Happy New Year 2025

Tag: costs

Chocolate costs remain elevated as cocoa crops get hit by weather, disease

FOX Business’ Madison Alworth speaks with Enjou Chocolat co-owner Mark Chinsky to discuss the impact sky-high cocoa prices have had on the chocolate industry.

Consumers with a sweet tooth will pay more for one of the most popular Valentine’s Day treats this year.

Cocoa prices skyrocketed, compared with a year ago, due to crop conditions coupled with rising manufacturing costs, leaving some businesses with no option but to increase prices for different chocolate products.

Ray Bitzel Jr., the owner of Bitzel’s Chocolate, an artisan chocolate factory in Suwanee, Georgia, has absorbed a hefty amount of the cost to keep customers. Still, the sweet treat shop had to raise prices to account for the increased costs.

“Chocolate prices from 18 months ago have basically nearly doubled,” Bitzel told FOX Business. “It’s that bad.”

COCOA PRICES CONTINUE TO SPIKE: WHAT’S DRIVING COSTS HIGHER?

Wells Fargo Agri-Food Institute sector manager David Branch reported that the price of cocoa has more than doubled since the beginning of 2024, forcing industries that rely on the commodity to raise prices in order to remain profitable. Branch told FOX Business that “nearly all major candy manufacturers” indicated that they will have to raise their prices.

An assortment of chocolates from Bitzel’s Chocolate in Suwanee, Georgia. (Bitzel’s Chocolate)

The issue, according to Branch, is that the production of cocoa has been hammered for several years as key cocoa-producing regions in West Africa face higher-than-normal temperatures, which poses risks to crop development. The prevalence of cocoa swollen shoot virus disease (CSSVD), one of the most devastating diseases on cacao that causes significant losses, has also exacerbated production issues.

COCOA PRICES SURGE TO RECORD HIGHS DURING THE EASTER SHOPPING SEASON

Branch cited data from The International Cocoa Organization, which projected that global cocoa production in 2023-2024 will fall by 13.1% year over year, resulting in a projected production deficit for the third year in a row.

Since January 2023, the price of cocoa beans is up more than 355%. From January 2024 to December 2024, it surged over 143%, hitting an all-time high of $12,565 per metric ton.

Year to date, cocoa deliveries from the Ivory Coast, the world’s largest producer of the commodity, are up 76% on an annual basis. But nearby futures prices for the November 2024 contract increased 33% in London and 26% in New York. While the market has expectations of a better crop than in the previous season, it appears that supply risk and the current supply deficit are still big concerns, the Wells Fargo report said.

A chocolate made by Bitzel’s Chocolate in Suwanee, Georgia. (Bitzel’s Chocolate)

Bitzel’s biggest concern is making sure he doesn’t raise prices too much. As an artisanal chocolatier, Bitzel said he uses fine-grade cocoa, which hasn’t seen a reduction in prices.

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Right now, Bitzel estimates that raw commercial-grade chocolate is around $8 a pound and $12 a pound for white chocolate.

“Our job is just to figure out how to make a really good, quality product, and not have to charge an absolute fortune for it,” Bitzel said.

He said that there is a price point where people stop buying, and they seek alternatives to chocolate. This year, the business is seeing more customers, which Bitzel attributes in part to Valentine’s Day falling on a Friday. However, each customer is buying less than usual, he said.

February 14, 2025
Judge blocks Trump admin directive capping costs tied to federal research grants

A judge temporarily halted a directive by the Trump administration that imposed a cap on overhead costs that go to universities and other institutions that host federally funded research projects.

The directive, which went into effect Monday, sparked an outcry of criticism from research institutions that argued the new rule would have devastating consequences. It was immediately challenged in court by 22 Democratic state attorneys general, as well as by several leading research universities and related groups in a second lawsuit.

U.S. District Court Judge Angel Kelley subsequently ruled in favor of the 22 state attorneys general, granting their request for a temporary restraining order that prohibits agencies from taking any steps to implement, apply or enforce the new rule that imposed a cap on facilities and administrative costs that are part of federally funded research grants.

‘WHAT A RIPOFF!’: TRUMP SPARKS BACKLASH AFTER CUTTING BILLIONS IN OVERHEAD COSTS FROM NIH RESEARCH GRANTS

The rule capped overhead costs associated with National Institutes of Health (NIH) funded research grants at 15%.

When a grant is awarded to a scientist by the NIH, an additional percentage, on top of the allocated research funding, goes to the facility housing their work to cover these “indirect costs.” According to an announcement about the new funding cap from the Trump administration, that percentage has historically been around 27% to 28% for each grant. But in some cases, negotiated rates can be even higher, such as at the University of Michigan where the negotiated rate for indirect costs is 56%.

