Southwest Airlines joins American in extending 737 Max cancellations through Labor Day

Southwest Airlines on Thursday joined its rival American in removing the still-grounded Boeing 737 Max from its schedule through the start of September, the latest sign that the disruptions from the controversial aircraft’s grounding are hitting airlines harder than expected. The low-cost carrier is scrubbing about 100 flights a day from its schedule because of the change, it said. Southwest is the largest U.S. operator of the Max, with 34 of the planes in its fleet of about 750 Boeing 737 jets.


Southwest Airlines on Thursday joined its rival American in removing the still-grounded Boeing 737 Max from its schedule through the start of September, the latest sign that the disruptions from the controversial aircraft’s grounding are hitting airlines harder than expected. The low-cost carrier is scrubbing about 100 flights a day from its schedule because of the change, it said. Southwest is the largest U.S. operator of the Max, with 34 of the planes in its fleet of about 750 Boeing 737 jets.
Southwest Airlines joins American in extending 737 Max cancellations through Labor Day Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: leslie josephs
Keywords: news, cnbc, companies, sept, cancellations, planes, flying, fly, max, 737, day, southwest, labor, boeing, american, pilots, extending, schedule, airlines, joins


Southwest Airlines joins American in extending 737 Max cancellations through Labor Day

Southwest Airlines on Thursday joined its rival American in removing the still-grounded Boeing 737 Max from its schedule through the start of September, the latest sign that the disruptions from the controversial aircraft’s grounding are hitting airlines harder than expected.

The low-cost carrier is scrubbing about 100 flights a day from its schedule because of the change, it said. Southwest is the largest U.S. operator of the Max, with 34 of the planes in its fleet of about 750 Boeing 737 jets.

Aviation authorities grounded the jets in mid-March after two fatal crashes within five months of one another.

The Federal Aviation Administration and its international counterparts have not said when the planes might return to service, a headache for carriers left without the fuel-efficient planes during the peak summer season.

Southwest in April had previously removed the jets from its schedule through Aug. 5.

“With the timing of the MAX’s return-to-service still uncertain, we are again revising our plans to remove the MAX from our schedule through Sept. 2,” the Dallas-based airline said in a statement.

American Airlines extended its cancellations due to the Boeing 737 grounding through Sept. 3, after previously targeting Aug. 19.

American’s CEO Doug Parker on told investors on Wednesday that it removed the planes from the schedule because pilots and flight attendants were about to set up their schedules for that time period and “we still don’t have certainty as to when the aircraft will be back to service.”

Boeing last month said it completed a software fix for a stall-prevention system aboard the planes, but aviation officials are yet to sign off on those changes. Investigators have implicated that system, known as MCAS, in the two crashes, which together killed 346 people.

Boeing is scrambling to restore confidence in the 737 Max from regulators, customers and the flying public. Surveys have shown some passengers would avoid flying on the Boeing best-seller, even after aviation safety officials allow it to return to service.

Parker said the carrier’s management team thinks it’s “highly likely” that the plane will be flying by Sept. 3. American Airlines executives and pilots would fly on the planes before paying customers, once the aircraft are cleared to fly, but before the carrier resumes selling seats on them, he added.

“Because we haven’t been able to sell those seats yet, we can use that time for things such as myself and other members of management and pilots to go fly the aircraft,” said Parker. “Those types of things, I think, will help.”


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: leslie josephs
Keywords: news, cnbc, companies, sept, cancellations, planes, flying, fly, max, 737, day, southwest, labor, boeing, american, pilots, extending, schedule, airlines, joins


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

China’s rare earths exports fell in May amid trade war with the US

Chinese exports of rare earths fell in May amid Beijing’s threat to stop supplying the U.S. with those minerals used to make a wide range of consumer electronics. Data released on Monday by Chinese customs showed that China exported 3,639.5 metric tons of rare earths last month, down from 4,329 metric tons in April. The country produced 120,000 metric tons or 70% of total rare earths in 2018, according to the United States Geological Survey. The U.S. pales in comparison, mining 15,000 metric ton


Chinese exports of rare earths fell in May amid Beijing’s threat to stop supplying the U.S. with those minerals used to make a wide range of consumer electronics. Data released on Monday by Chinese customs showed that China exported 3,639.5 metric tons of rare earths last month, down from 4,329 metric tons in April. The country produced 120,000 metric tons or 70% of total rare earths in 2018, according to the United States Geological Survey. The U.S. pales in comparison, mining 15,000 metric ton
China’s rare earths exports fell in May amid trade war with the US Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: yen nee lee
Keywords: news, cnbc, companies, chinese, war, tons, minerals, chinas, exports, china, fell, trade, earths, rare, metric, american, amid


China's rare earths exports fell in May amid trade war with the US

Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011.

