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Measures of business uncertainty have begun to ease recently, with tariff deals being announced with Japan and the European Union. The National Federation of Independent Business (NFIB) Uncertainty Index declined in June and will likely come down further in July. When uncertainty declines, businesses tend to be more willing to invest and expand. Perhaps related to the decline in uncertainty is that bank lending for commercial and industrial purposes has bumped up in June and July after staying flat for two years. However, businesses are still showing their caution by limiting their hiring plans.

Labor costs continue to ease slowly at the mid-year mark. Annual wage growth has dipped from 3.9% at the beginning of the year to 3.7% now, and should hit 3.5% by the end of 2025. However, production worker/blue collar wage growth should stay a bit higher, at 3.7%, as slowing immigration reduces labor supply for these jobs. Of course, the construction, agriculture, retail, leisure, and hospitality industries will be most affected by possible labor shortages because of their reliance on immigrants.

Tariffs will add about 15% to the cost of most imports, on average. Businesses will face the decision of whether to pass that cost along to end-users or customers. Some will accept reduced profit margins in order to maintain current customer relationships. As more trade deals are made and the future landscape turns more predictable, businesses can project pricing decisions better. But the prices of raw materials like steel, aluminum, copper, and graphite could jump, given special tariff rates of 50% or more. Commerce Department investigations are continuing for semiconductors, pharmaceuticals, and lumber. A lumber import tariff of 35% is expected when that investigation concludes in the next month or two.

Other tariffs that have been implemented include an additional 20% on imports from China, bringing the rate to 30%; 25% on imported motor vehicles; 25% on imports from Canada and Mexico that were not covered under the previous USMCA agreement (which is up for renegotiation in July 2026); and 10% on energy imports from Canada. Recent trade agreements include 15% tariffs on Japan and the European Union, and 10% on the United Kingdom. Important for foreign automakers is that these trade deals mean a reduction from the original tariff of 25% imposed on auto imports back in April.

The cost of shipping by truck will follow the seasonal pattern of the past two years. Rates have fluctuated in a narrow band for a while, and won’t pick up appreciably until demand for manufactured goods and home construction improves. However, UPS and FedEx rates have spiked this year as earlier surcharges appear to be permanent. As a result, shippers are looking to slower, cheaper services like FedEx Ground Economy, UPS Ground Saver, and, of course, the U.S. Postal Service.

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A frantic arms race between the US and China is underway in the Pacific while the fate of Taiwan hangs in the balance.

Washington and its allies are trying to stay ahead of Chinese capabilities, shaking Beijing off-balance as it considers whether it can launch a successful invasion of Taiwan.

At the heart of the US strategy is a new technology that has the ability to inflict devastating losses on the Chinese navy: precision strike missiles (PrSMs, pronounced “prisms”).

The missile has just been tested in Australia, where it struck a target more than 190 miles away, marking the first time the Lockheed Martin-manufactured weapon has been used by a US ally.

It can be fired with either American-made HIMARS or British MLRS artillery systems: missile launchers that were recently used by Ukraine to launch counter-offensives on invading Russian forces and strike deep inside enemy territory, blunting Moscow’s advances.

Game-changing firepower

To date, those launchers have been used with Atacms missiles, which have been in service for more than three decades with a top range of some 190 miles.

But PrSMs reportedly have a range of more than 300 miles, with the potential for this to improve in future variants. And at the recent test flight in Australia, the missile reached speeds of 4,000kmph, beating the Atacms by some 300kmph.

Each launch pod will be able to hold two of the precision missiles, compared to just a single Atacm, according to Alex Miller, the US Army’s chief technology officer. It is also said to be less susceptible to jamming.

The PrSMs combine those next-generation improvements with the advantages of the Himars and MLRS systems, which are quick, agile and relatively easy to disguise – and could wreak havoc on Chinese ships attempting an invasion.

Brad Bowman, a senior director at the Foundation for Defence of Democracies, said: “It really creates a challenge for our adversaries, because where that system is now, it may not be there in 30 seconds or five minutes… That’s a real detection and targeting dilemma.”