In fiscal year 2023, the NIH spent around $35 billion on roughly 50,000 grants that go to research institutions, such as universities and hospitals. Of that $35 billion, according to the Trump administration, $9 billion was allocated for “indirect costs” that cover expenses related to depreciation on buildings, equipment, capital improvements, interest on debt associated with certain buildings, and operations and maintenance expenses. (iStock)

The lawsuit from the attorneys general argued the move violated federal law governing the procedures federal agencies must follow when implementing new regulations. They also argued that the move usurped the will of Congress, which, in 2018, passed legislation prohibiting the NIH or the Health and Human Services Department from unilaterally making changes to current negotiated rates, or implementing a modified approach to the reimbursement of indirect costs.

UNIVERSITY PROFESSOR HAILS THAT SCIENCE ‘THRIVED’ UNDER HITLER IN ATTACK ON TRUMP’S NIH CUTS

Kelley’s temporary restraining order requires the Trump administration agencies that are impacted by the new rule to file reports within 24 hours to confirm the steps they are taking to comply with her order. Meanwhile, Kelley set an in-person hearing date on the matter for Feb. 21.

Fox News Digital reached out to the White House for comment on the restraining order, but did not hear back at press time. However, after the directive went into effect on Monday, White House spokesperson Kush Desai told Fox News Digital, “Contrary to the hysteria, redirecting billions of allocated NIH spending away from administrative bloat means there will be more money and resources available for legitimate scientific research, not less.”

The National Institutes of Health (NIH) announced a $9 billion spending cut in response to a new mandate from the Trump administration. (Alamy/Getty Images)

Earlier on Monday, U.S. District Judge John J. McConnell said the Trump administration had violated his order halting a federal aid funding freeze that sought to pause “all activities related to obligation or disbursement of all Federal financial assistance,” to ensure federal disbursements aligned with the president’s executive actions.

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McConnell ordered the government to “immediately restore frozen funding,” noting that plaintiffs had provided adequate evidence to show the Trump administration “in some cases [has] continued to improperly freeze federal funds and refused to resume disbursement of appropriated federal funds,” despite his “clear and unambiguous” order lifting the freeze.

February 11, 2025
Trump cuts $9 billion in overhead costs from NIH research grants: ‘A ripoff!’

The National Institutes of Health (NIH) announced it would be cutting billions in overhead costs associated with federally funded research grants that go to various institutions, as part of a wider move by the Trump administration to slash wasteful spending.

The agency’s announcement unveiling the directive indicated that in fiscal year 2023, the NIH spent around $35 billion across roughly 50,000 grants that go to research institutions, such as universities and hospitals. Of that $35 billion, according to the announcement, $9 billion was allocated for “indirect costs” that cover expenses related to depreciation on buildings, equipment, capital improvements, interest on debt associated with certain buildings, and operations and maintenance expenses.

When a grant is awarded, an additional percentage, on top of the allocated research funding, goes to the facility housing their work to cover these “indirect costs.” According to the announcement, that percentage has historically been around 27 to 28% for each grant; however, the new directive is now imposing a 15% threshold, unless otherwise negotiated.

US SEASONAL FLU CASES SKYROCKET TO HIGHEST LEVEL IN AT LEAST 15 YEARS: CDC

A medical technologist in the molecular diagnostic lab extracts DNA from milk samples for testing at the Animal Health Diagnostic Center at Cornell University on Dec. 10, 2024 in Ithaca, New York. (Photo by Michael M. Santiago/Getty Images)

“Most private foundations that fund research provide substantially lower indirect costs than the federal government, and universities readily accept grants from these foundations. For example, a recent study found that the most common rate of indirect rate reimbursement by foundations was 0%, meaning many foundations do not fund indirect costs whatsoever,” NIH’s announcement, released Friday evening, stated. “In addition, many of the nation’s largest funders of research—such as the Bill and Melinda Gates Foundation—have a maximum indirect rate of 15%. And in the case of the Gates Foundation, the maximum indirect costs rate is 10% for institutions of higher education.”

Some universities responded to the new indirect cost cap with confusion and backlash.

The University of Wisconsin-Madison put out a statement arguing the new indirect cost cap will “significantly disrupt vital research activity and daily life-saving discoveries.” It added that the move will also “have an inevitable impact on student opportunities to engage in research activities.”

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News of the cap on indirect costs associated with agency research grants came in a memo issued by the Office of the Director of the National Institute of Health.

