Posts belonging to Category taxation



Germany and France draw up no-deal Brexit plans

Angela Merkel tells German MPs they must ‘prepare for every scenario’ of UK’s exit

Germany and France are starting to step up their preparations for a no-deal Brexit even though both publicly insist an agreement with the UK over the terms of its departure from the EU can still be achieved. While there was there was still a chance for a deal, it was “only fitting as a responsible and forward-thinking government leadership that we prepare for every scenario”, the German chancellor told MPs in Berlin. “That includes the possibility of Britain leaving the EU without an agreement.”

France has published a draft bill that would allow the government to introduce new legal measures to avoid or mitigate the consequences of a hard Brexit by emergency decree, as opposed to parliamentary vote, within 12 months of the law being passed. Angela Merkel revealed for the first time on Wednesday that Germany was drawing up contingency plans, saying the government had started making “suitable preparations” for the possibility of Britain leaving with no accord.

http://www.theguardian.com

3.7 percent unemployment rate in US

A 49-year low

For a solid decade after the collapse of Lehman Brothers touched off a global financial crisis, there was good reason to think the U.S. economy remained broken, from skepticism about the health of the labor market to tepid economic growth and the moribund rate of interest paid on U.S. Treasury bonds.

In a heartbeat, that seemed to change this week, adding facts on the ground to Federal Reserve Chairman Jerome Powell’s glowing portrait of a historically rosy and extended period of super-low unemployment, modest inflation and steady growth.

It came through Amazon.com Inc’s (AMZN.O) move to a $15 minimum wage, possibly setting the bar for companies nationwide. It came through a jump in long-term bond yields that signaled faith the gears of growth will remain engaged for a record-long recovery.

http://www.reuters.com

Boris Johnson humiliated Theresa May

Tory members cheered every word

Imagine being Theresa May, at half past 12 this afternoon. Walking, with your party chairman, through the venue of your party conference – when you happen upon a swarm of photographers. But those photographers aren’t here to see you. And nor, not far from the swarm, are the hundreds upon hundreds of your party members, who are currently standing in the most enormous, snaking queue.

The queue isn’t for the main hall, where your ministers are giving speeches to promote your policies. The main hall is practically empty. Your members aren’t interested. They don’t want to see your ministers, or hear about your policies.

http://www.telegraph.co.uk

China will never use its currency as a weapon in the trade war

The trade war between China and the United States is intensifying

Premier Li Keqiang told an audience of global executives and policymakers that China would not weaken the yuan to boost trade with the rest of the world. “China will never go down the path of stimulating exports by devaluing its currency,” Chinese Premier Li Keqiang said Wednesday.

His comments came a day after the United States and China announced that they would impose their biggestrounds of tariffs yet on each other’s exports, starting next week. That brings the value of goods hit by tariffs in the escalating conflict to more than $360 billion. President Donald Trump has threatened to hit another $267 billion of Chinese goods with tariffs.

http://www.cnn.com

US and Canada reach deal on NAFTA

The 3 country North American Free Trade Agreement is preserved

Canada has agreed to sign on to a trade deal between the United States and Mexico, preserving the three-country North American Free Trade Agreement after more than a year of tortuous negotiations.
The US and Canadian governments agreed to a deal that would allow US farmers greater access to Canada’s dairy market and address concerns about potential auto tariffs just hours before a self-imposed midnight deadline, a US official and a Canadian official told CNN late Sunday.
The new deal has a new name: the United States-Mexico-Canada Agreement.

http://www.cnn.com

Elon Musk, Sued For Fraud By SEC, Calls Lawsuit ‘Unjustified’

Tesla stock plunged

Tesla chief executive Elon Musk has responded to news that the U.S. Securities and Exchange Commission (SEC) is suing him for fraud. Tesla stock plunged on Thursday after the SEC press conference, in which the Commission noted Musk had made “false and misleading” statements about taking Tesla private. In August, Musk tweeted about taking his electric car manufacturer private. The SEC alleges that Musk’s statements violate the 1934 Securities Exchange Act, and that Musk “knew or was reckless in not knowing” that his tweets were not accurate and true. Musk skipped his tendency to tweet in response to news of the lawsuit—arguably, his erratic, uncensored behavior on Twitter is the reason both Musk and Tesla are in hot water—and Tesla responded with a statement on behalf of the CEO on Thursday.

http://www.fortune.com

China says U.S. trying to force it to submit on trade

The United States and China imposed fresh tariffs on each other’s goods on Monday as the world’s biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth. Soon after the new duties went into effect, China accused the United States of engaging in “trade bullyism” and said it was intimidating other countries to submit to its will, the official Xinhua news agency said, reiterating China’s willingness to fight if necessary.

