Business Groups Warn of Peril as Trump’s Trade War Spirals

The latest whipsawing escalations in the United States’ trade war with China prompted a wide array of business organizations to warn over the weekend that American consumers and workers would soon be caught in the crossfire.

It is now looking increasingly likely that few large American companies will be able to sidestep the toll exacted by the new tit-for-tat tariffs that China and President Trump rolled out on Friday.

Many business leaders have kept a low profile as the trade war intensified, for fear of attracting President Trump’s ire, and in the hope that the threats of tariffs could be negotiating tactics that will lead to some sort of trade agreement.

But with several tariffs already in place, and President Trump staking out an even more aggressive stance on Friday, many industries are reckoning with just how serious the situation has become.

Joshua Bolten, the president and chief executive of the Business Roundtable, an organization representing the leaders of the largest American companies, said on Sunday that many C.E.O.s were already “poised right on top of the brake.”

“The risk is that everybody’s going to slam on the brake, and that would be a disaster,” Mr. Bolten said on “Face the Nation” on CBS.

President Trump’s latest moves, Mr. Bolten said, could “disrupt trade and commerce in a way that would cause huge damage — not just to the Chinese economy, but to the global economy and the U.S. economy.”

The American manufacturing sector shrank in August for the first time since 2009.
CreditRoss Mantle for The New York Times

The American economy has so far been relatively resilient as the two sides battle. But several recent signs suggest that the tit-for-tat is beginning to broadly hit American businesses.

The American manufacturing sector, for instance, shrank in August for the first time since 2009, according to data released last week from the research group IHS Markit.

“America’s manufacturing workers will bear the brunt of these retaliatory tariffs, which will make it even harder to sell the products they make to customers in China,” the president and chief executive of the National Association of Manufacturers, Jay Timmons, wrote on Twitter on Friday.

While corporate earnings have held strong, several companies said last week that they were trimming their profit expectations as a result of the trade war.

On Friday, after China announced new tariffs and Mr. Trump ordered American companies out of China, the Standard & Poor’s 500 index slid 2.6 percent and the tech-heavy Nasdaq composite fell 3 percent. After the markets closed, the president announced more tariff increases.

China said on Friday morning that it would impose new tariffs on $75 billion of American imports. A few hours later, President Trump announced on Twitter that he would be raising tariffs further on $550 billion of goods coming from China.

The biggest shock was from Mr. Trump’s statement that he was ordering American companies to “immediately start looking for an alternative to China.”

The president said he had the power to do so as a result of a 1977 law that has traditionally been used to deal with security and military threats.

President Trump on Sunday at the G7 summit in Biarritz, France.
CreditErin Schaff/The New York Times

Over the weekend, some of Mr. Trump’s advisers tried to somewhat soften the blow of the president’s words.

Treasury Secretary Steven Mnuchin, speaking on “Fox News Sunday,” said that Mr. Trump had the authority to make such a demand if he declared a national emergency but that he had not yet done so.

“I think what he was saying is he’s ordering companies to start looking because he wants to make sure — to the extent we are in an extended trade war — that companies don’t have these issues and move out of China,” Mr. Mnuchin said. “And we want them to be in places where they are trading partners that respect us and trade with us fairly.”

There is still significant uncertainty on how many of the steps that China and Mr. Trump have announced will come into effect. The president has stepped back or delayed previous tariffs. And on Sunday the president said he was having “second thoughts” about the threats he made last week. But shortly thereafter, the White House press secretary, Stephanie Grisham, said that the president’s regret was that he had not raised tariffs even further.

American businesses have already begun taking steps to respond. The toymaker Hasbro said last month that it was planning to shift a significant portion of its manufacturing from China to other Asian countries by 2020.

The American toy industry is particularly reliant on Chinese factories, which account for 88 percent of its production, according to the National Retail Federation. But the figures are also large for other major portions of the retail industry.

David French, the senior vice president for government relations at the retail federation, said this weekend that companies were facing a difficult road because it could take years to make the kind of moves that the president has demanded.

It’s impossible for businesses to plan for the future in this type of environment,” Mr. French said in a statement. “The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”

Hasbro toys at a Target store in Manhattan. The toy company said last month that it was planning to shift a significant portion of its manufacturing from China to other Asian countries by 2020.
CreditJeenah Moon for The New York Times

President Trump has said that he expects China to pay the costs of the tariffs he has imposed. But the direct costs of the tariffs are generally paid by the companies importing goods from China, who can then pass them along to consumers.