Chinese exports of rare earths fell in May amid Beijing’s threat to stop supplying the U.S. with those minerals used to make a wide range of consumer electronics.

Data released on Monday by Chinese customs showed that China exported 3,639.5 metric tons of rare earths last month, down from 4,329 metric tons in April. That came as total exports from China in May unexpectedly rose 1.1%, while imports fell by a surprise 8.5% — taking the country’s overall trade surplus significantly higher to $41.65 billion.

Tensions between China and the U.S. — the two largest economies in the world — escalated last month after President Donald Trump increased tariffs on $200 billion worth of Chinese goods. Washington also placed Huawei on a blacklist for national security concerns, which limits American firms’ ability to do business with the Chinese tech giant.

In return, Beijing raised tariffs on $60 billion of American goods and threatened to stop exporting rare earths to the U.S.

China is the world’s leading producer of rare earths, which are a group of 17 minerals produced in fairly scarce quantities. They are commonly used in everything from car motors and electronics to oil refining and clean diesel to many major weapons systems the U.S. relies on for national security, including lasers and radar.

The country produced 120,000 metric tons or 70% of total rare earths in 2018, according to the United States Geological Survey. The U.S. pales in comparison, mining 15,000 metric tons of rare earths in 2018.

Experts are split on whether Beijing’s rare earths threat could be a game changer in the ongoing trade war.

Some argue that the U.S. is more reliant on Chinese supply than what current trade data suggest, so China limiting rare earths exports could hurt American industries such as defense and autos. However, others say the American manufacturing sector is not a big consumer of rare earths, so Beijing’s ability to use those minerals as a leverage is limited.

— CNBC’s Evelyn Cheng, Tom DiChristopher and Yun Li contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: yen nee lee
Keywords: news, cnbc, companies, chinese, war, tons, minerals, chinas, exports, china, fell, trade, earths, rare, metric, american, amid


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

American Airlines extends cancellations from grounded Boeing 737 Max to Sept. 3

American Airlines said Sunday that it is removing the Boeing 737 Max from its schedules through Sept. 3, a sign that the planes’ grounding will disrupt travel longer than expected. The 737 Max has been grounded worldwide since mid-March, following two fatal crashes that claimed a total of 346 lives. American, which has 24 of of the planes in its fleet of more than 900 aircraft, in April said it extended flight cancellations with the 737 Max through Aug. 19. Even American Airlines customers whose


American Airlines said Sunday that it is removing the Boeing 737 Max from its schedules through Sept. 3, a sign that the planes’ grounding will disrupt travel longer than expected. The 737 Max has been grounded worldwide since mid-March, following two fatal crashes that claimed a total of 346 lives. American, which has 24 of of the planes in its fleet of more than 900 aircraft, in April said it extended flight cancellations with the 737 Max through Aug. 19. Even American Airlines customers whose
American Airlines extends cancellations from grounded Boeing 737 Max to Sept. 3 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-09  Authors: leslie josephs
Keywords: news, cnbc, companies, planes, airlines, extends, grounded, 737, cancellations, united, max, travel, sept, american, boeing, flights


American Airlines extends cancellations from grounded Boeing 737 Max to Sept. 3

American Airlines said Sunday that it is removing the Boeing 737 Max from its schedules through Sept. 3, a sign that the planes’ grounding will disrupt travel longer than expected.

The 737 Max has been grounded worldwide since mid-March, following two fatal crashes that claimed a total of 346 lives. Boeing has completed software changes for the planes but the Federal Aviation Administration and its international counterparts haven’t signed off on the fixes.

American, which has 24 of of the planes in its fleet of more than 900 aircraft, in April said it extended flight cancellations with the 737 Max through Aug. 19.

A total of about 115 flights per day will be canceled through Sept. 3, American said on Sunday.

“By extending the cancellations, our customers and team members can more reliably plan their upcoming travel on American,” the airline said in a statement.

Even American Airlines customers whose flights were not scheduled on the 737 Max may face cancelled flights as the airline moves aircraft around to service other high-passenger routes. Travelers whose flights have been canceled can request a refund if they don’t want to rebook.

Other carriers, like United Airlines that recently added the now-beleaguered planes to their fleets recently have also extended cancellations during the busy summer season, when carriers need the planes the most. United and Southwest Airlines, which has 34 of the planes in its fleet of about 750 Boeing 737s, have removed the 737 Max from their schedules through early August.

The FAA has not said when it would allow the planes to fly again. Boeing’s CEO Dennis Muilenburg last week said he expects the planes to be flying by the end of the year.


