The Finance Ministry is implementing tax increases and expanding the tax base to finance defense and security, including lowering the revenue threshold for reporting for small and medium-sized businesses and introducing taxes on gambling. These measures come as the economy cools and revenue from oil and gas sales decline. Facing economic challenges and previously aiming to replenish the National Welfare Fund, the Ministry now plans to adjust oil-related tax flows. The Ministry’s proposals were made shortly before the formal 2026 budget proposal is to be presented.
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New Zealand is easing immigration policies by introducing two new residency pathways to address workforce shortages and stimulate the economy. These pathways, slated for mid-2026, target skilled workers meeting experience and salary requirements, as well as those in trades and technical roles with specific qualifications and wage thresholds. This initiative follows previous changes to attract digital nomads and wealthy investors, although it has faced internal government dissent. While welcomed by some business groups, a minor coalition partner expressed concerns about the plan.
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At a recent gathering of CEOs, primarily Republican, many expressed concerns about the current administration’s policies. Despite initial support out of patriotic duty, business leaders voiced that Trump’s actions are undermining the economic foundations of the U.S. Two-thirds of the CEOs reported that tariffs have harmed their businesses, leading to uncertainty and investment hesitations. They also expressed disapproval of the administration’s economic interventions and foreign policy, fearing these moves benefit China.
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In an interview with Fox News, President Donald Trump criticized the network’s polling data on the economy, specifically the recent survey indicating that 52% of voters believe the economy has worsened under his administration. Trump suggested that Fox News should replace its pollster. These comments came amidst concerning economic reports, including a rise in unemployment to 4.3% and a slowdown in job growth. The survey, conducted by Beacon Research and Shaw & Company Research, revealed that the economy remains the top concern for voters, underscoring the significance of these polling results.
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The Federal Reserve lowered its key interest rate by a quarter-point, projecting two more cuts this year due to concerns about the labor market’s health. This move, the first since December, reflects a shift from focusing on inflation to employment, as hiring slows. While the Fed aims to boost growth and hiring, the decision faced dissent from a newly appointed policymaker favoring a larger cut. Despite some internal differences, officials still anticipate further rate reductions, although less than Wall Street had anticipated. The Fed faces the challenges of a weakening economy and external pressures on its independence, particularly regarding the attempt to remove a Fed governor.
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On Wednesday, the Bank of Canada reduced its key interest rate by 25 basis points to 2.5 per cent, marking its first cut since March. This decision was made due to a weakening economy, softening job market, and reduced inflation risks, which the central bank believes are now more “contained”. The U.S. trade war continues to impact the Canadian economy, specifically in tariff-exposed industries. Despite a stronger-than-expected consumer spending in the second quarter, the central bank decided that a rate cut was still appropriate to better balance the risks going forward.
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The Wall Street Journal’s editorial board has cautioned President Trump that blaming Joe Biden for negative economic news is becoming unsustainable. The board cited recent revisions to job creation data and the slow pace of economic progress, arguing that Trump’s policies are hindering growth. They also noted that the president’s anti-growth measures, like border taxes and deportations, are contributing to inflation and higher prices. The editorial concluded that Trump should change his economic policies to help businesses, workers, and consumers, as ignoring these economic indicators could be politically damaging.
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A recent Labor Department report revealed that the labor market created significantly fewer jobs than initially reported, with revisions showing a decrease of 911,000 jobs from the prior year. These downward revisions, the largest since 2002 and more than 50% higher than the previous year’s, indicated a weakening employment picture across various sectors, including leisure and hospitality, and professional and business services. The adjustments, based on quarterly census data, have sparked concerns about the economy’s health and have drawn criticism of the Bureau of Labor Statistics’ (BLS) data collection methods, leading to calls for new leadership. The White House has cited these revisions as evidence of economic struggles and increased pressure on the Federal Reserve to lower interest rates.
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President Trump’s political strategy hinges on projecting an image of strength and victory to maintain support. Following a disappointing July jobs report, Trump replaced the official overseeing the data to reframe the narrative. However, the August jobs report revealed a meager 22,000 jobs created, significantly less than the previous month, and a downward revision for June. Economists suggest the impact of Trump’s trade policies, specifically tariffs, played a significant role in the economic slowdown, despite the personnel change.
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In Ellabell, Georgia, a large-scale immigration raid at Hyundai’s construction site led to the arrest of 475 individuals, primarily Korean nationals. The raid, the largest of its kind during the President’s second term, halted construction and sparked concerns within the Korean community and among local business owners who relied on the migrant workforce. While the permanent impact on the local economy is yet to be seen, many workers were detained for visa violations, and there was a noticeable chilling effect on public discourse and commerce. The South Korean government expressed concern, and protests against the arrests have taken place. The raid exposed the reliance on a transient workforce and raised questions about the integration of the project into the community.
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John Q. Hosedrinker