Finance

More Americans leaving San Francisco, New York due to affordability concerns

Published

8 months ago

August 7, 2024

Business Finance News

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The exodus from major cities in states run by Democrats continues.

A growing number of Americans are migrating from predominantly blue cities like San Francisco and New York, according to a Bank of America analyst note that is based on aggregated and anonymous internal customer data.

In the three-month period from April to June, there were “large population declines” in many Northeastern and Western cities, continuing a long-term trend that began during the pandemic.

New York and Boston saw the largest net population outflows in the Northeast, while San Francisco, Los Angeles, Seattle and Portland, Oregon, saw the largest drops in the West.

WALL STREET’S FEAR GAUGE SPIKES TO HIGHEST LEVEL SINCE 2020 AS GLOBAL TURMOIL DEEPENS

New York and California have some of the highest tax burdens in the country. San Francisco has also been plagued by a spike in property-related crime, according to the California Department of Justice’s Criminal Justice Statistics Center.

A truck is parked in front of a U-Haul facility on Aug. 31, 2020, in New York City. (John Lamparski/Getty Images / Getty Images)

Among the top 23 major metropolitan areas in the country, Columbus, Ohio, saw the biggest influx of people during the second quarter of 2024. That was followed by Austin, Texas; Las Vegas; San Antonio, Texas; and Jacksonville, Florida.

Texas, Florida and Nevada do not have a state income tax.

RECESSION FEARS, MARKET SELL-OFF RAISE ODDS OF A BIGGER FED RATE CUT

Still, the findings from Bank of America also show that fewer households are moving between cities, likely due to the increased “hidden” costs of homeownership. Homeowners’ insurance and property taxes are among the “hidden” costs that have spiked in recent years, particularly in the Sun Belt.

Gen Z and lower-income households were more likely to relocate in the second quarter, likely due to financial necessity rather than choice, the report said.

A view of downtown Austin, Texas. (iStock / iStock)

“In our view, the current level of inter-city moves is being held back by the ‘hidden’ costs of homeownership, alongside more overt costs such as higher mortgage rates,” the report said. “At the same time, Gen Z and those on lower incomes, particularly renters, are continuing to move.”

Affordability and cost-of-living are most likely the top reasons behind younger Americans and lower-income households moving.

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“It’s also important to note that it’s easier for younger and lower-income households to change addresses because a greater proportion of these consumers are renters rather than homeowners,” the report said. The homeownership rate is just 35% for Americans ages 25 to 30, compared to a 66% rate across all ages.

Finance

China’s response to U.S. tariffs will likely focus on stimulus, trade

Published

2 hours ago

April 3, 2025

Business Finance News

Chinese national flags flutter on boats near shipping containers at the Yangshan Port outside Shanghai, China, February 7, 2025.

Go Nakamura | Reuters

BEIJING — China’s reaction to new U.S. tariffs will likely focus on domestic stimulus and strengthening ties with trading partners, according to analysts based in Greater China.

Hours after U.S. President Donald Trump announced additional 34% tariffs on China, the Chinese Ministry of Commerce called on the U.S. to cancel the tariffs, and vowed unspecified countermeasures. The sweeping U.S. policy also slapped new duties on the European Union and major Asian countries.

Chinese exports to the U.S. this year had already been hit by 20% in additional tariffs, raising the total rate on shipments from China to 54%, among the highest levied by the Trump administration. The effective rate for individual product lines can vary.

But, as has been the case, the closing line of the Chinese statement was a call to negotiate.

“I think the focus of China’s response in the near term won’t be retaliatory tariffs or such measures,” said Bruce Pang, adjunct associate professor at CUHK Business School. That’s according to a CNBC translation of the Chinese-language statement.

Instead, Pang expects China to focus on improving its own economy by diversifying export destinations and products, as well as doubling down on its priority of boosting domestic consumption.

