employers announced combined reductions of more than 1 million, according to Challenger records going back to 1989.

“Job cut announcements were dominated last month by Department of Government Efficiency [DOGE] plans to eliminate positions in the federal government,” said Andrew Challenger, senior vice president and workplace expert at the firm. “It would have otherwise been a fairly quiet month for layoffs.”

However, DOGE has continued to cut aggressively across the government.

Various reports have indicated that the Veterans Affairs department could lose 80,000 jobs, the IRS is in line for some 18,000 reductions and Treasury is expected to drop a “substantial” level of workers as well, according to a court filing.

The year to date tally for federal government announced layoffs represents a 672% increase from the same period in 2024, according to Challenger.

To be sure, the outsized layoff plans haven’t made their way into other jobs data.

Weekly unemployment claims have held in a fairly tight range since President Donald Trump took office. Payroll growth has slowed a bit from its pace in 2024 but is still positive, while job openings have receded but only to around their pre-pandemic levels.

However, the Washington, D.C. area has been hit particularly hard by the announced layoffs, which have totaled 278,711 year to date for the city, according to the report.

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