But Beijing also said it was willing to restart trade negotiations with the United States if the talks are “based on mutual respect and equality,” Xinhua said, citing a white paper on the dispute published by China’s State Council. U.S. tariffs on $200 billion worth of Chinese goods and retaliatory tariffs by Beijing on $60 billion worth of U.S. products took effect at midday Asian time, though the initial level of the duties was not as high as earlier feared.

http://www.reuters.com

Stiglitz: US has a major monopoly problem

Economy dominated by large corporations has failed the many and enriched the few

The Nobel Prize winner argues that an economy dominated by large corporations has failed the many and enriched the few. There is much to be concerned about in America today: a growing political and economic divide, slowing growth, decreasing life expectancy, an epidemic of diseases of despair. The unhappiness that is apparent has taken an ugly turn, with an increase in protectionism and nativism. Trump’s diagnosis, which blames outsiders, is wrong, as are the prescriptions that follow. But we have to ask: Is there an underlying problem that can and must be addressed?

There is a widespread sense of powerlessness, both in our economic and political life. We seem no longer to control our own destinies. If we don’t like our Internet company or our cable TV, we either have no place to turn, or the alternative is no better. Monopoly corporations are the primary reason that drug prices in the United States are higher than anywhere else in the world. Whether we like it or not, a company like Equifax can gather data about us, and then blithely take insufficient cybersecurity measures, exposing half the country to the risk of identity fraud, and then charge us for but a partial restoration of the security that we had before a major breach.

New NAFTA agreement possible

Canada and U.S. Express Optimism

The United States and Canada are aiming to reach a deal by the end of the week that keeps the three-country North American Free Trade Agreement intact, as President Trump and Prime Minister Justin Trudeau of Canada expressed optimism that the two countries could resolve their differences.

“I think Canada very much wants to make a deal,” Mr. Trump said from the Oval Office on Wednesday, sounding far more optimistic than just days before, when he announced a deal with Mexico and threatened to leave Canada behind.

http://www.nytimes.com

Separate U.S.-Mexico trade agreement

Canada may join later

The Trump administration said Monday it had reached a new, 16-year trade deal with Mexico, setting in motion a rapid chain of events that could redraw the world’s largest trade agreement.

The ultimate scope of the deal could hinge on whether Canadian prime minister Justin Trudeau decides to join the agreement after months of feuding with President Trump.

White House officials said the agreement, centered largely on manufacturing, would help American workers by making it harder for countries like China to ship cheap products through Mexico and then into the United States. Harmonizing labor and environmental rules would also protect U.S. jobs and salaries, the officials said, by making it less attractive for U.S. companies to move operations to Mexico.

http://www.washingtonpost.com

The UK would vote to stay in the European Union by 53% to 47% if asked again.

45% of people support a People’s Vote on the final deal, while 34% do not

UK voters would back remaining in the European Union by 53% to 47% if a referendum was held now, according to a comprehensive new poll published today.

A YouGov survey for the ‘pro-remain People’s Vote campaign’ found that 45% want a say on the outcome of the Brexit negotiations with 34% opposed.

Exactly half of respondents said the final decision over whether to leave the EU without a deal should be taken by the public in a second referendum, while a quarter said the British parliament should decide.

Opponents of the UK’s exit from the bloc said the YouGov study of more than 10,000 adults showed public opinion was shifting.

https://www.rte.ie/

Berkshire Hathaway profit surges

Economy gives Buffett a boost

Berkshire Hathaway Inc, the conglomerate run by billionaire Warren Buffett, on Saturday said quarterly operating profit rose 67 percent, as insurance underwriting rebounded and several business units benefited from a growing economy.