Company: cnbc, Activity: cnbc, Date: 2019-06-09  Authors: leslie josephs
Keywords: news, cnbc, companies, planes, airlines, extends, grounded, 737, cancellations, united, max, travel, sept, american, boeing, flights


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

‘We have all these tools’: Mnuchin defends using punishing tariffs to solve security problems

Speaking to CNBC’s Nancy Hungerford in Fukuoka, Japan, Mnuchin defended the president’s mixing of trade and non-trade issues — something that’s drawn criticism from outside commentators. Asked if trade could again be used as a weapon in non-trade disputes, Mnuchin said, “I think it’s very important that we have all these tools, that we use them. And President Trump has really done a great job at using these tools.” Mnuchin stressed that Washington’s ongoing campaign against telecommunications be


Speaking to CNBC’s Nancy Hungerford in Fukuoka, Japan, Mnuchin defended the president’s mixing of trade and non-trade issues — something that’s drawn criticism from outside commentators. Asked if trade could again be used as a weapon in non-trade disputes, Mnuchin said, “I think it’s very important that we have all these tools, that we use them. And President Trump has really done a great job at using these tools.” Mnuchin stressed that Washington’s ongoing campaign against telecommunications be
‘We have all these tools’: Mnuchin defends using punishing tariffs to solve security problems Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-09  Authors: natasha turak
Keywords: news, cnbc, companies, punishing, using, tariffs, problems, security, tools, mnuchin, trump, solve, trade, president, nontrade, defends, issues, american, secretary


'We have all these tools': Mnuchin defends using punishing tariffs to solve security problems

The White House has had no problem leveraging American economic heft to bring other countries to heel on issues that aren’t related to the economy — and it may continue to do so, Treasury Secretary Steven Mnuchin indicated to CNBC on Sunday.

Markets have been on edge in recent weeks as U.S. President Donald Trump threatened Mexico with tariffs unless it vowed new assistance on immigration issues, and suggested that he was willing to link trade talks with Beijing to American security concerns around Chinese tech giant Huawei.

Speaking to CNBC’s Nancy Hungerford in Fukuoka, Japan, Mnuchin defended the president’s mixing of trade and non-trade issues — something that’s drawn criticism from outside commentators.

Asked if trade could again be used as a weapon in non-trade disputes, Mnuchin said, “I think it’s very important that we have all these tools, that we use them. And President Trump has really done a great job at using these tools.”

The secretary was referring, in particular, to the threat of tariffs on Mexico over its role in Central American migration as well as the increasing tariffs imposed on China in an attempt to address the U.S.-China trade deficit and curb what the administration calls Beijing’s “unfair” trade practices.

Mnuchin stressed that Washington’s ongoing campaign against telecommunications behemoth Huawei is a national security issue, not a trade-related one. But he added that Trump may soften the stiff restrictions that the U.S. has slapped on the Shenzhen-based company after feeling satisfied on the trade issue.


Company: cnbc, Activity: cnbc, Date: 2019-06-09  Authors: natasha turak
Keywords: news, cnbc, companies, punishing, using, tariffs, problems, security, tools, mnuchin, trump, solve, trade, president, nontrade, defends, issues, american, secretary


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

U.S. commander says American forces face ‘imminent’ threat from Iran

BAGHDAD — The top commander of U.S. forces in the Middle East says he believes the Iranians or their proxies may orchestrate an attack at any moment. “I think the threat is imminent,” Marine Gen. Frank McKenzie said in an exclusive broadcast interview with NBC News in the Iraqi capital. The U.S. has beefed up its military presence in the region in an effort to deter Iran and protect American forces and allies. McKenzie said he was “heartened” by the efforts of the Iraqi government to protect Ame


BAGHDAD — The top commander of U.S. forces in the Middle East says he believes the Iranians or their proxies may orchestrate an attack at any moment. “I think the threat is imminent,” Marine Gen. Frank McKenzie said in an exclusive broadcast interview with NBC News in the Iraqi capital. The U.S. has beefed up its military presence in the region in an effort to deter Iran and protect American forces and allies. McKenzie said he was “heartened” by the efforts of the Iraqi government to protect Ame
U.S. commander says American forces face ‘imminent’ threat from Iran Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: courtney kube, amanda macias
Keywords: news, cnbc, companies, american, imminent, think, threat, posture, region, iraqi, forces, middle, iran, commander, protect, mckenzie, face


U.S. commander says American forces face 'imminent' threat from Iran

Iranian President Hassan Rouhani (L) attends the 21st Nationwide Assembly of the Islamic Revolution Guards Corps (IRGC) Commanders in Tehran, Iran on September 15, 2015.

BAGHDAD — The top commander of U.S. forces in the Middle East says he believes the Iranians or their proxies may orchestrate an attack at any moment.

“I think the threat is imminent,” Marine Gen. Frank McKenzie said in an exclusive broadcast interview with NBC News in the Iraqi capital. “We continually evaluate our force posture in the region.”

