US states often more attractive tax havens than Panama

Mossack Fonseca, the Panamanian company at the heart of the leaked documents scandal, has set up over 1,000 businesses inside the US since 2001, highlighting the emergence of the United States as an international tax haven. Mark Hays of Global Witness, a transparency nonprofit, tells RT America’s Simone Del Rosario which states are so attractive for hiding money.

Frustration, Miscalculation: Inside the U.S.-China Trade Impasse

The latest breakdown shows the two countries still haven’t found a way to negotiate effectively. ‘Sometimes you need to say “stop screwing me.”’

The U.S. and Chinese governments both sent signals ahead of their trade talks in Washington last week that a pact was so near they would discuss the logistics of a signing ceremony.

In a matter of days, the dynamic shifted so markedly that the Chinese deliberated whether to even show up after President Trump ordered a last-minute increase in tariffs on Chinese imports because the U.S. viewed China as reneging on previous commitments.

Inside the cloistered Zhongnanhai government compound in Beijing, President Xi Jinping and his close advisers discussed how to respond to the tariff increase, given the talks were just days away, according to Chinese officials with knowledge of the decision-making process.

After huddling Tuesday to analyze a press conference given by the U.S.’s two top negotiators, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, Chinese officials concluded that they should travel to at least avoid a rift that could be difficult to repair.

The recommendation went to China’s chief negotiator, Liu He, and ultimately to Mr. Xi. He decided to send the team even though Beijing was fully aware that the trip held little prospect of progress, given how quickly problems had arisen. “The goal was simply to keep the talks going,” said one of the Chinese officials with knowledge of the matter.

By the end of the week, that was as much as both sides could cite for their efforts: the avoidance of a serious rupture that would doom any prospect of a future deal and a commitment to stay near the negotiating table.

So far, the trade talks have provided little evidence that the two nations have found a formula for how to negotiate successfully since Messrs. Trump and Xi met in Buenos Aires Dec. 1, which paved the way to Washington last week.

China didn’t immediately impose new strictures on U.S. businesses, as it has done when things weren’t going well in the past. Mr. Liu is expected to brief Mr. Xi on the discussions he had in Washington before Beijing decides on the next course of action, according to the officials familiar with the process.

.. Bridging the trade rift may ultimately depend on the personal chemistry between President Trump and President Xi and their willingness to push matters forward after months of negotiations that have been full of positive intentions but thwarted by miscalculations, accusations of backtracking and unfulfilled expectations.

.. “They were playing games with us,” said one senior U.S. trade official of the talks in Washington three months ago. Mr. Kudlow told reporters at the time that Mr. Lighthizer “read them the riot act.

“The more heated moments have been in situations where we thought we had something and suddenly there was some backsliding,” said one person involved in the discussions on the U.S. side.

“We’ve expressed some pretty serious frustration at times,” this person said. “It’s been a necessary ingredient to success. You can be nice to someone, but sometimes you need to say ‘stop screwing me.’ ”

.. “We were in the process of planning for a signing summit with President Trump and President Xi upon the completion of this agreement,” Mr. Mnuchin later told reporters. One of the issues was where to hold the celebratory moment: Washington or Mr. Trump’s golf estates in Mar-a-Lago, in Florida, or Bedminster, N.J., say Trump aides.

 .. Chinese negotiators let their U.S. counterparts know that they had serious reservations with the text. The Chinese were no longer willing to commit to changing laws covering intellectual property, forced technology transfer, subsidies and other issues at the heart of the dispute. They also objected to publication of all the details of the text, preferring a summary.

To the Chinese, this was a matter of honor: The U.S. should trust Beijing to make the changes they said they would make, even if that meant changing regulations rather than laws. Besides, the U.S. was being unfair in refusing, upon the signing of a deal, to remove tariffs that had been assessed in the yearlong fight, the Chinese believed.

“There is a real desire on our end to keep the tariffs on,” one White House official said. “That is a sticking point.”

Another major area of conflict has been how to deal with what the U.S. sees as Chinese recalcitrance on clamping down on the theft of U.S. intellectual property, said people briefed on the talks. The U.S. initially had sought to appeal to Mr. Xi’s nationalistic tendencies, arguing that if China was as great as Mr. Xi portrayed it, why would it need to steal U.S. technology?

The Trump administration believed it had an agreement that included a satisfactory level of enforcement should the Chinese record not improve. “Not tiger teeth, but real enough to make a deal,” one of the people tracking the talks said.

Then Chinese officials said enforcement procedures would need to go through Chinese law-enforcement channels and couldn’t be guaranteed at the negotiating table, this person said, which U.S. officials didn’t view as a credible option.

In Beijing, as the talks approached, Chinese officials believed they had some leverage, The Wall Street Journal has previously reported, because they saw Mr. Trump’s public criticism of the Federal Reserve and his desire for lower interest rates as a sign that he was worried about the future course of the U.S. economy and therefore may be more eager to do a deal. It was a miscalculation on their part; Mr. Trump has long called for low borrowing costs and also has repeatedly cited the enduring strength of the U.S. economy.

