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This story in WSJ says China may have a lead in electric car battery sales in 2024 and beyond. China is investing heavily in battery plants and EV plants in Europe and the US. This would help China meet the restrictions on import of electric vehicles from China by the Biden administration. CATL increased its market share in Europe from 10% to 24%. Sales of EV vehicles in China went up by 37% in the first 9 months of 2023, and China is the top exporter of electric vehicles. CATL's electric battery sales in Europe doubled compared to 60% for LG. And in excluding China sales CATL has caught up with LG both having 28% of the market.

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The U.S. trade agreement with Mexico is for 16 years, to provide business with a stable rules environment to operate in. It includes a clause for review after 6 years. The content made in the U.S. is increased to 70% from 62.5%. This has to be made by workers earning at least $16  an hour. Aluminium and steel going into the cars has to come from the U.S. helping push U.S. steel plant capacity utilization to 80%. Labor collective bargaining is strengthened in Mexico through new provisions, a provision supported by new Mexican socialist president Obrador. Free trade in agricultural products is maintained. $4.7 billion was added in help to U.S. farmers as aid for the effects of China's tariff retaliation. New rules are set for textiles, chemicals, and steel intensive products that set requirements to qualify for tariff free import into the U.S. This is intended to help bring more jobs and investment in these industries in the U.S.     ...

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Neil Irwin in the NYT why the U.S. China Phase 1 Trade Agreement is more than a hill of soyabeans as he puts it, more than about all the soyabeans that the U.S. farmers can sell to China. China's economy was seeing the effect of U.S. tariffs. Additional tariffs to cover all imports from China to the U.S. would have worsened this. China avoided this by agreeing to Phase 1. The U.S. had looked for some enforcement mechanism based on China putting this down in a written agreement particularly for avoiding subsidies to state enterprises and improper access to U.S. advanced technologies. China's reluctance to do this led to Mr. Trump saying that China had reversed its position and Trump expanding the tariffs stage by stage. These issues are now set aside for Phase 2 still to be negotiated. Both sides taking what they could get. China relief from the threat of tariffs on all exports. The U.S. under Mr. Lighthizer's negotiating leadership retaining the enforcement idea through the tariffs that are still in place of 25% on half of China's exports to the U.S. The bonus for Mr. Trump is the goodwill China generates by agreeing to buy all the U.S. farmers can produce, farmers having not only stood behind Mr. Trump but also forming a key part of his support base. China will continue to compete in technological areas with the U.S., and the state enterprise model which worked for China as Mr. Xi tells visitors will continue. Phase 2 is just that Phase 2, when and if it can be negotiated between Trump with his negotiator Lighthizer and Xi with his negotiator Liu He. On key points neither side is budging. A key goal for Mr. Trump is to put the trade surplus China enjoys of $300 plus billion a year with the U.S. on a serious downward path, and bring so many of the jobs and manufacturing back home. On this trade data for 2019 and the plan for 2020 of both countries is clear. It should be down each year by 10-20% for the next few years, a major achievement of Mr. Lighthizer, who did the same with  Japan under president Reagan. ...

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The title of this BBC report is a misnomer as the content of the report is that India and the US are actively negotiating a Trade Agreement after some disagreements on Indian oil purchases from Russia bumped up from 2% before 2019 to about one third to 40% of its imports by 2024. This is being rapidly reversed and some estimates by consultants CLSA show India only made $2-3 billion from Russian discounted oil sales, a miniscule amount. On American interest in agricultural exports India can take in some products other than grain which it sees as important to feed 1 billion people and food security.  DJT says the "special relationship" between India and the US is important, and says "there's nothing to worry about. We just have moments on occasion". India has much bigger stakes in trade with the US. In fact it's growth into the third largest economy in the world means doubling or tripling its trade with the US and the European Union in the next few years. This would narrow the difference in GDP and per capita between India and China, as India and China started at the same GDP and per capita in 1950. Only in 1990 with China's trade with the US has the Chinese GDP and per capita income increased to create the huge gap with India. ...