At the University of Michigan, which currently has a negotiated indirect cost rate with the federal government of 56%, the school put out a statement emphasizing the “great deal of uncertainty” over how the policy will be implemented. The school said it has begun investigating the implications of this new rule on its current grants.

“It seems like it is of a piece with the sort of slash-and-burn philosophy of the current administration,” Dr. Francis P. Wilson, a Yale associate professor of medicine and public health, told the Yale Daily News. “It feels indiscriminate and abrupt, executed with little regard for the potential downstream consequences.”

The Trump administration’s Department of Government Efficiency, led by Elon Musk, applauded the move in a post on social media. “Amazing job by the NIH team,” the group said in a post on social media. “Saved > $4B annually in excessive grant administrative costs.”

The National Institutes of Health under President Donald Trump put a cap on indirect costs associated with agency research grants, as part of a wider move to reduce wasteful government spending. (Alamy/Getty Images)

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“Can you believe that universities with tens of billions in endowments were siphoning off 60% of research award money for ‘overhead’?” Musk also posted on social media. “What a ripoff!”

“Contrary to the hysteria, redirecting billions of allocated NIH spending away from administrative bloat means there will be more money and resources available for legitimate scientific research, not less,” added White House spokesperson Kush Desai in an emailed statement to reporters.

Fox News Digital reached out directly to the NIH for comment but did not receive a response in time for publication.

February 10, 2025
Experts weigh in on how Trump’s tariffs might impact healthcare costs

President Donald Trump’s tariffs on China have raised significant concern over their potential impact on healthcare costs, but while the move could have a broad effect on the industry, it is likely they will not produce the devastating results that some may be expecting, health policy and trade experts say.

A survey by market research group Black Book Research found that 84% of the healthcare consumers they questioned said they expect to see higher costs due to increased pricing on medical treatments and drugs as a result of Trump’s new tariffs. But health policy expert Chris Pope posited that healthcare is “not a very highly tradable sector” and that the sectors that do rely on trade relations, like pharmaceutical drugs or medical devices, will hinge on the magnitude of any Trump tariffs.

“There’s not much international trade for most of healthcare. The biggest parts of healthcare – physician services, these are all provided domestically already, and hospitals are a domestic part of healthcare, so you take out those two things, and you’ve kind of ruled out almost three-quarters of all healthcare spending,” Pope said in an interview with Fox News Digital. “So, for the most part, we’re talking about drugs and devices, which are, at most, about a quarter of healthcare spending.”

DEMS CLAIM TRUMP TARIFF COULD ‘DRIVE UP’ COSTS DESPITE DEFLECTING BLAME FROM BIDEN’S INFLATION

“In terms of prices for the industry, whether it’s absorbed in their margins, or they do less research and development, or they pass it on to consumers … it’s not completely devastating, but it’s definitely annoying,” said Christine McDaniel, a senior economist at George Mason University’s Mercatus Institute.

Picture of President Donald Trump alongside an image of someone dispensing pills from a pill bottle. Experts say Trump’s tariffs could have a broad impact on the industry, and it is hard to predict, but added that it is likely they will not have the devastating impacts that some may think. (Fox News)

Experts told Fox News that drug prices are among the most vulnerable aspects of the healthcare system, largely due to the U.S.’ reliance on China for certain precursor chemicals and compounds that are essential for producing important medications. However, Pope said that the impact will likely only affect generic drugs and not branded drugs that are based on demand rather than supply. Generic drugs are already relatively cost-efficient, with many of them ranging under $10, he said.

Monica de Bolle is an immunologist and a senior fellow at the Peterson Institute for International Economics, a Washington, D.C.-based think tank. She painted a bleaker picture of how many drugs could be impacted by the tariffs.

‘MAKING AMERICA EXPENSIVE AGAIN’: DEMOCRATS FIND A TAX THEY DON’T LIKE IN TRUMP TARIFFS

“If you go through a list of the kinds of things that we import from China when it comes to active drug ingredients, or anything else that goes into the making of over-the-counter drugs, everything is in there. If you look at the list, it basically spans the range of potential medications that anyone takes at any point in their lives,” said de Bolle. “It includes things like over-the-counter NSAIDS, so non-steroidal, anti-inflammatory drugs, things like Motrin, ibuprofen, even Tylenol, because Acetaminophen is on that list.”

She added that drugs that are more dependent on China include medications for anxiety and other psychiatric disorders, such as antidepressants, and following Trump’s tariffs, “those prices are going to go up, for sure,” she said.

