TMR

PRESIDENT Donald Trump said he’d impose increased tariffs on countries buying energy from Russia while clarifying that levies on semiconductor and pharmaceutical imports would be announced “within the next week or so.” 

In a divergent approach toward Asia’s giants, Trump said he’d raise tariffs on India “very substantially over the next 24 hours,” accusing its Russian oil purchases of “fueling the war machine.” By contrast, he said he was “very close to a deal” with China to extend a trade truce that saw the two countries agree to reduce tit-for-tat tariff hikes and ease export restrictions on rare earth magnets and certain technologies.

India, which hoped to lure manufacturers amid Trump’s tariff blitz, will face a double squeeze as Trump said levies on pharmaceutical imports would be announced in the next week or so, along with tariffs on semiconductors. Unlike Beijing, which used its dominance of rare earths in trade dealings with Washington, Delhi has no such leverage.

Coming just days after Trump re-set his tariff plan with rates on imports from trade partners ranging from 10% to 41%, his latest blast of trade threats and deadlines shows his quest to remake global trade in America’s favor is far from done. That’s even as the latest economic data suggests the US economy is grappling with the fallout. 

Asian stocks struggled for direction in early trade Wednesday. The S&P 500 was on the brink of all-time highs on Tuesday, before losing steam. 

Trump is threatening secondary tariffs on buyers of Russian oil as he ratchets up pressure on Russian President Vladimir Putin to halt the war in Ukraine. The Kremlin is weighing options for a concession that could include an air truce with Ukraine to try to head off the threat of such sanctions.

When asked if he’d follow through on a previous threat to impose tariffs on additional countries, including China, Trump said “we’ll be doing quite a bit of that.” 

In an interview with CNBC earlier Tuesday, Trump indicated he would push forward with escalated tariffs on India in particular.

“We settled on 25% but I think I’m going to raise that very substantially over the next 24 hours, because they’re buying Russian oil,” Trump said. “They’re fueling the war machine. And if they’re going to do that, then I’m not going to be happy.”

He also detailed timing and discussed potential levels of US tariffs on semiconductor and pharmaceutical imports. 

“We’ll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it’s going to go to 150% and then it’s going to go to 250% because we want pharmaceuticals made in our country,” Trump said Tuesday in the interview on CNBC. 

Trump said the US was “getting along with China very well.” 

“It’s not imperative, but I think we’re going to make a good deal,” Trump said. 

Still, Trump downplayed the notion that he was eager for a meeting with Chinese President Xi Jinping, saying he would only want to see his Chinese counterpart as part of an effort to conclude trade negotiations. 

“I’ll end up having a meeting before the end of the year, most likely, if we make a deal,” Trump said. “If we don’t make a deal, I’m not going to have a meeting.”

“It’s a 19-hour flight — it’s a long flight, but at some point in the not too distant future, I will,” Trump added.

A preliminary deal between the US and China is set to expire on Aug. 12. That initial truce eased worries of a tariff war that threatened to choke off bilateral trade between the world’s two largest economies and also gave the countries more time to discuss other unresolved issues such as duties tied to fentanyl trafficking.

Last week, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Stockholm — the third round of trade talks between the US and Beijing in less than three months. 

While Chinese officials and the Communist Party’s official newspaper had signaled satisfaction with the Stockholm talks, the pact remained fragile. Bessent had said that any agreement to extend the arrangement would be up to Trump. –BLOOMBERG

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Travelers heading to London Heathrow Airport faced disruption on Tuesday because of the closure of a main road tunnel at the biggest UK hub, less than a week after a UK-wide air-traffic control failure canceled some flights.

A technical issue meant the road tunnel into Terminals 2 and 3 was blocked off to drivers on Tuesday morning, a Heathrow spokeswoman said. The issue was later resolved and the tunnel reopened, with traffic flowing again, she said in an update.

Adding to the sense of disruption is the Heathrow Express train line, which operates between the airport and London Paddington station and stopped running in both directions because of overcrowding on the service, according to its website. The latest disruption comes in the busiest season for air travel as people head to the airport to jet off for summer vacations. 

Heathrow was most affected by an air traffic control outage last week that was triggered by a radar-related glitch at NATS, a key ATC service in the UK. Although the issue was resolved quickly, the interruption caused more than 150 cancellations across the country with over 45 flights scrapped at Heathrow.

