Unadorned Notes: May 23-29, 2025
U.S. Consumer Confidence Rebounds; Pending Home Sales Drop Sharply; U.S. Court Halts Tariff Ruling; U.S. Targets China Ties in Academia; U.S. Blocks EDA Exports
Economics, Finance, and Business
U.S. Consumer Confidence Rebounds: U.S. consumer confidence rose in May 2025 following five consecutive monthly declines, according to data from the Conference Board. The confidence index increased by 12.3 points to 98.0, exceeding economists’ expectations of 87.0. The improvement partially followed a temporary easing of trade tensions after the U.S. and China agreed to reduce tariffs for 90 days. Despite the uptick, consumer concerns over the economic impact of tariffs remained prominent in survey responses. Analysts noted that the recovery in sentiment had already begun before the trade announcement but accelerated afterward.1
Jobless Claims Rise, Profits Decline: Initial U.S. jobless claims rose by 14,000 to 240,000 for the week ending May 24, 2025, with continuing claims reaching their highest level since November 2021 at 1.919 million. The Labor Department reported significant increases in Michigan, Nebraska, and California, as layoffs in the automotive sector and other industries accelerated. Concurrently, corporate profits declined by $118.1 billion in Q1, marking the steepest drop since 2020, largely driven by nonfinancial domestic firms. Business sentiment deteriorated due to tariff uncertainty, with many firms suspending financial forecasts and limiting hiring amid weak demand and record trade deficits. Federal Reserve minutes and survey data suggest potential softening in the labor market, with expectations that unemployment may rise further in the near term.2
Pending Home Sales Drop Sharply: U.S. pending home sales declined by 6.3% in April 2025, according to the National Association of Realtors, significantly exceeding economists’ forecast of a 1.0% decline. The Pending Home Sales Index fell to 71.3, marking a 2.5% decrease compared to the same month last year. The downturn was attributed to higher borrowing costs, with the average 30-year fixed mortgage rate rising to 6.81% from 6.65% in March. NAR Chief Economist Lawrence Yun emphasized the central role of interest rates in determining housing demand. While existing home sales weakened, new home sales rose 10.9% month-over-month to 743,000 units, highlighting a divergence in the housing market.3
Nuclear Stocks Surge on EO: Shares of nuclear power and uranium companies rose sharply after U.S. President Donald Trump signed executive orders aimed at revitalizing the nuclear energy sector. The directives call for regulatory easing, expedited reactor licensing, and support for domestic uranium production to meet anticipated record electricity demand driven by AI data centers and crypto mining. Uranium mining firms such as Uranium Energy, Energy Fuels, and Centrus Energy posted gains between 19.6% and 24.2%, while Canadian miner Cameco rose nearly 10%. Nuclear utilities and advanced reactor developers, including Nano Nuclear Energy and Oklo, also saw significant increases. Analysts cited sustained tax incentives for nuclear power and reduced green-energy subsidies under Trump’s fiscal legislation as catalysts for the sector’s renewed momentum.4
Trump Media Bets on Bitcoin: Trump Media and Technology Group announced plans to raise $2.5 billion to invest in bitcoin, marking a significant shift toward digital assets as part of a broader diversification strategy. The funding includes $1.5 billion in stock sales and $1 billion in convertible notes issued at a 35% premium. The bitcoin holdings will be custodied by Anchorage Digital and Crypto.com and added to the company’s balance sheet, which held $759 million in cash and short-term investments at the end of Q1. CEO Devin Nunes described bitcoin as a symbol of “financial freedom” aligned with the firm’s “America First” principles. The initiative mirrors broader corporate trends, though it has drawn scrutiny from lawmakers over regulatory oversight of crypto-linked investment products.5
Tariffs Threaten U.S. Leather Sector: The U.S. leather industry faces heightened risk from tariffs amid heavy reliance on imported goods, particularly from China, which accounts for nearly one-third of all leather-related imports. In 2024, imports of leather and allied products—broadly including synthetic substitutes—were over ten times greater than exports, underscoring a persistent trade imbalance. While the Trump administration claims tariffs may revive domestic manufacturing, the most affected businesses are importers of finished goods rather than raw leather buyers. Many U.S. firms are not reshoring production but are instead shifting sourcing to lower-cost countries outside China. The structural decline in China’s consumer demand and mobility further complicates supply chain decisions, reflecting broader stagnation in both Chinese and global trade dynamics.6
Xiaomi Unveils Custom 3nm Chip: Xiaomi has introduced its first custom 3nm mobile processor, the Xring O1, becoming the fourth smartphone manufacturer globally to reach this milestone after Apple, Samsung, and Huawei. The chip, which will debut in three devices including the Xiaomi Tablet 7 Ultra, is based on Arm public IP and reaches a peak frequency of 3.9GHz. Its development required extensive backend design work, including modifications to over 480 standard libraries, reflecting a strategic push toward technological self-sufficiency. CEO Lei Jun announced a 200 billion yuan ($27.8 billion) R&D investment over five years, with $7 billion allocated to chip development over the next decade. The Xring O1 marks a renewed commitment following Xiaomi’s earlier unsuccessful attempt with the Pinecone/Surge S1 chip in 2017.7