Rising drug costs have become a concern for many following President Donald Trump’s tariffs on China, which the United States relies on for many less-advanced drugs. (iStock)

Experts say costs in healthcare could also rise due to disruptions in the supply chain for medical devices, but they noted that the impact will be a lot harder to generalize, compared to the impact on drug pricing.

“Maybe before [the supply chain] was broken up into five stages. Well, now maybe they’ve broken it up into six or seven stages. So there are certain things that they have to stay in China for, or they have to source from China, but then they do the next step in India or another nearby country . . . which is going to be more expensive,” McDaniel said.

‘THIS IS ABOUT FENTANYL’: TARIFFS ARE CRUCIAL TO COMBATING ‘DRUG WAR,’ TRUMP AND CABINET OFFICIALS SAY

However, Pope argued that prices could change, depending on the device and the magnitude of Trump’s tariffs.

“It’s going to vary a lot, according to where the devices are manufactured, where the components are manufactured, what kind of subsidies are available from other countries and domestically, and the degree of retaliation,” he said.

There is a debate about whether the U.S. should wean off its dependence on Chinese-manufactured drugs, like antibiotics. (AP Photo/Kiichiro Sato)

While Trump’s tariffs might be new, the experts say that getting out of China is not. Reducing the U.S.’ dependency on Chinese products tied to healthcare, particularly drugs like antibiotics, has been talked about among lawmakers for some time due to the potential national security risks. Parallel to these discussions, companies have been preparing for future tariffs in light of increased geopolitical tensions.

“There has been a lot of discussion coming from both the Democratic camp, as well as the Republican one, about the necessity to bring some of the production of certain types of drugs back to the U.S. to reduce dependency on China,” said de Bolle. “This whole deal about drugs and medical equipment and all of that that was under discussion before Trump. So, it’s not even Trump-related.”

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“In essence, you know what’s happening now with the tariffs that Trump imposed isn’t any different from the sorts of things that these people were thinking of doing anyway.”

February 10, 2025
Amazon to settle lawsuit alleging it stole drivers’ tips to save labor costs

Wolf Financial chief strategy officer Shay Boloor analyzes Amazon and discusses the demand for A.I. on ‘Making Money.’

Amazon has agreed to pay $3.95 million to settle a lawsuit in which it was accused of subsidizing its labor costs by stealing the tips its drivers received to cover part of the employees’ base wages, D.C. Attorney General Brian L. Schwalb announced Friday.

According to Schwalb, Amazon misled consumers in Washington, D.C., between 2016 and 2019 by assuring them that all the tips they provided would go to Amazon’s Flex drivers, employees who deliver packages with their own cars.

Schwalb’s office alleged that by diverting millions of dollars in tips, Amazon was able to save on its own operating costs and therefore increase profits.

“When companies mislead customers to boost their profits by stealing tips intended for their workers, they are cheating their consumers, their employees, and their competitors who play by the rules,” Schwalb said.

AMAZON SUED FOR ALLEGEDLY STEALING MORE THAN $1M IN TIPS FROM DELIVERY WORKERS

An Amazon Flex driver loads their personal vehicle with packages. (Chip Somodevilla / Getty Images)

Amazon said in a statement to Fox News Digital that the company disagrees with the allegations, noting that Amazon Flex has evolved since then.

“For nearly a decade, Amazon Flex has empowered delivery partners to earn extra money on their own schedules,” Amazon spokesperson Steve Kelly said. “Like any successful program, Amazon Flex has evolved over time, and this lawsuit relates to a practice we changed more than five years ago. While we continue to disagree with these allegations, we’re happy to have the matter behind us so we can continue to focus on supporting delivery partners and customers.“

140,000 AMAZON DRIVERS WILL GET BACK $60M IN ALLEGEDLY WITHHELD TIPS

Flex workers load vehicles with orders at an Amazon delivery station. (Kathy Tran/Bloomberg / Getty Images)

When Amazon Flex launched in 2015, consumers were able to tip their delivery drivers at checkout, which stated that 100% of the tips would go to the drivers.

The lawsuit claimed that Amazon changed its driver payment model the following year, and that instead of allowing the tips to increase the driver’s total compensation, the company used it to cover the employees’ base wages Amazon had already promised to pay the drivers.

According to the Federal Trade Commission, the payment model change was not disclosed to the drivers or the consumers, allowing the model to continue taking tips until 2019, when Amazon became “aware of the FTC’s investigation in 2019.”

The company was accused of stealing more than $1 million in tips to cover its labor expenses.

Amazon packages sit in delivery bags. (Lakeville Police Department)

As part of a settlement with the FTC in 2021, all the customer tips at issue were eventually paid to the drivers, according to an Amazon spokesperson at that time.