The U.S. has beefed up its military presence in the region in an effort to deter Iran and protect American forces and allies.

Over the last month, the Trump administration announced that it was sending an aircraft carrier strike group and Air Force bombers to the Middle East, as well as Patriot missiles and additional troops, amid heightened concerns of an Iranian attack.

McKenzie stressed that tensions remain high.

“I don’t actually believe the threat has diminished,” McKenzie said after holding a series of meetings with the Iraqi prime minister and defense chief. “…I believe the threat is still very real.”

McKenzie said he was “heartened” by the efforts of the Iraqi government to protect American forces and its allies in the region. Roadside bombs have posed the major danger to American forces in Iraq, McKenzie added, but he said the threat from the Iranians is evolving.

“They probe for weakness all the times,” McKenzie said. “I would say the threat has probably evolved in certain ways even as our defensive posture has changed and become more aggressive, and we certainly thank our Iraqi partners for many of the things they’ve done.”

“I think we’re still in the period of what I would call tactical warning,” he said. “The threat is very real. ”

McKenzie declined to go into specifics on the nature of the threats.


Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: courtney kube, amanda macias
Keywords: news, cnbc, companies, american, imminent, think, threat, posture, region, iraqi, forces, middle, iran, commander, protect, mckenzie, face


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Trump’s blacklisting of Huawei is hurting American chip firms

Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018. U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology. Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the am


Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018. U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology. Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the am
Trump’s blacklisting of Huawei is hurting American chip firms Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: arjun kharpal
Keywords: news, cnbc, companies, chinese, firms, blacklisting, shanghai, hit, american, trumps, china, month, world, hurting, huawei, permission, chip


Trump's blacklisting of Huawei is hurting American chip firms

Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018.

U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology.

Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the amount of electronics manufacturers relying on U.S. chips.

Trump signed an executive order last month that gave permission to Commerce Secretary Wilbur Ross to block transactions that involve information or communications technology that “poses an unacceptable risk” to U.S. national security. Huawei was then put on a blacklist that requires American firms to get permission to sell to the Chinese networking equipment and smartphone giant.

The move has hit the businesses and share prices of U.S. chip firms.


Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: arjun kharpal
Keywords: news, cnbc, companies, chinese, firms, blacklisting, shanghai, hit, american, trumps, china, month, world, hurting, huawei, permission, chip


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Trump’s Mexico tariff threat worries US farmers already pummeled by China trade war

Daniel Acker | Bloomberg | Getty ImagesPresident Donald Trump’s threatened 5% tariff on all Mexican imports could hit American farmers especially hard if Mexico retaliates with punitive duties on U.S. agricultural products. Farmers are already reeling from Trump’s drawn out trade war with China and fear further losses could be in their futures. Even so, that hasn’t stopped other countries from chipping away at American agricultural dominance when it comes to supplying its neighbor to the south w


Daniel Acker | Bloomberg | Getty ImagesPresident Donald Trump’s threatened 5% tariff on all Mexican imports could hit American farmers especially hard if Mexico retaliates with punitive duties on U.S. agricultural products. Farmers are already reeling from Trump’s drawn out trade war with China and fear further losses could be in their futures. Even so, that hasn’t stopped other countries from chipping away at American agricultural dominance when it comes to supplying its neighbor to the south w
Trump’s Mexico tariff threat worries US farmers already pummeled by China trade war Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: jeff daniels
Keywords: news, cnbc, companies, mexico, worries, products, mexican, threat, trumps, farm, tariffs, china, agricultural, pummeled, farmers, american, trade, war, tariff, goods


Trump's Mexico tariff threat worries US farmers already pummeled by China trade war

A farmer fills seed boxes on a Case IH Agricultural Equipment planter while planting corn in Princeton, Illinois, April 24, 2018. Daniel Acker | Bloomberg | Getty Images

President Donald Trump’s threatened 5% tariff on all Mexican imports could hit American farmers especially hard if Mexico retaliates with punitive duties on U.S. agricultural products. Farmers are already reeling from Trump’s drawn out trade war with China and fear further losses could be in their futures. “When you look at all the different products that the U.S. exports to Mexico, all those folks are getting nervous that retaliatory tariffs could certainly find their way onto their products,” said Veronica Nigh, an economist with the American Farm Bureau Federation, the nation’s largest farm sector organization. Mexico is considered one of the most lucrative markets for American agriculture products given its easy access and close proximity to the U.S, whether via rail, ship or truck. Even so, that hasn’t stopped other countries from chipping away at American agricultural dominance when it comes to supplying its neighbor to the south with grains, meats and other farm products. The U.S. exported $19 billion in agricultural exports to Mexico last year, making it the second-largest purchaser after Canada, according to the U.S. Department of Agriculture. Mexico is the top market for U.S. corn, rice, dairy products, poultry, eggs, pecans and also a major buyer of American beef, pork, soybeans and wheat.