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The U.S. plans to join the EU's WTO complaint over Russia's recycling fee for automobile imports which does not apply to domestically manufactured cars. EU officials say the levy has cut the imports of European automobiles into Russia by 7%. The levy was imposed for five years following Russia's admission into the WTO and is seen as unfairly discriminating against imported cars. Russian automobile sales reached 2,935,000 in 2012, increasing by 11% over 2011. Sales are estimated at 2.8 millon by the AEB trade group for 2013. All ten of the leading models by sales for 2012 were Russian domestically manufactured automobiles. The case goes before the WTO in July 2013.

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Indian exports to US drop from $8.8 to $5.5 billion May to September drop of 37%. A trade agreement is likely and should be similar to Japan's or EU where with Japan it is now 15% and with EU it is 10%, both key allies of the US. India is also a key ally in Asia requiring the DJT administration -once it gets over Modi-DJT differences on the nuclear aspect of the India-Pakistan 48 hour conflict in 2025, and India reverts to getting oil and energy from non Russian sources as it did in 2019, and issues of agricultural exports to India- to drop this tariff of additional 25% for Russian oil and drop the basic tariff of 25% to 15% as the US did with Japan. At 15% Japan and India will still be able to compete with China's 47% (dropped from 57%) to export to the US.  The result can be positive for India as it improves it's cost effectiveness to export to the US and EU, with rapid investment to improve logistics, and streamlining import of technologies and machinery to rapidly cut costs of production. ...

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Ms. Annegret Kramp-Krarrenbauer, elected leader of the CDU party in 2018 with the support of Angela Merkel, will not run for chancellor in next years election and will resign from her position by the end of the year. She will continue as Germany's defense minister. After losses for the CDU in recent elections and the embarrassment of local CDU leaders in Thuringia supporting the far right AfD, AKK as she is known decided to step down. Angela Merkel has decided not to run for chancellor again. Germany is set to chair the EU in the second half of 2020, and Merkel is no longer seen as a leader of influence. The Nationalist Alternative for Germany AfD has gained votes in recent elections following the 2015-2016 migrant crisis, with large numbers of refugees from North Africa and Arab world landing in Greece and Turkey and walking to Hungary, Austria and Germany. Merkel's handling of the crisis with acceptance of a million refugees in 2015-2016 unsettled European and German politics. Why? One way of looking at it is that in the same way that the U.S. took in Chinese imported goods ending in the Trump tariffs war, at some point it just becomes too big to handle. That ended up at $1 billion a day in imports from China when president Trump called it off and accused Obama Democrats, Bush Republicans, of betraying the country. Putting it into perspective Germany with one fourth of the population of the U.S. took in about twice the number of refugees in just one year 2015-2016 that the U.S. took in 10 years 2005-2015. The U.S. took in 675,000 immigrants between 2005-2015. This is as if the U.S. took in something like 20 million immigrants in a short period of 1 year on an equivalent basis- though the cultural impact is even greater in a nation like Germany that is like Japan an historically immigrant averse nation. All this happened too quickly for Germany to handle for its fragile cultural fabric. Much of the initial outpouring of support and positive sentiment came from the sense of having gone through World War II and the refugees in that and the early post war period, the need to return in the same spirit support Germany had received. Over time it eroded support for the Christian Democratic Union and Merkel. That Merkel could have done this is itself a small miracle. Now the rebuilding has to begin. Adenauer's CDU and the socialist SPD party of Willy Brandt now have less than 50% support, only with the Greens Party do they make up 50%. The question now is can the CDU, and the SPD which has fallen to 14% in elections, make it back and what kind of future makeup political parties will have in Germany, how the social fabric can be restored. AKK's achievement is to mend relations between the liberal Merkel wing of the CDU and conservatives from Bavaria (CSU) over immigration.  Candidates for CDU leadership are Armin Laschet, Jens Spahn, and Friedrich Merz. Laschet premier of North Rhine-Westphalia has Merkel's support. Looking back too much attention was taken up by the euro crisis, and too little was done in the areas of infrastructure, inequality gaps, education, child care, under Merkel's leadership and of the preceding SPD years, much like what happened under Bush and Obama administrations in the U.S. where wars, economic crises led to neglect on issues that affect lives of ordinary working families. ...