The next day, the UK’s largest airport said it submitted a £49 billion ($65 billion) expansion proposal to government which included plans to build a third runway, upgrade terminals and reroute the M25, a major highway around London. –BLOOMBERG

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From clean energy and research to advocacy, nonprofit groups are struggling as federal dollars dry up

by EMMA COURT & OLIVIA RAIMONDE

IF ANY nonprofit epitomises the whiplash experienced by climate advocacy groups in the US over the past few years, it’s Rewiring America.

Founded in 2020 shortly before former President Joe Biden was elected, the organisation focuses on shifting US homes from fossil fuel-powered appliances to electric ones like heat pumps — a prime goal of Biden’s Inflation Reduction Act when it was passed in 2022. Rewiring America was poised to receive nearly US$500 million (RM2.12 billion) from a US$27 billion programme created by that law.

In February, the group was blocked from accessing those funds, and the Environmental Protection Agency (EPA), which administers the programme, has since terminated US$20 billion in grants because of “substantial concerns” about “programme integrity, the award process, programmatic fraud, waste and abuse, and misalignment with [the] agency’s priorities.” The programme is under investigation by the Federal Bureau of Investigation (FBI), according to the agency. Meanwhile, grantees have sued over frozen bank accounts. (The government has since walked back some of its claims in court. “To be clear, we’re not accusing anybody of fraud,” Justice Department lawyer Yaakov Roth said at a hearing in May.)

The funding uncertainty put Rewiring America in a bind, says CEO Ari Matusiak, “and so we had to make the decision to operate financially as though the dollars weren’t there.”

It’s led to Rewiring America laying off 36 staff — more than a quarter of the organisation — and scaling back its work while putting more focus on regional projects.

President Donald Trump’s assault on clean energy regulations and funding has hit other parts of the climate NGO sector. Biden-era programmes that injected billions into nonprofits have been culled, and leading philanthropists have warned they’ll be unable to fill in the gap.

At risk is the energy transition in the US as nonprofits struggle to provide services while also playing defence to protect remaining federal climate programmes.

“We still need to act now to stop some of the worst impacts of climate change,” said Randall Kempner, founder and ED of the Climate Philanthropy Catalyst Coalition. “That fact has not changed. If anything, our ability to move on that has been negatively impacted by the change in the administration and its policies.”

Rewiring America isn’t alone: US climate-related nonprofits have cut positions and looked for other ways to cut costs in recent months as the flow of funds has dried up. Environmental group RMI has also cut jobs, laying off about 10% of its staff in May following federal funding cuts. The New Orleans-based nonprofit Deep South Centre for Environmental Justice had to lay off eight staffers after losing a US$13 million, five-year federal grant in February, said Beverly Wright, the group’s founder and ED.

“We hired a lot of people we had to let go,” Wright said. “I thank God we hadn’t hired even more.”

A climate activist holds a sign during a protest outside of Citigroup headquarters in New York

Nonprofits were among the entities eligible for around US$54 billion of the IRA’s nearly US$105 billion in climate grants and direct agency spending, according to the Inflation Reduction Act Tracker, a project run by Columbia Law School and the Environmental Defence Fund.

For organisations highly dependent on public money, “the funding became so uncertain that their survival required contracting the workforce,” said Alexander Reid, a tax policy expert and nonprofit consultant at BakerHostetler who works with many climate nonprofits.

The White House didn’t respond to specific questions about the effect of cuts on nonprofits. Spokesperson Taylor Rogers said the tax law Trump recently signed “will create thousands of good, new, good-paying jobs thanks to the explosive growth” it will bring.

Rewiring America is part of a coalition dubbed Power Forward Communities that applied for a grant from the US$27 billion Greenhouse Gas Reduction Fund (GGRF), which supports providing clean energy in low-income and disadvantaged communities.

The group was awarded US$2 billion last year, of which Rewiring America itself was set to receive nearly US$500 million over seven years to help electrify homes at a discount.

The EPA specifically singled out Power Forward Communities before it terminated US$20 billion in GGRF grants, calling it “a new nonprofit with ties to Stacey Abrams” — who previously worked with Rewiring America — and suggesting that the organisation shouldn’t have received funding because it was new and had limited revenue in 2023.

Despite the layoffs, Rewiring America is still moving forward with the home equipment upgrade programme, though at a smaller scale, a spokeswoman said.

The group has also decided to focus its efforts on states and localities and invest less in federal work, which the organisation sees as less winnable, said a former employee impacted by the layoffs. The five employees dedicated to state and local policy were unaffected by the layoffs, a spokesman said.