The Consumer Technology Association, which represents the largest electronics companies, has said that the tariffs are already costing the American tech sector $1.3 billion a month, and could raise the price of cellphones by $70 and the price of

The latest whipsawing escalations in the United States’ trade war with China prompted a wide array of business organizations to warn over the weekend that American consumers and workers would soon be caught in the crossfire.

It is now looking increasingly likely that few large American companies will be able to sidestep the toll exacted by the new tit-for-tat tariffs that China and President Trump rolled out on Friday.

Many business leaders have kept a low profile as the trade war intensified, for fear of attracting President Trump’s ire, and in the hope that the threats of tariffs could be negotiating tactics that will lead to some sort of trade agreement.

But with several tariffs already in place, and President Trump staking out an even more aggressive stance on Friday, many industries are reckoning with just how serious the situation has become.

Joshua Bolten, the president and chief executive of the Business Roundtable, an organization representing the leaders of the largest American companies, said on Sunday that many C.E.O.s were already “poised right on top of the brake.”

“The risk is that everybody’s going to slam on the brake, and that would be a disaster,” Mr. Bolten said on “Face the Nation” on CBS.

President Trump’s latest moves, Mr. Bolten said, could “disrupt trade and commerce in a way that would cause huge damage — not just to the Chinese economy, but to the global economy and the U.S. economy.”

The American manufacturing sector shrank in August for the first time since 2009.
CreditRoss Mantle for The New York Times

The American economy has so far been relatively resilient as the two sides battle. But several recent signs suggest that the tit-for-tat is beginning to broadly hit American businesses.

The American manufacturing sector, for instance, shrank in August for the first time since 2009, according to data released last week from the research group IHS Markit.

“America’s manufacturing workers will bear the brunt of these retaliatory tariffs, which will make it even harder to sell the products they make to customers in China,” the president and chief executive of the National Association of Manufacturers, Jay Timmons, wrote on Twitter on Friday.

While corporate earnings have held strong, several companies said last week that they were trimming their profit expectations as a result of the trade war.

On Friday, after China announced new tariffs and Mr. Trump ordered American companies out of China, the Standard & Poor’s 500 index slid 2.6 percent and the tech-heavy Nasdaq composite fell 3 percent. After the markets closed, the president announced more tariff increases.

China said on Friday morning that it would impose new tariffs on $75 billion of American imports. A few hours later, President Trump announced on Twitter that he would be raising tariffs further on $550 billion of goods coming from China.

The biggest shock was from Mr. Trump’s statement that he was ordering American companies to “immediately start looking for an alternative to China.”

The president said he had the power to do so as a result of a 1977 law that has traditionally been used to deal with security and military threats.

President Trump on Sunday at the G7 summit in Biarritz, France.
CreditErin Schaff/The New York Times

Over the weekend, some of Mr. Trump’s advisers tried to somewhat soften the blow of the president’s words.

Treasury Secretary Steven Mnuchin, speaking on “Fox News Sunday,” said that Mr. Trump had the authority to make such a demand if he declared a national emergency but that he had not yet done so.

“I think what he was saying is he’s ordering companies to start looking because he wants to make sure — to the extent we are in an extended trade war — that companies don’t have these issues and move out of China,” Mr. Mnuchin said. “And we want them to be in places where they are trading partners that respect us and trade with us fairly.”

There is still significant uncertainty on how many of the steps that China and Mr. Trump have announced will come into effect. The president has stepped back or delayed previous tariffs. And on Sunday the president said he was having “second thoughts” about the threats he made last week. But shortly thereafter, the White House press secretary, Stephanie Grisham, said that the president’s regret was that he had not raised tariffs even further.

American businesses have already begun taking steps to respond. The toymaker Hasbro said last month that it was planning to shift a significant portion of its manufacturing from China to other Asian countries by 2020.

The American toy industry is particularly reliant on Chinese factories, which account for 88 percent of its production, according to the National Retail Federation. But the figures are also large for other major portions of the retail industry.

David French, the senior vice president for government relations at the retail federation, said this weekend that companies were facing a difficult road because it could take years to make the kind of moves that the president has demanded.

