Tag: United States Economy

Federal Reserve Walks a Tightrope Between Inflation and Recession

Chin@Strategy

In an interview, James D. Hamilton, professor of economics at the University of California, San Diego, and a leading expert on the economic effects of oil shocks, said they had “made major contributions to recessions over many decades.” At current oil price and supply levels, the effects of the Russian war “are fairly manageable for the American economy.” But Professor Hamilton pointed out that Russia’s oil, which amounts to about 10 percent of world production, could not be easily replaced if totally cut off — an outcome that he does…

I.M.F. Forecasts U.S. and China Slowdowns Will Hold Back Growth

Chin@Strategy

The pandemic has changed the way people in many parts of the world spend their money, shifting funds that might have been used for dining, travel and entertainment to goods they can play with, sit on or consume at home. That increased demand, combined with persistent difficulties in moving goods from one city or continent to another, skyrocketing energy prices and labor shortages, has driven up costs. Some of those pressures are expected to wane toward the end of the year — but not everywhere. “In the United States the…

Biden Looks to Intel’s U.S. Investment to Buoy His China Agenda

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WASHINGTON — In celebrating a $20 billion investment by Intel in a new semiconductor plant in Ohio, President Biden sought on Friday to jump-start a stalled element of his economic and national security agenda: a huge federal investment in manufacturing, research and development in technologies that China is also seeking to dominate. With two other major legislative priorities sitting moribund in Congress — the Build Back Better Act and legislation to protect voting rights — Mr. Biden moved to press for another bill, and one that has significant bipartisan support.…

Supply Chain Woes Could Worsen as China Imposes Covid Lockdowns

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WASHINGTON — Companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay. The measures have already confined tens of millions of people to their homes in several Chinese cities and contributed to a suspension of connecting flights through Hong Kong from much of the world for the next month. At least 20 million people, or about 1.5 percent of China’s population, are in lockdown, mostly…

Supply Chain Woes Prompt a New Push to Revive U.S. Factories

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Called near-shoring, the move to Mexico is paralleled in Europe with factories opening in Eastern Europe to serve Western European markets like France and Germany. “We’re starting to see it in Mexico as well as in the U.S.,” said Theresa Wagler, chief financial officer of Steel Dynamics, a steel maker based in Fort Wayne, Ind. “Many companies now prefer security of supply over cost.” Mr. Knizek of EY-Parthenon expects industries with complex and more expensive products to lead the resurgence, including automobiles, semiconductors, defense, aviation and pharmaceuticals. Anything that requires…

U.S. Effort to Combat Forced Labor Targets Corporate China Ties

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A far-reaching bill aimed at barring products made with forced labor in China became law after President Biden signed the bill on Thursday. But the next four months — during which the Biden administration will convene hearings to investigate how pervasive forced labor is and what to do about it — will be crucial in determining how far the legislation goes in altering the behavior of companies that source products from China. While it is against U.S. law to knowingly import goods made with slave labor, the Uyghur Forced Labor…

Biden’s China Dilemma: How to Enforce Trump’s Trade Deal

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“I want the farmers to come tell me, ‘Sir, we can’t produce that much,’” he added. When Mr. Trump signed the trade deal with China in January 2020, those estimates became enshrined as the word of the U.S. government. And though Mr. Biden and his deputies have criticized the trade deal for failing to address many of the most pressing trade issues that the United States has with China, they have since promised to uphold it. In a call last month with President Xi Jinping of China, President Biden underscored…

How the U.S. Lost Ground to China in the Contest for Clean Energy

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WASHINGTON — Tom Perriello saw it coming but could do nothing to stop it. André Kapanga too. Despite urgent emails, phone calls and personal pleas, they watched helplessly as a company backed by the Chinese government took ownership from the Americans of one of the world’s largest cobalt mines. It was 2016, and a deal had been struck by the Arizona-based mining giant Freeport-McMoRan to sell the site, located in the Democratic Republic of Congo, which now figures prominently in China’s grip on the global cobalt supply. The metal has…

What Is Going on With China is Not a ‘Cold War’

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A new idea is gaining currency among some politicians and policymakers in Washington: The United States is in a Cold War with China. It’s a bad idea — bad on history, bad on politics, bad for our future. The Biden administration has wisely pushed back on the framing. But the president’s actions suggest that his strategy for dealing with China may indeed suffer from Cold War thinking, which locks our minds into the traditional two-dimensional chess model. Competition with China, though, is a three-dimensional game. And if we continue to…

Washington Hears Echoes of the ’50s and Worries: Is This a Cold War With China?

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The White House is loath to put a label on this multilayered approach, which may explain why Mr. Biden has yet to give a speech laying it out in any detail. But his actions so far look increasingly like those in a world of competitive coexistence, a bit edgier than the “peaceful coexistence” that the Soviet leader Nikita S. Khrushchev used to characterize the old Cold War. (Interestingly, after meeting this month in Switzerland with Jake Sullivan, the president’s national security adviser, China’s top diplomat said he objected to any…