Both the US and China are ramping up their military capabilities in the Pacific and particularly around Taiwan, which Beijing regards as part of its territory even though it has effectively been independent since the 1940s.

Taiwan under threat

Earlier this year, Xi Jinping, the Chinese premier, said “reunification” with China was inevitable, and that those on either side of the Taiwan Strait were “one family”.

China has regularly threatened Taiwan with fighter jet and warship incursions, but has always stopped short of a direct confrontation.

At a security conference in May, Pete Hegseth, the US defence secretary, warned that a Chinese invasion of Taiwan “could be imminent”.

The stakes couldn’t be higher, for both sides.

If the US’s military capabilities are outstripped by China, it would prove fatal to Taiwan, which relies on Washington to provide a credible deterrent. And if the island nation falls, it means the loss of a key strategic buffer against Beijing expansionism.

But failing to take the island would inflict a stunning blow on China, and almost certainly lead to the fall of Xi’s regime.

“There’s always a constant battle with both sides to try to respond to whatever advances the other side has,” said Doug Bandow, a senior fellow with the Cato Institute.

“But I’d say these [PrSMs] have the potential for dramatically increasing the risk factor for a Chinese fleet. So that’s substantial.”

China’s military will be only too aware of the damage Ukraine has managed to inflict on Russia using Himars since they were first provided by the US in June 2022, and will be warily eyeing the upgraded precision missiles.

Taiwan already has 11 HIMARS from previous arms sales with the US, and it is expected to receive more in 2026.

Mr Bandow said the PrSMs will have inflicted an important psychological blow on China without any shots even being fired, and could convince its leadership to delay its imperial ambitions.

“The most important advantage of a weapons advance like this is it simply encourages the Chinese to say, ‘No… we don’t have to do it now’,” he told The Telegraph.

“In my view, the best chance of getting through this is to simply have that happen a lot. And hopefully we can get to a point, whatever that point is, where everyone agrees war is really stupid and this won’t happen.”

Credit: Taiwan Military News Agency

Real damage could be inflicted on the Chinese fleet, both in ports and moving out to a potential invasion, if PRSs are deployed throughout Taiwan and the rest of the first island chain, which includes Japan, Indonesia and parts of the Philippines.

Australia aligns with US

Elsewhere in the Pacific, Australia signed a $310m deal with the US to join the missile programme in June.

“This is all about extending deterrence in the Indo-Pacific, all about signalling to any potential adversary that pain can be inflicted,” Pat Conroy, Australia’s defence industry minister, said at the test flight this month.

But China is also moving quickly to innovate, and earlier this year appeared to be constructing D-Day style barges for an invasion that would allow it to bypass rocky or soft beaches unsuitable for tanks, providing multiple fronts for an invasion.

Some experts are concerned the US is too slow to procure PrSMs. The Pentagon’s recent funding request to Congress shows the army intends to buy 44 of the missiles from Lockheed Martin.

“There’s very rarely a decisive game changer by itself… but this is a key capability for the United States and our allies to have,” Mr Bowman said.

“That is the ability to sink Chinese naval vessels in large quantities from ground-based mobile platforms. That’s why I think we need a whole lot of them, fast.”

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An Australian Army HIMARS fires a Precision Strike Missile (PrSM) in the Northern Territory during Exercise Talisman Sabre 2025 – CPL Cameron Pegg

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To grow its economy, China is betting big on artificial intelligence, cloud computing, and other digital technology—and a big part of that bet involves rapidly building data centers to boost computing power. But these massive collections of servers gobble up growing amounts of energy, and each one cycles through hundreds of thousands of gallons of water a day to carry away the heat they generate.

That means these facilities—in China and beyond—will increasingly compete with water demand linked directly to human survival, from agriculture to daily drinking. Many companies have sited their data centers in some of the driest regions of the world, including Arizona, parts of Spain, and the Middle East, because dry air reduces the risks of damage to the equipment from humidity, according to an investigation by the nonprofit journalist organization SourceMaterial and the Guardian. Partly to address water concerns, China is now putting a data center in the wettest place there is: the ocean. This June construction began on a wind-powered underwater data center about six miles off the coast of Shanghai, one of China’s AI hubs. [Read more: What Do Google’s AI Answers Cost the Environment?]

