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Global Recession News and Discussions

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#781
Jessica

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Farm bankruptcies jump to highest level since 2011 as Trump's tariffs bite
 
A tit-for-tat tariff dispute between the Trump administration and China has piled on pressure in an already strained Farm Belt, leaving an increasing number of growers unable to stay afloat.

Farmers filed 580 Chapter 12 bankruptcy filings between January and September, according to the American Farm Bureau Federation, the largest farm advocacy group in the country. That was a 24% increase from the previous year and the highest level since 2011, when there were 676 filings.

China placed steep tariffs on US farm products last year to retaliate against punitive moves by the Trump administration, adding to challenges for farmers already faced with harsh weather conditions and low commodity prices. Those have sent exports sharply lower and made it difficult for growers to plan the next harvest.

 



#782
Jessica

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Pelosi: Compromise on trade deal 'within range'

Source: Politico



Speaker Nancy Pelosi said Monday that House Democrats and the Trump administration have worked out their issues on the USMCA, but she wants to see it in writing before declaring victory.

“We are within range of a substantially improved agreement for America’s workers. Now, we need to see our progress in writing from the Trade Representative for final review,” Pelosi said in a statement.

U.S. Trade Representative Robert Lighthizer had a sit-down with Pelosi and House Ways and Means Chairman Richard Neal (D-Mass.) late last week to discuss the last sticking points with the NAFTA update. They did not strike a deal then but committed to continuing talks this week in an effort to finish negotiations.

Pelosi and Democrats have repeatedly said they need to be sure the new pact includes stronger enforcement mechanisms before a House vote could be held.

 


Read more: https://www.politico...in-range-073790



#783
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Americans are paying $40 billion a year in import taxes thanks to Trump's tariffs: study

Source: raw story



Published 8 hours ago on November 25, 2019
 



According to a new study from the New York Federal Reserve, Chinese businesses have not lowered prices in a significant way when it comes to exports in response to President Trump’s trade wars, leaving Americans to absorb additional import taxes levied by the Trump administration, to the tune of around $40 billion per year.

“The continued stability of import prices for goods from China means US firms and consumers have to pay the tariff tax,” study authors Matthew Higgins, Thomas Klitgaard, and Michael Nattinger, wrote.


As Business Insider points out, the study’s findings contradict a claim made by Trump that foreign exporters are shouldering up to 25 percent of the costs — a claim the White House has continued to disseminate even after other studies have reached the same conclusion.

“China is paying us tremendous — and they’re paying for it,” Trump said last week. “Those tariffs are not paid by us. Those tariffs are paid because they’re devaluing their currency and pouring cash into their economy.”

According to the New York Fed, Chinese firms have “accepted the loss in competitiveness in the US market and have used the weaker currency to pad profits on each unit of sales.”.................

 


Read more: https://www.rawstory...-tariffs-study/



#784
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Trump administration to propose tariffs on $2.4B in French goods

Source: The Hill



The U.S. Trade Representative on Monday said that it has determined that France’s digital services tax discriminates against U.S. companies, and is proposing tariffs of up to 100 percent on $2.4 billion of French products.

“USTR’s decision today sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on U.S. companies,” U.S. Trade Representative Robert Lighthizer said in a news release.

USTR in July announced an investigation into the French digital services tax, in order to determine whether it’s unreasonable or discriminatory and burdens U.S. commerce. The investigation took place under section 301 of the U.S. Trade Act of 1974, the same section that Trump has used to justify tariffs on Chinese goods.

USTR announced last week that it would be issuing its findings in its investigation Monday, after a 90-day deadline for negotiations between the U.S. and France expired.

 


Read more: https://thehill.com/...in-french-goods



#785
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Dow drops 400 points, biggest fall in 2 months, after Trump says he could wait on China deal

Source: CNBC



U.S. equities sank on Tuesday after President Donald Trump suggested he may want to delay a trade deal with China until after the 2020 presidential election.

The Dow Jones Industrial Average fell more than 400 points in morning trading, led lower by trade-vulnerable Apple, Caterpillar and 3M. The S&P 500 slid 1% amid losses in chip stocks like Nvidia, Micron and Advanced Micro Devices. The Nasdaq Composite also lost 1%.

Markets hit the lows of their day after Fox News reported that the White House still plans on moving ahead with scheduled Dec. 15 tariffs on Chinese goods notwithstanding recent efforts at a “phase one” trade truce.