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In this economy there is wide divergence in the US for upper income people earning well on assets they own at 5%+ for extra income and the lower middle classes wage earners that are struggling even with low unemployment and inflation at 3%. WSJ looks at these two divergent parts of the US economy and what can be done. Inflation could be worse with higher Trump tariffs on imports, says WSJ. The situation is a difficult one for families struggling even with higher incomes, as this one in Michigan in the WSJ, that finds it necessary to take money out of savings with prices higher but not reflected in inflation statistics of 3%. One example is higher housing and apartment rental costs with 25% of families having to spend over 50% of their income on home rental leaving little for food and expenses. President Biden has called for limiting price increases on home and apartment rentals to 5%, and Harris has proposed aid for families spending more than 30% of household income on housing costs. Strong action is needed. ...

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This NYT analysis of fund raising by the Republican and Democratic parties for the 2020 election campaign shows Republicans hardly raising any money from people with incomes over 250,000 and very little from incomes over $200,000 with most funding coming from the base white working class and lower and upper middle class. For Democrats fund raising is significant at the levels of income over $200,000. Geographically the Democrats get most of their funding from the east and west coast areas.  This reflects the changes in the parties starting in the the 2008 elections when higher income groups in software, finance, and in professions of law and medicine and Silicon Valley tech shifted to Democrats. The Democrats also held onto minority votes. In 2016 this changed with a sharp turn with tech on the west coast and finance professionals on the east coast shifting to the Democrats. The PPP agreement under Obama favored tech over the auto industry, and renewal fossil fuels such as solar were favored over the oil industry and fracking. In 2016 this helped shift the votes in Michigan and Pennsylvania to Republicans. Older manufacturing industries, oil and fracking were supported by Republicans who pushed back against ceding global dominance in manufacturing to China. By 2020 these changes are now entrenched with white working class voters in industries decimated and communities destroyed by foreign imports mainly from China, supporting Republicans. Republicans under Trump have made regaining the manufacturing leadership of the U.S. that was the situation after World War II, a top priority for the U.S.  The minority vote shifted with Hispanics moving towards Republicans to a much larger degree than before. The urban rural divide is similar to Europe where the similar impact of foreign imports mainly from China have destroyed older industries and led to sharp decline in older towns and communities outside major cities. This is the situation facing the U.S. and Britain, France, Italy Spain, and Poland. Germany as a manufacturing country dependent on exports is also affected but to a lesser degree. The unwholesome aspect of this is that the larger urban areas are divorced from the rest of the country  and rural small towns, smaller cities. In some form reintegration has to take place. The vast majority of the working class classified in today's terminology as the less educated lacking a college degree and white are  paradoxically with Republicans, and the wealthy professionals and industries in software, finance with Democrats. Nothing makes this more evident than a quick look at the map of the U.S. with blue on the opposite coasts for Democrats and mostly red in between and in the south. This is unprecedented in American history. A rising tide that lifts all boats in the U.S. and the return of the U.S. to the position it held after World War II could change this in the next decade. ...

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The Berman Amendments are what is seen by the Biden administration as well as the previous Trump administration as preventing the US government from regulating or restricting foreign apps, including TikTok. What are these Berman Amendments? They were introduced as legislation by Mr. Berman who represented the Los Angeles District in 1988, that includes the entertainment industry, who now works for a law firm that is representing TikTok, according to this WSJ report. The Berman amendments took away the powers of the president of the US to ban the import of "informational materials" from adversarial nations, later in 1994 it was added to include "digital media." It is now seen in the US Congress as coming from another era the end of the Cold War and needing to be completely rewritten. 

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In August 2023 the Ukraine war is reduced to small unit tactics after a stalled Ukraine offensive. The results of the war over the last 2 years is a broadened NATO with Sweden and Finland inside NATO increasing the borders of NATO with Russia. On the Russian side some of eastern Ukraine on the Black Sea and the Dnieper river are now part of Russia in addition to the Crimea. The Ukraine offensive is stalled. Russia's economy has shifted from its western European orientation for energy exports and auto other imports to a Chinese orientation.  These changes are likely to remain with a shift of supply chains back from China and its suppliers to the US and the EU. This acts to restore the factory bases in the US and EU and revive communities built around factories in small towns across the region. This will bring back regions in the EU and the US that suffered from the loss of factory jobs and public services they supported. Overall this is a healthier situation for the people of Europe and the US. For China also the situation reverses to better quality yet slower growth, and a pause to take stock of the immense changes that happened with explosive growth in trade- the damage to the environment, floods and heat waves from climate change, the explosion in debt to three time its GDP, higher unemployment, rural poverty, and devise solutions to these problems. The war has accelerated the unraveling of the existing economic, social and trade arrangements that had stopped working for many years. ...

