Who’s paying for Donald Trump’s tariffs? So far, it appears to be American businesses and consumers. General Motors was the latest US company to disclose how the levies are raising costs, with the automaker saying Tuesday that the duties dented profits by more than $1 billion as it chose to absorb the blow. That helps explain why car prices didn’t rise in last week’s inflation data, while robust price increases for other commonly imported goods like toys and appliances showed those tariff expenses are indeed being passed on to consumers.

GM said it suffered a $1.1 billion profit hit from Trump’s trade war and revealed no plan for a near-term fix to return to pre-tariff profit levels. The automaker said it earned $2.53 per share on an adjusted basis, above the Bloomberg consensus forecast of $2.33 but short of the $3.06 it made a year ago.

Meanwhile, import prices excluding fuel were up notably in June, suggesting foreign companies aren’t shouldering the burden by offering US firms lower prices—challenging the Republican president’s claims that other countries pay the rate. While customs duties are giving a significant boost to US revenues, the data show that those coffers are being filled domestically.

“The top-down macro evidence seems clear: Americans are mostly paying for the tariffs,” George Saravelos, global head of FX research at Deutsche Bank, said in a note Tuesday. “There is likely more pressure on US consumer prices in the pipeline.” —Jordan Parker Erb and David E. Rovella

What You Need to Know Today

A different kind of zombie apocalypse may be coming. The private equity boom is leaving some midsize players behind as they get hit particularly hard by the industry’s vicious cycle: They aren’t finding the price they want for businesses they own, so their clients aren’t getting money back to invest in the next round of funds. While industry giants like KKR and Apollo used the boom times to branch out into new businesses like private credit, infrastructure and insurance, smaller firms have no such refuge.

Buyout firms almost never collapse. Instead, they risk turning into so-called zombie firms, with a reduced staff trying to shepherd a shrinking pile of existing investments rather than chasing the next big deals with fresh money. That threat is growing since more than 18,000 private capital funds worldwide are now soliciting investor cash, according to a Bain & Co. report released in June.

Collectively, they’re seeking $3.3 trillion, translating into $3 of demand for every $1 of supply. Certain firms of this size “weren’t structured right to handle this moment,” said Andrea Auerbach, global head of private investments at Cambridge Associates.

The Trump administration awarded a $1.26 billion contract to build the biggest immigrant detention center in the US. The work would turn Fort Bliss, an Army base in Texas, into a tent camp with 5,000 beds, according to a Pentagon contract notice. It’s Trump’s latest move to vastly expand space for his crackdown, and has raised alarms among immigrant advocates who worry that tent facilities are unlikely to meet federal standards, citing issues such as protection from the elements and adequate medical facilities.

At least half of all America’s immigrant detainees reportedly have no criminal records. Allegations of intense overcrowding, inhumane conditions and mistreatment by guards at various Trump administration detention facilities, such as “Alligator Alcatraz” in Florida, have been piling up. Human rights groups have alleged detainees are being denied medical care and in some cases subjected to degrading treatment.

Trucks leave the Dade-Collier Transition and Training Airport as demonstrators protest the construction of the immigrant detention center dubbed “Alligator Alcatraz,” in the Everglades near Ochopee, Florida. Photographer: Giorgio Viera/AFP/Getty Images

Microsoft accused Chinese state-sponsored hackers of using flaws in its SharePoint document management software in a hacking campaign that has targeted businesses and government agencies around the world. In a Tuesday blog post, the tech giant identified two groups supported by the Chinese government, Linen Typhoon and Violet Typhoon, as leveraging flaws in SharePoint software used by customers who managed it on their own networks, as opposed to in the cloud.

Another hacking group based in China, which Microsoft calls Storm-2603, also exploited the SharePoint vulnerabilities, according to the blog. In a statement, the Chinese Embassy said China firmly opposes all forms of cyberattacks and cybercrime.

The Brightline train running from Miami to Orlando, lauded as an alternative vision for the future of American rail travel, is making some investors anxious. The concerns have amped up since Bloomberg reported earlier this month that Brightline was going to delay an interest payment on $1.2 billion of bonds it issued through the municipal-bond market, one of several different types of debt issued by various arms of the company.

Kohl’s shares more than doubled Tuesday, minting it as the newest meme stock amid an influx of mentions by retail traders on social media. The retailer’s stock price soared as much as 105% when the equity market opened, its largest one-day jump ever, bringing it to $21.39, a level last seen nearly a year ago. “It’s all social media chatter,” said Steve Sosnick of Interactive Brokers.

A federal appeals court will allow Trump to continue blocking news outlets from covering him in “restricted” spaces such as the Oval Office and Air Force One based on their editorial decisions. In a one-page order, the US Court of Appeals in Washington as a whole left in place an earlier decision by a three-judge panel that let White House officials exclude the Associated Press from a rotating pool of reporters and photographers who cover Trump’s daily movements while an underlying legal fight goes forward. The decision is a win for Trump and senior aides who have sought to exert unprecedented control over the media organizations that have access to him.

What You’ll Need to Know Tomorrow

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