“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right,” Trump told reporters earlier on Tuesday. When asked if he had a deal deadline, he added: “I have no deadline, no ... In some ways, I think it is better to wait until after the election if you want to know the truth.”

 



Read more: https://www.cnbc.com...de-tariffs.html



#786
caltrek

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Huawei is back in the news again.

 

Huawei Sues FCC Over "Unconstitutional Ban" On The Use Of Federal Subsidies To Buy Its Equipment

 

https://techcrunch.c...-its-equipment/

 

Extract:

 

(TechCrunch) Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.

 

The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.

 

…During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.

 

…“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”

 

Articles on Huawei first appeared in this thread when I posted concerning the following articles:

 

https://techcrunch.c...ks-trade-fears/

 

https://www.courthou...t-bail-hearing/

 

 

(Courthouse News) On Dec. 1, (2018) Canadian authorities detained the Chinese telecom executive (Meng Wanzhou) at Vancouver International Airport at the behest of the United States, which is now seeking her extradition on suspicion of violating trade sanctions on Iran.

 

Meng’s arrest drew a swift rebuke from the Chinese Embassy in Ottawa and officials on both sides of the border remain tight-lipped about the details of the case.

 

“At the request of the U.S. side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law,” the embassy’s statement reads.

 

https://www.aljazeer...8010817198.html


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#787
caltrek

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Below is a link to a Wikipedia review of the Meng Wanzhou case. She is apparently still fighting extradition from Canada.

 

https://en.wikipedia...ki/Meng_Wanzhou

 

 

(Wikipedia) Meng Wanzhou's extradition hearing is set to start on January 20, 2020 with a potential end date in October 2020.

 

Edit: Also of relevance in that Wikipedia article:

 

 

(Wikipedia) ...on January 28, U.S. Homeland Security Secretary Kirstjen Nielsen and other officials released a redacted version of an indictment filed January 24, 2019, against Meng personally as well as three corporate entities (including Huawei) and at least one other person whose name was redacted. Meng was charged with bank fraud, wire fraud, and conspiracies to commit bank and wire fraud. The same day, the US government announced a different indictment against Huawei relating to theft of trade secrets; but that does not pertain to Meng personally

The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#788
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The USMCA is finally done. Here's what is in it.

https://www.washingt...res-what-is-it/



The goal of the new deal is to have more cars and truck parts made in North America. Soon, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

There’s also a new rule that a significant percentage of the work done on the car must be completed by workers earning at least $16 an hour, or about three times what the typical Mexican autoworker makes. Starting soon, cars and trucks must have at least 30 percent of the work on the vehicle done by workers earning $16 an hour. That gradually moves up to 40 percent for cars by 2023.

...

The USMCA requires Mexico to change its laws to make it easier for workers to unionize. The Trump administration pushed hard for this because it should cause wages to rise in Mexico, making it less attractive for companies to move factories south of the U.S. border. The USMCA also stipulates that Mexican trucks that cross the U.S. border must meet higher safety regulations.

Democrats and U.S. labor unions insisted on tougher enforcement to ensure Mexico follows through on its commitments. There will be a formal committee to monitor Mexico on labor issues (as well as “labor attachés” based in Mexico), according to a fact sheet from Rep. Richard E. Neal (D-Mass.), chair of the House Ways and Means Committee. And there are clear benchmarks Mexico has to hit in the coming years — or face penalties. (We await details on what those punitive measures are).

 



#789
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U.S. trade offensive takes out WTO as global arbiter
 
DECEMBER 10, 2019 / 9:27 AM / A DAY AGO
 
BRUSSELS (Reuters) - U.S. disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
 
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
 
Major trade disputes, including the U.S. conflict with China and metal tariffs imposed by U.S. President Donald Trump, will not be resolved by the global trade arbiter.
 
Stephen Vaughn, who served as general counsel to the U.S. Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
 
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
 


#790
caltrek

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Mine may be a dissenting voice in this forum, but I say good riddance.  It has been my impression that the WTO all too often has been an organization that overturned the sovereignty of individual countries on the issue of trade relations.  This gave far too much voice to a body that was obsessed with free trade at the expense of experimentation and reasonable regulation to achieve other goals, such as stricter consumer standards.  Sure, countries may have on occasion used such issues as an excuse to indulge in protectionism, but even that was better than the heavy handed sanctions dealt out by the WTO.  An organization that is not democratically accountable except very indirectly and only to the most powerful participating nations.  