“China’s ambitious approach signals a bold shift toward low-carbon digital infrastructure, and it could influence global norms in sustainable computing,” says Shabrina Nadhila, an analyst at energy-focused think tank Ember, who has researched data centers.

Keeping Data Centers Cool

Data centers store information and perform complex calculations for businesses, whose increasing automation is steadily ramping up such needs. These facilities consume vast amounts of electricity and water because their servers work nonstop and in close proximity—and they generate waste heat as a by-product, which can damage equipment and destroy data. So they need to be constantly cooled.

Instead, undersea data centers use pipes to pump seawater through a radiator on the back of server racks to absorb heat and carry it away. Hailanyun—the company sometimes referred to as HiCloud, that is behind the Shanghai data center—says an assessment conducted with the China Academy of Information and Communications Technology shows its project uses at least 30 percent less electricity than on-land data centers, thanks to natural cooling.

The Shanghai center will also be connected to a nearby offshore wind farm that is set to supply 97 percent of its energy, says Hailanyun spokesperson Li Langping.

The project’s first phase is designed to contain 198 server racks—enough to hold 396 to 792 AI-capable servers—and is slated to begin operation in September, Li says. It is expected to provide enough computing power to complete the equivalent of training GPT-3.5—the large language model that OpenAI released in 2022 and used to fine-tune ChatGPT—in the space of a day, he adds. Yet Hailanyun’s Shanghai center is small compared with a typical land-based one: a medium-scale data center in China normally has up to 3,000 standard racks, while a superscale version can contain more than 10,000.

Leapfrogging the U.S.

At the core of Hailanyun’s $223-million Shanghai gambit is a technology that Microsoft pioneered more than a decade ago under an effort called Project Natick, in which the company sank a shipping-container-sized capsule holding more than 800 servers 117 feet below the surface off the coast of Scotland. After hauling up the pod two years later, Microsoft found that underwater data centers “are reliable, practical and use energy sustainably.”

The experiment also resulted in fewer broken servers compared with on-land data centers because the vessel was sealed off and filled with nitrogen, which is less corrosive than oxygen, Microsoft said in a 2020 press release. The lack of people also meant that the equipment avoided physical contacts or movements that may otherwise cause them damage in an on-land center, the company said.

But Microsoft has reportedly shelved Project Natick. A company spokesperson did not answer questions about whether or not the project was terminated. Instead, they provided a statement: “While we don’t currently have data centers in the water, we will continue to use Project Natick as a research platform to explore, test, and validate new concepts around data center reliability and sustainability.”

Hailanyun aims to leapfrog American companies: if the Shanghai project is successful, Li expects his company to springboard toward large-scale deployments of offshore, wind-powered undersea data centers with the support of the Chinese government.

Zhang Ning, a postdoctoral researcher at the University of California, Davis, who specializes in next-generation low-carbon infrastructure, notes that Hailanyun has moved from a pilot project conducted in Hainan in December 2022 to commercial rollouts in less than 30 months—“something Microsoft’s Project Natick never attempted.”

Environmental Concerns

In spite of the apparent benefits of underwater data centers, some concerns remain—especially over potential environmental impacts. Microsoft researchers found their pod had caused some localized warming in the sea, though the impact was limited. “The water just meters downstream of a Natick vessel would get a few thousandths of a degree warmer at most,” they wrote.

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The economy was supposed to crumble. The trade war was expected to escalate out of control. Markets were forecast to plunge.

None of that happened – at least, not yet.

President Donald Trump has pulled off what few outside the White House predicted: A trade war victory of sorts that sets America’s taxes on imported goods higher than the infamous Smoot-Hawley era, without any of the damaging fallout so far. Customs revenue has increased sharply while inflation remains reasonably low. And America’s trading partners, for the most part, have been willing to accept the higher tariffs without significant retaliation.

Multiple framework agreements between the United States and other trading partners have jacked up tariffs on foreign goods imported to America while setting levies on US exports at or near zero. Overseas trading partners have agreed to open previously closed markets to some US goods, pledged increased investments in the United States and dropped some of what the Trump administration has lambasted as non-trade barriers, like taxes on digital services.