Farmer walks through his soy fields in Harvard, Illinois. Nova Safo | AFP | Getty Images

Frustrated with Central American migration, the White House last Thursday announced the U.S. plans to slap 5% tariffs on Mexican goods, including cars, beer, tequila, as well as fruits and vegetables. The duties would start June 10 and gradually increase to 25% on Oct. 1 unless Mexico “substantially stops the illegal inflow of aliens coming through its territory.” “If you put a tariff on imported goods, usually that price gets passed to consumers,” said Luis Ribera, an agricultural economist at Texas A&M University. “And you can expect that Mexico will retaliate one way or another.” Mexican officials in Washington this week as part of a diplomatic push to avert new tariffs are warning the levies won’t stop the flow of migrants. Talks between U.S. and Mexican officials on Wednesday failed to produce a deal, a senior administration official told NBC News. Trump slapped tariffs last year on imported steel and aluminum, resulting in Mexico imposing levies on $3 billion of U.S. goods, including a variety of agricultural products. The U.S. last month lifted metals tariffs against Mexico and Canada as part of a push to get ratification of the pending United States-Mexico-Canada Agreement. However, Trump’s threat to impose new tariffs against Mexico over immigration puts USMCA in jeopardy and raises the risk of additional financial fallout for American farmers already hurting from the escalating trade war with China. The new USMCA is designed to replace the North American Free Trade Agreement, a 25-year-old pact between the U.S., Canada and Mexico.

“Amid a perfect storm of challenges in farm country, we cannot afford the uncertainty this action would bring.” Lynn Chrisp president, National Corn Growers Associatiop


Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: jeff daniels
Keywords: news, cnbc, companies, mexico, worries, products, mexican, threat, trumps, farm, tariffs, china, agricultural, pummeled, farmers, american, trade, war, tariff, goods


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Is China really paying for Trump’s tariffs? It isn’t so straightforward

Trump has on many occasions said the U.S. is collecting billions of dollars in tariffs from China. But Trump could be right in that, eventually, it may be the Chinese that pay for the consequences of those tariffs, economists said. That would happen if exporters in China slash the prices they charge their American customers — and therefore earn lower profits — to remain competitive. Despite some studies pointing to American consumers eventually paying the cost of tariffs, the U.S. inflation rate


Trump has on many occasions said the U.S. is collecting billions of dollars in tariffs from China. But Trump could be right in that, eventually, it may be the Chinese that pay for the consequences of those tariffs, economists said. That would happen if exporters in China slash the prices they charge their American customers — and therefore earn lower profits — to remain competitive. Despite some studies pointing to American consumers eventually paying the cost of tariffs, the U.S. inflation rate
Is China really paying for Trump’s tariffs? It isn’t so straightforward Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: yen nee lee
Keywords: news, cnbc, companies, chinese, american, china, levies, economists, straightforward, consumers, tariffs, trump, paying, price, isnt, trumps, prices, really


Is China really paying for Trump's tariffs? It isn't so straightforward

U.S. President Donald Trump talks to reporters with Treasury Secretary Steven Mnuchin (L) and U.S. Trade Representative Robert Lighthizer (R) in the White House on March 8, 2018. Chip Somodevilla | Getty Images

More than a year after U.S. President Donald Trump fired the first tariff salvo that eventually led to a trade war with China, the debate about who actually bears the burden of those elevated levies has not found a definite conclusion. Trump has on many occasions said the U.S. is collecting billions of dollars in tariffs from China. In fact, the president reiterated that view over the weekend in a Twitter post, saying that “China is paying a heavy cost in that they will subsidize goods to keep them coming, devalue their currency.” But Trump’s claim has been disputed by many American businesses that import Chinese goods, which argue that they’re the ones bearing the brunt of those duties. According to economists, both sides could be right.

Footing the bill

When Chinese goods arrive in America, importers — which are generally American but can also be U.S.-registered entities of foreign firms — pay tariffs to customs in order to receive their products. In that sense, American businesses are right that they’re the ones footing the bill. But Trump could be right in that, eventually, it may be the Chinese that pay for the consequences of those tariffs, economists said. That would happen if exporters in China slash the prices they charge their American customers — and therefore earn lower profits — to remain competitive. Effectively, that situation would mean the Chinese companies are paying for the levies going into U.S. government coffers.