U.S. Politics, Policies, and Geopolitics
U.S. Court Halts Tariff Ruling: A federal appeals court has issued an administrative stay temporarily blocking a lower-court ruling that invalidated President Donald Trump’s tariffs, pending further legal review. The U.S. Court of Appeals for the Federal Circuit set an expedited schedule, requiring briefs from the parties in early June 2025 and indicating that the full 11-judge panel will hear the case. The Trump administration, invoking the International Emergency Economic Powers Act (IEEPA) of 1977, has argued the tariffs are critical to national security and economic policy. Both the Court of International Trade and a federal judge in Washington, D.C., have ruled the tariffs exceed presidential authority under IEEPA. The injunctions have been narrowly applied, allowing time for appeals while avoiding immediate nationwide enforcement.8
Trump Delays EU Tariff Hike: U.S. President Donald Trump has postponed a proposed 50% tariff on European Union imports until July 9, 2025, following a request from European Commission President Ursula von der Leyen. The decision marks a temporary reprieve in escalating U.S.-EU trade tensions, which have been aggravated by stalled negotiations and previous rounds of tariffs. Financial markets responded positively, with the euro strengthening and European stocks, particularly in automotive and luxury sectors, posting gains. The EU currently faces multiple U.S. tariffs, including 25% duties on steel and aluminum and 10% on most other goods, which were set to rise further without a deal. Trump’s administration continues to push for concessions from the EU, while Brussels seeks a more balanced agreement within the extended negotiation window.9
Trump Threatens Tech Tariffs: U.S. President Donald Trump warned that Apple and other smartphone manufacturers, including Samsung, must produce devices domestically or face a 25% import tariff. Trump criticized Apple CEO Tim Cook for shifting iPhone production to India, stating that devices sold in the U.S. should be manufactured within the country. The proposed tariff would apply to all foreign-made smartphones entering the U.S. market, potentially impacting global supply chains and pricing. Apple recently acknowledged that most iPhones sold in the U.S. would originate from India, estimating up to $900 million in tariff-related costs this quarter. While Samsung does not produce phones in China, its major manufacturing hubs in Vietnam, India, and Brazil could also be affected by the policy.10
Trump Pressures Powell on Rates: Federal Reserve Chair Jerome Powell met with President Donald Trump at the White House to discuss the economy, including growth, inflation, and employment, following the president’s invitation. Trump urged Powell to lower interest rates, arguing current policy disadvantages the U.S. compared to global competitors, particularly China. Powell reiterated the Fed’s independence and emphasized that monetary decisions would be based solely on incoming economic data and objective analysis. Despite publicly criticizing Powell and calling him a “fool”, Trump has stated he does not intend to remove him before his term ends in May 2026. The meeting follows months of tension between the White House and the Fed, amid uncertainty over the economic impact of tariffs and elevated inflation.11
Trump Backs U.S. Steel Deal: President Donald Trump approved a revised $14.9 billion acquisition of U.S. Steel by Japan-based Nippon Steel, framing it as a strategic partnership with safeguards for U.S. national interests. The agreement includes a “golden share” for the U.S. government, an American CEO, a U.S.-majority board, and government oversight of key decisions. Nippon Steel pledged $14 billion in additional investments, including a new electric arc furnace and upgrades to Pittsburgh-area facilities, as well as R&D funding at Carnegie Mellon University. U.S. Steel will maintain its Pittsburgh headquarters, and Nippon has committed to avoiding layoffs and import competition with domestic production. While the United Steelworkers union remains skeptical, the deal could create the world’s third-largest steel producer by volume.12
FTC Drops Pepsi Price Case: The U.S. Federal Trade Commission dismissed its lawsuit accusing PepsiCo of violating the Robinson-Patman Act through discriminatory pricing practices that allegedly favored Walmart. Filed shortly before President Donald Trump took office, the case had accused PepsiCo of disadvantaging smaller retailers and contributing to higher consumer prices. FTC Chairman Andrew Ferguson criticized the suit as a politically motivated action lacking legal merit and said agency resources should not be used for “dubious partisan stunts”. PepsiCo denied any wrongdoing, asserting its commitment to fair and competitive pricing across all customer segments. The decision marks a shift away from the more aggressive antitrust posture under former Chair Lina Khan, who condemned the case’s dismissal as favoring large corporations at the expense of market fairness.13
QZ’s Comment: The FTC’s retreat signals a correction to the more performative, neo-Brandeisian antitrust approach that prioritizes headline-grabbing cases over empirical evidence of consumer harm.