Watch for cascading tariffs as tariffs reroute trade within Asia, says economist

China, the world’s second-largest economy, has since September stepped up stimulus efforts by expanding the fiscal deficit, increasing a consumption trade-in subsidy program and calling for a halt in the real estate slump. Notably, Chinese President Xi Jinping held a rare meeting with tech entrepreneurs including Alibaba founder Jack Ma in February, in a show of support for the private sector.

The policy reversal — from regulatory tightening in recent years — reflects how Beijing has been “anticipating the coming slowdown or even crash in exports,” Macquarie’s Chief China Economist Larry Hu said in a report, ahead of Trump’s latest tariff announcement. He pointed out that the pandemic-induced export boom of 2021 enabled Beijing to “launch a massive regulatory campaign.”

“My view stays the same,” Hu said in an email Thursday. “Beijing will use domestic stimulus to offset the impact of tariffs, so that they could still achieve the growth target of ‘around 5%.'”

Instead of retaliatory tariffs, Hu also expects Beijing will focus on still using blacklists, export controls on critical minerals and probes into foreign companies in China. Hu also anticipates China will keep the yuan strong against the U.S. dollar and resist calls from retailers to cut prices — as a way to push inflationary pressure onto the U.S.

China’s top leaders in early March announced they would pursue a target of around 5% growth in gross domestic product this year, a task they emphasized would require “very arduous work” to achieve. The finance ministry also hinted it could increase fiscal support if needed.

About 20% of China’s economy relies on exports, according to Goldman Sachs. They previously estimated that new U.S. tariffs of around 60% on China would lower real GDP by around 2 percentage points. The firm still maintains a full-year forecast of 4.5% GDP growth.

Changing global trade

What’s different from the impact of tariffs under Trump’s first term is that China is not the only target, but one of a swath of countries facing hefty levies on their exports to the U.S. Some of these countries, such as Vietnam and Thailand, had served as alternate routes for Chinese goods to reach the U.S.

At the Chinese export hub of Yiwu on Thursday, businesses seemed nonchalant about the impact of the new U.S. tariffs, due to a perception their overseas competitors wouldn’t gain an advantage, said Cameron Johnson, a Shanghai-based senior partner at consulting firm Tidalwave Solutions.

He pointed out that previously, the U.S. had focused its trade measures on forcing companies to remove China from their supply chains and go to other countries. But Chinese manufacturers had expanded overseas alongside that diversification, he said.

“The reality is this [new U.S. tariff policy] essentially gives most of Asia and Africa to China, and the U.S. is not prepared,” Johnson said. He expects China won’t make things unnecessarily difficult for U.S. businesses operating in the country and instead will try harder to build other trade relationships.

Since Trump’s first four-year term ended in early 2021, China has increased its trade with Southeast Asia so much that the region is now Beijing’s largest trading partner, followed by the European Union and then the U.S.

The 10 member states of the Association of Southeast Asian Nations (ASEAN) joined China, Japan, South Korea, Australia and New Zealand in forming the world’s largest free trade bloc — the Regional Comprehensive Economic Partnership (RCEP) — which came into being in early 2022. The U.S. and India are not members of the RCEP.

“RCEP member countries will naturally deepen trade ties with one another,” Yue Su, principal economist, China, at the Economist Intelligence Unit, said in a note Thursday.

“This is also partly because China’s economy is likely to remain the most — or at least among the most—stable in relative terms, given the government’s strong commitment to its growth targets and its readiness to deploy fiscal policy measures when needed,” she said.

Uncertainties remain

The extent to which all countries will be slapped with tariffs this week remains uncertain as Trump is widely expected to use the duties as a negotiating tactic, especially with China.

He said last week the U.S. could lower its tariffs on China to help close a deal for Beijing-based ByteDance to sell TikTok’s U.S. operations.

But the level of new tariffs on China was worse than many investors expected.

“Unlike some of the optimistic market forecasts, we do not expect a US-China bilateral grand bargain,” Ting Lu, chief China economist at Nomura, said in a note Thursday.

“We expect tensions between these two mega economies to worsen significantly,” he said, “especially as China has been making large strides in high-tech sectors, including AI and robotics.”