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Trade War & Recession News and Discussions

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#761
Jessica

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U.S. manufacturers experience worst month since 2007-2009 Great Recession, ISM finds

Published: Oct 1, 2019 10:55 a.m. ET

ISM manufacturing index drops to 47.8%; Trump blasts Fed again

By JEFFRY BARTASH
REPORTER


The numbers: American manufacturers posted the biggest contraction in September since the end of the 2007-2009 recession, reflecting a slowdown in the U.S. and global economies made worse by a tense trade war with China.

The Institute for Supply Management said its manufacturing index fell to 47.8% last month from 49.1%, marking the lowest level since June 2009. That's when the Great Recession ended.

MW-HS396_NAPM_20191001103725_MG.png

Economists surveyed by MarketWatch had forecast the index to total 50.2%.

The sharp decline in the index raised the specter of recession, wiping out early Wall Street gains and sending stocks lower. Readings over 50% signal business conditions are getting better, below 50% indicates they are getting worse.

President Trump quickly took to Twitter to blast the Federal Reserve again, blaming the central bank for keeping U.S. interest rates too high.

 


{snip}

Read more: https://www.marketwa...inds-2019-10-01
 



#762
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Trump just imposed tariffs on EU countries : 25% tax on French wine and Scotch whiskey
Link to tweet




Full list : https://ustr.gov/sit...roduct_List.pdf


Breaking: US imposing 25% on French wine, single-malt Scotch whisky as part of response to EU aircraft subsides



Also, olives, sweaters, anoraks , butter and all kinds of cheese: Edam, Gouda, Pecorino. Swiss, Stilton, Cheddar.


#763
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EU vows to hit back over US tariffs as businesses count cost

Source: ABC News


The European Union warned Thursday it will retaliate against the U.S. decision to slap tariffs on a range of the bloc’s exports - from cheese to wine - that could cause job losses in Europe and price increases for Americans.

The Trump administration’s decision to put new import taxes on EU goods worth $7.5 billion opened a new chapter in the global trade wars that are heightening fears of a global recession.

The latest tariffs target large aircraft but also many typical European products such as olives, whiskey, wine, cheese and yogurt. They will take effect Oct. 18 and amount to a 10% tax on EU aircraft and steep 25% rate on everything else.

<snip>

It all adds up to a grim outlook for exporters and manufacturers, which are cutting down on investment.

 


Read more: https://abcnews.go.c...l_headlines_hed



#764
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U.S. economy added just 136,000 jobs in September, in fresh sign economy is cooling

Source: Washington Post



The U.S. economy added a modest 136,000 jobs in September, in what is likely to be interpreted as further evidence that the country is headed for a slowdown.

The pace is well-below average monthly growth last year, though the unemployment rate fell to a 50-year-low of 3.5 percent.Manufacturing has already entered a decline and - after more than a year of strength - consumer spending is also appearing to soften.

The National Retail Federation warned Thursday that economic uncertainty, new tariffs and fluctuations in the stock market could derail Americans' spending plans in the run-up to the holidays.

And economists point to other signs, including a manufacturing recession as affecting employers as they struggle to find workers in a tight jobs market.

 


Read more: https://www.washingt...omy-is-cooling/



#765
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Fed Chair Powell says central bank will buy more Treasury bonds soon, but this is 'not QE'

Source: Washington Post


Federal Reserve Chair Jerome H. Powell said Tuesday the central bank will begin buying more Treasury bonds “soon" in order to keep the plumbing of the U.S. financial system running smoothly. “My colleagues and I will soon announce measures to add to the supply of reserves over time,” Powell said at the National Association of Business Economics meeting in Denver, Colorado. “This is not QE."

President Trump wants the Fed boost the economy ahead of the 2020 election with lower interest rates and big purchases of Treasury bonds, an action known as “quantitative easing," or QE. He has pressed Powell and the Fed to make these changes for months, but Powell has long insisted that he will not change course based on political pressure. The Fed chair did not specify the exact size of the new asset purchase program, but he said it would not be a resurrection of what they did after the recession 10 years ago. “I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis,” Powell said.

In an effort to pump more money into the financial system, the Fed went from holding less than $1 trillion in assets in 2007 to $4.5 trillion in 2015. The Fed has gradually trimmed its holdings back under $4 trillion as the economy has improved, but that action has shrunk the level of reserves available to banks. There was alarm on Wall Street last month when there did not appear to be enough reserves in the system and the overnight borrowing rates that banks use to ensure they have enough capital on hand spiked to levels not seen since the financial crisis.

The Federal Reserve Bank of New York took swift action to pump additional reserves into the system for several days, but many analysts said the Fed needed a more permanent fix. Powell’s announcement Tuesday was a widely anticipated move that is meant to prevent a repeat of what occurred in September. The final details should be announced at the Fed’s next meeting and press conference on October 30.