“It’s impossible for businesses to plan for the future in this type of environment,” Mr. French said in a statement. “The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”

Hasbro toys at a Target store in Manhattan. The toy company said last month that it was planning to shift a significant portion of its manufacturing from China to other Asian countries by 2020.
CreditJeenah Moon for The New York Times

President Trump has said that he expects China to pay the costs of the tariffs he has imposed. But the direct costs of the tariffs are generally paid by the companies importing goods from China, who can then pass them along to consumers.

The Consumer Technology Association, which represents the largest electronics companies, has said that the tariffs are already costing the American tech sector $1.3 billion a month, and could raise the price of cellphones by $70 and the price of laptops by $120, on average.

JPMorgan Chase analysts recently predicted that the overall costs to American families of the tariffs were likely to be between $1,000 and $1,500 a year.

“Tariffs are taxes on Americans, putting us on the wrong economic path and compromising our global leadership,” the president and chief executive of the technology association, Gary Shapiro, said on Friday. “How much longer will our families, companies and economy be forced to bear the financial burden of this misguided trade policy?”

China appears to be aiming its tariffs at parts of America where support for President Trump is particularly strong, like farm country in the Midwest. China’s actions on Friday, for instance, add 5 percentage points to the 25 percent tariff already paid on American soybeans.

The president of the American Farm Bureau, Zippy Duvall, said after the latest announcements that “continued retaliation only adds to the difficulties farm and ranch families are facing and takes the situation in the exact wrong direction.”

China also added new tariffs to cars made in America. Tesla, as well as the Germany carmakers Daimler and BMW, are the most vulnerable to the additional levies. Six of the top 10 vehicle models exported from the United States to China, the world’s biggest car market, are from the two German brands, according to the forecaster LMC Automotive.

In private, auto executives say that, for now, the uncertainty is a greater concern than the potential material impact of the tariffs. One auto executive who spoke on the condition of anonymity said the industry was more worried that it cannot predict what might happen next or how bad it might get.

JPMorgan Chase analysts recently predicted that the overall costs to American families of the tariffs were likely to be between $1,000 and $1,500 a year.

“Tariffs are taxes on Americans, putting us on the wrong economic path and compromising our global leadership,” the president and chief executive of the technology association, Gary Shapiro, said on Friday. “How much longer will our families, companies and economy be forced to bear the financial burden of this misguided trade policy?”

Could an Amy Klobuchar Solve Democrats’ Dilemma?

They seek a presidential candidate who appeals to both their liberal coastal base and to Midwestern working- and middle-class voters

When asked recently who Republicans should fear most in the 2020 presidential campaign, two prominent GOP figures, both women speaking independently of each other, gave the same response: Sen. Amy Klobuchar of Minnesota.

A third Republican, a male, asked which kind of candidate Democrats should want, replied: “They need a boring white guy from the Midwest.”

So, there you have it: The dream ticket of Amy Klobuchar and Sen. Sherrod Brown of Ohio. Case closed, cancel the primaries, on to the general election.

So if all that creates an opportunity for Democrats in 2020, here’s their dilemma: Can they pick a candidate who can blend the party’s conflicting impulses?

This may seem a long ways off, but the reality is that most Democrats thinking of running for president—and the number probably runs into the 20s—plan to make their decision over the next several weeks, so they can move out starting in early 2019.

As this drama begins, the key question is whether the party will find somebody who appeals both to its coastal base dominated by progressives, upscale college graduates, millennials and minorities, or choose someone who is more appealing to traditional working- and middle-class voters in industrial Midwest states such as Pennsylvania, Wisconsin and Michigan, all of which helped Democrats reclaim the House in this year’s mid-term elections.

.. The winning lottery ticket, of course, goes to somebody who can appeal to both. And that’s why Ms. Klobuchar’s name—and profile—attract attention. She’s a woman, obviously, which is important at a time when newly energized women are a growing force within the party. She pleased her party base in the hearings on the Supreme Court nomination of Brett Kavanaugh when she challenged him about his use of alcohol, but did so in a sufficiently calm and understated manner that she won an apology from Mr. Kavanaugh after he initially responded angrily.

.. She also won re-election this year with more than 60% of the vote in the one state Trump forces lost in 2016 but think they have a legitimate chance to flip their way in 2020.