Power Forward Communities is suing Citibank, accusing the bank of “unlawful suspension of accounts,” which the group said it is legally entitled to. But the organisation has had to lay off staff, and two of the coalition’s five members — Habitat for Humanity International and United Way Worldwide — have left.

Climate United Fund, another GGRF recipient that also had its money frozen, is suing Citibank alongside Power Forward Communities.

The group has lost about 10 of 35 staffers since February due to layoffs, departures and reassignments, said CEO Beth Bafford. Coalition members CPC Climate Capital and Self-Help Climate Capital have also had to fire and reassign staff, Bafford said.

When the Kresge Foundation surveyed grantees earlier this year about the impact of federal grant cancellations, as many as half of groups receiving climate-related grants reported that they were either already affected or at risk of being affected. Many were benefitting from IRA funds, and shortfalls ranged from 20% to up to 80% of their budgets. RMI, which now has fewer than 700 staffers, had five federal agreements cancelled, according to a spokesperson. Those represented a relatively small portion of the group’s overall revenue — around US$7.5 million compared to US$170 million in revenue and support listed in its most recent annual report — but the philanthropic organisations that provide most of its funding are also facing uncertainty, the spokesperson said. (RMI receives funding from Bloomberg Philanthropies, the philanthropic organisation of Michael Bloomberg, the founder and majority owner of Bloomberg LP, which owns Bloomberg News.)

Smaller NGOs working at the local or regional level are also reeling — and often have fewer resources to cushion the blow.

The Deep South Centre for Environmental Justice was expecting funding to help dramatically scale up the group’s work with community-based organisations focused on climate resilience issues like flash flooding, overflowing sewers and toxic air in underserved areas. The nonprofit previously partnered with 10 to 20 community groups a year and aimed to reach at least 200 across 14 states.

“We’re back to getting all these phone calls we can’t respond to,” Wright, the ED, said. “It’s disheartening and stressful.”

The IRA grant was one of two big federal programmes supporting the group’s work, she said. It hasn’t heard back about the other grant, which has helped fund the centre for more than 30 years. Without it, the organisation may need to lay off more staff.

Not all organisations are feeling the same pressure. Stand.earth ED Todd Paglia said that the advocacy group has never accepted corporate or government cash and that its model is designed specifically to avoid political shifts’ impact on grants and giving. “We want to maintain our independence,” he said.

Paglia said that the organisation has a “diverse stream of revenue sources,” including tens of thousands of donors, foundations and many high-net-worth individuals.

“We are not having the downturn that a lot of groups are having,” he said.

Some foundations are increasing their giving or easing administrative processes for grantees. But “there are definitely going to be some foundations who do not want to run afoul of the Trump administration,” said Kempner, the founder and ED of the Climate Philanthropy Catalyst Coalition, given its attacks on “private-sector organisations with whom it disagrees.”

A delivery worker unloads an electric heat pump hot water heater in Washington

Large institutional foundations are most likely to increase their grantmaking, said Kempner, whose coalition is composed of philanthropic networks, advisory firms and foundations. Corporate giving has also continued, he said, but organisations aren’t talking about it as much or are shifting how they describe their climate programmes, part of a phenomenon known as greenhushing.

Philanthropies are also more likely to focus on legal defense of policies like the IRA and areas where there may be more climate momentum, including at the state and local level, Kempner said.

The MacArthur Foundation announced in March that it plans to increase its giving over the next two years in response to Trump’s attempts to cut budgets, going from 5% of its endowment to 6%. However, the extra cash will be spread across multiple focus areas, said Deborah Philbrick, a senior programme officer within climate solutions at the MacArthur Foundation.

“It’s not the role of philanthropy to backfill for the government in all cases. It’s a balancing act,” Philbrick said. Some organisations she oversees are reporting funding gaps in the millions, she added.

The Kresge Foundation, which provides about US$20 million in grants to environmental organisations a year, said it is simplifying its processes to help nonprofits spend “time and energy where it is needed most,” according to a letter president and CEO Rip Rapson sent out to more than 900 grantees on June 3.

Kresge anticipates spending more this year to help grantees survive the federal funding pullback, said Rapson, noting nonprofits don’t have the cash reserves needed to get through a year or 18 months.

“There’s no way that philanthropy over the next two or three or four years can fill in where the federal government has pulled back,” he said. “A foundation like Kresge is a mid-sized foundation, and yet we could deplete our annual grantmaking easily with just a handful of grants to people who are in vulnerable positions.” — BLOOMBERG

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