 


Read more: https://www.washingt...this-is-not-qe/



#766
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Trump announces partial trade deal with China, lifting hopes that tensions could ease

Source: Washington Post


 

President Trump said Friday that the U.S. and China have reached a limited trade deal, marking the first tangible achievement in the 18-month trade war between the world’s two largest economies. Speaking in the Oval Office during a meeting with Chinese Vice Premier Liu He, the president said negotiators had reached a “substantial phase one” agreement though details remained to be written down.

As part of the partial agreement, the White House agreed not to proceed with plans to increase tariffs on $250 billion in Chinese goods next week from 30 percent from 25 percent. The partial accord, involving major Chinese purchases of U.S. farm products and U.S. tariff concessions, is intended to pave the way for a more complete bargain between Washington and Beijing. Trump and Chinese President Xi Jinping could meet to finalize such an agreement in Chile at an Asian-Pacific leaders summit in mid-November. “Both presidents have to own this thing,” said Craig Allen, president of the U.S.-China Business council.

News of a potential deal, which capped two days of talks in Washington, had cheered Wall Street earlier on Friday. Even before the president spoke, the Dow Jones Industrial Average was up more than 480 points or 1.8 percent amid hints that a partial accord was imminent. But the lack of specificity in Trump’s announcement, and his comment that the partial deal could still take weeks to iron out, cooled some of that optimism. And the Dow Jones Industrial Average closed up slightly more than 300 points on the day.

Some China hawks were unimpressed by the agreement. “It’s basically some purchases and a bunch of fluff because no one in the administration really wants to go through with the tariffs anyway,” said Derek Scissors, a China expert at the American Enterprise Institute.

 


Read more: https://www.washingt...ina-trade-deal/



#767
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How Trump’s Tariffs Are Creating Jobs — for Canadians

 

https://www.propubli...s-for-canadians

 

Introduction:

 

(ProPublica) A few months ago, Elliot Markillie started getting calls about small boxes.

 

He works for a logistics company near Vancouver, British Columbia, called a52 that handles distribution for big apparel and footwear brands. The brands source their goods from China and had just been hit with steep tariffs, on top of the duties already applied to clothes and shoes.

 

But, the brands had learned, there might be an out: According to U.S. customs rules, packages worth less than $800 — known as the de minimis threshold — don’t have to pay duties at all. They just have to ship items directly to consumers one at a time, rather than in bulk to stores or U.S.-based warehouses.

 

The result: Companies now have an incentive to use fulfillment centers in Canada and Mexico rather than the United States.


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


#768
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China Wants More Talks Before Signing Trump's 'Phase One' Deal

Source: Bloomberg


China wants further talks as soon as the end of October to hammer out the details of the “phase one” trade deal touted by Donald Trump before Xi Jinping agrees to sign it, according to people familiar with the matter.

Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, one of the people said. Another person said China wants Trump to also scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed. The people asked not to be named discussing the private negotiations.

The details of the verbal agreement reached in Washington last week between the two nations remain unclear. While Trump hailed an increase in agricultural purchases as “the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” China’s state-run media only said the two sides “agreed to make joint efforts toward eventually reaching an agreement.”

S&P 500 futures extended losses, the Stoxx 600 fell and the yen rose as investor pessimism on the deal grew.

 


Read more: https://www.bloomber...al?srnd=premium



#769
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US retail sales unexpectedly decline in a sign that consumer economy could be cracking
PUBLISHED 4 HOURS AGO UPDATED 37 MIN AGO

Thomas Franck
https://twitter.com/tomwfranck

KEY POINTS

-- U.S. retail sales fell for the first time in seven months in September.
-- The report could raise fears that manufacturing-led weakness was spreading to the broader economy.
-- The U.S. government said retail sales dropped 0.3% as households slashed spending on building materials, online purchases and especially automobiles.

gbcn1-retail-sales-over-the-last-5-years
 

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy.

The Commerce Department said Wednesday that retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles. The decline was the first since February.

Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared with September of last year, retail sales increased 4.1%.

"While this is by no means conclusive evidence that the consumer is wavering (after all, the upward revisions reduce the impact of September's declines), it nonetheless reinforces our ongoing concern that a spending retrenchment will ultimately trigger a more durable slowdown," wrote Ian Lyngen, head of rates research at BMO Capital Markets.

 

....

Read more: https://www.cnbc.com...ember-2019.html



#770
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China asks WTO for $2.4 billion sanctions against U.S. in latest clash
 
China is seeking $2.4 billion in retaliatory sanctions against the United States for failing to comply with a World Trade Organization ruling in a case that highlights White House complaints about the global trade body.

