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Could Trump’s Tariffs Hurt The U.S. Economy?

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Could Trump’s Tariffs Hurt The U.S. Economy

About a year ago, the media was talking about how Trump’s trade wars could negatively affect many industrial companies, the agricultural sector, and right down to the every day American worker.

The recent stats from Gross Domestic Product has now revealed the current reality of Trump’s multiple front trade war.

Data shows that imports increased, while exports decreased by over 5%. Business investments have declined by 0.6%, and this decline has been happening since 2016. Most North American corporate capital spending is also on a declining trend.

Trumps’s tax reform was short-lived for most American companies. We did not get many benefits from the trade tensions either. U.S. corporate debt is getting much worse and far more significant than household debt.

Many are speculating that the cutting interest rates will lead to more zombie companies that will threaten both the U.S. and global economy.

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Business

US Vows 100% Tariffs on French Champagne, Cheese, Handbags Over Digital tax

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Image via Shutterstock
By David Lawder and Andrea Shalal

The US government on Monday said it may slap punitive duties of up to 100 percent on $2.4 billion in imports from France of Champagne, handbags, cheese and other products, after concluding that France’s new digital services tax would harm US tech companies.

The US Trade Representative’s office said its “Section 301” investigation found that the French tax was “inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected US companies,” including Alphabet Inc’s Google, Facebook, Apple and Amazon.com.

US Trade Representative Robert Lighthizer said the government was exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

“The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets US companies,” Lighthizer said. His statement made no mention of proposed digital taxes in Canada or Britain.

The US trade agency said it would collect public comments through Jan. 14 on its proposed tariff list as well as the option of imposing fees or restrictions on French services, with a public hearing scheduled for January 7.

It did not specify an effective date for the proposed 100% duties.

CHAMPAGNE, ROUGE AND GRUYERE

The list targets some products that were spared from 25 percent tariffs imposed by the United States over disputed European Union aircraft subsidies, including sparkling wines, handbags and make-up preparations – products that would hit French luxury goods giant and cosmetics maker L’Oreal hard.

Gruyere cheese, also spared from the USTR aircraft tariffs levied in October, featured prominently in the list of French products targeted for 100 percent duties, along with numerous other cheeses.

The findings won favor from US lawmakers and US tech industry groups, who have long argued that the tax unfairly targets US firms.

“The French digital services tax is unreasonable, protectionist and discriminatory,” Senators Charles Grassley and Ron Wyden, the top Republican and Democrat, respectively, on the Senate Finance Committee, said in a joint statement.

Spokespeople for the French embassy and the European Union delegation in Washington could not immediately be reached for comment.

But prior to the release of the USTR’s report, a French official said that France would dispute the trade agency’s findings, repeating Paris’ contention that the digital tax is not aimed specifically at US technology companies.

“We will not give up on taxation” of digital firms, the official said.

France’s 3 percent levy applies to revenue from digital services earned by firms with more than €25 million ($27.86 million) in French revenue and €750 million (£644 million) worldwide.

The USTR’s report and proposed tariff list follow months of negotiations between French Finance Minister Bruno Le Maire and US Treasury Secretary Steven Mnuchin over a global overhaul of digital tax rules.

The two struck a compromise in August at a G7 summit in France that would refund US firms the difference between the French tax and a new mechanism being drawn up through the Organization for Economic Cooperation and Development.

But Trump never formally endorsed that deal and declined to say whether his French tariff threat was off the table.

Reuters

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Business

Stocks Just Spiked to Record Highs After China Budged on a Key US Trade Demand

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According to a Fox Business report, China “issued a document to ‘effectively curb’ violations of intellectual property rights such as trademarks and copyrights.” This move is aimed at increasing the chances of a trade deal between the two largest economies. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite Indexes reached all-time highs after China’s statement.

Adam Phillips, director of portfolio strategy for EP Wealth Advisors, said “I don’t think we would be seeing these types of deals if the outlook for markets and the economy weren’t favorable. This is one additional piece we can look at to see the outlook for markets is a positive one.”

Bloomberg reported that equities climbed across Asia, “led by those in Hong Kong, where local elections brought a landslide victory to pro-democracy candidates. The dollar gained versus the euro and yen.”

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Andrew Yang Wants You to Make Money Off Your Data by Making it Your Personal Property

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Andrew Yang, 2020 Democratic presidential candidate, plans to regulate the tech industry by prioritizing in giving people the right to own their personal data (“data as a property right”), thus allowing them to make money by sharing it with companies. Currently, companies entirely own users’ data – users do not have much control over it.

Yang said, “our data is now worth more than oil” and gave emphasis to the great amount of data people create and how companies make money over it. “By implementing measures to increase transparency in the data collection and monetization process, individuals can begin to reclaim ownership of what’s theirs,” he said.

He also cited a report saying that the collection and use of Americans’ personal data has become a $198 billion industry. Yang believes that people should have more control over their data, such as being able to see how their data is being used and having the freedom to opt out if they choose.

Yang added that we need politicians “who understand technology and a modern way to regulate it,” as reported by Engadget. “In order to regulate technology effectively, our government needs to understand it. It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this,” said Yang.

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