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Impeachment 2

Trump’s Impeachment Looks at President Trump’s View on Friendship

Next week will see President Donald Trump go on trial to defend the accusation that he offered $400 million in military aid to the Ukraine if they gave him information he could use on his political enemies.

And although it is only Trump’s “deal” with the Ukraine that is on trial, it seems that a new story regarding his world view is appearing in the media, making America’s strong relationships with its allies seemingly being based on how much money he can get from them, such as larger subsidies for US troops based in locations including South Korea.

Trump had also bragged about the fact that Saudi Arabia had placed $1 billion into a US bank account in an attempt to gain a detachment of US troops – a claim that has been declared untrue.

And while it seems that Trump is only out to get as much money as he can from his new found “friends,” he is also restricting them too. He has threatened European allies with 25% auto tariffs if they did not enforce a dispute mechanism against Iran with regards to the nuclear deal. He also threatened to take action against Iraq that would “make Iranian sanctions look somewhat tame” if the country evicted US troops from the country, as is their sovereign right.

This came alongside the news that Baghdad had been warned by the US that its central bank’s account in New York could be frozen, which was seen as a clear attack to destroy their economy.

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It is actions like these that make many think that if this is the way America treats its friends, they may end up lonely soon. It has also been noted that by having a foreign policy purely designed to increase the country’s wealth goes against the United States’ mission to make the world safer for democracy.

As is always the case, Trump has his supporters who cannot see anything wrong with what he is doing. Trump’s announcement that the world has been “ripping off” America has been seen by many as exaggerations, however many others agree with him saying that creating deals with other countries is the way America has always worked.

Several text messages have been released by the House Intelligence Committee and have thrown a new name into the Ukraine issue. Robert F. Hyde – Connecticut’s congressional candidate – had sent texts where he seemed infuriated with then-Ambassador Marie Yovanovitch. Texting Lev Parnas, an associate of Rudy Giuliani, Hyde said, “she had visitors.” Before adding “Hey broski tell me what we are doing what’s the next step.”

In retaliation to the messages being released Hyde’s Twitter account for his election campaign appeared to renounce Parnas as “some dweeb we were playing with” while Adam Schiff, House Intel leader was dismissed as a “desperate turd.”

Yet despite Trump’s dubious ways of keeping his friends happy he seems keen to be rebuilding his relationship with China.

Following on from the recent trade war with China, which saw many of China’s technology giants including Huawei being banned in the country as well as TikTok being banned from all US military, it seems that the two countries have been working towards a deal that should keep both countries happy.

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Trump’s trade deal with China was reported during the week and if Trump’s assurances that President Xi was watching on TV in Beijing is to be believed, the Chinese President would have been shocked with what he heard in the 40 minute tirade Trump delivered to Chinese leaders, CEOs, cabinet members and lawmakers as well as the world’s media. Trump was keen to announce that the impeachment is a “hoax,” US Trade Representative Robert Lighthizer “tosses and turns” and is unable to get a good night’s sleep as well as other facts that many were not expecting to hear.

He continued to thank President Xi who is “a very, very good friend of mine” before explaining that “we’re representing different countries. He’s representing China, I’m representing the US, but we’ve developed an incredible relationship.”

Following on from Trump’s fallout with Iran many countries in the Gulf and Europe fear retaliation. The President’s unpredictable behavior alongside his habit of off-the-cuff speeches has left many governments concerned that although the American President will react when American lives are at stake, he may not be so supportive if regional interests are under attack or even merely threatened.

A great example is Trump’s reluctance to react when Iran allegedly attacked vital Saudi oil facilities last year. Although America has declared that one of its policy priorities is to protect Saudi Arabia there clearly are conditions. Ilan Goldenberg from the Center for a New American Security is an expert on Middle East issues and said there are two sides to these “battles.”

“On the one hand, they are happy that Trump is willing to sanction and pressure and take Iran down a notch.” However it appears that “they are nervous that he is unsteady and goes too far… No one really knows what Donald Trump will do”

Whatever Trump does decide to do, it is unclear whether being his friend is beneficial to you or not.

US & France Wine Tax

Import Tax Likened to “Prohibition” in Latest Trade War

The recent decision by President Donald Trump to increase tax on all European wine imports to 100% has sparked outrage across the industry, with many comparing it to Prohibition during the 1920s and 30s.

The new tariffs are a direct response to the European subsidies for Airbus and American importers are asking Washington to cancel the proposal after it was revealed it would impact around $2.4 billion worth of French products that also include cosmetics and cheese as well as wine.

Washington has challenged the French government’s new digital services tax claiming it is specifically aimed at American technology giants and the retaliating import tax increase is seen by many to potentially be the start of further international trade wars. Although the current trade war with China has seen a preliminary trade deal appearing to be finalized.

While America and France have confirmed a two week period to discuss a deal that would suit both nations — with French Finance Minister Bruno Le Maire and US Treasury Secretary Steven Mnuchin agreeing to further talks at the World Economic Forum towards the end of January — the European Union has vowed to back France.