The WTO's Dispute Settlement Body (DSB) will review the case which dates back to the Obama-era on Oct. 28, a document published on Monday showed.

WTO appeals judges said in July the United States did not fully comply with a trade body ruling about tariffs it put on Chinese solar panels, wind towers, and steel cylinders. They said Beijing could impose retaliatory sanctions if Washington did not remove them.

Washington has challenged the validity of the WTO ruling and could dispute the $2.4 billion in retaliatory sanctions, sending the matter to arbitration.

 



#771
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Could Tik Tok Pose “National Security Risks” to the United States?

 

https://techcrunch.c...ecurity-threat/

 

 

Introduction:

 

(TechCrunch) Two lawmakers have asked the government’s most senior U.S. intelligence official to assess if video-sharing app TikTok  could pose “national security risks” to the United States.

 

In a letter by Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR), the lawmakers asked the acting director of national intelligence Joseph Maguire if the app maker could be compelled to turn Americans’ data over to the Chinese authorities.

 

TikTok has some 110 million downloads to date and has spiked in popularity for its ability to record short, snappy videos that are sharable across social media networks. But the lawmakers say because TikTok is owned by a Beijing-based company, it could be compelled by the Chinese government to turn over user data — such as location data, cookies, metadata and more — even if it’s stored on servers it owns in the United States.

 

Both Schumer and Cotton warn that TikTok’s parent company, ByteDance, is “still required to adhere” to Chinese law.

 

“Security experts have voiced concerns that China’s vague patchwork of intelligence, national security, and cybersecurity laws compel Chinese companies to support and cooperate with intelligence work controlled by the Chinese Communist Party,” the letter, dated Wednesday, said. “Without an independent judiciary to review requests made by the Chinese government for data or other actions, there is no legal mechanism for Chinese companies to appeal if they disagree with a request.”


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


#772
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Survey: US business hiring falls to a 7-year low

Source: Associated Press

Survey: US business hiring falls to a 7-year low
By CHRISTOPHER RUGABER
today


WASHINGTON (AP) -- A measure of hiring by U.S. companies has fallen to a seven-year low and fewer employers are raising pay, a business survey has found. ... Just one-fifth of the economists surveyed by the National Association for Business Economics said their companies have hired additional workers in the past three months. That is down from one-third in July. Job totals were unchanged at 69% of companies, up from 57% in July. A broad measure of job gains in the survey fell to its lowest level since October 2012.

The hiring slowdown comes as more businesses are reporting slower growth of sales and profits. Business economists also expect the economy's growth to slow in the coming year, partly because tariffs have raised prices and cut into sales for many firms. ... "The U.S. economy appears to be slowing, and respondents expect still slower growth over the next 12 months," said Constance Hunter, NABE president and chief economist at the accounting firm KPMG.

Perhaps because of concerns over a weakening economy, businesses are less likely to offer higher pay, even with unemployment at a 50-year low. Just one-third of economists said their firms had lifted pay in the past three months, down from more than half a year ago. ... Companies are also cutting back on their investments in machinery, computers, and other equipment. The proportion of firms increasing their spending on such goods is at its lowest level in five years, the survey found.
....

Two-thirds of the economists surveyed now forecast that the economy will grow just 1.1% to 2% from the third quarter of 2019 through the third quarter of 2020. A year ago, they were more bullish: Nearly three-quarters forecast growth of 2.1% to 3% from the third quarter of 2018 through the third quarter of 2019. ... The NABE surveyed 101 economists at companies and trade associations from Sept. 26 through Oct. 14.

 


Read more: https://apnews.com/b...a750fc1d3565b44



#773
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The US economy is slowing
https://www.cnn.com/...rter/index.html

New York (CNN Business)The US economy grew at an annualized rate of 1.9% in the third quarter, the Commerce Department announced Wednesday.

This is the preliminary reading of US gross domestic product, the broadest measure of the American economy. The Commerce Department will update its estimate twice more.

Although the economy's growth is slowing, it remains relatively strong. However, the third quarter marks the first time since the final quarter of 2018 in which the US economy has grown at a rate slower than 2%.

The economy was helped by growing consumer and government spending, but the pace of growth decelerated. Americans spent less on cars, continuing a trend that has been ongoing for a year.

But Americans also spent less on clothing and footwear. The Trump administration hit some Chinese imports of clothes and shoes with tariffs during the summer.
Nevertheless, the report beat analyst expectations. Economists polled by Refinitiv expected growth to be as slow as 1.6% ahead of the release.

Both the GDP report and ADP private payrolls report exceeded investors' expectations ahead of the Federal Reserve's monetary policy decision at 2 pm ET Wednesday. But neither data point "will be able to move the needle for the Fed," wrote Todd Schoenberger, senior research analyst at Wellington & Co. Schoenberger agrees with the majority of investors, who expects the Fed to cut rates by another quarter percentage point today.

