Early Headlines: Asia Stocks, Oil And Gold Down, Dollar Up, US To Leave WTO?, US Border Arrests Way Down, Merkel Still In Trouble, Lopez Obrador Wins, Canada Adds Tariffs, And More

Written by Econintersect

Early Bird Headlines 02 July 2018

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, published Monday, Wednesday and Friday, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.

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​Global

• Asian stocks close sharply lower as China losses weigh on markets; wave of tariffs on the horizon (CNBC) Major Asian markets closed sharply lower on Monday, the first trading day of the second half of the year, as heavy losses were recorded in China ahead of a looming deadline when tariffs from both Washington and Beijing are expected to take effect. The U.S. dollar was higher as the euro fell. The dollar index climbed 0.1% to 94.701. U.S. West Texas Intermediate crude futures fell 0.88% to $73.50 per barrel and Brent crude futures dropped 1.11% to $78.35. Spot gold was down 0.1% at $1,250.95 an ounce as of 0116 GMT.

U.S.

• The Trump administration reportedly drafted a bill that abandons WTO rulebook (CNBC)

• U.S. officials have drafted a bill that will give President Donald Trump’s government the ability to unilaterally raise tariffs without congressional consent, Axios reported.
• That means the world’s largest economy would be acting outside World Trade Organization rules.
• Trump has reportedly told officials that he wants to leave the global trading body.

• Collins: White House has expanded its list of potential Supreme Court picks (The Hill) The White House has expanded its list of potential Supreme Court nominees after Sen. Susan Collins (Maine) urged President Trump to broaden his search, the GOP senator said Sunday. Collins said that she suggested Trump broaden his search beyond the list of 25 candidates that the White House released in November. The senator told ABC that Trump has added five judges to that list.
• Foreigners still see US commercial real estate as healthy investment (Mortgage Professional America) Foreign investment into US commercial real estate continued to be strong in 2017 with almost a fifth of National Association of Realtors (NAR) members practicing in the segment closing a sale with an international client during the year, according to the trade association’s 2018 Commercial Real Estate International Business Trends report.

NAR found, however, that a majority of foreign buyers (70%) closed their international transactions with cash. Meanwhile, only 25% of commercial deals involved debt financing from US sources.

• Trump administration says it will detain migrant families for as long as it takes to prosecute them (NBC News) A Trump administration filing with the U.S. District Court here argues that the government can detain parents and children together at the border for as long as it takes to prosecute them. The filing is a response to U.S. District Court Judge Dana Sabraw’s ruling in San Diego Tuesday that immigration authorities must stop separating migrant children from their parents and reunite about 2,000 children who have been detained separately since May.

The preliminary injunction in favor of an anonymous woman from the Democratic Republic of Congo, known only as Ms. L, meant that President Donald Trump’s Department of Justice had two choices: Release parents and children or hold them together for 20 days, the limit for holding children under a 1997 court settlement known as the Flores settlement agreement.

Government attorneys have formally requested that the deal be modified so it can hold families together for the duration of the parents’ prosecution for allegedly crossing into the United States illegally. But the Trump administration in the meantime is arguing that Sabraw’s order gives it no choice but to hold families for prosecution.

• Ocasio-Cortez shreds conservative TV host for sharing picture of her childhood home (The Hill) Ocasio-Cortez actually went to Boston University. She lived in the Bronx’s Parkchester apartments before moving to Yorktown Heights at age 5 to attend a better public school than what was available in the Bronx at that time. She was responding to the tweet below. Ocasio-Cortez said:

“I went to [Boston University]. Try Google.”

“My mom scrubbed toilets so I could live here & I grew up seeing how the zip code one is born in determines much of their opportunity,”

• How accountants broke capitalism: the Tax Justice Network’s June 2018 podcast (Tax Jusice Network) Hat tip to Jerri-Lynn Scofield, Naked Capitalism. We’ve had leak after leak, whistleblower after whistleblower. But no matter what the scandal is, when it comes to financial secrecy and tax dodging, the so-called big four accountancy firms are key players. We interview investigative journalist and former tax inspector Richard Brooks of the Private Eye on his new book: Bean Counters: the triumph of the accountants and how they broke capitalism.

Plus: will President Trump be prosecuted for foundation fraud? And can a leopard change its spots? How come the secrecy jurisdiction of Delaware came out in support of a financial transparency bill?

Featuring: U.S. economist, attorney, and investigative journalist James Henry, the Tax Justice Network’s John Christensen and investigative journalist Richard Brooks of the Private Eye on his new book: Bean Counters: the triumph of the accountants and how they broke capitalism. Produced and presented by Naomi Fowler.