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A look at the economic collapse in Lebanon as reported in the NYT. Lebanon depended on foreign inflows of money for its economy and standard of living. The economy has collapsed in recent years because of mismanagement, corruption and sectarian conflict. A civil war in Syria. and wars in the Middle East hurt Lebanon's economy after 2011.  After Lebanon's civil war ended in 1990 the central bank decided to tie the currency lira to the US dollar at 1507 lira to the dollar. To be able to exchange lira for dollars the central bank had to attract dollars. To attract foreigners to deposit dollars the central bank head decided to pay 15% interest. With insufficient US dollars as dollars were also needed for imports, the central bank ended up paying depositors with dollars from new deposits, what is called a Ponzi scheme says the NYT. When these deposits stopped coming in 2019 people could not withdraw their money. Three developments after 2019 hurt the economy. The pandemic hurt tourism which makes up 18% of the Lebanese economy. The pandemic hit Lebanon hard. Then in 2020 a bomb blast hit Beirut port from an abandoned ship in the port destroying three large neighborhoods that could not be repaired. ...

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Germany stands out as an outlier in the percentage of cars imported into the US and not made in the USA- for VW this is 80% and for Mercedes 63%. Only Hyundai falls into this category with 65 percent and it announced a $21 billion plan for investment in the US including a $6.5 billion steel plant in Louisiana. All other foreign companies import about half or less of their sales into the US. VW and Mercedes could follow Hyundai in making the shift to making in the US. Honda makes 65% of its cars and Ford 80% in the USA. Peter Navarro, senior Trade adviser to DJT says-"foreign trade cheaters" countries  such as Germany and Japan, South Korea have turned America's manufacturing sector into a "lower wage assembly operation for foreign parts." Not said is that the Clinton, Bush and Obama administrations, the "smart" economists at Ivy League universities, and America's finance sector looked the other way as this destroyed industry after industry and American manufacturing, destroying America's foundations, its broad middle class.     ...

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Jim Tankersley of the Washington Post looks at the myths and realities of trade following incorrect statements made by Donald Trump about international trade. For example Trump suggests that Japanese automobiles imports are a big problem, though the imports have been cut by over 50% since the 1980's with Japanese companies Toyota and Honda making cars in the U.S. in Kentucky and Ohio. Detroit faces competition from foreign manufacturers based in southern states, including Alabama for Mercedes Benz and Tennessee for Nissan. Mismanagement including lagging in fuel efficiency and quality, and higher health costs for older workers were problems facing Detroit in the past decade. The Obama administration provided support to the auto companies to make the recovery following two bankruptcies in the U.S. auto industry, showing the U.S. has intervened as needed and the auto companies have made transformational changes. A big problem says Trump is the trade agreement with China which he promises to renegotiate. Tankersley points out that no such treaty exists. The U.S. agreed to China's entry into the WTO. This is not something the U.S. can renegotiate as the WTO sets rules for trade for all countries. The likely result of a shift away from Chinese imports would be more imports from countries such as India and Vietnam which are lower cost producers than China. Trump says some of the 2 million jobs lost in the past 2 decades will come back, yet the shift may be towards lower cost countries from China, with fewer jobs coming back to the U.S. High tariffs would not lead to the growth Trump predicts. A study made by Moody's Analytics at the request of the WP shows a Trump move for high tariffs would lead to a recession and lead to mass layoffs as other countries imposed their own tariffs, leading to large loss in U.S. exports. Trump has made claims such as telling the Post that $19 trillion in federal debt could be paid off in 8 years without raising taxes by fixing trade. No grounding on facts is provided by Trump. One of the failures of the media in the 2016 election campaign is the failure of the media to provide scrutiny for candidates claims and wild exaggerations, which have gone uncontested or unquestioned, or without the persistence till satisfactory answers are given by the candidates making them. Especially when the stakes are so high, for the U.S. and for the global economy. ...