 

 



#774
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China Wins WTO Case to Sanction $3.6 Billion in U.S. Trade
(Bloomberg) -- China secured the World Trade Organization’s go-ahead to impose $3.6 billion in sanctions against the U.S., in a case that predates the tariff war between the world’s two largest economies but may add a layer of tension to ongoing talks.

The damages awarded, in a document released Friday on the Geneva-based organizations’ website, are the third highest in WTO history. The amount is about half of what was requested by China, which argued that some U.S. anti-dumping rules were illegal.

The case began before the 18-month-old trade war between the two nations, which has led to tit-for-tat tariffs covering some $500 billion in goods going in both directions. While the ruling deals with matters outside current negotiations to conclude phase one of a comprehensive trade deal, it gives Beijing a new -- and legal -- weapon to wield against the Trump administration if it opts to do so.

The ruling also comes as the U.S. is mounting an assault on the WTO’s dispute resolution system, with the current terms of two of the final three judges on its appellate body due to expire in December and Washington blocking new appointments. The Trump administration is likely to cite the case as an example of what it sees as the overreach of the WTO’S dispute system.

 


https://www.msn.com/...GCOm?li=BBnb7Kz



#775
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Trump Vowed to Shrink the Trade Gap. It Keeps Growing.
WASHINGTON — The overall United States trade deficit continued to widen in the first nine months of 2019, data released Tuesday morning show, defying a Trump administration plan to try to shrink the figure by renegotiating trade agreements.

The trade deficit for both goods and services grew to $481.3 billion in the first three quarters of the year, up 5.4 percent from the same period last year, according to data released by the Commerce Department. Total American exports fell by $7 billion from the previous year, while imports grew by $17.8 billion.

The trade deficit in goods for the first nine months also widened slightly from the previous year, as exports of American products fell by more than imports.

Economists have argued against the Trump administration’s focus on the trade deficit, saying the figure is a poor metric for measuring American well-being or the health of the economy. They say the trade deficit continues to rise largely because the United States is growing faster than other countries around the world, which boosts American purchases of foreign products and weighs on its sales abroad.

 



https://www.msn.com/...Tqg9?li=BBnbfcN


#776
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I do wish the media would present a coherent description of just what is happening with the trade deficit. Contrast the article cited by Jessica above with this article:

 

 

US Trade Deficit Falls to Lowest Level in Five Months

 

https://www.courthou...in-five-months/

 

Introduction:

 

 

(Courthouse News) – America’s trade gap with all countries fell 4.7% to a five-month low in September, while the closely watched deficit with China also edged down.

 

The difference between the goods and services the United States sells and buys from other countries dropped to $52.5 billion, compared to $55 billion in August. That marks the lowest overall deficit since April.

 

 

Am I missing something, or did these two articles just totally contradict each other?

 

Reminds me of the old cliché: there are lies, damn lies, and statistics.


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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


#777
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US & China Trade Jabs at Southeast Asian Summit

 

https://www.courthou...t-asian-summit/

 

Introduction:

 

NONTHABURI, Thailand (AP) — The rivalry between the United States and China over influence in the Asia-Pacific region was on show Monday as they traded barbs over freedom of navigation in the South China Sea.

 

The war of words took place at the annual summit of leaders of the Association of Southeast Asian Nations, hosted this year by Thailand. The meeting allows Southeast Asian leaders to deal as a bloc with the world’s major powers, leveraging their influence in making security and trade arrangements.

 

This year’s meeting highlighted the rivalry between the United States and China, which both seek to strengthen their clout in the geopolitically important region.

 

On Friday the two countries repeated familiar charges …

 

Those charges relating to complaints over interference with their respective spheres of influence, particularly in the South China Sea.


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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


#778
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I do wish the media would present a coherent description of just what is happening with the trade deficit. Contrast the article cited by Jessica above with this article:

 

 

US Trade Deficit Falls to Lowest Level in Five Months

 

https://www.courthou...in-five-months/

 

 

 

Am I missing something, or did these two articles just totally contradict each other?

Reminds me of the old cliché: there are lies, damn lies, and statistics.

The other article is insinuating that since Exports dropped faster than imports as a % then the trade gap widened. Which ignores the fact that the US imports a lot more than we export such that even with Exports dropping faster as a % imports are dropping faster as a total value.


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#779
caltrek

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The other article is insinuating that since Exports dropped faster than imports as a % then the trade gap widened. Which ignores the fact that the US imports a lot more than we export such that even with Exports dropping faster as a % imports are dropping faster as a total value.

 

Thank you, I think. At any rate, that sounds like it may be what I was missing.


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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






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

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