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The language and tone of the leaders says something about what is likely to be the outcome of the G20 summit. Its a first for significant participation, as countries as diverse as Russia, China, India, Indonesia, Saudi Arabia, and the Netherlands are represented. The credible positions of both sides, the US, UK and Japan, and the European side of France, Germany and the Czech Republic, well presented, provide for some serious discussion and negotiations. France's Sarkozy and Germany's Merkel want to see a global regulator that would reach inside the borders of the US with stricter regulation. Sarkozy calls this "nonnegotiable." And he said that he would reject an agreement that puts off stringent new regulations on banks, tax havens, and hedge funds. He said "the compromise has to come from all countries around the world." US President Obama said that if there is going to be renewed growth it can't just be the US as the engine, everybody is going to have to pick up the pace," at the same time saying that the US had to be concerned about its own deficits. The fact is that the US stimulus will mostly help a severely impacted domestic economy recover with social safey net payments to local and state governments and unemployment insurance, as well as targeted investments in infrastructure, education, energy and health care. It will not mean anywhere near the kinds of imports the US made from other countries, especially China. And Obama made that clear when he said the US will never return to that situation, where the US had become a "voracious consumer market." For the Germans the major market for their middle companies is China, and China has its own stimulus spending on infrastructure spending, which should provide for continued imports of machinery from Germany at a much lower level. Thus Germany and France see a strong tendency to call the source of the crisis and repeat that call till the US listens, and refer to the failure of free market capitalism in its unregulated form. And to insist on fixing it through a global regulator with strict and systemwide rules. So you hear this in Merkel's words, "the foundation for this finacial architecture must be laid now, that is why we seem to be so tough." While the vivacious Sarkozy talks of compromise, and a US gesture in regulation in return for Franc's gesture of joining NATO, the mild mannered Merkel is clear and focussed about her concern. She rejects the idea of linking stimulus spending demands of the Anglo-Americans with the Franco-German demands for global systemwide regulation. "This is not a bargaining chip," she says. The media may mistakenly report lack of consensus as a failure of the summit. But in the long run in the presence of good positions on both sides, it could lead to some tough negotiations even if continued at another meeting. And result in something serious, credible and lasting in its impact, rather than something that was easy and did not in Andy Grove's useful words involve "constructive confrontation." ...

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A number of factors hitting at the same time Chinese factories in the south, in Guangdong province and the Pearl River delta. Currency exchange rates, stricter labor laws, eliminated government tax benefits and incentives, stricter pollution laws, high oilprices, and higher wages, all have combined to make the apparel and footwear factories in the south less profitable and harder to run. In recent years about 10% of the footwear makers in the province have closed operations. Manuy are smaller operations. About 10% of the 60,000 to 70,000 HongKong owned factories in the delta region will close in 2008. Not just apparel companies making products for HP and Apple have longer term plans to shift production to othcountries. Hon Hai Precision Manufacturing Company has said it will quintuple its planned investment in Vietnam to $5 billion. Apparel makers VF corporation which owns labels like North Face and Nautica says it takes 30 days from Cambodia compared to 20-25 days from China to get product on retail shlves so the advantage of China in this respect is also diminishing...

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WSJ report shows that on the morning of the 90 Day Pause in Tariffs announcement discussions took place with the Swiss prime minister, with Treasury Secretary Scott Bessent, and watching Fox News interview of JP Morgan Chase's Jamie Dimon. Seeing the turmoil in financial markets and bond markets, US president DJT made the decision to give time to make the agreements with about 50 countries, and time for financial markets to understand the president's  policy and goals to reformulate the world trading system into one that offers a level playing field. The chart showing the Tariffs of 67% by China and US 34% imposed tariff in the Rose Garden on April 2, 2025, was say reports the result of the influence on the president of the advice of Peter Navarro.  Treasury Secretary Scott Bessent's expertise is in financial markets as a protege of Soros, Navarro's is world trade. Bessent stepped in when financial markets appeared to reflect the uncertainty and convinced the president that the 90 day pause would be the best way to implement the policy on trade. There is a vigorous debate in the administration about how to get a level playing field for trade, and get the job done without disruptions in financial markets or a recession induced by uncertainty. On April 10 as part of the effort to talk to the American people US president DJT opened up his Cabinet meeting to the media and had Bessent, Borghum, RFK Jr and Marco Rubio talk about their plans and policies. Proper implementation, gaining confidence of the people of America and financial markets, is now as important as the goals and policies in the next 90 days. Getting the trade deals with the European Union, Japan, South Korea, Taiwan, Britain and India would go a long way to reassure financial markets and set the right tone for the future.   ...