Results easily topped analyst forecasts. Underwriting profit at the Geico auto insurance unit more than quintupled, the BNSF railroad benefited from demand to ship consumer products, grain, petroleum and steel, and the Berkshire Hathaway Automotive car dealership financed more vehicle purchases.

“Good results across the board,” said Doug Kass, who runs the hedge fund Seabreeze Partners Management Inc in Palm Beach, Florida. He has previously sold Berkshire shares short, betting on a decline, but is not doing so now.

http://www.reuters.com

China Dethroned by Japan as World’s Second-Biggest Stock Market

Losing the ranking to Japan is the damage caused by the trade war

China just lost its ranking as the world’s number two stock market. After a Thursday slump, Chinese equities were worth $6.09 trillion, according to data compiled by Bloomberg. That compares with $6.17 trillion in Japan. The U.S. has the world’s largest stock market at just over $31 trillion.

China’s stock market overtook Japan’s in late 2014, then soared to an all-time high of more than $10 trillion in June 2015. Chinese equities and the nation’s currency have taken a beating this year amid a trade spat with the U.S., a government-led campaign to cut debt and a slowing economy.

http://www.bloomberg.com

Trump, EU agree to work on lowering tariffs

Averting a potential trade war

President Donald Trump on Wednesday said the United States and the European Union had launched a “new phase” in their relationship, saying that the two major economies would start negotiations immediately on a number of areas that include working toward “zero tariffs” on industrial goods, and further cooperation on energy issues.
“We agreed today, first of all, to work together towards zero tariffs, zero non-tariff barriers and zero subsidies for the non-auto industrial goods,” Trump said at a joint press conference in the White House Rose Garden with European Commission President Jean-Claude Juncker.

Trump did not address whether the two leaders had reached an agreement on car tariffs, though Juncker said that no new tariffs would be assessed as negotiations proceed. Economists have said that, among the major issues under discussion, tariffs on cars could be the biggest threat to the U.S. economy.

http://www.cnbc.com

Venezuela’s inflation rate may hit 1,000,000 percent

Hyperinflation in Venezuela

 When the International Monetary Fund predicted this year that hyperinflation in Venezuela could top 13,000 percent, it seemed as if the South American country’s economic outlook could not get any worse.

It just did. With the situation in the country deteriorating faster than expected, the IMF has unveiled a far more severe prognosis, saying that Venezuela’s hyperinflation is poised to reach an annualized rate of 1 million percent by year’s end. That inflation rate is set to catapult socialist Venezuela into a rogue’s gallery of nations that have suffered the worst inflation rates in history.

Venezuela’s “is one of the most severe hyperinflation situations that we’ve known about since the beginning of the 20th century,” said Robert Rennhack, deputy director of the IMF’s Western Hemisphere Department.

http://www.washingtonpost.com

All-out trade war would lower earnings for US companies by 15%

60% probability that the U.S. imposes tariffs on $200 billion of imports from China

The acceleration of U.S. trade actions poses a risk to S&P 500 earnings through falling export revenues and rising input costs for American companies, according to Goldman Sachs. A 10 percent tariff on all imports from China would lower Goldman’s 2019 S&P 500 earnings per share estimate by 3 percent, Goldman Sachs chief U.S. equity strategist David Kostin wrote. If “tensions spread” and a 10 percent tariff were imposed on all U.S. imports, Goldman said, it would lower its 2019 EPS estimate by 15 percent to $145 a share.

“Tariffs benefit some domestic industries, but pose a risk to S&P 500 earnings through reduced revenues (lower exports) and weaker margins (higher input costs),” Kostin wrote. “Our economists now assign a 60 percent probability that the U.S. imposes tariffs on the recently targeted $200 billion of imports from China.” President Donald Trump and his administration have defended an initiative of “fair and reciprocal” trade in recent months, demanding that some of the nation’s economic allies offer the U.S. a better deal in an effort to curb Washington’s trade deficit and promote American exports.

http://www.cnbc.com