A third of America’s wine industry is from imported wines and warnings have already been issued that the tariffs could devastate the $70 billion wine industry that in turn could affect businesses across the country including restaurants, bars, warehouses and even our own wineries, effectively placing thousands of American jobs at risk.

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The recent US Trade Representative (USTR) hearing in Washington saw industry insiders calling for certain products to be excluded from the tariffs, especially considering many businesses are already suffering difficulties thanks to the 25 percent tariffs that were imposed at the end of 2019 on specific German, French and Spanish wines. These tariffs were imposed as part of a different trade dispute regarding European subsidies to many large aircraft makers. The new tariffs proposed by Trump’s administration will cover more products such as sparkling wines.

And with small profit margins on the majority of wines being sold it is virtually impossible for restaurant owners and wine importers to absorb the tariffs meaning prices will have to be increased, hitting the American consumer’s pocket. The National Association of Wine Retailers has already announced they believe that the cost of some bottles of wine could double while others will disappear from our shelves completely as they will become too expensive to continue importing.

Vintage 59 is a small wine import business and partner Michael Daniels commented:

“Any increased tariff burden levied on wines or spirits from the EU… will force our customers to choose different products. Any significant sales losses, even during a short period, will require layoffs. Any extended period of losses could lead to our full-scale collapse.”

There are also major concerns that the tariffs could result in many European wine exporters opting to stay away from America on a more permanent basis which could have dire consequences in the long term as well as the short term.

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Passed in July 2019, the French digital tax saw a 3 percent tax imposed on all revenue generated from digital services and has affected corporations that have global revenues of over $1.1 billion and French revenues of nearly $28 million.

An investigation by the USTR claimed that American companies were discriminated against by the tax resulting in Washington threatening retaliatory tariffs on French imports. France disputed this and explained they were struggling to deal with the way in which they should tax technology corporations that conduct business in their country. Other European countries are now considering similar taxes, which could see further disputes with America.

Senior fellow and trade expert at the Peterson Institute for International Economics Gary Hufbauer has stated that the “thresholds and definitions of ‘taxable services’ ensure that US firms are the primary target.” This follows the Computer and Communications Industry Association imploring the US to react to the tax.
Benjamin Aneff is managing partner of Tribeca Wine Merchants and has likened the tariff to Prohibition commenting, “it is without hyperbole that I tell you that the proposed tariffs would be the greatest threat to the wine and spirits industry since Prohibition, in 1919.”

Trump has said that he believes the two countries will “work it out” however he has also disregarded concerns of wine drinkers saying we should replace French wines with products from wineries across America.

Yet even with the potential for higher sales for American wines Californian wineries have also criticized the tariffs, stating that if people cannot buy their favored wine they may choose to buy anything other than American products, in an act of protest to the government. And with many great wines from countries across the world, including South Africa, New Zealand or Chile, there is still a great range to choose from.

USA China Trade War 2

Promising Progress Made In US-China Trade War Negotiations

A new easing of trade tariffs between the US and China has sparked fresh hope that an end to the trade war between the countries could now be in sight.

Since Donald Trump was elected President, discussions with China’s Xi Jinping have remained tense. However, new revelations that some tariffs are to be rolled back has led analysts to predict real potential for growth in the coming months.

The stock market has also responded enthusiastically, and there has also been unprecedented steps by the International Monetary Fund (IMF) to increase their global growth forecasts, should a deal to ease trade tensions come to fruition.

Although the details are yet to be finalised, it has been revealed that the deal will reintroduce the movement of US agricultural goods to China alongside a reduction in tariffs on Chinese imports entering the US. There are also suggestions that US poultry imports could also start flowing back into China.

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The first phase of the deal relies on the US rolling back tariffs on over $350bn of Chinese imports. If this is achieved, Xi Jinping will make the historic journey to the US to sign a partial trade deal with Donald Trump. Such progress is unprecedented and there has been excitement from investors, leading to a surge in stock markets and an all-time weekly high for the S&P 500.

Less than six months ago, further tensions were added as China announced new tariffs on $60bn of US imports, after warnings from Donald Trump against adding further fuel to the fire were ignored. Currently, China’s tariffs affect US imports of soybeans, beef, pork seafood, vegetables, liquefied natural gas, whiskey and ethanol. They range between 5% to 25%. The US currently levies a 15% duty on a range of Chinese imports, from meat through to musical instruments. According to Wikipedia, in 2018, over 1,300 categories of Chinese imports were listed for tariffs, including aircraft parts, batteries, flat-panel televisions, medical devices, satellites, and various weapons. In September, it was announced that China has implemented a 5% levy on US crude oil, the first time fuel had been affected by the ongoing trade battle.

