Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o President Donald Trump’s tariffs have ramifications not only for those in the United States, but also globally. Lesotho – a country in southern Africa that is among the poorest on earth – was hit with a 50 percent tariff last week on the denim that it exports to the United States for American-branded jeans. Lesotho has a population of two million people and a national output of about $2 billion per year, with an annual per capita income of $975. The tariffs also impact other poverty-stricken countries in Africa, but no country is more impacted on the continent than Lesotho.
Lesotho imported less than $3 million in American goods but exported $240 million to the United States last year. Its exports of denim and diamonds make up more than 10 percent of the country’s gross domestic product (GDP). Seventy percent of what Lesotho produces is exported to the United States after its textile industry was nurtured after the United States passed the African Growth and Opportunity Act in 2000 which was designed to boost manufacturing across Africa. [The New York Times]
o President Donald Trump’s tariffs has threatened to upend the rehabilitation of US-Vietnam relationship 50 years following the end of the Vietnam War. The US has become Vietnam’s largest customer, importing $137 billion in Vietnamese goods last year. The US trade deficit with Vietnam is third only to China and Mexico.
Companies, such as Nike and Apple, doubled down on their investments to manufacture products in Vietnam following the first Trump administration and his first round of tariffs on Chinese goods. Multinational companies found the Vietnamese government to be pro-business and eager to boost manufacturing. After Trump announced his latest batch of tariffs on countries around the world, Vietnamese factory owners have become concerned about finding other countries for their products due to Chinese competition. [The Wall Street Journal]
o Frustration, anger, anxiety and fear set in among Wall Street’s elite, surveying last week’s sell-off. With a decline of 10 percent over a two-day period, the markets have not seen a more drastic sell-off since Lehman Brothers collapsed in 2008 – the short-lived panic at the start of the COVID-19 pandemic notwithstanding.
This sell-off is unique due to the lack of a potential rescue by the federal government – a government that has torn apart the interconnectedness that world order was built on. The true depth of the impact is yet to be determined, but Bank of America projects that profits for companies in the S&P 500 may fall by more than one-third if retaliatory tariffs are enacted by the countries subject to President Donald Trump’s tariffs. [The New York Times]
o Americans have racked up $35 trillion of wealth in their homes, an increase of nearly 80 percent from early 2020. However, many are finding out that rising home values can translate to higher costs elsewhere, such as property taxes. According to ICE Mortgage Technology, the average homeowner with a mortgage had $313,000 of home equity entering 2025. Meanwhile, home prices have increased 47 percent from February 2020 to February 2025, according to the National Association of Realtors. The average tax bill for homeowners has climbed 14 percent from 2019 to 2023 to an average of $4,062 for a single-family home.
In addition, while home values are increasing and many could look to tap into the equity of their home over concerns of market volatility and a possible recession, high interest rates and tight lending standards make doing so a difficult task. In the fourth quarter of 2024, only 0.41 percent of homeowners are tapping into their home equity, well below the 0.92 percent quarterly average in the decade before the Fed started raising interest rates in 2022. [The Wall Street Journal]
o Electric vehicles (EV) are losing their appeal to American consumers. According to Gallup, the number of Americans open to buying an EV is 51 percent in early 2025, down from 59 percent in 2023. Sales of EVs have slowed in recent months, led by Tesla. Even as sales have slowed, more than 365,000 EVs were sold in the final quarter of 2024, an increase from 317,000 from the final quarter of 2023. However, the rate of growth has slowed considerably.
Experts don’t believe that political controversies are the primary reason for the drop, particularly in the case of Tesla and Elon Musk. But Democrats, young adults and college graduates have shown a slight decline in enthusiasm toward EVs from 2023 to 2025, while Republicans have shown a slight increase in enthusiasm toward EVs. In addition, the poll found that consumers have high interest in hybrid vehicles. [The Washington Post]