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Garlic, ginger, turmeric and similar products are vital for healthy living and healthy food. So it is surprising that so little has been done before the Trump tariffs on Chinese food dumped in the U.S. This BBC report by Pamela Parker says 1994 was when the U.S. confirmed dumping by China of garlic yet the tariff that was placed was of an ineffective type that could be circumvented. As a result the U.S. producers such as Vessey in California that produced garlic for 100 years and 5 generations decided to not produce it beside cauliflower and cabbage. Of the surviving producers one producer today in California produces 100 million pounds of this product that has value way beyond the actual dollars as vital for healthy food supplies in the U.S. In fact after reports of contaminated water supplies in China imports of ginger and other such food products have been shifted away from China.  It is well known that the industrial revolution in China came too quickly and at a large cost to the environment after 1990 including contamination of the water, rivers. For this reason it is stunning that the people setting trade policy in Washington could have ignored the vital need of U.S. meeting food needs for healthy living out of its own soil and trusted farming community. To not have done so and let producers of garlic or ginger or other such vital food products to sustain health to go out of business is nothing less than a part of the growing calamity of self inflicted wounds that have happened so far. At no time more compelling an issue as today in the pandemic. The truth is that when it comes to healthy food supplies it is vitally important, as important as national security. And local supplies grown in one's own state or country particularly for vegetables, herbs, and fruit, are very critical. There is no way to even compare product grown locally to product grown in any country where water supplies may be contaminated by rapid industrial growth. ...

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Brazil's ever increasing production of soyabeans and investments in Brazil by China and US's Cargill ADM result in a oversupply of soyabeans in world's markets leading to lower prices for American farmers. 70% of soyabeans imports by China were from Brazil in 2024 and Cofco state owned agricultural company in China is building a large port terminal on Brazil's coast to handle soyabeans and other exports. Trade tensions with the US mean there are no written agreements farmers can count on for soyabean exports to China. China purchased 13 million metric tons from Argentina last month and committed to buying 25 million metric tons in 2026-2028. Argentina lifted its 26% export tax for the first $7 billion in agricultural exports to bolster it's peso recently. US is turning to other markets in Turkey, Egypt, Morocco, Pakistan, Bangladesh, Thailand and Europe to make up for volume lost to Brazil. For September and October there is a 45% increase in US exports in 2025 resulting from these non-Chinese buyers. No mention is made of India, yet India could in future be a significant buyer of soyabeans because of thenutritional value of soyabeans in an anti-cancer diet and the high protein content which would make Indian diets healthier. In agriculture farmers are not the ones who develop new tastes and new trends in new markets, yet this effort should be part of farmer's outreach to other nations and other cultural food habits with shifts to healthy nutrition. ...

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Half of the 17 percentage points of lower investment in Britain between 2016 and 2023 came from administrative barriers with EU and of Brexit. Britain had deindustrialized and hoped to get growth from so called "clever industries" such as finance, media, and higher education. The Tories party led by Johnson and then Sunak painted a rosy picture for Britain leaving the European Union and doing better without it by working with China and the US and connecting to global supply chains. They ignored the actual facts of the globalization cycle reversing itself leaving Britain exposed in the storm.The slump in investment from Brexit hit Britain hard, the Ukraine war meant higher prices for energy imports from Norway and the US. The result is that only about half percentage point of 2 percent cumulative GDP growth in Britain between 4th qtr 2019 and 4th qtr 2023 came from jobs growth compared to about 3.75% in the EU economies. Eurozone growth at 4% was twice that in UK, and the US with higher productivity and job growth was growing at four times that in UK and twice that in EU at 8% over this period. ...