 

Having said that, I am sure the Trump administration has anything but such things as consumer protection or stricter environmental regulation on its mind. Protectionism perhaps, but that is all.  Even that is a protectionism mostly designed to benefit the wealthy elite as opposed to workers. 


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#791
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Fed study finds Trump tariffs backfired

Source: Marketwatch


President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study released this week.

“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper.

While the tariffs did reduce competition for some industries in the domestic U.S. market, this was more than offset by the effects of rising input costs and retaliatory tariffs, the study found.

“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” the study said.

Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found.

 


Read more: https://www.marketwa...7?mod=home-page



#792
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Donald Trump's Trade War Tariffs Reduced Employment at U.S. Factories and Hiked Prices, Federal Reserve Study Finds


By Brendan Cole On 12/28/19 at 8:27 AM EST


Import tariffs introduced by President Donald Trump aimed at protecting American manufacturers have actually caused job losses and higher prices for consumers, according to a study published by the U.S. Federal Reserve.

In March 2018, the Trump administration introduced steel and aluminum tariffs to counter what the president described as "aggressive foreign trade practices."

The president also took aim at Chinese goods as he started a trade war with Beijing that may be soon eased with a preliminary trade deal.

However, Federal Reserve economists Aaron Flaaen and Justin Pierce concluded that any gains made by the tariffs in reducing competition for some U.S. domestic industries were cancelled out by rising input costs and retaliatory tariffs.................................

 

Read more: https://www.newsweek...obox=1577540010



#793
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China, U.S. sign initial trade pact but doubts and tariffs linger
 
JANUARY 15, 2020
 
BEIJING/WASHINGTON (Reuters) - China will boost purchases of U.S. goods and services by $200 billion over two years in exchange for the rolling back of some tariffs under an initial trade deal signed by the world’s two largest economies, defusing an 18-month row that has hit global growth.
 
Key world stock market indexes climbed to record highs after the deal was signed on Wednesday in Washington, but later stalled on concerns it may not ease trade tensions for long, with numerous thorny issues still unresolved.
 
While acknowledging the need for further negotiations with China to solve a host of other problems, President Donald Trump hailed the agreement as a win for the U.S. economy and his administration’s trade policies.
 


#794
caltrek

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How Trump's hatred of international cooperation weakened the China deal

 

https://theweek.com/...ened-china-deal

 

Introduction:

 

(The Week) The ink on President Trump's new trade deal with China is still drying, but worries are already growing about whether it can survive.

 

"Phase 1" of the agreement, which Trump signed Wednesday, only partially addresses the two sides' beefs with one another: It reduces some tariffs, commits China to purchase more American exports over two years, and includes some provisions to deal with intellectual property and other issues. But a large portion of the tariffs thrown up by both the U.S. and China, as well as American grievances with Chinese trade practices, remain unresolved.

 

Moreover, it's not obvious to a lot of observers how the commitments that are spelled out in Phase 1 are even going to be enforced. And this missing piece reveals a much larger point about the Trump administration — namely, its deep hostility towards international cooperation.

 

Conclusion:

 

Arguably, the real problem with multilateralism lies elsewhere: Not in whether its a better process for getting things done, but getting things done for whom? Countries are not monoliths. They contain all sorts of groups with different interests — in particular owners versus workers. As (Alex) Pascal (who wrote in The Atlantic)  admits in passing, the binding rules of the multilateral status quo have worked out very well for wealthy owners and investors across the world, but they have not worked out so well for the working classes, particularly in the West.

 

This really called for a different kind of multilateralism, focused on different goals and priorities, rather than the end of multilateralism entirely. But establishment elites were as interested as Trump in treating the choice before us as simply multilateralism-as-it-exists or no multilateralism at all. And that was the mistake that gave Trump his opening to start tearing down the system.


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#795
Yuli Ban

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Donald Trump is threatening a damaging new trade war with the UK after Brexit

  • Donald Trump is threatening to launch a damaging new trade war with the United States' historically closest ally, the United Kingdom.
  • In recent weeks Trump and his allies have issued a series of trade threats to the UK on everything from the future of the Iran nuclear deal to Huawei, to taxes on tech firms.
  • The threats come as Britain prepares to leave the EU on January 31.
  • The UK plans to seek a host of new trade deals as Trump appears to take advantage of the country's vulnerable new position on the world stage.