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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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Toyota's changes in its global architecture in 2011-2013. Reorganization to build amore tight knit management structure for better responsiveness and decisionmaking. The focus is on getting rid of bureaucracy after years of growth that led to excessive and sometimes indirect reporting layers. For instance, chief engineers now report directly to top product planning executives to speed decisionmaking and make new product introductions faster. Regional managers are now shrunk to three groups: North America and China; Japan and Europe; Australia, Russia and emerging markets. It is interesting to note that China and the U.S. are put together- the logic is based on the idea that the buyers in each group tend to have similiar buyer behaviour for vehicles, say Toyota managers. Another significant effort focusses on increasing the use of standardized parts to 50% for vehicles that are of similiar size. The Prius C, the redesigned Camry and the Etios subcompact in India, were cited recently by CEO Akio Toyoda as examples of products that have utilized these changes in methods and approach....

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The German Chambers of Commerce and Industry President Heinrich Driftmann told reporters in Berlin that the new government should overhaul the tax code and improve credit access for companies. The German chamber wants to see changes to the corporate and inheritance taxes. He said that even if it was considered taboo companies needed more flexibility in the labor market. Merkel has promised labor unions that keeping social protections will be a priority in her administration. Economists say it will be difficult to cut taxes because unemployment will rise to 11% in 2011 as Germany's economy contracts 5% this year, and this will mean less tax revenues and increasing costs for social spending.

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How many jobs will leak out for the fiscal stimulus if a lot of them, like 40% of manufacturing ouput in the US consisting of imported goods, are jobs created in China and Europe or other countries that make the parts for the wind energy and the solar energy products made in the USA? There will be domestic content rules but the international economy is better off if some of the jobs that result from a USA stimulus are offset by the jobs created here from the stimulus packages of Europe, China and other countries. China's infrastructure spending would lead to jobs in the US making some of the infastructure equipment that is exported or in the case of India the nuclear plants equipment that is exported.

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From 1990 to 2008 most other developing countries did better in increasing life expectancy than China- this includes India, Indonesia and other developing countries.

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It took this long to do what would be done at the outset years ago- setup teen accounts that are private for Instagram. There is a warning in this that only thoughtful regulatory oversight at the beginning would prevent harm to parents and children. At this point the action does not address what only regulatory oversight by the government based on common sense about the interests of the people in education, mental health and children's education, can provide. This is to do what is done in China and other parts of the world where there are limits in ages, hours of use and what time it is turned off for young people. 

This is happening also when Australia and now Britain is removing social media from children which is the only policy that will make it possible to restore the health and educational level of young people after so much damage has been done.

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China's strategy for climate change action makes allowance for the need for coal as base energy, and insurance to prevent factory shutdowns from shortfalls of hydroelectric energy in drought seasons. It planned 80GW in 2024 for new coal powered plant construction. 

What should the US do? DJT and Republicans including North Dakota Governor Borghum say the US should also make some room for this in transition policy. DJT calls it "drill baby drill." Yet it is more nuanced than that, it means US will produce natural gas to supply Europe and keep gas and electricity prices down as a cost of living action. DJT knows industry has already put in plans for renewable energy production, it just won't be accelerated in ways that won't let the US economy grow. This is the rational for Alaska oil and gas and rare minerals policies shown alongside this article.

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Mark Landler of the NYT intervews Ben Bernanke at his office overlooking the Washington Mall, and Secretary Paulson in his Treasury office. Both men look back at events that led to Chinese savings financing excessive American consumption, and currency and other policies on both sides perpetuating the dependence of America on lowpriced Chinese products, and of China on the American export market. Now that this export market is collapsing it presents China with serious problems with unemployment in the export sector, and pesents America with the hangover from a consumption binge that now must be paid for with years of low or negative growth. Could this have been foreseen and if foreseen could things either have been mitigated or prevented. In March 2005, Prof. Bernanke at Princeton was not at the Fed (his Fed job started in 2006), and cautioned about the imbalances presented by Chinese savings finacing American consumption. But Bernanke saw this as a market phenomenon that would take years, even a decade to work itself out in a global economy. He said "for now, we have little choice except to be patient." The prevailing opinion among Greenspan, Bernanke and others was that the global economy worked in ways that were ultimately benign and regulation was not a good thing. After all the situation benefitted American consumers and kept inflation low while also providing China as an additional engine for global economic growth. The American economy it was believed was large and resilient, and it would not be adversely affected in the long run by such a large dependence on foreign savings. Only the positive effects were visible and the adverse effects were simply talked away as not serious for now. Zoellick, who was deputy secretary of state says that successful models are very hard to change, and Paulson says that without some kind of crisis its hard to get changes made once asituation gets entrenched. For China efforts to strengthen the currency that would slow exports and improve internal consumption were stymied by a reluctance to disturb the status quo, and Americans were lulled into complacency as years of low priced imports provided the best of both worlds, high growth and low inflation. ...

