O’Leary Ventures Chairman Kevin O’Leary shares whether or not he is involved about President Donald Trump’s tariffs on metal and aluminum, the destiny of the U.S. penny and the dealing with of the TikTok sale.
President Donald Trump is looking for to finish manufacturing of recent pennies and not too long ago informed Treasury Secretary Scott Bessent to make that occur.
Trump revealed late Sunday evening he had “instructed my Secretary of the US Treasury to stop producing new pennies,” arguing that “for far too long the United States has minted pennies which literally cost us more than 2 cents” and that “this is so wasteful!”
Former President Donald Trump, the Republican presidential nominee, arrives to talk throughout an election evening occasion on the Palm Seaside Conference Heart Nov. 6, 2024, in West Palm Seaside, Fla. ( Chip Somodevilla/Getty Photos / Getty Photos)
The transfer has raised the query of how American shoppers may very well be affected and, in keeping with one knowledgeable, the affect will probably be negligible.
“I don’t think it’s gonna have any impact on consumers. I think it’s just a very sensible thing to do, because nobody uses pennies anymore. Nobody needs pennies,” David Bahnsen, founding father of the Bahnsen Group, informed FOX Enterprise. “Just as a matter of basic practicality and cost benefits, the studies I’ve seen are that it costs three cents to make a penny, so there’s something rather backwards about that math.”
TRUMP IS ‘RIGHT’ TO ORDER THE US TO DITCH THE ‘STUPID’ PENNY, KEVIN O’LEARY SAYS
The price of making and distributing a penny stood at 3.69 cents in 2024, the U.S. Mint’s most up-to-date annual report indicated.
The U.S. Mint shipped 3.17 billion new pennies final yr. The gross price of these pennies, $117 million, was considerably larger than their $31.7 million mixed worth, in keeping with the report.
“In terms of affecting consumers, does it make a difference to their spending habits to not have exact change to the extent that that exists at all? It’s so marginal it would be a rounding error,” Bahnsen stated.
Pennies are displayed at Glenview Coin & Collectibles July 6, 2006, in Glenview, In poor health. (Tim Boyle/Getty Photos / Getty Photos)
Canada moved away from its model of the penny over a decade in the past, and different nations like Australia, New Zealand and Sweden took related motion effectively earlier than that. In Canada, after the federal government began phasing out pennies, rounding up or right down to the closest 5 cents turned widespread for money transactions.
TRUMP SAYS HE HAS INSTRUCTED US TREASURY TO STOP MINTING NEW PENNIES: ‘THIS IS SO WASTEFUL!’
Bahnsen stated rounding money transactions “is just less likely to happen in a more digital payment environment,” noting not many individuals “are paying with cash” lately.
A report launched final summer season by Federal Reserve Monetary Providers discovered 32% of funds in October 2023 used bank cards and an analogous however barely smaller share — 30% — used debit playing cards. Funds with money, in the meantime, represented 16% of transactions, in keeping with the report.
The Canadian authorities stated in its 2012 financial motion plan that eliminating pennies in New Zealand, Australia and different nations “did not cause an increase in price inflation.”
The U.S. stopping manufacturing of recent pennies would have little bearing on ideas, Bahnsen additionally stated.
He additionally famous present pennies will nonetheless be in circulation “but you’re really talking about more of a collectible item, not a consumer item, not a transactional currency that people are paying.”
“Ultimately, President Trump’s motive here was to just be more efficient, and I think that the Treasury Department’s wasting a lot of money making pennies that have no real commercial use,” Bahnsen informed FOX Enterprise. “This isn’t an earth-shattering event, but it’s something that marginally is more efficient, and that’s what the Treasury Department’s job is.”
People for Frequent Cents, which has been vital of Trump’s effort, argued in a late January press launch that ditching the penny “won’t save the government money.”
A pile of U.S. pennies in a photograph illustration in Washington, D.C., Feb. 10, 2025. (Saul Loeb/AFP through Getty Photos / Getty Photos)
“Many Mint overhead costs would remain and have to be absorbed by other coins without the penny,” Government Director Mark Weller stated. “Also, there would be greater demand for expensive nickels, which means even more costs.”
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The group receives important funding from Artazn, in keeping with CNN. That agency reportedly provides blanks which are utilized in Mint coin manufacturing.
People for Frequent Cents has proposed the federal government “reexamine how the Mint allocates its overhead costs and focus on reducing the cost of producing nickels” as a substitute of transferring away from pennies.
It price the Mint almost 13.8 cents to supply a nickel final yr, in keeping with the company.
The group has additionally pushed again towards arguments that the penny doesn’t have worth and has argued a “rounding tax” ensuing from eliminating the one-cent denomination would “disproportionately affect” individuals with out entry to banking or strategies of non-cash cost.