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Manufacturing could be the bright spot for the U.S. in 2021 and the years ahead. The pandemic has hurt industrial production in the U.S. in 2020. This brings manufacturing in the U.S. to a new low. This report in the WSJ says there is hope today because negative trends are about to be reversed. During three decades since the eighties three trends hurt the U.S.- lack of sustained capital investment, noncompetitive labor costs, degrading infrastructure.  To make the reversal of these trends and raise American manufacturing to what it was after World War II attention is being paid to these negative trends. The response- a quick recovery from the recession,  localization of supply chains, technological advancements to close the gap with competitors. By market capitalization on S&P 500 the U.S. manufacturing industrial sector was 15% in 2000, in 2020 it is 9%. Hope today lies in the determination to reverse the trends in this sector and regain leadership. Even in the aerospace sector the determination and legacy of American manufacturing is strong. Recently the WSJ ran a story on how David Farr, the CEO of industrial company Emerson Electric, which makes automation equipment for factories and aerospace parts based in Ferguson, Missouri, managed his company through the pandemic so that it was posed to return quickly to full production. Against all the hurdles he would not give up and fought hard in each battle with suppliers, governments and the pandemic.This bodes well for American manufacturing coming back on quickly even in tough markets such as aerospace and automation. Other factors WSJ mentions are quick reversal in hit to earnings, robust demand. Consumables have sprung back up fastest, but automobiles are also holding up in demand. This leads us to the localization of supply chains. Companies realize the risks of tensions in the South China Sea and technology theft today in a way that they did not before and this is changing the mood resulting in plans to move production onshore. Warnings from the Trump administration played a role with new tariffs on Chinese imports. Shipping products halfway around the world no longer makes sense, especially in losing control of supplies. Emerson depended on production off shore in China and other countries and panic from the pandemic set in quickly that everything would come to a halt as supplies stopped coming and Emerson could do nothing. The economics WSJ points out are also different today with labor cost inflation in China and labor cost deflation in the U.S. which improves U.S. competitiveness. To make U.S. labor cost competitive with China says Scott Davis in WSJ, one has to make the same quantity of product with half the employees, and this is now possible with automation technologies in 2020. The result is that even at this low point in manufacturing one can see the future is bright for the USA as it moves rapidly to rebuild the strength in manufacturing it had for most of the twentieth century. ...

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Swiss face 39% tariff by US after "disastrous" call by Swiss president to DJT higher even than proposed 31%. Swiss surplus of $46 billion is the issue in US trade. Swiss say they can't import chocolates from the US, the US thinks they can take in oil and LNG. Swiss have not learnt from the UK, EU and Japan, South Korea which came up with solutions to cut deficits with the US, knowing the US was serious to cut it's trade deficits. India faces the same problem as the Swiss, the need to come up with solutions and think that this is a new system of world trade that replaces the old one that lasted for 50 years and is now gone- call it LPF -a level playing field for all countries.

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Milan will host the World Cities Culture Summit in 2020, and the Winter Olympics in 2026 shared with the Alpine town of Cortina. The international book fair of Turin is moving to Milan. The left of centre Mayor Giuseppe Sala has promoted the city to increase tourism by 50%. And foreign investment is increasing for new construction projects with $21 billion to be taken up in the next 15 years. Experts are asking if this is coming at a price as the rest of Italy has stagnated for 20 years, and the rural large city gap is increasing throughout Europe. The flow of professionals to cities such as Milan, Paris, Munich, Berlin, from other towns and cities is creating a huge shift that experts at the Centre of European Reform see as a problem because of the political turmoil, and rising inequality with ever widening gaps between smaller cities and towns and rural areas with the big cities. This is compounded by ageing and demographics such as seen in the eastern part of Germany, and parts of France. Experts call it The Big European Sort, where a sifting or sorting process is increasingly transforming the demographics of European countries and driving polarisation. This process is also happening in the U.S. Experts say the big cities benefitted from the change with the European single market and the European Union. Places where working class people live are not seeing and increase in wealth which is disproportionately going to professionals clustered in big cities. Deindustrialisation has turned places like Mezio only 20 miles from Milan into industrial ruins. Towns that once voted socialist are now voting far right in these hollowed out industrial places. In the U.S. and in Europe the process was exacerbated by the flow of cheap imports from Asia hollowing out factories in regions around big cities, and by the growth of services industry in big cities with globalization in finance, legal, and other professional services. Fro 1980 to 1995 Paris region lost about $5.5 billion in industrial output and gained $20 billion in services output that also aligns with globalization in areas such as finance, according to CER, Eurostat. The process had accelerated in 1995-2020. By telling this story about Milan and the Lombard region around it like Mezio, The Guardian is saying it is time to look at how everything works together rather than breaking apart- citing the Finnish architect Saarinen about how a chair fits into a room, a room into a house, and a house into its environment, an environment in a city. So the question is how can we build the future by seeing that the city fits into a region, and a region fits into a country. As a young professional described this on BBC television interview recently this is a difficult period with the ability to design the future seemingly snatched away by the times, but also an opportunity to rethink and take the actions today for a better tomorrow for all. This is part of the coverage on Cities in The Guardian looking at how cities can work, and how cities can become part of healthy regions, for organic growth. ...