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Lael Brainard, head of the National Economic Council, and former Vice Chair at the Federal Reserve answers questions at the Council of Foreign Relations in Dec. 2024. Points she made are- The inflation we experienced was correctly diagnosed by Powell and the Fed as caused by Supply shocks from the pandemic not 1970's style embedded expectations inflation.  The response was to free up the supply by freeing up the clogged Los Angles Ports with labour and logistics coordination, and other actions. It also included redoing the supply chains to reduce dependence on China as only supplier. The 2017 tax cuts mean revenue will be 1.5 percentage points lower than the historically 18% of the GDP. This will increase the deficit. Biden administration had kept the deficit in control and reduced it by making offsetting adjustments when investment in certain areas such as childcare was done. The childcare tax credit is important for American families. Action is needed to increase the supply of housing. These are reminders of what is needed for the new DJT administration to keep the American economy on a strong footing says Brainard.     ...

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U.S. president Trump's statement calling for a list of goods for tariffs on $200 billion of Chinese goods leaves China without a clear response and facing new risks. The U.S. exports about $150 billion in goods to China so that China would have to impose penalties to respond at the same level. Placing restrictions on American firms on access to China's market, and imposing other penalties would have the effect of reinforcing the perception of unfair practices targeting American business and lead to hardening of U.S. response.  The U.S. sees itself as being in a better position with the U.S. economy experiencing a growth trend. China with large local government and bank debt faces a difficult situation. President Jinping's policy of reducing the risks of bad debt in the banking system involved sacrificing some growth to stabilize the system. China's GDP growth in 2017 was 6.9%, the target at 6.5%. Future targets and actual growth now look to be much lower.The trade war with the U.S. has the effect of dampening growth leading to calls for the central bank to loosen its monetary stance. In response to Trump's announcement the People's Bank of China pumped $31 billion into the nation's banks. China is studying Japan's response in the 1980's and 1990's when the U.S. took strong action against Japan's growing trade surplus. Japan responded by appreciating its currency and using stimulus to cushion the effect of lower exports on the economy. The stimulus led to the housing bubble and over time a period of low growth and stagnant economy. The large China stimulus in 2008-2009 has compounded the problems in the banking system. Not deleveraging and controlling financial risks in China's banking system because of the trade war would bring a new set of risks. ...

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Apple CEO Cook's blue collar roots in Alabama. He says he has worked at an aluminium factory in Virginia and a paper factory in Alabama, and grew up spending a lot of time in factories. Cook was hired by Steve Jobs to fix Apple's manufacturing operations after Jobs rejoined the company in 1997. At that time Apple's manufacturing plants had serious quality problems and high levels of rework in plants, and Apple had high levels of inventory. Cook was largely responsible for the new manufacturing setup at Apple. Jobs did not get it into the details of manufacturing- being more interested in the design aspects of the product- and people close to Apple say Jobs rarely visited Apple plants. This gives Cook greater credibility as Apple tries to change the way its products are made in China. Under Cook Apple has joined the Fair Labor Association and initiated FLA inspections of Foxconn plants making Apple products.

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The most alarming report is that from researchers at Peking University Health Sciences Center in Beijing, which shows 10 years of data on lead poisoning. Its conclusion: About 34% of children in China have blood levels that exceed the WHO limit of 100 micrograms per 1 litre of blood. A whole generation of children may be compromised. To avoid being noticed factories that have toxic byproducts or emissions are being setup in the countryside. Lead products are added to herbal products that are sold by weight to make them weigh more. It is regularly added to plastics and vinyl to make it temperature resistant. Once in the human bloodstream lead mimics other substances like calcium and zinc and iron and binds to sites in the brain intended for calcium disrupting brain cells leading to ireversible brain impairment. See the article in August 2, 2007 NYT, about the recall of 1 million Mattel toys, Elmos and Big Birds, for lead detected in them. Note that Mattel's monitoring system did not catch this, it was caught by a retailer....