But Trump’s early trade victory may be short-lived. In fact, it is already showing signs that it may not last.

EU is already turning against its deal

The European Union, fresh off its 11th-hour compromise to get a trade agreement done before Trump’s self-imposed August 1 deadline, is already in revolt.

French Prime Minister François Bayrou called Sunday a “dark day.” Hungarian Prime Minister and Trump ally Viktor Orban said Trump steamrolled the EU. Belgium’s Prime Minister Bart De Wever lambasted the Trump administration’s “delusion of protectionism.” And Bernd Lange, chair of the European Parliament’s trade committee, said the deal is “not satisfactory.”

The 27-member bloc has to hammer out key aspects of its framework, and the fragile trade truce between two of the world’s largest economies could quickly break apart if sentiment turns against the arrangement.

Canada’s not playing ball

The Trump administration’s trade talks with its northern neighbor and one of its largest trading partners have been effectively shut down. Despite Canada relenting on its digital services tax that the president has lambasted, Trump continued to threaten higher tariffs on some Canadian goods, including lumber.

Although many goods imported from Canada continue to be tariff-free because of the US-Mexico-Canada free trade agreement, the USMCA only covers just about half of Canadian goods. So higher tariffs on Canada could raise some costs for American consumers down the road.

And the fact that America is even embroiled in a trade spat with Canada in the first place is a sign that the recent cooling off in the trade war may not last: Trump negotiated and signed the United States’ current trade agreement with Canada during his first term. At any time, even after an agreement is inked, Trump could turn around and decide to raise tariffs again.

Elusive China deal

A third round of talks between China and the United States’ trade negotiators is expected to result in a continued pause of their historically high tariffs on one another. But it’s unclear what else might come from the discussions, and the Trump administration has grown frustrated by what it has described as China’s slow-walking of its previous agreements.

Both sides have aimed to reduce more regulatory barriers on shipments of key technologies. China has sought more access to critical semiconductors, and the United States wants the flow of rare earth magnets to increase further.

But the Trump administration has tried repeatedly to speed up China’s slow progress, claiming the country has failed to live up to its agreement to approve the critical materials for crucial electronics. Trump has also said he wants China to open up its market to more US goods – a desire that Chinese Premier Xi Jinping is unlikely to give in to significantly.

Trump’s rhetoric against China has cooled in recent months, but the truce appears to be on a knife’s edge.

Key court decision

A crucial appeals court hearing Thursday could determine whether most of Trump’s tariffs are legal at all.

For most of his tariffs, Trump has cited powers listed in the International Emergency Economic Powers Act. But a federal court in May ruled that Trump overstepped his authority to levy tariffs on that basis.

An appeals court paused that ruling from taking effect and will hear oral arguments Thursday. It’s not clear when the court will rule, and the White House would likely appeal to the Supreme Court if it loses.

If Trump ultimately loses his ability to levy tariffs using emergency powers, he has plenty of other options – but legal experts have said those alternatives could limit his ability to set tariffs without Congress. For example, Trump may be able to impose some tariffs as high as just 15% but only for 150 days, potentially taking some of the bite out of his tariff regime.

Economy is flashing some warning signs

Although the US economy remains strong, with rebounding retail sales, a still-robust labor market, and rising consumer confidence, there is some evidence that inflation in key areas is starting to creep higher – slowly – because of tariffs. That’s a potential warning sign as the tariffs take full effect.

The Bureau of Labor Statistics’ Consumer Price Index, earlier this month, showed that some tariff-affected goods have started to gain in price. Clothing, appliances, computers, sporting goods, toys, video equipment, hardware, and tools prices have been on the rise. And it’s starting to become a trend – in many of those categories, the rise has been happening for a few months.

Many major retailers, including Walmart, have said they will raise prices because of tariffs. Procter & Gamble, which makes Tide and a host of consumer goods, said Tuesday it will raise prices in part because of tariffs. And GM, Volkswagen, and Stellantis all reported tariff charges of $1 billion or more over the past quarter.

