US trade deficit dips in June along with ‘World Cup effect’

TRADE

US trade deficit dips in June along with ‘World Cup effect’

The US trade deficit in goods and services fell slightly to $73.3 billion in June as the United States imported fewer foreign computers and pharmaceuticals in the month. Imports dropped 1.8 percent from the previous month, to $388 billion, though imports from Mexico, Vietnam, and South Korea were at record levels. US exports also fell slightly from a busy month in May, according to data the Commerce Department released Tuesday. Exports dropped 0.9 percent in the month, to $314.7 billion, as petroleum exports fell back from a historical high the prior month. The combination decreased the monthly trade deficit, the gap between what the United States imports and what it exports. The US trade deficit in goods and services fell 5.6 percent from the prior month. But both exports and imports of services hit record levels in June. Diane Swonk, chief economist at KPMG US, said services exports had picked up in part because of increased tourism to the United States — what she called a “World Cup effect.” “That’s considered an export, along with their purchases of ranch dressing,” she joked. Swonk said imports had actually been relatively strong in June, as companies tried to make foreign purchases before a new round of tariffs. But the trade deficit had been held down in part because of large gold exports, she said, which have tended to fluctuate month to month. — NEW YORK TIMES

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A twice-weekly dive into the power players and moves driving business in Massachusetts, authored by long-time business columnists Shirley Leung and Jon Chesto.

HEALTH

Chipotle pulls jalapeños from some restaurants as health officials investigate salmonella outbreak

Chipotle Mexican Grill said Tuesday that it had removed jalapeños from some of its restaurants after determining the peppers could potentially be tied to a salmonella outbreak public health officials are investigating. In a brief statement, Chipotle maintained that the “health and safety of our guests and employees is our highest priority” — and that it had pulled the jalapeños out of an abundance of caution and “replaced them with product from different growers” in all locations where a previous common lot had been distributed. The company did not specify where the initial peppers came from but noted that the jalapeños in question were sent across multiple states to several retailers. The Minnesota Department of Health on Tuesday confirmed that it was investigating a salmonella outbreak tied to several Mexican-style, quick-service restaurants — with jalapeños as the suspected source. Officials identified 110 cases in the state. Chipotle made up the majority of those where they were able to reach impacted consumers for an interview — who ate at the chain between mid-June and mid-July — but not all. “Based on all the evidence so far, the food that made people sick was served at other restaurants as well,” Carlota Medus, senior epidemiologist supervisor in the Minnesota Department of Health’s Foodborne Diseases Unit, said in a statement. Medus said Chipotle had been cooperative over the course of the investigation — and that given the measures the company put in place, his department was not concerned about the chain at this time. Still, he said it was “too soon for us to know if the outbreak is ongoing” and that it’s possible contaminated food is being served elsewhere. The Minnesota Department of Health noted that other states are contributing to the investigation, without elaborating further. On the federal level, the Food and Drug Administration is conducting the traceback probe, covering but not limited to jalapeños. The FDA on Tuesday confirmed it initiated its traceback investigation “of multiple ingredients” on July 22, in response to a cluster of salmonella illnesses identified by both state officials and the federal Centers for Disease Control and Prevention. — ASSOCIATED PRESS

LEGAL

New Jersey sues Amazon, saying it suppresses pay for delivery drivers

A worker makes Amazon deliveries in New York on March 19.VINCENT ALBAN/NYT

New Jersey’s attorney general sued Amazon under federal antitrust law on Tuesday, accusing the company of abusing its market power to suppress pay for delivery companies and their drivers that bring packages to customers’ doorsteps. The lawsuit, filed in US District Court for the District of New Jersey, claimed that Amazon abused its role as the dominant buyer in a market to control its network of delivery companies, limit their growth, and micromanage nearly all aspects of their business, including the pay and working conditions of drivers. “Amazon has too much power as a buyer of the labor of thousands of New Jerseyans who deliver packages to our doorsteps,” Attorney General Jennifer Davenport said at a news conference. “And because of that power, those workers are forced to accept lower wages and appalling conditions.” Amazon said that characterizations of the company in the lawsuit were wrong and that the contractor companies, which it calls delivery service partners, control their own destiny. “The truth is, DSPs are independent business owners who make their own decisions about hiring, fleet management, and capacity planning — and they choose whether to work with other companies besides Amazon,” Steve Kelly, an Amazon spokesperson, said in a statement. He said the company was confident it would prevail in court. The case focuses on the New Jersey market, as well as the New York City region, including all five boroughs. — NEW YORK TIMES

MEDIA

Judge sets Paramount-Warner Bros. merger trial for March

The Paramount logo is displayed on a water tower at the Paramount Studios lot in Los Angeles, Calif., on July 13.Justin Sullivan/Getty

A federal judge on Tuesday scheduled a trial to determine whether Paramount’s $111 billion purchase of Warner Bros. Discovery violates antitrust law for March, a timeline that could further delay one of the biggest media deals in history. Judge Araceli Martínez-Olguín of the US District Court for the Northern District of California ruled that the trial would begin March 2 and run for 12 days, with two breaks in early and mid-March. The timeline is a win for a coalition of 12 states that sued to block Paramount’s acquisition and last week had asked Martínez-Olguín for an April start date. Paramount asked that the trial begin in November and called the states’ request a “stonewalling tactic.” The delay could be costly for Paramount. The company has agreed to pay Warner Bros. Discovery shareholders $650 million for every quarter that the deal doesn’t close beginning in October. Paramount has agreed not to close its merger with Warner Bros. until June 2027 at the latest while the lawsuit works its way through the court. “We respect the court’s decision,” a spokesperson for Paramount said in a statement. A spokesperson for California Attorney General Rob Bonta said that his office appreciated “the court’s attention to the case.” In a letter to investors Tuesday, Paramount owner David Ellison said the company was making strides to improve its business while it prepared to close the deal. The company said it would generate $3.9 billion in adjusted profit this year as it cuts billions in costs. — NEW YORK TIMES

ARTIFICIAL INTELLIGENCE

White House readies AI framework to review security risks

In a meeting on Tuesday with top artificial intelligence companies, White House officials said the federal government planned to review only certain types of AI models for potential security risks and not others, according to four people familiar with the discussions. The AI models the government plans to review are known as “closed” models, which do not publish their underlying code and are made by companies like Anthropic and OpenAI, three of the people said. But the administration said it did not plan to review “open source” AI models, which have computer code available to the public to download and modify, although that could change as the technology advances. American companies including Nvidia, Meta, and Google, make open-source models, as do Chinese firms such as Alibaba, DeepSeek, and Moonshot AI. Among those in attendance at the meeting were representatives from Anthropic, OpenAI, Microsoft, Meta, Google, and Nvidia, according to two of the people, who spoke on condition of anonymity because the details of the meeting were private. The White House solicited feedback from the companies, but the rules governing the AI reviews are almost complete, said one of the people. The moves, which are an effort by the Trump administration to take a more hands-on approach to regulating AI, formalize oversight of leading AI labs like OpenAI and Anthropic. But they delay some of the most pressing regulatory issues with the technology, including potential threats posed by increasingly powerful open-source models made by Chinese companies. The decision to exclude open-source models could also be a boon for companies that are trying to catch up to Anthropic and OpenAI, which are widely considered leaders in developing next-generation AI. Some companies, like Meta, have used open-source software to create products to directly compete with the two leading startups. — NEW YORK TIMES