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Apple shares are down 25% says this WSJ article and asks the question whether Apple's best days are past. In the fastest growing markets in Asia and Africa, Apple iPhones are beyond the reach of about 95% of the population. The number of Apple iPhones sold in India have dropped 40% in 2018 compared to 2017. Apple's market share in India has fallen from 2% to 1%, according to Canalys research firm. The $1.8 billion in Indian sales is about half of what Apple executives had hoped for when Tim Cook visited India in 2016. Some call it a rout. Tim Cook seldom mentions India now. At the center of this is Apple's reluctance to change its business model of getting the highest margins, making not a range of handsets, but a few models selling at high prices. This is the strategy that Apple has used to revive the company from near bankruptcy in 1997. Competitors including Xiaomi, the Apple for China and India, tweak their phones constantly to address local concerns for battery life, and lower prices to get market penetration. Only 24% of Indians have a smartphone and India is fastest growing market. Friction with the Modi government which cannot be favorable to Apple's plans to push a high  margin product when competitors have similar but better value packages.   In price sensitive markets of Africa and Asia most people buy phones outright and use pay as you go plans, Apple is not popular. Even in China Apple's market share is down from 12.5% in 2015 to 8% in 2017, according to Canalys. Apple is reluctant to make many models offering lower prices and to address concerns such as battery life in India. In India 39 million people will add smartphones in 2018 with 75% costing less than $250, 95% costing less than $500. In Apple's lineup the iPhone 7 costs around $550. Competitors such as Xiaomi, OnePlus, Oppo, and Vivo flooded India with smartphones costing less than $200. Unlike Apple which spurns market research these companies do extensive research work on local situation. OnePlus has focussed on battery life and gained 30% share of the premium segment to Apple's 25%. By making the devices in India these companies avoid having to pay the 20% tariff. Apple has so far not put up a new plant with the restriction that India places of single brand retailers over 51% foreign owned to buy locally 30% of manufacturing materials. The Modi government felt Apple was not focussed enough on bringing high tech jobs to India and helping local manufacturing, a perception not conducive to expansion in India where "Made in India" is the government plan. This means opening Apple stores in India is less likely now.  The turnover of Apple India executives is also increasing with 3 new CEO's 2017- 2019. Apple's strategy of targeting wealthier Indians makes it not even a fringe player in the Indian market down to 1% of the market. Just as it shrinks in the Chinese market where most customers are price sensitive and the economy is slowing.   ...

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The influence of business executives who helped shape president Trump's views on Mexico, China, Export Import Bank, and other issues is covered by Stokols and Bender of WSJ. On Mexico the departure of Mike Flynn helped moderate views, Wilbur Ross, the Commerce Secretary also provided a moderating influence. The plans are now to change NAFTA but not entirely redo the agreement. On the Export Import Bank the views of Boeing CEO Muilenburg, who explained to Trump why the Bank supported U.S. exports and how other countries had similar banks, led to the president filling the bank vacancies. On China the influence of NEC head, Gary Cohn, former president of Goldman Sachs, and other business executives, led to a less confrontational position. The president once called NATO obsolete during the campaign but he met this week with NATO secretary general Stoltenberg this week and expressed strong support for NATO after rising tensions with Russia.

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The Trump administration's early proposal for NAFTA moves away from campaign pledges to completely renegotiate the treaty, instead taking the approach of working to improve the U.S. trade position in relation to Mexico and Canada. It includes seven objectives for tougher rules for labor and the environment favored by Democrats in Congress, and it also has support from Republicans with its effort to update NAFTA for changes in technology and in other areas since the accord was signed during the Clinton administration. The area in which U.S. and Mexican business are wary is one in which the Trump administration still seeks to keep the option of imposing protective tariffs, and a border-adjusted tax to level playing field for differences in taxes, as well as other measures to protect American jobs and interests. Because any renegotiated NAFTA also has to pass both houses of Congress this proposal took into account the different constituencies and interests for this issue. Robert Lighthizer, trade representative under president Reagan is likely to become the next U.S. Trade Representative and lead negotiator. We first profiled Lighthizer in a group in Lyrarc for pointing to the need for a level playing field in trade. As early as 2010 Lighthizer argued in op-ed articles that globalization and trade practices should ensure a level playing field for the U.S., and was covered in Lyrarc. ...

