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Tariffs aren’t just bad for business and consumers: They will also increase the number of Americans living in poverty, according to new research. An analysis out this week from The Budget Lab at Yale University found the Trump administration’s new 2025 tariff hikes will increase the number of Americans living in poverty by somewhere between 650,000 and 875,000 in 2026that’s 0.2% to 0.3% of the U.S. populationincluding some 150,000 to 375,000 children. “Because tariffs directly reduce the purchasing power of low-income households (either by decreasing nominal incomes or by increasing prices), they also affect poverty,” the report said. Yale researchers used the Official Poverty Measure, a standard metric for calculating poverty based on pre-tax income, and the Supplemental Poverty Measure, a more comprehensive measure which takes into account more information on household resources and the cost of living. They used data from the U.S. Census Bureau. You can think of tariffs as indirect taxes, which increase prices, thereby decreasing the purchasing power and income of American households. That’s because tariff costs are often passed from businesses onto consumers. In fact, U.S. consumers absorbed 22% of tariff costs through June, and that number is expected to rise to 67% by October, according to an analysis from Goldman Sachs, CNN reported. When Americans lose purchasing power (meaning they are not able to buy as much with the same income), households with the lowest income feel the most burden, and more end up falling below the poverty threshold. Lower-income families often use a bigger chunk of their earnings on living expenses than wealthier ones, making them more vulnerable to price shifts, CNN noted. On Tuesday, the Supreme Court agreed to hear arguments on whether Trump’s sweeping global tariffs are legal. The Budget Lab estimated consumers face an overall average effective tariff rate of 18.6%, the highest since 1933.
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A battery plant co-owned by Hyundai Motor is facing a minimum delay of two to three months following an immigration raid last week, Hyundai’s CEO Jose Munoz said Thursday. The Georgia plant, which is operated through a joint-venture between Hyundai and South Korea’s LG Energy Solution, was at the center of the largest single-site enforcement operation in the U.S. Department of Homeland Security’s history. Munoz, in his first public comments since the raid, said he was surprised when he heard the news and immediately inquired if Hyundai workers were involved. He said the company discovered that the workers at the center of the raid were mainly employed by suppliers of LG. It is typical for an automotive battery plant to employ these workers as it’s getting off the ground, Munoz said. For the construction phase of the plants, you need to get specialized people. There are a lot of skills and equipment that you cannot find in the United States,” Munoz said, on the sidelines of an automotive event in Detroit. Nora Eckert, Reuters
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Wind and solar power generated more than a third of Brazils electricity in August, the first month on record the two renewable sources have crossed that threshold, according to government data made public on Thursday and analyzed by energy think tank Ember. The clean energy sources accounted for 34% of the countrys electricity generation last month, producing a monthly record of 19 terawatt-hours (TWh), enough to power about 119 million average Brazilian homes for a month, Ember told The Associated Press. That surpassed the previous high of 18.6 TWh set in September 2024. The milestone came as hydroelectric output, Brazils dominant power source, fell to a four-year low. Brazil shows how a rapidly growing economy can meet its rising need for electricity with solar and wind, said Raul Miranda, Embers global program director based in Rio de Janeiro. Solar and wind are a perfect match for Brazils hydropower resources, taking the pressure off in drought years. A diversified mix is a fundamental strategy for tackling risks related to climate change,” he said. Hydropower dips, fossil fuels stay low Hydropower provided 48% of electricity in August, only the second month on record it has supplied less than half of Brazils power. Despite the weak hydro output, fossil fuel plants, mainly powered by natural gas, coal and oil, accounted for just 14% of generation, or 7.8 TWh. In past drought years, fossil fuel use has spiked to cover shortfalls, reaching 26% in August 2021. Ember said the rapid growth of wind and solar helped Brazil avoid similar surges this year. Wind and solar power are also reshaping the countrys energy mix. In 2024, they generated 24% of Brazils electricity, more than double their share from five years earlier. Solar power grew from just over 1% of generation in 2019 to 9.6% in 2024, while wind climbed from 8.8% to 15% over the same period. Brazils power sector emissions peaked in 2014 and by 2024 had fallen 31% even as electricity demand rose 22%, Ember said. The think tank credited a fifteenfold increase in wind and solar generation with outpacing demand growth and cutting fossil generation by 45%. Praise and warnings Ricardo Baitelo, project coordinator at Brazils Institute for Energy and the Environment, said the record reflects more than a decade of steady growth in wind and solar capacity, with solar expanding rapidly in recent years. This is a number that was expected, because the installed capacity of these sources has been built over at least 15 years and, more recently, with solar energy, he said. But it is undoubtedly symbolic, and you see these sources contributing a significant fraction of electricity at a given moment and showing that they are important. They are not alternative sources, they are already a well-represented part of Brazils electricity mix. He said the milestone highlights Brazils shift from an almost entirely hydro-based power system to one built on three main pillars: hydro, solar and wind. He added that Brazil is the only G20 country currently on track to meet the goal of sharply increasing renewable energy within the next five years a target set at the U.N. COP28 climate summit in Dubai in 2023. This is the big warning and a yellow light that could turn red, Baitelo said. And Brazil needs to take urgent measures to avoid losing this condition and this good example of wind and solar deployment. Paulo Pedrosa, president of Abrace Energia, which represents large energy consumers, said Brazils heavy reliance on subsidies to expand renewables, particularly residential solar, has created distortions in the power market. The excess of renewable energy subsidy models has increased the cost of energy and, ironically, promoted the contracting of expensive thermal energy, which is necessary to keep the system balanced when there is no wind and no sun, Pedrosa said. He argued Brazil should focus on using its abundant clean, low-cost energy to boost industrial output and competitiveness while contributing to global decarbonization. Baitelo warned that without reforms, fossil fuel interests could seize the opportunity to expand thermal generation in upcoming auctions, increasing greenhouse gas emissions even as renewables grow. ____ The Associated Press climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Steven Grattan, Associated Press
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