Aside from the restitution-only settlement with the FTC, the attorney general’s office filed a lawsuit for injunctive relief and civil penalties, noting that additional penalties were warranted to disincentivize unlawful behavior.

“It’s not sufficient, after being caught, to simply give back the ill-gotten gains,” Schwalb said. “Rather, there must be meaningful consequences to deter misconduct from happening in the first place. Especially when living expenses are harder and harder to afford, my office will continue to ensure that hardworking District residents receive every penny of their earnings and consumers have confidence that they are not being misled.”

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AMZN AMAZON.COM INC. 229.15 -9.68 -4.05%

According to the settlement, Amazon has denied all the allegations and claims.

“Amazon maintains that it made truthful, complete, unambiguous, and accurate representations to customers regarding tips for drivers,” the settlement stated.

According to the settlement terms, Amazon will pay $3.95 million, including $2.45 million in penalties and $1.5 million in costs.

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The company has also agreed to maintain transparent tipping practices.

“If Amazon uses tips for any purpose other than increasing driver compensation, the company must make clear disclosures about how tips are used on both its website and its app,” the settlement stated.

Fox News’ Daniella Genovese contributed to this report.

February 9, 2025
Dems claim Trump tariff could ‘drive up’ costs despite deflecting blame from Biden’s inflation

Democratic lawmakers are claiming that President Donald Trump’s impending tax on international goods will raise costs, despite spending years deflecting blame for high prices from the Biden administration.

Trump signed an executive order Saturday night to impose a 25% tariff on imports from Mexico and Canada and a 10% tax on all imports from China, fulfilling a promise he made during his 2024 presidential campaign as a way to circumvent drug trafficking into the U.S.

The tariffs on Canada and China are set to go into effect at midnight, but Trump announced on Monday that he would pause the tariff on Mexico for one month after discussions with President Claudia Sheinbaum. However, as the tariffs loom, Democrats are claiming they could drive up bills for everyday Americans, despite supporting several tax hikes under the Biden administration.

“This is a terrible idea,” Sen. Mark Kelly, D-Ariz., said in a statement. “Folks are already struggling to get ahead because of high prices, and now President Trump is about to drive up grocery and gas prices while raising costs on Arizona businesses.”

TRUMP DEFENDS TARIFFS, ACCUSES CANADA OF BEING ‘VERY ABUSIVE OF THE UNITED STATES’: VIDEO

Sen. Chuck Schumer, D-N.Y., criticized President Donald Trump’s order to tariff Mexico, Canada and China. (J. Scott Applewhite)

Sen. Mark Warner, D-Va., claimed Trump’s tariffs “could cost a typical family $1,200 per year,” while Rep. Jamie Raskin, D-Md., said that “President Trump owns the economic and national security fallout.”

TRUMP’S TARIFFS ON MEXICO, CANADA ARE THE ‘BEGINNING OF A NEGOTIATION,’ SAYS KEVIN O’LEARY

Additionally, Democratic Rep. Greg Stanton of Arizona cosigned a letter with 42 lawmakers calling on Trump to “immediately” rescind the 25% tariffs on Mexico and Canada.

“Trump’s tariffs on Canada will do nothing but hurt American workers and auto manufacturers. He’s giving our overseas competitors a leg up,” Sen. Gary Peters, D-Mich., claimed in a reaction to the impending tax.

Rep. Jamie Raskin, D-Md., said that “President Trump owns the economic and national security fallout.” (Kevin Dietsch)

“It would be nice if Donald Trump could start focusing on getting the prices down instead of making them go up,” wrote Sen. Chuck Schumer, D-N.Y. “I am concerned these new tariffs will further drive up costs for American consumers. We should be focused on going hard against competitors who rig the game, like China, rather than attacking our allies.”

While Democrats are uniting to criticize Trump’s tariffs, members of the party did not widely push back on tax increases implemented by former President Joe Biden.

During his administration, Democrats backed Biden’s proposals for a range of tax increases, including hikes on small businesses, corporations, capital gains and dividends, personal income, energy and a second estate tax.

President Donald Trump said that Canada has been “abusive” toward the U.S. in terms of trade. (Getty Images)

When gas prices doubled under Biden, according to data from the Energy Information Administration, Schumer, then-Senate majority leader, claimed that it was oil companies “gouging us at the pump” who were to blame.

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Despite the backlash, Trump has defended his decision to authorize the tariffs, telling reporters on Sunday night that Canada has been “abusive” toward the U.S. in terms of trade.

Aubrie Spady is a Writer for Fox News Digital.

February 3, 2025