ASUNCIÓN, Paraguay (AP) — The Biden administration on Tuesday imposed sanctions on a Paraguayan tobacco company for allegedly enriching the country's controversial former president, a cigarette tycoon sanctioned last year by the White House for corruption.
The U.S. Treasury Department said it was targeting cigarette producer Tabacalera del Este over its links to Horacio Cartes, one of the Paraguay’s richest men who served as president from 2013 to 2018 and still wields significant political power in the country. Paraguay's current president, Santiago Peña, is a political protégé of Cartes who also hails from the dominant conservative Colorado party.
Citing a “concerted pattern of corruption," the Treasury Department last year sanctioned Cartes over accusations that he had paid millions of dollars in bribes to lawmakers to pave his way to power and that he had cultivated ties to Lebanon's Hezbollah militant group, which is believed to operate in the porous Triple Frontier where Argentina, Brazil and Paraguay meet.
At the time, the Treasury also designated four companies controlled by Cartes that spanned the Paraguayan economy's main sectors, including cattle ranching, tobacco and consumer goods.
Cartes has dismissed the corruption allegations as politically motivated. There was no immediate response from the Tabacalera del Este tobacco company. The phone numbers on the company website were disconnected.
Cartes says he no longer owns nor is actively involved in the management of Tabacalera del Este, a company that has roused competitors' suspicions that smuggling was occurring given its massive volume of cigarette sales.
Nonetheless, the Treasury Department on Tuesday accused Tabacalera del Este of funneling millions of dollars to Cartes “pursuant to a sales agreement.” The department's Office of Foreign Assets Control last year identified Cartes as owning a 50% or greater interest in the company, directly or indirectly.
“The United States remains dedicated to ensuring accountability for Cartes and to promoting meaningful anti-corruption reform in Paraguay,” said State Department spokesperson Matthew Miller.
Cartes currently faces no criminal charges in Paraguay and was elected last year as president of the Colorado party, which controls the majority of seats in both houses of Congress.
Controversy — and U.S. law enforcement inquiries — have followed the politician throughout his career as the country's leading businessman. Currency fraud allegations sent him to jail for a few months early in 1986. All charges were later dropped.
Last year Paraguay’s attorney general launched a criminal investigation into the U.S. Treasury's corruption allegations about Cortes, but there have been no results.
The State Department has said deep-rooted corruption in Paraguay often prevents convictions in money-laundering and terrorism financing cases.
Although last month Moody’s ratings agency lifted Paraguay to investment-grade status, citing the nation's strong economic growth, analysts and investors have expressed concerns about endemic organized crime fueled by cigarette and drug smuggling.
FILE - Former President Horacio Cartes covers himself with a flag of the ruling, Colorado party after the polls closed during the general election in Asuncion, Paraguay, April 30, 2023. The Biden administration on Tuesday, Aug. 6, 2024, slapped sanctions on a Paraguayan tobacco company for financing Cartes, a cigarette tycoon whom the White House sanctioned in 2023 for corruption. (AP Photo/Jorge Saenz, File)
U.S. companies had trillions of dollars in value wiped out Thursday after President Donald Trump slapped sweeping tariffs on foreign imports.
Virtually every sector suffered big losses as U.S. financial markets closed with their biggest one-day drop since COVID-19 flattened the global economy five years ago.
Banks, retailers, clothing, airlines and technology companies were among the hardest hit, with consumers expected to cut spending if tariffs lead to higher prices for goods and services.
Many economists called the tariffs much worse than expected, and investors dumped shares in companies they predict will suffer most from what is effectively a business tax.
In many cases that tax will be passed on to consumers. If consumers pull back their spending because of higher prices, businesses will produce fewer goods and economic growth could stall or contract. Consumer spending makes up about 70% of economic activity in the U.S.
“This is a game changer, not only for the U.S. economy but for the global economy," Olu Sonola, Fitch Ratings’ head of U.S. Economic Research, said in a report. "Many countries will likely end up in a recession.”
With a drop of 4.8% in the S&P 500, more than $2 trillion in value vanished, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.
Here's a breakdown of some of the market's worst performing sectors and companies on Thursday.
Airlines had been projecting a strong year for profits. However, if Americans are faced with higher prices for essentials, economists say that could put a crimp in their travel budgets.
United Airlines, down 15.6%
American Airlines, down 10.2%
Delta Air Lines, down 10.7%
Most major shoe and clothing makers have their products made outside of the U.S., meaning they will have to pay a tariff, or import tax, on all the goods that are shipped back into the country for sale here.
Nike, down 14.4%
Under Armour, down 18.8%
Lululemon, down 9.6%
Ralph Lauren, down 16.3%
Levi Strauss, down 13.7%
Big box and online retailers also import a massive amount of their inventory from outside the U.S.
Amazon, down 9%
Target, down 10.9%
Best Buy, down 17.8%
Dollar Tree, down 13.3%
Kohl's, down 22.8%
Companies that make and sell computers, smartphones and other technology source many of their parts from abroad. Some manufacture their entire products overseas, meaning they will have to pay a tariff when those products are shipped back for sale to consumers.
Apple, down 9.2%
HP, down 14.7%
Dell, down 19%
Nvidia, down 7.8%
If the economy slips into a recession, households and businesses will be less likely to borrow money as demand for products and services decline.
Wells Fargo, down 9.1%
Bank of America, down 11.1%
JPMorgan Chase, down 7%
American consumers, feeling less confident about their financial futures this year, have already been pulling back on spending at restaurants as they tighten their budgets and prioritize only essential goods and services.
Starbucks, down 11.2%
Cracker Barrel, down 12.7%
Cheesecake Factory, down 9.4%
Somewhat surprisingly, automakers didn't get hit as hard most other sectors did on Thursday. That could be because most of Ford, GM and Stellantis’ steel and aluminum — which Trump previously announced tariffs on — already comes from the United States, reducing the direct impact the companies would feel from higher duties.
General Motors, down 4.3%
Ford, down 6%
Tesla, down 5.5%
Stellantis, down 9.4%
A screen displays financial news as traders work on the floor at the New York Stock Exchange in New York, Thursday, April 3, 2025. (AP Photo/Seth Wenig)