More often than not, the “real pain” of tariffs is split between the country that impose those levies and the nation targeted, according to Simon Baptist, global chief economist and managing director in Asia at consultancy The Economist Intelligence Unit. That means that everyone along the supply chain of a product targeted by Trump’s tariffs — from the manufacturer and exporter in China, to importer and consumer in the U.S. — will bear some burden. And economists are increasingly focusing their research on how that burden is shared among those involved in moving goods from China to the U.S. “How the real pain — along with the smaller amount of gain — is spread around depends on how prices and quantities in the market adjust in response,” Baptist wrote in a May note. He explained that, generally, if China is the only supplier for a product, “more (or all) of the tariff is passed on to US consumers, and the pain is felt by the latter.” But in the event that China is merely one of the many countries that sell a product, “prices do not change much and Chinese suppliers lose market share. Then the pain is felt mostly by Chinese producers.” “So, the answer very much varies by product, which is why both sides have been selecting the targets so carefully,” Baptist wrote.

What do we know so far?

An expanding body of research has found that the burden of tariffs has mostly fallen on the U.S. One of the latest papers published on the topic is by economics researchers from the International Monetary Fund, Harvard University, University of Chicago and the Federal Reserve Bank of Boston. Using price data collected at the U.S. borders and at retailers, the researchers found “nearly complete pass through of tariffs” to America. In other words, little cost is falling on the Chinese manufacturers. The investigation remains in progress into how much, if at all, retail prices are rising, although some preliminary findings suggest that retailers have absorbed “much of the price impact” and earn lower profit margins from products impacted by Trump’s tariffs.

How the real pain — along with the smaller amount of gain — is spread around depends on how prices and quantities in the market adjust in response. Simon Baptist economist, The Economist Intelligence Unit

Other studies, though, suggest that consumer prices have gone up in the U.S. as a result of higher levies. One such paper, focusing on washing machines, was published in April by researchers from the Federal Reserve and the University of Chicago. Washers were among the earliest products targeted by the Trump administration, with tariffs from 20% to 50% imposed on nearly all imported large residential washing machines, regardless of their countries of origin. The impact, according to the study, was a nearly 12% jump in the price of washers — both imported and domestically produced — in the immediate four to eight months after the implementation of the new levies. In addition, the study found that the price of dryers increased by the same magnitude, although they were not subject to elevated tariffs. William Reinsch, senior advisor and Scholl Chair in international business at think tank Center for Strategic and International Studies, cited that particular study in an April commentary on the impact of tariffs. He explained that prices of both items went up “because most consumers buy washers and dryers together, and manufacturers realized they could get away with increasing the price of both and simply pocket the extra money.” On why the price of washers made in the U.S. also went up even though they’re not subject to tariffs, Reinsch said that phenomenon “illustrates the central point of protection — to allow domestic producers to raise prices and make more money so they can recover from the damage done to them by the imports.”

Not all products will react to tariff the same way as washing machines due to different demand and supply dynamics at play. But another study published in March looking at the collective impact of all tariffs imposed by the Trump administration in 2018 found that consumers are bearing the full cost. “We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters. We also find that U.S. producers responded to reduced import competition by raising their prices,” wrote researchers from the Federal Reserve Bank of New York, Columbia University and Princeton University That change in prices has led to an estimated reduction in U.S. real income of $1.4 billion per month by the end of last year, the researchers said. Despite some studies pointing to American consumers eventually paying the cost of tariffs, the U.S. inflation rate has been relatively stable, according to the Bureau of Labor Statistics’ Consumer Price Index. Mary Daly, president and chief executive of the Federal Reserve Bank of San Francisco, said part of the reason inflation has not ticked up is “firms are still not passing along” the increase in costs to consumers. Instead, they appear to mostly be bearing the brunt of the levies themselves. Still, that analysis has not been universally confirmed. In fact, some research indicates that Chinese exporters may be the ones paying the toll. European economists Benedikt Zoller-Rydzek and Gabriel Felbermayr argued in a November 2018 paper that “Chinese firms pay approximately 75% of the tariff burden.” In particularly, their analysis found that a 25 percentage point increase in tariffs results in an average 4.5% rise in the price that U.S. consumers pay for Chinese products, but it slashes the price that producers in China charge by 20.5%.

Who really loses — the US or China?

How all parties along the supply chain are affected forms just one part of the overall economic cost of tariffs. Economists also take into account how the changes in prices and sales volume affect the behavior of consumers and companies in the long run. That’s ultimately more important for economic growth. Generally, economists predicted that the Chinese economy — instead of the U.S. — will experience a larger hit from Trump’s tariffs. That’s partly because the American economy is on better footing, and over the longer term, China may have more to lose because of its larger reliance on exports. Research firm Oxford Economics said in a May report that, if the U.S. and China impose elevated tariffs on all goods they trade, the American economy in 2020 is estimated to grow by 0.5 percentage points less than a no-tariff scenario. Meanwhile, China’s economic setback is expected to be 1.3 percentage points, the report said.