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The problems Brazil faces with a sea of liquidity from developed countries with low interest rates going to emerging market countries with higher interest rates. Brazil is taking steps including a recent cut in interest rates to stem the flow. But interest rates at 12% are still too high not to attract business people in the carrying trade who borrow at low rates in the U.S. and Europe and invest the money in Brazil. The foreign direct investment has also increased. The result is an artificially overvalued currency- by as much as 36% since Jan 1, 2009 according to analysts- which hurts exporters and job creation in Brazil, as it becomes cheaper to import products than manufacture at home. Workers from VW recently protested in Sao Paulo as imports of cars are up significantly and there is a fear of job reduction at VW plants in Brazil. Brazil's automakers association estimate is for car imports to make up 25% of all cars sold in Brazil in 2011. This compares with 5% of cars sold being imported in 2005. It also shows up in production statistics. Brazilian industrial production declined by 1.6% in June 2011 from May. The cost of inputs are increasing rapidly for labor, raw materials, transportation, making Brazil a costly place to do business. The cost of living is now higher in Sao Paulo than in New York city. Cynthia Benedetto, the CFO of Embraer, a large Brazilian aircraft maker, says she always thought since she was a little girl that Brazil was the place of the future. But its deceptive now that the future is here, because this euphoria of progress could be shortlived. Embraer is investing in technology to reduce labor costs and is opening factories overseas. Bombardier, one of Embraer's competitors from Canada recently announced plans to build a manufacturing plant in Mexico. Brazilian president Rousseff is aware of this, and told Latin American leaders in Lima, Peru: "we have to defend ourselves against this immense, fantastic, extraordinary sea of liquidity that finds its way to our economies in search of returns that it can't find in its own." At the same time Rousseff has election promises to fulfill that require larger spending and for which the capital inflows are convenient but could prove erratic- for social welfare projects, and for infrastructure spending in advance of the Olympics. Turkey is seeing a similiar situation with booming consumer credit sustained by capital inflows even as its manufacturing competitiveness has remained weak. ...

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The task of getting 20 million tons of foodgrains in Ukrainian silos out of Ukraine is being taken up by the European Union. Ms. Leyen of the EU has emphasized the importance of this mission for poor countries. About 50 countries depend on Ukraine and Russia for over 30% of imports of foodgrains says the WSJ. One way supported in this WSJ Editorial Board opinion is to use naval ships to escort ships carrying grain out of Black Sea ports. This requires Turkey's support and has to be done as a humanitarian move with ships from many countries. Rail would be an option yet Ukraine and the rest of Europe use different railway infrastructure. Steps need to be taken to do this quickly to overcome the rail issues and also use motor transport. The port of Odessa has been mined by Ukraine to prevent a Russian naval assault showing that there are obstacles along the way to be met by land or by sea. Starting now would be the best way to approach this. Both the Eu and the US should work together on this. The baby food crisis in the US was tackled by special flights from Germany. This shows that many options can be combined and problems tackled to get food grains out. What seems insurmountable can be tackled with action taken early, learning along the way. The Berlin Airlift did this in 1947 with another Soviet blockade. This would also lift spirits throughout the world. ...