Judge Blocks Trump Harvard Ban: A federal judge extended a restraining order blocking the Trump administration’s attempt to bar Harvard University from enrolling international students. The Department of Homeland Security had revoked Harvard’s ability to sponsor foreign students, citing alleged regulatory violations and insufficient responses to antisemitism on campus. Harvard filed suit, arguing the government failed to follow required administrative procedures, including providing notice and an opportunity to respond. Despite the injunction, students have reported increased visa denials, delays, and additional screenings at U.S. borders, contributing to widespread uncertainty. The dispute marks an escalation in tensions between the administration and the university over governance, academic autonomy, and political interference.14
U.S. Targets China Ties in Academia: The United States is intensifying scrutiny of elite universities’ connections to China, with lawmakers pushing to restrict Chinese nationals in STEM fields and hold institutions accountable for national security vulnerabilities. The Trump administration’s attempt to bar Harvard University from enrolling international students—citing ties to the Chinese Communist Party and sanctioned entities—marks an escalation in this campaign. China condemned the move as politically motivated and warned it would damage the global perception of U.S. higher education. Critics argue that the decision unfairly penalizes students and undermines America’s scientific and diplomatic standing. The dispute underscores growing tensions between national security priorities and the global nature of academic collaboration.
U.S. Blocks EDA Exports: The U.S. Department of Commerce has directed electronic design automation (EDA) software providers, including Cadence, Synopsys, and Siemens EDA, to cease sales to Chinese entities as part of broader efforts to hinder China’s chip development capabilities. The restriction, issued through the Bureau of Industry and Security, follows earlier measures targeting AI chip exports and comes amid ongoing but fragile U.S.-China trade negotiations. Synopsys and Cadence reported significant revenue exposure to China, and both saw steep share price declines following the announcement. The move has accelerated the rise of Chinese EDA firms such as Empyrean, Primarius, and Semitronix, which gained market value in response. U.S. officials have framed the controls as necessary to maintain a strategic edge, despite concerns over undermining recent trade truce efforts.15
China Unveils Anti-Stealth Radars: China showcased a range of next-generation anti-stealth radar systems at the 11th World Radar Expo in Hefei, highlighting advancements that could challenge U.S. stealth platforms. Key systems included the JY-27V meter-wave radar and YLC-8E UHF radar, both designed to detect and track stealth aircraft such as the F-22, F-35, and B-2 using low-frequency bands and advanced signal processing. The mobile SLC-7 multifunctional radar, capable of tracking stealth drones, submarines, and ballistic projectiles, was also featured, emphasizing adaptive anti-jamming and multi-target engagement capabilities. These developments signal a growing focus by China on neutralizing U.S. strategic advantages in air and maritime domains. Analysts warn that such systems could alter the balance of power in regions like the South China Sea and Western Pacific.16
Trump Warns Putin Over Ukraine: President Donald Trump accused Russian President Vladimir Putin of “playing with fire” following a large-scale Russian missile and drone assault on Ukraine that killed at least 12 civilians. Trump’s remarks marked a shift in tone, as he called Putin “absolutely crazy” and warned that continued aggression could lead to Russia’s downfall. The statements followed a U.S.-brokered prisoner swap between Russia and Ukraine involving 1,000 detainees, which Trump promoted as a diplomatic breakthrough despite ongoing hostilities. The attacks coincided with initial ceasefire negotiations that ultimately failed to yield a truce. In response to Trump’s warning, former Russian President Dmitry Medvedev referenced the risk of World War III, underscoring escalating tensions.17
Israel Threatens Iran Strike: As the Trump administration pursues renewed nuclear negotiations with Iran, Israel has raised the possibility of military strikes on Iran’s nuclear sites. The divergence in strategy has resulted in heightened tensions between the U.S. and Israel, including a reportedly strained phone call between President Donald Trump and Israeli Prime Minister Benjamin Netanyahu. Israeli officials remain skeptical of a diplomatic resolution, pressing instead for direct action to prevent Iran from advancing its nuclear program. The Biden-era efforts to restore the JCPOA collapsed in 2023, prompting Trump to initiate a new diplomatic effort to curb Iranian enrichment. President Trump stated that progress in the talks could be announced within days, despite Israel’s opposition.18