Economists widely expect inflation to pick up in the late summer and throughout the rest of the year as retailers work through the inventories of goods they had stockpiled before tariffs went into effect. No one expects anything close to the inflation crisis of a few years ago. But with consumers still dealing with price-hike PTSD, that won’t be a welcome change from the return to healthy inflation levels over the past year.

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Taxes can get you thinking about fairness. For instance, when I’m calculating deductions on my salary and watching a decent chunk go to Uncle Sam, I can’t help but wonder: What if the ultra-wealthy paid the same percentage of their income in taxes that regular people do? So I decided to ask ChatGPT a simple question: “What would happen if billionaires paid taxes at the same rate as the middle class?” The AI’s response was more nuanced than I expected — and revealed some surprising truths about how our tax system really works.

Setting the Record Straight

First, ChatGPT corrected a common misconception I had. Based on actual data from PolitiFact and ProPublica investigations, the 25 wealthiest Americans currently pay an average federal income tax rate of 16% under existing law.

Meanwhile, households earning $50,000-$100,000 (where most teachers, firefighters, and other middle-class workers fall) typically pay an effective tax rate between 0% and 15%.

So contrary to what I’d heard, billionaires don’t actually pay less than teachers under current tax law. But here’s where it gets interesting.

How Wealth Grows vs. How Wages Work

ChatGPT explained that the issue isn’t necessarily the tax rates themselves, but how different types of income get taxed. This is where the system becomes genuinely unfair.

“Billionaires benefit from tax strategies that lower their effective tax burden compared to what ordinary income earners face on wages,” the AI explained. “The current system taxes work more than wealth.”

Here’s what that means in practice: When I get my salary, taxes come out immediately. When a billionaire’s stock portfolio increases in value by millions, they don’t pay taxes on that growth until (or unless) they sell those stocks.

The ‘Buy-Borrow-Die’ Strategy

ChatGPT broke down something called the “buy-borrow-die” strategy that wealthy people use to minimize taxes. It sounds like financial wizardry because, honestly, it kind of is.

Here’s how it works: Billionaires borrow money against their stock holdings (which isn’t taxed), live off those loans, and then pass their assets to heirs largely tax-free when they die. Meanwhile, regular people like me can’t defer taxes on our paychecks or borrow against our retirement accounts without major penalties.

The AI used ProPublica data to illustrate this: “The top 25 billionaires saw their wealth grow by $401 billion from 2014-2018, but paid just $13.6 billion in federal income taxes — an effective rate of 3.4% on wealth growth.”

That 3.4% figure is what really stung. While they’re paying their legal tax obligations on realized income, their actual wealth is growing at a rate that’s taxed far below what middle-class workers pay on their salaries.

What If We Changed the Rules?

ChatGPT ran the numbers on what would happen if billionaires paid taxes at the same rate middle-class families do — around 15%-22%.

Using the ProPublica data, if those top 25 billionaires had been taxed at a 20% rate on their wealth growth, they would have paid around $80 billion instead of $13.6 billion. 

“Extrapolate that across approximately 1,000 billionaires?” the AI asked. “You’re talking hundreds of billions in added revenue annually.”

Where That Money Could Go

The AI outlined several ways this massive revenue increase could transform government services:

• Healthcare: We could expand Medicare and Medicaid, potentially moving toward universal coverage.
• Education: Fund universal pre-K or make community college free for everyone.
• Infrastructure and climate: Invest seriously in clean energy projects and fix our crumbling roads and bridges.
• Debt reduction: Actually pay down the national debt instead of adding to it every year.

ChatGPT noted that this extra revenue could “stabilize the economy by boosting the spending power of everyday Americans.” Basically, reducing inequality in a way that helps everyone, not just those at the bottom.

What Surprised Me Most

The most eye-opening part was learning that the problem isn’t necessarily that billionaires are breaking the law or even paying lower rates on their taxable income. The issue is that our entire tax system is designed around taxing work rather than wealth.

“Middle-class families can’t defer taxes on wages or borrow against stocks tax-free,” ChatGPT pointed out. This creates a fundamental unfairness where people who work for their money get taxed immediately, while people whose money grows through investments can delay or even avoid those taxes entirely.