• Border Apprehensions are Way Down (Twitter)

Germany​

• Interior minister offers to resign, in blow to German coalition (Reuters) German Interior Minister Horst Seehofer offered his resignation to party colleagues late on Sunday, party officials said, escalating a row over migration with Chancellor Angela Merkel that threatens her fragile government.

North Korea

• North Korea has increased nuclear production at secret sites, say U.S. officials (NBC News) U.S. intelligence agencies believe that North Korea has increased its production of fuel for nuclear weapons at multiple secret sites in recent months – and that Kim Jong Un may try to hide those facilities as he seeks more concessions in nuclear talks with the Trump administration, U.S. officials told NBC News. The intelligence assessment, which has not previously been reported, seems to counter the sentiments expressed by President Donald Trump, who tweeted after his historic June 12 summit with Kim that “there was no longer a nuclear threat from North Korea.”
• U.S. has plan to dismantle North Korea nuclear program within a year: Bolton (Reuters) White House national security adviser John Bolton said on Sunday he believed the bulk of North Korea’s weapons programs could be dismantled within a year, as the United States and North Korea resumed working-level talks.

China

• Yuan, Chinese Equities To Brace For Impact From US-China Trade Tariff Hits (Talk Markets) The Chinese Yuan and equities may continue to bear bearish pressure in the coming week, from the US-China trade battles. On July 6, the U.S. customs will begin to charge additional tariffs on $34 billion Chinese goods. China plans to retaliate on the same amount of U.S. goods on the same day. Based on US President Trump’s threat, this will lead to another around of battles, on additional $200 billion goods.

Signals have hinted that the time frame of this war has expanded. China has prepared itself for U.S. tariffs attacks: it will lower imports of agriculture products, aquatic products, energies, and raw materials from Asian countries, effective on July 1. In specific, the tariff on soybean will be cut from 3% to 0%. Soybean is one of the major U.S. products that China targeted at. Within such context, a relative weak Yuan may help to make up for some loses of Chinese exporters due to the increased tariffs.

At the same time, the Chinese currency has been falling at a rapid pace, and may be too fast from a regulator’s point of view. Coupled with the tumbling Chinese equities, it may have raised the regulator’s concern on financial stability. Also, Yuan’s overnight borrowing cost saw increased in the offshore Hong Kong market on Friday. Taking into account all these above, a retracement in the Yuan is possible in the near term.

Mexico

• Mexican leftist Lopez Obrador wins presidency: exit polls (Reuters) Andres Manuel Lopez Obrador decisively won Mexico’s presidency on Sunday, exit polls showed, setting the stage for the most left-wing government in decades at a time of tense relations with the Trump administration. See also next article and Anti-Trump mood sways Mexican voters in U.S. in favor of Lopez Obrador.

• Lopez Obrador scores landslide victory as Mexico votes for change (CNN) President-elect Lopez Obrador is estimated to have received over 53% of the vote, more than double the total of his closest rival, according to the country’s electoral commission.
• Trump congratulates Mexico’s new president: ‘I look very much forward to working with him’ (The Hill) President Trump on Sunday night congratulated the winner of Mexico’s presidential election, a left-wing populist who has vowed to take a tougher stance against the U.S. president.

Andrés Manuel López Obrador beat out the candidate representing the ruling PRI party on Sunday amid growing discontent over the country’s rampant crime and corruption. A third-time presidential candidate, López Obrador has publicly derided Trump’s plans to build a wall along the border between the U.S. and Mexico and has said he will demand respect from the White House.

• Hundreds of Mexican politicians have died in the run up to the election – but cultural leaders are fighting back (The Converation) Politics in Mexico is a blood sport.

Canada

• Canada slaps tariffs on $13 billion worth of US goods (The Hill) Canada announced Sunday that it has moved forward with retaliatory measures against U.S. steel and aluminum tariffs, slapping $13 billion in its own tariffs on American exports. CNN reported that over 40 U.S. steel products will see tariffs of 25%. A 10% tariff will be levied on more than 80 other American items, including toffee, maple syrup and coffee beans. Chrystia Freeland, Canada’s foreign minister, said Friday:

“We will not escalate, and we will not back down.”

• The Nation That Sits Astride the U.S.-Canada Border (Politico) A community of 13,000 Mohawks live in Akwesasne, partly in Canada and partly in the U.S. The border going through Akwesasne has created a jurisdictional nightmare. The town has three different governments: one elected council recognized by Canada, one by the United States and a traditional government affiliated with the Iroquois Confederacy, of which the Mohawk are one of the six constituent nations, or tribes. All told, including the United States, Canada, the state of New York and the provinces of Quebec and Ontario, there are eight governments with some level of jurisdiction over a territory with an area of less than 40 square miles. Akwesasne’s unique status makes it a curiosity, though not a particularly amusing one to the residents, who feel their right to free movement is violated on a daily basis by a border they don’t recognize.