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China imports from the US only $143 billion and much of this is soyabeans (US farmers), petroleum oil products (buyers in Europe and Asia), aircraft (Boeing). Farmers were compensated from the tariff revenues in the first term, oil products would be shipped to Asia and LNG to Europe to make up for loss of supplies from Russia. India will take up the Boeing production as it's economy expands to levels China, Japan had earlier. The action is a last resort as 490,000 lives were lost in 12 years from the fentanyl shipped raw materials from China and drug trafficking gangs in Mexico processing it in labs to ship across the long US border or Canadian border into the US. China and Mexico have not stopped the flow of fentanyl into the US. How much is 490,000 American lives worth? That is 5 times the lives lost in the Vietnam War and the Korean War combined of 100,000 lives lost in both wars. China exported $436 billion to the US in 2023 increasing by about 6% from prior year. Integrated Circuits alone were more than all US exports combined to China at $154 billion. Electric batteries another $80 billion. Computers and office machine parts were $54 billion. Where will China ship all these products. It is brave but it is easier to stop fentanyl flows out of China, and cut all the trade barriers, reverse state policy to dominate key industrial sectors in State Planning. The problem in the stock market response is that this is a trade war which it is NOT. It is about National Security if this is allowed to continue as Clinton, Bush, Obama have allowed to happen US is in real danger of becoming a second rate power in the world, at which point the world will become a dangerous place with India, China, Russia, Germany and other states having no constraints to create future wars without US to set some basic principles of world peace. UN itself would not exist without Cordell Hull and FDR. The world we know will be GONE. US Navy will not be able to build the ships it needs in USA if this deindustrialization is allowed to continue.    ...

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A new family sedan will come out of a new manufacturing plant VW has built in Chattanooga, Tennessee, in 2011. The plant will turn out a new version of the Passat to compete with the Toyota Camry and the Honda Accord. Production capacity will be 150,000 A new Beetle will also be introduced. This is the first time VW has built a car specifically designed for the U.S.. During its previous efforts in the 80's VW used European designs and transferred them to the U.S. Its plans are to sell 400,000 VW's in the U.S. by 2013. VW sold 213,000 cars in the U.S. in 2009, so this means doubling sales in 4 years. At it height VW sold 577,000 cars in 1970, but this was before the Japanese and the Koreans entered the market in a significant way, and now the potential is there for Chinese and Indian imports at the low end of the price scale. Another factor making this goal difficult to achieve is the smaller car market and lower economic growth. By 1992, sales had dropped to 49,000, after the boxier replacement to the bug- in its Rabbit and Golf models- never took off. The new Beetle's introduction in 1998 improved sales, which reached 356,000 in 2001, and then declined as a result of too few new models, declining quality and a weakening dollar. There is a feeling among VW's American dealers, that VW's European headquarters staff is not giving the US the priority it deserves. The revolving door change in CEO's for the US operations, has only reinforced this impression. Mr Browning of GM's European operations replaced Jaccoby recently. Jaccoby joined Volvo as its new CEO. Steps taken to address these issues are to revamp the Jetta model for American customer preferences, and advertising that appeals to price conscious customers with the line: "Great for the price of good." Another innovative effort is an ad strategy that tries to capture Hispanics in the US market, with ads on Spanish language television networks. A sign of how much German management is involved in the detail of the new Jetta, is the discussion at the management board level about whether the new model should have American style cup holders. This meant pushing the brake two inches forward towards the driver, a decision that was made to do so after some deliberation at the management board. This will lead to intense competition in the US market, with Asian, European and US manufacturers all vying for the same price conscious customers....

LyrArc Article Gist
The Guardian's Greenhouse says the UAW sees the tariff action with 25% tariff on cars imported into the US starting April 2 2025, as a positive step.  Shawn Fain of the UAW who had the support of president Biden during his term 2020-2024 says DJT's actions match those taken by Biden to help working class Americans and the middle class. Supporting the president “for stepping up to end the free trade disaster that has devastated working-class communities for decades”. “Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions.” Greenhouse is concerned that the way it is being implemented can create problems with tariffs on one day and off the next. The reason for the on again off again action was to give Mexico, Canada, and China time to respond with action they have not taken on fentanyl flows into the US, and Mexico time to address migrant trafficking across its borders. The US International Trade Commission study in 2024 on the 25% tariff on US auto imports cited by BBC shows it would reduce imports by 75%, increase prices by a modest 5%, and increase revenues of auto makers in the US by 5%. Figures such as prices going up by $6000 may apply to BMW's that are imported from Germany and carry high price tags for a very small very affluent customer group unrepresentative of the US automobile market. ...