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Robert Lighthizer, U.S. Trade Representative, makes a passionate plea for the dignity of work in America, the founding principle for the society of opportunity that America has been and the reason it was settled by immigrants from Europe over 200 years. He points out that trade policy is not about geopolitics or about efficiency as others perceive, it is about what kind of society we want to live in. Is it about a society of opportunity? This is the foundation on which this American continent was settled by settlers from Britain and Europe, and the basis of the growth over two hundred years till the last four decades. From 2000 and China's entry into the World Trade Organization under president Clinton to 2016 the U.S. manufacturing base has shrunk with the loss of five million jobs, two million jobs lost to China in the period 1999-2011 alone. And 350,000 automobile manufacturing jobs to Mexico since 1994, one third of all U.S. automobile jobs. Without the initiative and hard work of Mr. Lighthizer both American workers and Mexican workers would be stuck in low paying jobs. The USMCA he negotiated changed all that by giving Mexican workers fair wages and American workers and manufacturing the opportunity for revival.  This view was also expressed by Intel founder Andy Grove, a founder of one of the first pioneer companies in Silicon Valley. Grove asked the question after seeing the outsourcing of production out of America and the condition of the American worker- he said for him it was about what kind of society he wanted to live in. It was all about the dignity of the American worker long ignored by economists who live in a world of theory and the elite that has lived for so long apart from the places where the fabric of American workers and working life was torn apart. It was a question that touched Andy Grove's heart just as it does for Robert Lighthizer and others who are fighting to make America a society of opportunity for the American worker and opportunity for the American people, for dignity in America. It also charts a new course for the French worker, the British worker, the Indian worker, as other countries learn from the American experience. We have covered Grove and Lighthizer from the early days of their leadership and wise reminders to the people of what America is and stands for. Lighthizer points out one huge error that makes the thinking of these economists and elite that have not listened for so long, more than a bit crazy, reckless and callous. He says there about half of 250 million adults who lack a college diploma in America. Historically manufacturing has provided stable well paying employment. Even if with investment in education they were taught to write software code, there aren't enough jobs for them. The combined total of jobs at Apple Google, Facebook and Netflix is 300,000 jobs. Never has so much been at stake for so many and defended by so few. ...

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Mr. Trump's conflict with the Justice Department in the last weeks of his presidency to appoint a new Attorney General with intent to contest the results of the presidential election of 2020, is shown in this report in NYT. This created risks for American democracy. The cracks in social cohesion following four decades of foreign wars 1980-2021, irresponsible behavior of financial institutions leading to financial crises and impoverishment of America, incompetent elites, neglect of rural America, ceding of technology and competitive position to China, failure to fund education, healthcare and infrastructure, under presidents Reagan, elder Bush, Clinton,  Bush, Obama, led to a situation of revolt against the status quo by a maverick politician using a new and proven dangerous form of communication social media. Ultimately this put democracy at risk. Lessons from this are only now being learned as people in the Biden administration and outside of it reflect on what happened. In this WSJ report Mr. Trump is seen pressuring officials of the Justice Department to agree to appointment of a new Attorney General shortly after the election. This was seen as an effort to question the results of the 2020 presidential election. A leading senator on the Judiciary Committee says this would lead to "shredding the US Constitution to stay in power." Of this and also of four decades of neglect in America Washington has this to say in his first Inaugural Address on April 30, 1789- "The blessed religion revealed in the word of God will remain an eternal and awful monument to prove that the best institutions may be abused by human depravity; and that they may even in some instances be made subservient to the vilest of purposes. Should, hereafter, those entrusted with the management of this government, incited by the lust of power and prompted by the supineness or venality of their Constituents, overleap the known barriers of this Constitution, and violate the inalienable rights of humanity: it will only serve to shew, that no compact among men (however provident in its construction and sacred in its ratification) can be pronounced everlasting and inviolable- and if I may so express myself, that no wall of words, that no mound of parchment can be so formed as to stand against the sweeping torrent of boundless ambition on the one side, aided by the sapping current of corrupted morals on the other." ...

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Andrew Witty, a 43 year old Briton, is taking over as CEO of GlaxoSmithKline. Before this he was in charge of European operations. His first moves include strengthening Glaxo's presence in the emerging markets of Russia, India and China. He has put new managers in charge of these efforts. He sees more opportunities to sell consumer health products in India and other emerging markets where people buy most of their medicines over the counter. He also hopes to make new pricing deals with insurers and governments to persuade them about linking the price of the drugs to how effective they are in treating patients.