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U.S., Mexico set to unveil two-way deal on NAFTA

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The United States and Mexico will announce a two-way deal on NAFTA Monday, clearing the way for Canada to return to the table to try to reach a final updated agreement in the coming days, according to a source close to the negotiations.

The development follows months of stalemate and comes just over a year after negotiators from the U.S., Mexico and Canada first sat down to discuss modernizing the 24-year-old trade pact. Despite the progress between the U.S. and Mexico on issues that were widely seen as more integral to the U.S.-Mexico relationship, it remains unclear how long it will take NAFTA negotiators to resolve the remaining issues between the three countries. Canada has not been at the negotiating table for more than two months.

“A big deal looking good with Mexico!” President Donald Trump tweeted this morning.

U.S. trade negotiators briefed congressional staff Monday on the details of the agreement between the U.S. and Mexico.

Mexican Economy Secretary Ildefonso Guajardo said Monday that there’s one U.S.-Mexico issue that remains to be fully resolved before all the talks between the two countries are complete.

But he cautioned that Canada must still go over all the solutions that the U.S. and Mexico reached. Canada is expected to return to the negotiating table as soon as the two countries announce a breakthrough in the bilateral talks.

“A lot of these things imply Canada. Therefore, until we finish with the position of Canada, we will not be able to disclose the elements,” Guajardo said.

A NAFTA breakthrough between the U.S. and Mexico would be welcome news after more than a year of negotiations between the U.S., Mexico and Canada. Last month, negotiators from the U.S. and Mexico made a renewed push to wrap up their two-way issues in the renegotiation, including the rules that govern how automobiles made in the North American region qualify for reduced tariffs under the trade pact.

Source: https://www.politico.com/story/2018/08/27/us-mexico-trade-deal-nafta-trump-administration-797464

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Molson Coors Turns to Marijuana as Beer Sales Drop

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Ten things you should know about interest rates as Trump's threats of a currency war loom

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There is one thing to be certain about with exchange rates, and it is this: they are the hardest economic variable to predict successfully

Source: http://www.independent.co.uk/voices/interest-rates-trump-trade-war-currencies-federal-reserve-bank-of-england-us-dollar-chinese-yuan-a8458011.html

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Markets fall as latest Trump tariff moves worry allies

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President Donald Trump’s latest steps to slap tariffs on an additional $200 billion in Chinese goods led markets to tumble Wednesday morning and raised alarm among U.S. lawmakers and trading partners that an extended conflict could have wide-ranging economic consequences.

The Dow Jones Industrial Average opened more than 130 points lower and continued to fall in the early hours after Trump late Tuesday announced plans to impose 10 percent tariffs on thousands more Chinese products, drastically escalating the trade war between the world’s two largest economies. The broader Standard & Poor’s 500 index also slid about 0.6 percent.

Overseas, Beijing rejected the new tariff list as “totally unacceptable” and vowed to respond with counter-measures and an additional lawsuit at the World Trade Organization — the third it has brought against the United States this year.

In Brussels, a top European Commission official, Vice President Valdis Dombrovskis, said he was “concerned” about an “immediate economic impact” from not only the latest tensions but also about a broader unraveling of the multilateral trading system. Trump’s latest trade moves have also begun to unite other countries against the U.S.: Germany, for example, appears to be in the early stages of an tenuous economic alliance with China.

“As relations with the U.S. become increasingly difficult, the other economic giant will inevitably become more important to us,” said Volker Treier, the deputy chief executive of Germany’s Chambers of Industry and Commerce.

But Trump, for his part, showed no sign of reconciling with China. In tweets from Brussels, where he was meeting with NATO allies, the president blamed other nations’ policies for hurting U.S. agriculture, despite the fact that farm exports have grown in recent years.

“Farmers have done poorly for 15 years. Other countries’ trade barriers and tariffs have been destroying their businesses,” Trump wrote. “I am fighting for a level playing field for our farmers, and will win!”

The latest set of duties would not take effect until the end of August at the earliest, after the administration holds a public comment period on the affected products. They would, however, drastically escalate the pitched trade war.

The levies would come on top of 25 percent penalties on $34 billion in goods the Trump administration imposed last week and another set of tariffs on $16 billion in goods that are in the pipeline and could kick into effect as early as next month.

China retaliated in lockstep against the initial $34 billion — a move that directly led to Trump’s latest threat — and has pledged to do the same with the looming $16 billion.