.. The question is whether she or anyone can put together a policy agenda that pleases both party liberals, who are pushing for

  1. a Medicare-for-all health system,
  2. the demise of the Immigration and Customs Enforcement system and an
  3. aggressive new climate-change action plan, and more moderate Midwestern voters, who may be scared off by all of those things.

Ms. Klobuchar’s policy priorities may suggest a path. To address health care, the top priority of Democratic voters, she advocates a step-by-step approach, one that seeks to

  • drive down prescription drug costs by opening the door to less-expensive drugs from Canada,
  • protect and improve the Affordable Care Act, and
  • expand health coverage by considering such steps as allowing more Americans to buy into the Medicare system.

.. She’s talked of a push to improve American infrastructure that would include expanding rural Americans’ access to broadband service, paying for it by rolling back some—though not all—of the tax cuts Republicans passed last year. She pushes for more vigorous antitrust enforcement, more protections for privacy and steps to curb undisclosed money in politics

.. For his part, Sen. Brown, a liberal who this year won Ohio as it otherwise drifts Republican, offers a working-class-friendly agenda that combines progressive impulses for government activism to drive up wages with Trumpian skepticism about trade deals and corporate outsourcing.

 

 

 

 

 

What Cain and Abel Tell Us About the War Between Priebus and Scaramucci

Scaramucci’s off-the-cuff biblical reference is full of interpretive possibilities.

Given the widely reported tensions between the two emerging West Wing rivals, most commentators quickly pointed out that Scaramucci’s Old Testament reference looks like a pretty direct threat to his “brother”: After all, in Genesis, Cain kills Abel.

.. But it’s not really a great analogy for him, either. This isn’t a story about crime and punishment, where Abel gets what’s coming to him. It’s a story about entirely unjustified premeditated murder.

.. It’s hard to imagine that Scaramucci wouldn’t similarly be viewed by some in the White House and the Republican Party as a hatchetman if Priebus gets the ax. In getting rid of one enemy, you often make many others.

.. One place where the parallel with the biblical story is pretty apt, though, is in the rationale for Cain’s murder of Abel: jealousy.

.. Scaramucci’s original grievance with Priebus, even before the leaks, was reportedly that Priebus had contrived to keep Scaramucci out of the White House. The root cause of both the biblical story and the drama in the administration is basically the same: Favoritism is fickle.

.. “I’m more of a front-stabbing person.” When Cain kills Abel, he never verbalizes his anger, which is why Abel never sees it coming. Priebus has gotten more warning than Abel ever did—so he might be smart enough not to go out into the field with his brother, and find himself on the wrong end of the knife.

.. Abel, by contrast, is virtually a ghost. His name in Hebrew even means “nothingness.” He never speaks, he never communicates with God, he never makes a choice. He’s there only to die, which he dutifully does. In this media-driven society, lots of people have made the basic reckoning that fame, even if it’s infamy, beats being ignored. Scaramucci is, if nothing else, savvy about the power of the media.

.. If Scaramucci sees himself as Abel, then he could have in mind that Priebus had tried to kill his earlier attempts to join the administration. Even better is the punishment that Cain has to endure: He is not sentenced to death for killing Abel, but is doomed to wander the earth, friendless. That sounds a lot like what Scaramucci might want for Priebus: banished from the Oval Office, stripped of his influence and forced to roam the sets of whatever cable news shows will take him in.

.. The Cain and Abel story is almost always read, with justification, as a statement about the corrupting influence of jealousy on the human heart, and on the power of sin to overtake our intentions.

.. Biblical scholars have also often pointed to this story as a depiction of an early conflict between pastoralists like Abel—that is, shepherds—and agriculturalists like Cain, which is to say, farmers. So too the Scaramucci/Priebus drama is really about something bigger: The conflict between traditional Republican politics and the new Trumpian attitude. It could also represent the clash of styles between Priebus’ aw-shucks Midwesternism and Scaramucci’s New York brashness

 

Is It So Bad if the World Gets a Little Hotter? Uh, Yeah.

If humanity burns through all its fossil fuel reserves, there is the potential to warm the planet by perhaps more than 10 degrees Celsius and raise sea levels by hundreds of feet.

This is a warming spike comparable in magnitude to that so far measured for the End-Permian mass extinction.

