Posts belonging to Category taxation

Sanctions against China for the “theft” of US intellectual property

Threats of retaliatory measures

President Donald Trump is poised on Thursday to unveil sanctions against China for the “theft” of US intellectual property, a White House official said, teeing up a second potential confrontation in as many months. Spokesman Raj Shah told AFP that Trump will announce actions following an “investigation into China’s state-led, market-distorting efforts to force, pressure, and steal US technologies and intellectual property.”

Beijing has already warned the Trump administration against the move, urging him not act “emotionally.” It is just weeks since Trump short-circuited White House deliberations and announced a raft of sanctions on foreign-produced steel and aluminum off the cuff.

That move prompted the resignation of top economic advisor Gary Cohn, a global stock market selloff, legal disputes and threats of retaliatory measures.

On Wednesday Federal Reserve Chairman Jerome Powell warned that the prospect of a trade war was a growing threat to the world’s largest economy. But the impulsive president is showing no sign of backing down.

China February exports surge most in three years

Global trade war fears build

China’s exports unexpectedly surged at the fastest pace in three years in February, suggesting both its economy and global growth remain resilient even as trade relations with the United States rapidly deteriorate.

Trade tensions have jumped to the top of the list of risks facing China this year, with planned U.S. tariffs on steel and aluminum signaling more measures may be on the way, Zhou Hao, senior emerging markets economist at Commerzbank, told the Reuters Global Markets Forum this week.

China’s February exports rose 44.5 percent from a year earlier, far more than analysts’ median forecast for a 13.6 percent increase and January’s 11.1 percent gain, official data showed on Thursday.

Imports grew 6.3 percent, missing forecasts for 9.7 percent growth and down from a sharper-than-expected 36.9 percent jump in January.…  March 08, 2018

Theresa May’s hopes of a post-Brexit trade deal with Trump in doubt

Trump launches European trade war

Theresa May’s plans for a quick post-Brexit trade deal with the US have been thrown into doubt after Trump announced plans to launch a trade war with Europe.

The president is reportedly planning to impose up to 25% tariffs on imported steel and 10% on aluminium in an attempt to save US industry.

“We are on the losing side of almost all trade deals,” Trump tweeted on Monday.

“Our friends and enemies have taken advantage of the U.S. for many years. Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!”…  March 06, 2018

Berkshire got a $29 billion gift from new tax code

Aversion to debt

Warren Buffett published his annual letter on Saturday, and it came with some of the usual trimmings: sage advice and reflections on the past year’s success.

With bonds, the “coupon rate” is the interest rate that an issuer uses to calculate regular interest payments to investors. The longer the term of a bond, the higher the coupon is likely to be; you’re paid more to wait longer to get your principal back. Higher risk, too, affects the coupon, with high-yield bonds from less solid companies offering more generous interest payments than you’ll get from higher-rated corporations or from U.S. Treasury bonds. Buffett told investors that Berkshire Hathaway (BRKB)made a $65.3 billion net gain in 2017 — but “only $36 billion came from Berkshire’s operations.”
The rest was a gift from the new U.S. tax code.…  Febuary 26, 2018

Stronger Economy Boosts Chance for Rate Hikes

 Republican tax cuts enacted in December boost growth

Federal Reserve officials at their January meeting believed that a brightening global economic picture and the effects of recently passed tax cuts had raised the prospect for solid growth and continued interest rate increases.

The minutes of the Fed’s Jan. 30-31 discussions showed that the officials were more optimistic about the economy than they had been in December. They noted a stronger U.S. and global economy as well as expectations that the Republican tax cuts enacted in December would boost growth.

The minutes said “a majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate.”…  Febuary 22, 2018

Despite Trump’s attacks, Obamacare sign-ups dip only slightly

Millions of Americans opted to sign up for coverage on the exchanges for 2018 anyway

Some 11.8 million people selected plans on the federal and state-based exchanges, down 3.7% from last year, according to the National Academy for State Health Policy. The data, released Wednesday, provides the first look at sign-ups for 2018 nationwide. Just over 8.7 million people signed up on the federal exchange, while a little over 3 million picked plans in the 11 states and District of Columbia, which run their own marketplaces. Obamacare advocates had feared that sign-ups would plummet after the Trump administration cut the open enrollment period in half, slashed advertising by 90% and reduced support for enrollment assistance. Also, insurers hiked premiums for many plans amid the uncertainty in Washington, D.C. and President Trump’s elimination of funding for Obamacare’s cost-sharing subsidies. However, in a strange twist, richer federal premium subsidies actually made coverage more affordable for many people.  Febuary 08, 2018

It’s official now: Brexit would damage UK growth

Leaked cabinet report

Brexit would leave the UK worse off under three possible scenarios: a comprehensive free trade deal, single market access and no deal at all, according to a leaked government analysis of the economic impact of leaving the EU.

The document was meant to be shown confidentially to cabinet ministers this week but was leaked in an embarrassing development for Theresa May and David Davis, the Brexit secretary.

It said national growth would be 8% lower under a no deal scenario, around 5% lower with a free trade agreement with the EU and about 2% lower with a soft Brexit option of single market membership over a 15-year period.…  Febuary 01, 2018

Trump angers US solar installers with panel tariff

Job creator, or job killer?

U.S. President Donald Trump signed into law a steep tariff on imported solar panels on Tuesday, a move billed as a way to protect American jobs but which the solar industry said would lead to thousands of layoffs and raise consumer prices.

The 30 percent tariff on solar panels is among the first unilateral trade restrictions imposed by the administration as part of a broader protectionist agenda to help U.S. manufacturers, but which has alarmed Asian trading partners that produce lower cost goods. The administration also introduced a tariff on imported washing machines. “You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” Trump said as he signed the order.

But the solar industry countered that the move will raise the cost of installing panels, quash billions of dollars of investment, and kill tens of thousands of jobs, raising questions about whether Trump’s move will backfire by triggering mass layoffs.…  January 24, 2018

Apple to pay $38 billion in cash taxes

 $30 billion U.S. investment plan

Apple Inc (AAPL.O) will open a new campus as part of a five-year, $30 billion U.S. investment plan and will make about $38 billion in one-time tax payments on its overseas cash, one of the largest corporate spending plans announced since the passage of a tax cut signed by U.S. President Donald Trump.

The company has been under increasing pressure to make U.S. investments since the 2016 presidential campaign, when Trump targeted the iPhone maker for making products in Asian factories.

While Apple has announced no plans to change that practice and experts say it would be economically impractical to make iPhones in the United States, the company has begun to emphasize its U.S. economic impact, from developers who sell software on its App Store to the tens of billions of dollars per year it spends with U.S. suppliers. … Thu., 18  January 2018

Wall Street worried by the lack of worry

Some investors are acting as if the market will never go down again

The stock market is sizzling. Companies are touting the bonuses they are giving thanks to lower taxes. And consumers are spending with gusto.
But some experts are worried that a sense of invincibility is starting to creep in among investors. Some are acting as if the market will never go down again.
“Investors are starting to feel a little too overconfident for my liking,” Jamie Cox, managing partner for Harris Financial Group, said in a recent report. “There is a clearly a confidence I haven’t seen in 10 years.” … Tue., 09  January 2018