Yangshan Deepwater Container Port in Shanghai, China. Qilai Shen | Corbis Historical | Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: yen nee lee
Keywords: news, cnbc, companies, chinese, american, china, levies, economists, straightforward, consumers, tariffs, trump, paying, price, isnt, trumps, prices, really


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

China would benefit from a positive response to US trade complaints

Chinese President Xi Jinping and members of Chinese delegation attend a working dinner with U.S. President Donald Trump after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. The focus of American policy changed after the collapse of the Soviet Union, as Washington tried to promote a market economy and democracy in China. Balanced trade and better tiesOne might call that a ruthless greed, a self-assured defiance toward Trump’s America or, more generously, a rational response t


Chinese President Xi Jinping and members of Chinese delegation attend a working dinner with U.S. President Donald Trump after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. The focus of American policy changed after the collapse of the Soviet Union, as Washington tried to promote a market economy and democracy in China. Balanced trade and better tiesOne might call that a ruthless greed, a self-assured defiance toward Trump’s America or, more generously, a rational response t
China would benefit from a positive response to US trade complaints Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-27  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, american, complaints, president, benefit, positive, trillion, chinas, washington, trump, policy, trade, response, china, chinese


China would benefit from a positive response to US trade complaints

Chinese President Xi Jinping and members of Chinese delegation attend a working dinner with U.S. President Donald Trump after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. Kevin Lemarque | Reuters

Was it ruthless greed, ineptitude or hubris that led China to entrap itself into its huge, systematic and unsustainable trade imbalances with the United States? The answer is: All of the above. Beijing’s trade problem was also part of unintended consequence of America’s economic policy errors. China, therefore, cannot complain about any sinister scheming. In trade and in most of the rest, America’s policy toward China has been an open book ever since the Shanghai Communique in 1972, when Washington began its “triangulation” game of playing China to fight its cold war with the Soviet Union. The focus of American policy changed after the collapse of the Soviet Union, as Washington tried to promote a market economy and democracy in China. The Chinese ignored the advice, kept pocketing the benefits of open access to U.S. markets and free technology transfers, accumulating $3.1 trillion of foreign reserves (at the last count) and steadily growing net foreign assets. Thanks in large part to American investments and technology, China moved from its cheap smokestack manufacturing base of the 1980s to an engineering powerhouse, with cutting-edge industries ranging from infrastructure to transportation, telecommunications, computing, military hardware, space exploration and global retailing.

Free-riding is over

It took a while for Washington to sober up from its missionary zeal, and to realize the importance of China’s bold and seemingly unstoppable economic development — with all of its political and security corollaries. The problem then became: What do we do now? Torn between extreme and useless advice of American sinologists — take it easy, cooperate; or hit them hard with everything you got, and the sooner the better — Washington opted early this decade for the containment strategy with a “pivot to Asia,” later morphing into the “rebalancing to Asia” as a semantic adjustment to apparently make it sound less offensive to China. And while the U.S. was agonizing over its China policy, or, if you wish, kicking the can down the road from one administration to the next, Beijing was stepping up its sales on American markets. Between the beginning of 2011 and the end of the first quarter of this year, the Chinese took $4 trillion on their goods exports to the U.S., encouraged by some economics-challenged pundits that there was nothing Washington could do to stop that. Some of them are still telling the Chinese that U.S. trade deficits and rising foreign debt are pre-ordained, because even in good years American spendthrifts save barely 6% of their after-tax income, while the penny-pinching Chinese squirrel away half of what they earn. The Chinese apparently could not bother with that nonsense. They just kept unloading their stuff, earning a net income of $3 trillion on those $4 trillion of American sales. Showing an incredible chutzpah, the Chinese did not change their trade policy even after U.S. President Donald Trump took office in January 2017 — a man who was throwing harsh trade warnings at China from the campaign trail since 2015. No, Beijing paid no attention to Trump threats: China’s exports to the U.S. in 2017 and 2018 exceeded the half-a-trillion dollar mark, and the Chinese surpluses on American trade kept soaring at average annual rates of 10%.