.. The last time it was 4 degrees warmer there was no ice at either pole and sea level was hundreds of feet higher than it is today.

.. in the coming centuries it’s not impossible that we might be headed back to the Eocene climate of 50 million years ago, when there were Alaskan palm trees and alligators splashed in the Arctic Circle.

.. “Lizards will be fine, birds will be fine,”

.. Huber says that, mass extinction or not, it’s our tenuous reliance on an aging and inadequate infrastructure—perhaps, most ominously, on power grids—coupled with the limits of human physiology that may well bring down our world.

.. “The problem is that humans can’t even handle a hot week today without the power grid failing on a regular basis,” he said, noting that the aging patchwork power grid in the United States is built with components that are allowed to languish for more than a century before being replaced.

.. By the year 2050, according to a 2014 MIT study, there will also be 5 billion people living in water-stressed areas.

.. “Thirty to fifty years from now, more or less, the water wars are going to start,” Huber said

.. “None of the economists are modeling what happens to a country’s GDP if 10 percent of the population is refugees sitting in refugee camps.

.. If people don’t have economic hope and they’re displaced, they tend to get mad and blow things up. It’s the kind of world in which the major institutions, including nations as a whole, have their existence threatened by mass migration.

.. Huber calculated their temperature thresholds using the so-called wet-bulb temperature, which basically measures how much you can cool off at a given temperature. If humidity is high, for instance, things like sweat and wind are less effective at cooling you down, and the wet-bulb temperature accounts for this.

.. Wet-bulb temperatures of 35 degrees Celsius or higher are lethal to humanity.

.. Above this limit, it is impossible for humans to dissipate the heat they generate indefinitely and they die of overheating in a matter of hours, no matter how hard they try to cool off.

.. 7 degrees Celsius of warming would begin to render large parts of the globe lethally hot to mammals.

.. truly huge swaths of the planet currently inhabited by humans would exceed 35 degrees Celsius wet-bulb temperatures and would have to be abandoned.

.. “In the near term—2050 or 2070—the Midwest United States is going to be one of the hardest hit,” said Huber. “There’s a plume of warm, moist air that heads up through the central interior of the US during just the right season, and man, is it hot and sticky. You just add a couple of degrees and it gets really hot and sticky.

.. the Hajj, which brings 2 million religious pilgrims to Mecca each year, will be a physically impossible religious obligation to fulfill due to the limits of heat stress in the region in just a few decades.

.. “You want to know how societies collapse?” Huber said.

“That’s how.”

Donald Trump and the Idea of the Rust Belt

But what dominated the map was a fist of red over the Great Lakes: Ohio, Michigan, Minnesota, Wisconsin, Iowa, and Pennsylvania. Set aside the hype and whimsy of Trump’s plan to conquer California, and this was the news: Trump will be running a Midwestern campaign.

.. And yet in Michigan—in most of the Midwest, really—the economy is doing O.K. Michigan, Wisconsin, Minnesota, and Iowa all have unemployment rates well below the national average of five per cent, and Ohio and Indiana are just a touch higher than average, at 5.2 per cent. Among Midwestern states, only Illinois’s unemployment is significantly higher than the national average, and when people talk about the decline of the Rust Belt no one really means Illinois.

.. It’s hard to know exactly how to get beyond the top-line statistics to understand how shaken people are by a recession, but one way is to examine economic instability. When Yale’s Jacob Hacker led a study that did so, no Midwestern state ranked among the places where instability was most acute. (Those were mostly in the South.) In Michigan especially, Hacker found, overall levels of economic instability were remarkably low.

.. A 2016 race between Clinton and Trump could devolve principally into a pitched battle for the Rust Belt,” the Washington Post’s Dan Balz predicted in March.

.. (those with family incomes between thirty thousand and seventy thousand dollars) in Michigan, Ohio, Pennsylvania, and Wisconsin. They found that Trump does not even have the support among these voters that Mitt Romney had. The poll had him trailing Hillary Clinton by nine per cent.

.. Just after 9/11 David Foster Wallace presented the view of the world among churchgoers in Bloomington, Indiana: “There is what would strike many Americans as a bizarre absence of cynicism in the room.” It is exactly this long tradition of seeing the Midwest as decent and innocent—and therefore as moral—that supplies the Rust Belt story with its force.