And remember my friend, future events such as these will affect you in the future.


#796
Cyber_Rebel

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Damn, wasn't the U.K. hoping for steady trade relations with the U.S. in order to kinda offset the worst outcomes of Brexit? How did they not see a possible backstab by the Donald coming, especially considering their weakened bargaining position without the EU bloc? 

 

Honestly feel kinda bad for them, because it is the citizens, workers, students and lower income class who will fell the brunt of this the most. Cannot say that they deserved it or did it to themselves, because not everyone wanted Brexit to begin with. 



#797
caltrek

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Surprise, surprise, surprise.  As the trade war draws to a probable conclusion it is unclear who can be counted among the losers - the American workers.

 

Here’s the truth about the Trump trade policy’s effects on workers

 

Introduction:

 

(Alternet) Donald Trump, the self-proclaimed “great negotiator” and author of The Art of the Deal, promised to use his bargaining skills to help the American worker.

 

Trump vowed to rewrite trade deals, stanch the offshoring of U.S. jobs and reinvigorate American manufacturing.

 

His behavior tells a different story. Both of the trade deals he produced so far—the original United States-Mexico-Canada Agreement (USMCA) and the “phase one” agreement with China—failed American workers.

 

Bad trade costs millions of American jobs. Trump’s brand of deal-making won’t bring them back.

 

Make no mistake, Trump inherited real trade problems

 

 

Of course, the Democrats need to really work at convincing workers that they are best able to fix these problems. After all, the free trade regime that we are trying to shake off was largely a Clintonite invention.


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#798
Yuli Ban

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What the Stock Market May Be Missing About the Coronavirus

It took investors a few days, but they think they have the effect of the new coronavirus from China worked out. The broad thrust: Suppliers to China, and travel and holiday stocks, will suffer, but nasty effects for the market as a whole will be offset by central banks. The virus will be controlled enough that it won’t cause a recession in the West.
Leaving aside the heartbreak experienced by relatives and friends of those with the illness, as well as the many deaths, this coldblooded analysis rests on several assumptions that may turn out to be unsound—notably, the big risk that this virus could follow a different pattern than the 2003 outbreak of severe acute respiratory syndrome, or SARS, the financial effects of which are being widely used as a model.

The new coronavirus has spread rapidly in China since emerging in Wuhan in December. So far its spread outside China has been limited, with around 100 cases and, so far, not much human-to-human infection—although the U.S. State Department is concerned enough to warn against all travel to China.

....

If confidence crumbles, it will be doubly bad. The S&P 500 was the most highly valued since 2002 just before the outbreak, with investors verging on exuberant, so any loss of faith could hit prices hard. Worse, the U.S. economy has been reliant on confident consumers for the past year as manufacturers and exporters struggled. If consumers close their wallets, there is no backup source of demand.


And remember my friend, future events such as these will affect you in the future.


#799
Yuli Ban

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China’s coronavirus is not remotely under control and the world economy is in mounting peril

The workshop of the world is closed. China is on a total-war footing. The Communist Party has evoked the "spirit of 1937" and mobilised all the instruments of its totalitarian surveillance system to fight both coronavirus, and the truth. Make GDP forecasts if you dare.
 
As of this week two-thirds of the Chinese economy remains shut. More than 80pc of its manufacturing industry is closed, rising to 90pc for exporters.
 
The Chinese economy is 17pc of the world economy and deeply integrated into international supply chains. It was just 4.5pc of world GDP during the SARS epidemic 2003, which some like to use as a reassuring template. You cannot shut down China for long these days without shutting down the world.
 
Wednesday's investor euphoria at reports of two new wonder drugs from Zhejiang University show how badly unhinged the market has become. This is not the way that medical science advances. Nor could these anti-virals possibly be ready, in time and at scale, to avert serious economic upheaval.


And remember my friend, future events such as these will affect you in the future.


#800
Erowind

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I have to wonder if this will entice governments to entertain more domestic industry or if they'll just ride this out and wait for however long it takes China to come back online. They can't just ship out to to other countries either if the outbreak spreads.





Also tagged with one or more of these keywords: trade war, economy, USA, China, EU, UK, Trump, Mexico, Canada, recession

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