President Xi also was encouraged by a pickup in Chinese growth—the result of Beijing’s aggressive stimulus policies—and by a perception that the American economy is about to enter a down cycle.Time is on our side,” said a senior official in Beijing. On the home front, Mr. Xi is wary of a potential political backlash as a result of any perception that he is conceding too much to Washington.

Chinese officials were therefore caught off guard, three days before the Washington talks were scheduled, when Mr. Trump said on Twitter he would increase tariffs, to 25% from 10%, on the $200 billion in Chinese goods because he saw the Chinese backtracking—the original threat he had set for a March 1 deadline.

Shortly after Mr. Trump’s announcement of the tariff increase, Beijing’s trade negotiators, who had booked Air China tickets to Washington, received an urgent order: Stay put until further notice. “Looks like we’re not going,” one of them said early Monday morning.

Up until that moment, China’s leadership had expected the trip to bring months of negotiations to a close, according to Chinese officials close to the negotiation process, given that Chinese diplomats were already in discussion with their American counterparts about a possible summit between Messrs. Xi and Trump to finalize a trade agreement.

Now, the pressing question for Beijing became: Should it pull out of the planned talks to adhere to its longstanding public position that China doesn’t negotiate under threat? Or should China bite the bullet and still send the delegation to avoid a complete collapse of negotiations?

The Chinese side wanted more information from Washington before making the decision. But senior officials knew news of Mr. Trump’s tweets would inevitably cause market anxiety. The first order of business Monday morning: China’s central bank sped up a plan to release more funds for banks, a stimulus measure aimed at calming jittery investors and businesses.

State-backed funds were also instructed to buy what was necessary to prevent a free fall of shares. China’s Foreign Ministry spokesman released a statement at Monday’s regular press briefing that said only that the Chinese delegation was “preparing to travel to the U.S.” The spokesman didn’t say when the team would depart or give additional details.

On Tuesday morning, a group of officials at the vice minister level, including Liao Min, a trusted aide to Mr. Liu and a vice Finance Minister, and Wang Shouwen, a vice Commerce Minister, reached the conclusion the talks should proceed, a position endorsed by Mr. Xi though expectations of a positive result had fallen sharply.

The U.S. side made some calls that turned off the Chinese, too. By insisting that it wouldn’t remove any tariffs upon closing a deal, the U.S. gave Beijing little incentive to accept tough conditions. The U.S. position remained firm: no tariff removal until Beijing showed it would carry through on the commitments it made under the deal. On top of that, the U.S. wanted China to pledge not to retaliate if the U.S. were to reimpose tariffs if it found China in violation of some provisions.

Mr. Trump on Thursday let it be known he didn’t want the U.S. to appear soft on China, according to one person briefed on the matter.

The two days of negotiations went amicably nonetheless, according to people tracking the talks. Messrs Lighthizer and Mnuchin, who both were in the discussions, took Mr. Liu to a working dinner at the Metropolitan Club, a ritzy private club near the U.S. Trade Representative’s headquarters that is a Lighthizer favorite. Mr. Liu continued the talks on Friday despite the U.S. implementing the higher tariffs very early Friday morning.

Later that morning, Mr. Lighthizer greeted the Chinese envoy at the door of the USTR office—a gesture he rarely makes, but one which he could be sure would be captured by photographers and camera crews waiting outside.

By then, though, the U.S. team went into the talks not expecting to do a deal, figuring they would have a “non-meeting,” according to one person briefed on the discussions. U.S. officials at least wanted to make sure they didn’t leave with a complete break. The goal of the meeting was to be able to say the U.S. negotiators were still trying, this person said.

In an interview with Chinese media Friday, Mr. Liu disputed U.S. accounts that China reneged on commitments it had already made as part of the trade talks. “We are very clear that we cannot make concessions on matters of principle,” Mr. Liu said. “We hope our U.S. colleagues understand this.”

E.P.A. Aide Questioned Deleting Sensitive Meeting Details. Then She Was Fired.

Last summer one of his senior schedulers, Madeline G. Morris, was fired by Mr. Pruitt’s former deputy chief of staff, Kevin Chmielewski, who said he let her go because she was questioning the practice of retroactively deleting meetings from the calendar. Mr. Chmielewski has emerged as a harsh critic of Mr. Pruitt after a bitter falling out that led to his departure from the agency as well.

.. Madeline G. Morris, was fired by Mr. Pruitt’s former deputy chief of staff, Kevin Chmielewski, who said he let her go because she was questioning the practice of retroactively deleting meetings from the calendar.

..  One case involved the deletion of several of Mr. Pruitt’s meetings during a spring 2017 trip to Rome, including one with a controversial cardinal then under investigation for sexual assault.

.. The E.P.A. acknowledged in a series of legal memos last year that it did in fact direct an agency scheduler — although it did not name the person — to revise Mr. Pruitt’s daily calendar retroactively. The agency said it was doing so to remove errors that had been left in the electronic record after various events were canceled or happened differently than expected.