What We Need To Think About

After diving into ChatGPT’s analysis, I realized the conversation about billionaire taxes is more complicated than simple rate comparisons. Under current law, wealthy Americans do pay their required taxes. But the system allows their wealth to grow in ways that are largely untaxed, while regular workers pay taxes on every dollar they earn.

The AI concluded that if we could successfully tax billionaires more like middle-class workers, the results would mean hundreds of billions in additional revenue annually and potentially better funding for health, education, and climate programs. What’s more, it could have the power to reduce inequality and improve public trust in the tax system. 

Maybe the real question isn’t whether billionaires should pay more taxes, but whether our entire approach to taxing work versus wealth makes sense in an economy where most billionaires’ fortunes come from asset appreciation rather than traditional income.

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If you are one of the 39 million Americans in the U.S. living with migraines, there’s a good chance an intense headache will begin when the weather shifts.

You aren’t alone. Studies find 30% to 50% of people with migraines identify some type of weather change as a trigger, making it the most commonly reported migraine source.

Yet, it’s also one of the most puzzling.

Some people are more sensitive to weather

As a neurologist and headache specialist practicing in Colorado, a place with frequent weather shifts, patients often tell me that weather is one of their biggest migraine triggers. The results can disrupt work, school, and social plans, and create a sense of helplessness.

Doctors still don’t fully understand why some brains are more sensitive to environmental changes.

What we do know is that people with migraines have especially sensitive nervous systems, and that certain environmental changes – like shifts in air pressure, temperature, humidity, and air quality – can activate pathways in the brain that lead to pain.

Key ways weather can trigger migraines

Weather triggers can vary from person to person, but there are a few common migraine culprits:

Barometric pressure changes, or changes in atmospheric pressure, are among the most commonly cited triggers.

When a storm system moves in, the air pressure drops. Some scientists believe this change may affect the pressure inside your head or how blood vessels in your brain dilate and constrict.

One theory is that changes in barometric pressure may cause a small imbalance in the pressure between the inside of your skull and the outside environment. That might directly stimulate pain-sensitive nerves in the head, triggering inflammation and the start of a migraine.

Others point to inflammation, the way the brain processes sensory input, and changes in serotonin levels, which play a key role in activating migraine.

Temperature extremes, with very hot or very cold days, or sudden changes in temperature, can throw off the body’s internal balance. High humidity or rapid shifts in moisture levels can have a similar effect.

Air pollutants like ozone and nitrogen dioxide can cause inflammation in the nerves that play a role in migraines.

Bright sunlight can also be especially bothersome, likely due to heightened sensitivity to light and an overactive visual processing system in the brain.

Lightning and strong winds may also be linked to migraine attacks in certain individuals.

In short, weather changes can act as stressors on a brain that’s already wired to be more sensitive. The exact triggers and responses vary from person to person, but the research suggests that the interaction between weather and our biology plays a significant role for a subset of patients with migraines.

Steps you can take to reduce the pain

You can’t change the weather, but you can be proactive. Here are a few tips to help weather-proof your migraine routine:

1. Track your migraines and watch the forecast: Use a migraine diary or app to track when attacks occur, along with weather conditions. Patterns may emerge, such as attacks a day before rain or during temperature changes, that will allow you to adjust your schedule or medication plan.

2. Develop healthy eating, sleeping, and exercise habits: Dehydration, poor sleep, and skipped meals can magnify the effects of weather triggers, so keeping your body on an even keel helps reduce vulnerability. Regular exercise and a healthy diet can also help.

3. Create a migraine-friendly environment: On days when the sun is harsh or the humidity is high, stay inside. Sunglasses, eye masks or even blue-light glasses can be helpful. Some people find that certain earplugs are able to reduce pressure changes felt in the middle ear.

4. Try meditation, mindfulness techniques, or biofeedback, which teaches people to moderate their physiological responses, such as muscle responses and breathing. These strategies can help your nervous system become less reactive over time, which can be especially helpful when dealing with uncontrollable triggers like weather.

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