Balanced trade and better ties

One might call that a ruthless greed, a self-assured defiance toward Trump’s America or, more generously, a rational response to America’s decades-old apparent indifference to one-third of its economy, where China’s trade surpluses were slashing growth, jobs and incomes. Instead of following the old law of holes — if you find yourself in a hole, stop digging — China continued to aggravate its U.S. trade case and broadening bilateral tensions with vacuous, lecture-style incantations of “win-win cooperation,” a “harmonious co-existence” and a “shared future for mankind.” That sort of hubris could perhaps sell in China, but it finds no takers in the U.S., Europe and most other places around the world. Somehow, Beijing officials seem to have chosen to use sloganeering as a substitute for a prompt and decisive action to sharply narrow their excessive trade surpluses with the U.S. — a policy that would have deprived Washington of any legitimate reason to seek relief from damages caused by China’s aggressive mercantilism. It is hard to believe that Beijing’s leaders did not step in to do the obvious, and the only thing China had to do: Slash the excessive trade surplus with the U.S. quickly and build a more productive relationship with Washington. Trump apparently still hopes that he can cut the Gordian knot with Chinese President Xi Jinping during the G-20 meeting in Japan next month. That perhaps explains his puzzling one-liners bubbling with optimism regarding trade talks with China. China should support that by sending stronger signals on bilateral trade flows to make such a deal possible. Maybe that’s what is intended by a 14% annual decline of Chinese exports to the U.S. during the first quarter of this year, resulting in a 12% cut of America’s trade deficit with China. But, if that’s Beijing’s true policy intent, China should restrain its apparent urge to “punish” Washington, as it did with a whopping 19% cut of American goods purchases in the January to March period. Stepping up imports from the U.S. would be a much better, and correct, thing to do to atone for China’s abusive trade policies toward the U.S. Washington, for its part, should step back from meddling in China’s legislative process and economic policies, while reserving the right to vigorously respond to cases of intellectual property violations, forced technology transfers, illegal industry subsidies and restricted market access to U.S. businesses operating in China.

Investment thoughts


Company: cnbc, Activity: cnbc, Date: 2019-05-27  Authors: dr michael ivanovitch
Keywords: news, cnbc, companies, american, complaints, president, benefit, positive, trillion, chinas, washington, trump, policy, trade, response, china, chinese


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Canada takes first step toward ratifying new North American trade deal

Canada took a first step toward ratifying the new North American trade agreement on Monday, just three days ahead of U.S. Vice President Mike Pence’s trip to Ottawa to discuss the passage of the treaty. “The entry into force of this agreement does not depend solely on Canada,” Freeland told reporters after presenting the motion. “Insofar as possible, we intend to move in tandem with the United States.” The United States is Canada’s top trading partner, taking in 75 percent of its goods exports.


Canada took a first step toward ratifying the new North American trade agreement on Monday, just three days ahead of U.S. Vice President Mike Pence’s trip to Ottawa to discuss the passage of the treaty. “The entry into force of this agreement does not depend solely on Canada,” Freeland told reporters after presenting the motion. “Insofar as possible, we intend to move in tandem with the United States.” The United States is Canada’s top trading partner, taking in 75 percent of its goods exports.
Canada takes first step toward ratifying new North American trade deal Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-27
Keywords: news, cnbc, companies, agreement, takes, canada, north, deal, united, states, ratifying, trade, told, minister, freeland, ahead, step, american


Canada takes first step toward ratifying new North American trade deal

Canadian Foreign Minister Chrystia Freeland speaks at a press conference August 31, 2018 at the Embassy of Canada in Washington, DC.

Canada took a first step toward ratifying the new North American trade agreement on Monday, just three days ahead of U.S. Vice President Mike Pence’s trip to Ottawa to discuss the passage of the treaty.

Foreign Minister Chrystia Freeland presented what is known as a “ways and means motion” to the House of Commons, which opens the way for the formal presentation of a bill.

The United States struck deals on May 17 to lift tariffs on steel and aluminum imports from Canada and Mexico, removing a major obstacle to legislative approval of the new U.S.-Mexico-Canada Agreement (USMCA), the trilateral trade deal to replace the 25-year-old North American Free Trade Agreement.

Pence is going to meet Canadian Prime Minister Justin Trudeau in Ottawa on May 30 to discuss “advancing” ratification.

“The entry into force of this agreement does not depend solely on Canada,” Freeland told reporters after presenting the motion. “Insofar as possible, we intend to move in tandem with the United States.”

The United States is Canada’s top trading partner, taking in 75 percent of its goods exports. Reaching a new trade deal had been a priority for Trudeau’s Liberal government, and now a national election is just five months away.

Some U.S. Democrats have come out against ratifying the trade agreement. While Freeland has said the government is “full steam ahead” on ratification, she would not say on Monday whether the government would push to get it done before parliament goes into recess ahead of the vote.

John Manley, a former Liberal foreign minister, said on Friday that Canada should pass the new treaty this summer.

“To fail to pass it is going to be a signal to the U.S. Congress that it is still open for renegotiations,” Manley told Reuters.


Company: cnbc, Activity: cnbc, Date: 2019-05-27
Keywords: news, cnbc, companies, agreement, takes, canada, north, deal, united, states, ratifying, trade, told, minister, freeland, ahead, step, american


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post