.. Ryan Jackson, Mr. Pruitt’s chief of staff, dismissed Mr. Chmielewski’s criticism as a fabrication by a disgruntled former employee. “Whatever he’s telling you about altering calendars is not correct,”

.. Ms. Morris was called last July by two agency lawyers, who told her that the changes she was making to Mr. Pruitt’s schedule might be illegal, according to a person familiar with the conversation. The following month, Ms. Morris noticed that a number of changes had been made to the record of a trip Mr. Pruitt had taken to Italy. Ms. Morris questioned the legality of the changes to Mr. Chmielewski and Mr. Jackson, and a few days later was fired, he said.

.. In another potential violation of federal law, the E.P.A. continued to pay Ms. Morris for six weeks after she was fired from the agency.

.. In July 2017, according to Mr. Chmielewski, Ms. Morris was instructed by him and Mr. Jackson to retroactively delete some meetings Mr. Pruitt held with lobbyists and replace them with staff meetings in the calendar, which was maintained in Microsoft Outlook. He and other people familiar with the calendar also said Ms. Morris was asked not to enter some of Mr. Pruitt’s meetings on the official calendar.

.. Mr. Chmielewski cited an August 2017 meeting with billionaire Denver-based businessman Philip Anschutz, a prominent donor to Republican Senate candidates and owner of an energy company regulated by the agency. Mr. Pruitt’s calendar for that day, which was publicly released, does not include the meeting.

.. including a special tour of the necropolis below St. Peter’s Basilica — as well as one meeting with Cardinal George Pell, a prominent Vatican leader who was then being investigated on allegations of sexual abuse.

Why the Trump administration has enraged flyers across America

The president wants to withdraw a sensible regulation about displaying baggage fees

FOR a president elected on a populist campaign message, Donald Trump is not doing much to make himself popular with flyers in America. On December 7th, the Trump administration announced that it was withdrawing a regulation proposed under Barack Obama to require airlines and other plane-ticket sellers to disclose baggage fees when customers begin the process of buying tickets. Airlines already have to display checked baggage fees on their websites. But the Obama administration’s proposal would have forced them to do so up front in the shopping process, so that travellers could compare the fees for various airlines and routes when choosing their itineraries.

The White House said in its announcement that the rules being scrapped had “limited public benefit.” In a statement, Elaine Chao, Mr Trump’s Transportation Secretary, said:

The department is committed to protecting consumers from hidden fees and to ensuring transparency. However, we do not believe that departmental action is necessary to meet this objective at this time.

On Afghanistan, There’s No Way Out

When it comes to Afghanistan, we’ve tried everything. The lesson is: Nothing works.

.. We’ve tried “light footprint.”

.. We’ve tried big footprint.

.. We’ve tried nation building.

.. the United States had spent $104 billion on Afghan relief and reconstruction funds, most of it for security but also nearly $30 billion for “governance and development” and $7.5 billion on counternarcotics.

.. Result: As of 2015, more than three in five Afghans remained illiterate. Afghan security forces lost 4,000 members a month

.. The country ranks 169th out of 176 countries on Transparency International’s Corruption Perceptions Index, ahead of only Somalia, South Sudan, North Korea, Syria, Yemen, Sudan and Libya. Opium

.. We’ve tried killing terrorists. Lots and lots of them. As many as 42,000 Taliban and other insurgents have been killed and another 19,000 wounded

.. Result: The Taliban’s numbers in 2005 were estimated at anywhere between 2,000 and 10,000 fighters. Within a decade, those numbers had grown to an estimated 60,000 fighters.

.. We’ve tried carrots and sticks with Pakistan. In 2011, Washington gave $3.5 billion in aid to Islamabad.

.. American leverage with Pakistan has declined as Chinese investment in the country has surged, reaching $62 billion this year.

.. The group’s insistence that all foreign troops withdraw before it enters talks gives away its game, which isn’t to share power with the elected government, but to seize power from it.
.. What about two supposedly “untried” options: another surge, exceeding what Obama did in troop numbers but not limited by deadlines or restrictive rules of engagement; or, alternatively, a complete withdrawal of our troops?

But that’s been tried, too. Soviet forces in Afghanistan in the 1980s practiced a “bomb-the-stuff-out-of-them” approach to warfare, likely including the use of chemical weapons.

.. Between 1990 and 2000, tens of thousands of Afghans — as many as a million people, according to one estimate — died in three waves of civil war.

.. President Trump may think he’s trying something new with his Afghan policy. He isn’t. Obama killed a lot of terrorists. George W. Bush pursued what amounted to a “conditions-based” approach, without target dates for withdrawal. Both were often stern with Pakistan. Both conducted intensive policy reviews.

.. Even if we could kill every insurgent tomorrow, they would return, as long as they can draw on the religious fanaticism of the madrasas, the ethnic ambitions of the Pashtun, and the profits of the heroin trade.

Rare look at Trump bookkeeping: ‘Extraordinary flim-flammery’

Trump was basically running two sets of books to distort the amount that he owed the city.
  • The auditors were physically blocked from accessing the books.
  • A staggering amount of information was lost: 7 months out of 12 months of the data
  • Trump offered the auditor’s brother a job.
  • A city clerk mis-labeled the report
  • Years later they reached an undisclosed settlement.