Trump has long believed that China has been operating unfair trade practices which have significantly disadvantaged the US economy. He also accused them of intellectual property theft. The objective of the tariffs was to help boost sales to US companies by making imports more expensive. As overseas imports can often be much cheaper to produce, consumers have increasingly shifted towards the cheaper options, even if it takes a little longer for them to arrive. By focusing on making US products and companies more attractive to consumers, he hoped to give the economy a much needed boost.

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Unfortunately, this objective has not been easy to achieve, nor has it been supported by a wide range of industry experts. The reality is that the ongoing trade war is continuing to not only impact politics but wider businesses and consumers too. And whilst the intention may have been to encourage more sales towards American businesses, the tariffs could in fact have the opposite effect and prevent those same businesses from expanding their operations overseas to lucrative international markets.

With Singles Day fast approaching, this is likely to be the next major event impacted by the ongoing trade war. Similar to Black Friday in the US, Singles Day is a huge sale event which takes place on the Alibaba shopping platform. Most popular with young Chinese people, the event takes place on November 11th, chosen because the number 1 is thought to closely resemble a single person alone. Also known as ‘Guanggun Jie’, analysts have suggested that the ongoing trade tensions between the US and China could affect sales of US products on Singles Day, mainly driven by the loyalty of Chinese consumers, who could actively avoid purchasing products from US companies in retaliation for the way China has been treated.

This viewpoint is reflected in the findings of a recent survey by AlixPartners has revealed that 70% of respondents felt the trade war was influencing their purchasing decisions. Interestingly, over 50% stated that their national loyalty was preventing them from purchasing American brands, suggesting that these brands could see sales adversely affected on Singles Day due to the trade war struggles.

Although the future is still somewhat uncertain, the potential olive branches which are being presented by both parties are being taken as a positive sign that we could be entering a new phase of arrangements between China and the US. Any positive steps towards a renewed deal could not only help to reignite the flow of products between the two countries, but help to stabilize the stock market and provide an optimism across the wider global economy too.

USA China Trade War 2

U.S. and China Discuss Rolling Back Tariffs

President Trump has invoked a trade war between the U.S. and China, resulting in potential economic damage to both countries. After Trump imposed tariffs on goods imported from China, China retaliated in kind, driving up the prices of consumer goods. Now, the two countries have agreed in an initial trade deal to roll back some of the tariffs each country has opposed on the other, pending finalization of their agreement. This development represents a reversal of the Trump administration’s position on tariffs, which they instituted in the first place, forcing China to retaliate. If the deal goes through, the price of consumer goods could decrease, boosting an economy which by traditional measures is already quite healthy.

Though Trump has canceled a planned tariff increase, he has continued to threaten Beijing with additional tariffs if they don’t comply with America’s terms. The battle between Trump and Xi Jinping has lasted for 19 months so far, and has caused pain for businesses, consumers, and investors in both countries. Following this news, stocks soared, as investors anticipate an end to the protracted and arguably unnecessary trade dispute. According to Gao Feng, a spokesman for China’s Commerce Ministry, the two countries have discussed resolving their differences over the past two sides, and have agreed to cancel tariffs by stages. However, a timeline has not yet been publicly established.

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As the reality of a deal between the two countries becomes increasingly likely, markets have reacted with optimism, as the S&P 500 rose to more than 3,090, approaching a record closing high. The companies most positively affected by the news are ones that have close ties to Chinese manufacturers and retailers. Despite the positive reaction in the markets, however, other sectors of the economy continue to struggle. In particular, the trade war with China has negatively impacted farm belt states like Iowa, Kansas, and Nebraska, where economic growth has slowed considerably. Though the Trump administration claims that Americans do not experience the effects of tariffs, businesses and farmers disagree.

This is not the first time that the United States and China seemed close to reaching a deal to end the trade war.

As a result of Trump’s presidency, American tariffs now apply to more than two-thirds of imports from China, whereas Chinese tariffs affect 58 percent of their imported goods from America. Tariffs are paid by consumers in the countries imposing the tariffs, making the trade war destructive on both sides, leading economists to issue warnings about the long-term impacts of ongoing tariffs. The imposition of tariffs on Chinese imports has long been considered a bad idea by experts, who are now vindicated by the Trump administration’s reversal of policy under significant public pressure.

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Issues unrelated to tariffs factor into the negotiations. American officials want China to take more aggressive action on protecting American intellectual property rights, for instance and contend that the ultimate decision is up to Trump. Additionally, the United States wants China to encourage more foreign investment and purchase more goods and services from abroad. This preliminary agreement suggests that China will be willing to make these concessions, but the final details have yet to be ironed out.

This is not the first time that the United States and China seemed close to reaching a deal to end the trade war. In May, the two countries agreed upon a resolution to end the trade war, which included concessions from China to change some of their business and legal practices. President Jinping even gave a speech celebrating the achievement. However, when a draft agreement was sense to the United States, significant changes had been made to the plan, leading Trump to accuse Beijing of reneging on its commitments. The changes to the draft agreement, which included the removal of promises to change domestic laws, were thought to have been personally made by Jinping himself. Only time will tell whether this new agreement suffers the same fate.