But China imported only $130 billion worth of goods from the United States in 2017, while the U.S. imported $505 billion worth from China — making it impossible for them to keep up with the dollar-for-dollar if Trump moves forward with tariffs on the full $200 billion list. But Beijing could fight back with other measures to make life difficult for American companies doing business in China.

The latest duties are aimed at pressuring China to take U.S. concerns about intellectual property theft and forced technology transfers more seriously and finally change what the administration and many in industry and Congress see as harmful practices.

But even those who agree with the administration on its principles in cracking down on China are increasingly uneasy with the president’s inclination to impose tariffs on an ever-increasing number of products. Members of Congress pushed back Tuesday night and early Wednesday against what they saw as harmful penalties that would leave American farmers and consumers caught in the crossfire.

House Ways and Means Chairman Kevin Brady said that tensions could escalate into a multiyear trade conflict, He also called for Trump to sit down soon with Chinese President Xi Jinping to address their differences — a move that was then echoed by House Speaker Paul Ryan.

“I don’t want to hamstring the president’s negotiating tactics, but I have long said I don’t think tariffs are the right way to go,” Ryan said during a press conference Wednesday morning.

Rep. Dave Reichert added that he “strongly disagrees” with the tariff plans, which he said would lead to “higher prices here at home for American families and less sales abroad for American workers and farmers as markets are closed to American-made goods through retaliation.”

“I am committed to working with the administration to address China’s theft of American technology and intellectual property in a way that targets the problem and does not further harm communities across America,” added Reichert, who chairs the House Ways and Means Trade Subcommittee.

Some lawmakers have begun to explore ways to rein in the president’s authority to unilaterally impose tariffs. The Senate is set to hold a “test vote” Wednesday on legislation spearheaded by Sens. Bob Corker (R-Tenn.) and Pat Toomey (R-Pa.) that would require lawmakers to sign off on any tariffs imposed for national security reasons moving forward, as well as on any that took effect during the past two years.

The legislation, if passed, would not affect these tariffs against Beijing, but it would affect penalties in place on nearly all imports of steel and aluminum, including from China.

The preliminary vote — which will give an indication of how many and which lawmakers support taking action to limit the president’s authority at least over national security-related tariffs — is scheduled to take place at noon.

Jakob Hanke contributed to this report.

Source: https://www.politico.com/story/2018/07/11/new-trump-tariffs-trade-war-china-678252

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U.S. cruises toward record-breaking debt on Trump’s watch

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The nation’s fiscal outlook looks ever bleaker, thanks in part to deficit spending during President Donald Trump’s first term, Congress’ nonpartisan budget scorekeeper projected Tuesday.

Within 16 years, the federal deficit is expected to be the largest in history, outpacing even the fiscal shortfalls that followed World War II, according to Congressional Budget Office estimates.

Congress’ recent tax and spending laws — along with ballooning costs of programs like Social Security and Medicare — also are driving up the amount the government pays in interest on money borrowed to make up for the gap in cash coming in and going out.

Indeed, those interest payments will exceed the cost of all Social Security spending within decades, CBO predicts. Interest costs also will be higher than discretionary spending, which amounts to all federal dollars Congress controls.

Debt is projected to reach 78 percent of gross domestic product by the end of this year — the highest level since about 1950.

At this rate, that debt would actually exceed the size of the economy within a decade, breaking the historic record of 106 percent by 2034.

In drumming up support for their tax overhaul, congressional Republicans have said the new law would spur enough economic growth to offset a loss in revenue over the next decade.

CBO predicts, however, that most of that economic revving will happen in the next several years, with the largest single-year increase occurring in 2022, with GDP growing by a full percentage point.

After that, GDP growth is expected to be modest, amounting to an average boost of 0.7 percent over a decade.

The effects of the Republican tax law on federal deficits are projected to diminish after 2026, when many of the costly individual tax breaks are set to expire. After that point, revenue is xpected to rise again. And a decade out, the tax law would have almost no effect on the economy or the federal deficit, CBO predicts.

Source: https://www.politico.com/story/2018/06/26/cbo-federal-deficit-break-records-651929

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Fed is set to leave rates alone but to hike later in year

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WASHINGTON (AP) — The Federal Reserve is all but sure to leave interest rates unchanged this week, though steady economic growth and inflation pressures will likely keep the Fed on a path toward further rate hikes later this year….

Source: http://hosted.ap.org/dynamic/stories/A/APFN_US_FEDERAL_RESERVE_LOOK_AHEAD?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT