Impact of Oil Spill in Indonesia

The Indonesian government has declared a state of emergency after an oil spill has continued to spread right off of the country's coast. The oil eventually caught fire producing thick black smoke. The repercussions of an oil spill like this go beyond the immediate fatalities. A significant portion of Indonesia's exports consist of seafood- with the oil spill it goes without saying that not only does the oil spill kill marine life but also, seafood may be contaminated and not fit for consuming. Inadvertently, the fishing sector suffers, especially traditional fisherman who depend on seafood as their daily livelihood. The oil spill may possibly ruin ships and fishing equipment too. Indonesia's tourism industry may also take a blow due to this, with one of it's main attractions being its beautiful beaches which may be contaminated. Moreover, businesses that earn revenue from recreational services such as jet ski rentals or even restaurants near the beach may also suffer a loss in profits.

https://www.cnn.com/2018/04/04/asia/indonesia-balikpapan-oil-spill-state-of-emergency/index.html

Japanese Aluminium Trade Group Calls Upon Trump Administration to Drop Aluminium Tariffs

After consideration of the $50 Billion tariff by the US placed on China, many have wondered what it would entail going forward in terms of the market, especially those targeting the aluminum market. Some individuals spoke on the possible threat this may induce on other markets considering in example, China is known for being “one of the largest buyers of US crops,” (CNN). However, in an interesting turn of events, the US has actually sanctioned higher demand in the Japanese Aluminum trades; and in turn created a higher appreciation than previously predicted of the Yen when compared to the US dollar. Japan is currently in between negotiations of seeking lower tariffs from the US, as they were not among the group of countries that were exempt, since the Trump administration’s focus was to hit China hard. Even without the tariff exemption however, imagine the strength gained and position in the market as a response following the plans for Japan to become the primary suppliers. I find the times quite intriguing of when it comes to: how one country imposing higher tariffs hitting a second country, will then create this large of an appreciation on a third country’s currency –especially since learning of the Plaza Accord. Yes, at that time (in 1985), the focus may have been between the depreciation of the US dollar and appreciation of the Japanese Yen for the prosperity of the market and its advancement. In a way, this has provided a similar boost to the future growth in market, and at the same time, has appreciated the Yen without depreciating another currency. It doesn’t feel too surprising (shutting down one opportunity of a market means moving to a second provider at a different price), but it certainly does bring an interesting change to the trade game, and the ever curiosity of what may come.

http://money.cnn.com/2018/04/03/news/economy/us-tariffs-china/index.html

https://aluminiuminsider.com/japanese-aluminium-trade-group-calls-upon-trump-administration-to-drop-aluminium-tariffs/

Chinese Tariff On American Ginseng 'Definitely Concerning,' Wisconsin Farmer Says

I heard this story on the radio this afternoon and found it especially interesting. China's tariffs on American food products in retaliation to the steel and aluminum tariffs are greatly affecting the production of Ginseng, an herb that we usually associate as coming from Asia, and that is used in herbal teas and remedies. The farmer interviewed in this story says that last year, Wisconsin farmers shipped almost $30 million of Ginseng to China, and until the 1990's, produced 95% of Ginseng worldwide. The report brings up questions of whether the tariffs on US products are being targeted to politically important production areas (because in this case, this district in Wisconsin is represented by Paul Ryan and also voted for Trump), but I also wonder what effect this will have on the Ginseng markets, since the overwhelming majority of supply is now going to cost at least 15% more.

http://www.wbur.org/hereandnow/2018/04/03/china-tariffs-ginseng-wisconsin

Coal power company files for bankruptcy and asks Trump for bailout

The Akron-based power company FirstEnergy has recently filed for Chapter 11 bankruptcy for their coal and nuclear divisions. However, FirstEnergy is seeking a government bailout through a lesser-known section of federal law typically reserved for natural disasters. Despite Trump's insistence on using coal power, the coal industry has faced severe pressure from the natural gas industry. Asking for a bailout from a fund used for natural disaster relief is a gross misuse of tax-payers' money. The coal industry has declined for good reason, as it is a very unclean source of energy. Should the Trump administration choose to bailout FirstEnergy's subsidies, I believe that they should only bailout the nuclear division. Despite many people's concerns, nuclear power is one of the cleanest forms of energy, and it should have priority over coal.

Source: http://money.cnn.com/2018/04/02/investing/firstenergy-coal-bankruptcy-trump/index.html

China retaliates against Trump tariffs with levy on US food imports

This article is about how China has implemented tariffs of up to 25% on U.S food imports in response to Trumps tariffs on steel and aluminum.   The article suggested that China and the U.S should resolve their issues through negotiation and dialogue because as the world’s two largest economies, they should be cooperating.  Although the two have been retaliating against each other, China's tariffs do not cover soybeans, the US’s biggest exports to China, indicating that it does not wish to start a huge trade war.  It can be predicted that the U.S and China will continue to retaliate against each other, but for how long and to what extent is unknown. 

Tesla Model X was in autopilot before fatal crash

This is an interesting article on Tesla's Model X which was involved in a fatal crash while it was in auto-pilot mode. Federal Regulators deemed this model to be highest in safety rankings for an SUV. It surprising to note that this incident happens just weeks after the autopilot Uber fatal crash which killed a woman on the highway in Arizona. It would be interesting to note what the future holds for these self-driving cars because already Tesla's stock has crashed 22 percent since the incident and Uber has also temporarily stopped its autopilot cars. Tesla issued a statement that the autopilot feature is not fully autonomous and the car issued several warnings before the crash for him to take the wheel which he didn't. More importantly, I'm more concerned about the future of the company which plans to roll out more models with the autopilot features.

http://money.cnn.com/2018/03/31/technology/tesla-model-x-crash-autopilot/index.html

U.S., China Quietly Seek Trade Solutions After Days of Loud Threats

US Treasury Secretary Steven Mnuchin, trade representative Robert Lighthizer and China's top economic adviser Liu He have opened talks on a trade dispute between the two powers, according to sources. Mnuchin and Lighthizer reportedly wrote to Liu late last week with requests for concessions to help ease the strained relationship, and a Treasury spokesman says they have discussed the trade deficit and are "committed to continuing the dialogue to find a mutually agreeable way to reduce it.

I found this extremely relevant due to this topic directly affecting the health of our national stock markets. Trade solutions often positively correlate with market growth.

https://www.wsj.com/articles/u-s-china-quietly-seek-trade-solutions-after-days-of-loud-threats-1522018524

Uber Pulls Out of Southeast Asia, Selling Operation to Rival Grab

Amy Peters

Uber Pulls Out of Southeast Asia, Selling Operation to Rival Grab

            Uber has recently decided to back out of doing business in Southeast Asia, both for their ride service as well as for their food delivery in that area. This decision was brought with great skepticism since this one of the fastest growing regions in the world, and the opportunity for Uber growth in the region was tremendous. The company Grab is now acquiring all of Uber’s current operations in this region, in return Uber gets a 28% stake in Grab as well as the Uber CEO will now sit on Grab’s board. This is being seen as a great success for Grab, the Singapore-based company. This is not the first time Uber has pulled out of expanding areas, backing out of China and Russia in the past years. Uber’s rationale for these decisions is that they want to focus on growth and investments in new products and they want to protect the financials of the company from possible losses before their expected IPO in 2019. Did Uber make the right decision by giving up this territory?

https://www.bloomberg.com/news/articles/2018-03-26/uber-cedes-southeast-asia-to-chief-rival-grab-in-latest-pullout

Uber’s Self-Driving Cars Were Struggling Before Arizona Crash

Uber cars was actually struggling before the crash in Arizona. The robots did not live up to expectations and have trouble driving through construction zones and next to tall vehicle

e and yet it killed a woman in Arizona. “Waymo, formerly the self-driving car project of Google, said that in tests on roads in California last year, its cars went an average of nearly 5,600 miles before the driver had to take control from the computer to steer out of trouble. As of March, Uber was struggling to meet its target of 13 miles per “intervention” in Arizona, according to 100 pages of company documents obtained by The New York Times and two people familiars with the company’s operations in the Phoenix area but not permitted to speak publicly about it”.  I am curious to see what they will do next.

https://www.nytimes.com/2018/03/23/technology/uber-self-driving-cars-arizona.html?rref=collection%2Fsectioncollection%2Ftechnology&action=click&contentCollection=technology&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront

Trump Gets First Major Trade Deal, as South Korea Looks to Avoid Tariffs

This article talks about the first of many deals that Trump's administration is trying to seal relating international trade. It started when he decided to impose tariffs on steel and aluminum, which at first would benefit local producers. Now he has decided to use these tariffs in order to have leverage over other countries while negotiating trade deals. It seems like the planned worked with South Korea, and the US is going to be benefited with the deal because now they will be able to increase exports of cars to South Korea. But this does not mean that every country is going to react the same way because some might not like the fact that the US is trying to take advantage of them, and their answer could be to impose tariffs in US products instead. Only with time, the repercussions of this trade war will be able to be analyzed, and it would be interesting to know if it actually benefits the US. So far it seems like it has but there is a long way to go.

https://www.nytimes.com/2018/03/26/business/south-korea-us-tariffs.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

For the U.S. and China, a Technology Cold War That’s Freezing Over

In the current state of our economy and political climate, the desire to protect domestic industry is greater than ever. This battle for protection of firms can be seen in the heavily competitive technology sector. China has historically placed heavy burdens on US companies trying to do business in China to support the emerging Chinese industry. Recently, however, the capacity of Chinese factories have begun to approach that of US firms. Because of this, the US government is beginning to take steps to protect our tech firms against the growing Chinese firms.

This is one of the first times in history that we have been at odds with a country that we share so much investment with that is also seen as a political threat. For example, Japan has always competed with us economically but they have also been a military ally and Russia has been an adversary but has never come close to our economic output. China is in a strange position of being able to compete with us in the open market but is also seen as a political adversary.

This article highlights that problems that arise when infant industries begin to compete on the open market with their mature peers. Only time will tell how we begin to solve this problem of approaching equity in the international tech industry.

Link to Article

U.S. gunmaker Remington files for bankruptcy

It is surprising to see this article stating one of the largest firearms makers to file bankruptcy protection at first, but it is somehow indicating how the gun industry will go due to the opposed public pressure.


https://www.reuters.com/article/us-remington-bankruptcy/u-s-gunmaker-remington-files-for-bankruptcy-idUSKBN1H204F 

For U.S. Farmers, China Tariffs’ Timing Is Brutal

Following President Trump's Tariff announcements on China, China has naturally decided to engage in action for their own financial benefit as a country. This attempt to improve the trade policy and relationship between the United States and China is starting to backfire on the U.S. agriculture industry. China's first action of protectionist response was to increase soybean purchases from Brazil, (where the crop is cheaper than in the U.S). Resulting from that shift, China is now buying less American soybeans. When asked about their decision to makes this move, they responded by saying that is in response to the recent steel and aluminum tariffs. This type of rogue protectionist trade policy should be watched closely as the role of globalization in today's markets are more prevalent than ever before. Markets are on edge following this recent Chinese response.


https://www.wsj.com/articles/for-u-s-farmers-china-tariffs-timing-is-harsh-1521979200

India’s need for growth

India’s former central bank governor, Raghuram Rajan says that India needs to grow faster. As of now, India has the third largest economy in India but continues to add approximately 12 millions workers into the job force every year. Rajan says that the current growth of 7.5 to 8 percent each year is easy and expected, and that India should be striving for the Chinese growth of the early 2000s, at least 10 percent. However, Rajan says that this all depends on the governments ability to speed up the land acquisition process that has stalled so many industrial projects. If this process is depoliticized, India may have a shot at quickly growing into the next industrial power.

https://www.google.com/amp/s/www.cnbc.com/amp/2018/03/19/indias-economy-needs-to-grow-10-percent-former-imf-chief-economist.html

Things could turn bad for India's economy in 2018

This article discusses how India could be the most vulnerable to the rising interest rate in the US. According to the article, high-interest rates would result in capital outflows from emerging economies as investors would prefer high yields. In the past, India had a high rate of sell-offs when the US tightened its monetary policies. The present conditions of the Indian economy are not good and there is a high risk of further deterioration.

https://www.cnbc.com/2018/03/21/credit-suisse-india-is-vulnerable-when-interest-rates-rise.html

Tariffs hurting GM

President Trump's tariff will have significant costs to the economy. One such company that is going to suffer is GM. With President Trump's tariff the rising price of steel and aluminum will cause the price of cars to go up $200 a car. This will most likely result in a decrease in demand for GM cars. In addition, this will hurt GM's bottom line by raising it's own costs by $300 million. This results in profit margins shrinking resulting a fall in the company's stock which is down over 10 percent in the last month.

http://www.businessinsider.com/trump-tariffs-general-motors-stock-price-to-have-a-two-fold-effect-2018-3

Bitcoin will be the single global currency

https://www.cnbc.com/2018/03/25/bitcoin-will-eventually-be-the-single-global-currency-twitters-jack-dorsey.html

This article is interesting, but I find it hard to agree with. Bitcoin is an interesting and complex, but to me, is rather worthless to law-abiding citizens. For instance, why go through the process of transferring USD into bitcoin in order to buy a cup of coffee, rather than just buy it with USD in the first place?

I believe the underlying technology, the blockchain, is a lot more valuable and useful to society. Overtime, blockchain will be adopted globally. Bitcoin, on the other hand, is just a currency that serves little purpose.

It will be interesting see how global governments react to the adoption of blockchain and other currencies. It will also be interesting to see cryptocurrencies affect the strength of currencies, such as, the US dollar. If more and more people use bitcoin in the United States to transact, than the value of the dollar could drop. This would hurt our economy and the businesses that use the dollar to import goods. Ultimately, using the blockchain to make transactions safe and secure is very important. But, I believe governments will work on using blockchain for US dollar transactions, and not bitcoin transactions. There was recently a G-20 summit about bitcoin and cryptocurrency, and almost all agreed that it an asset rather than a currency.

Im curious what other people think of bitcoin and the future of it as a currency?

The economy looks weak in the first quarter, but better days are coming

This article talks about how the GDP growth will likely be slow in the first quarter, but should accelerate stronger later in the year. The Bank of America indicated that its growth rate would decrease from 2.3% in Q1 but would eventually rise up to 2.9%. The Federal Reserve indicated that the US growth rate would increase from 2.5% to 2.7%. There will be a stronger payback in the second quarter, as mentioned in the article with growth projected to increase from 3.3% to 3.7%, and a 3.3% to 3.6% growth in the third quarter.  An investment strategist in Charles Schwab mentioned that “the economy looks strong and we believe the upcoming earnings season will be solid”. The optimism of a stronger economy arose from good estimates from the manufacturing industry. The only reason to negate that optimism are disappointing auto sales to retail to housing. Durable goods also increased by 3.1%, ahead of the 1.7%. Overall, with low cost of borrowing, high capacity utilization and tax cuts, US economist at Capital Economics Andrew Hunter believes that business investment will continue to expand at a healthy pace in the coming quarters. The Federal Reserve of Atlanta mentioned that the gains in durable goods were offset by a decrease in new home sales. According to the consensus, the market growth rate for the fourth quarter is at 2.5%.

A high expected growth rate is vital to increase the consumer confidence, so that spending is high (MPC increases), businesses are performing well, which further increases the economic growth rate in the long run.

https://www.cnbc.com/2018/03/23/the-economy-looks-weak-in-the-first-quarter-but-better-days-are-coming.html

A List of the Companies Cutting Ties With the N.R.A.

This article is pretty straight forward and talks about several companies that have chosen to cut ties with the NRA after the recent Parkland shooting.  Much talk has arisen about how the economy will be effected as a result, especially gun sales and the NRA.  Another conversation to potentially be having is how the companies that cut ties will be effected. For instance, a strong supporter of the NRA might not want to be a customer of one of the companies that cut ties.  Like Delta airlines, for example, could potentially lose business due to peoples political agendas regarding guns and the NRA.  On the other hand, business could fluctuate in a positive way for companies because of the very same reason.  If someone had a very strong dislike for the NRA, they might intentionally gravitate more towards the companies that cut ties, more than they otherwise would have.  Either way, the economy could be effected by more than just gun sales, but also these companies' decision to cut ties with the NRA.

Tariffs are beginning to have an effect on U.S agriculture.

Much of the agricultural side of our economy is going to be affected by the tariffs that Trump is putting in place. As he puts more tariffs in place china is putting some tariffs of its own into play as well to in reaction to Trump. These tariffs will be on pork fruit and nuts. The U.S is also the second largest importer of these good just under Canada. This will have a huge impact on domestic agriculture and it will definitely not be a positive affect on the U.S economy. However, just how negative these tariffs will affect the U.S is still to be seen.


https://www.wsj.com/articles/for-u-s-farmers-china-tariffs-timing-is-harsh-1521979200

Remington files for Bankruptcy

Through the past few weeks many things have happened including gun violence.  It seems very fitting during times like these that one of the oldest gun makers files for bankruptcy.  They have been facing loads of debt and law suits over the past couple years and it all seems to have caught up to them.  With everything that is going on in todays world it will be interesting to see what Remington does after this.  Many people are not behind them because of them being gun producers so it will be hard for them to bounce back to where they were once at in the world economy.

https://www.marketwatch.com/story/debt-laden-gun-maker-remington-files-for-chapter-11-bankruptcy-2018-03-25

What if China corners the cobalt market?

Cobalt recently entered in the growing market for batteries for electric vehicles, which each uses about 10kg of cobalt.  It's known that more than half of the world's cobalt reserves and production are in the country the Democratic Republic of Congo.  But what is less known is that four-fifths of the cobalt sulphates and oxides used to make the cathodes for lithium-ion batteries are refined in China.  Few analysts expect the cobalt market to soften soon.  Production in Congo is likely to increase in the next few years, but some investment may be deterred by a recent five-fold leap in royalties on cobalt.  Investment elsewhere is limited because cobalt is nearly always mined alongside copper or nickel.  At current prices the quantities needed are not enough to justify production for cobalt alone.

https://www.economist.com/news/finance-and-economics/21739161-nickel-could-make-good-substituteprovided-car-batteries-dont-catch-fire-what-if

Spotify Saved Music. Can It Save Itself?

I was surprised when reading this article.  Spotify has 70 million customers that pay for an account, but they make barely any revenue.  The CEO, Daniel Ek hired Barry McCarthy, a "finance whiz", who helped Netflix when they became public, to help him convince investors that Spotify is a good investment although they don't make much money.  Unlike Netflix, Spotify doesn't plan to make its own music and would not benefit from it.  Thus, they are trying to find other ways they can make some money.  Right now, they offer record companies free access to their data that they can utilize to plan album release dates and other logistics.  One thought is to start charging for access to this data.  I am curious to see what else McCarthy and Ek have in mind and if it will be enough to bring in some cash and convince investors. 

https://www.bloomberg.com/news/articles/2018-03-23/spotify-saved-music-can-it-save-itself

The economics of a military draft

In Dr. Daniel Sutter's article he discusses the economics that go along with a military draft. The common assumption was that a draft would reduce the cost of the military but this is a misconception . For one the government still has to pay for the individuals that have been enlisted from the draft. There is also a big trade off because many people who could have a big influence on the economy could end up serving. The article goes on to discuss  the cost and feasibility of a volunteer military from research. Personally I feel it is very unlikely for a draft to occur in our lifetime. However, I think to look at the trade-offs between a draft and the economy is very interesting. http://yellowhammernews.com/economics-of-a-military-draft/

New Fed head approves first rate hike of 2018

The FED is going to go through the first round of raising interest rates in 2018, as more after are expected throughout the year.  Wall street investors and bankers are most likely not going to be happy because this is most likely going to put the metaphorical brakes on the economy in a small way.  The FED is most likely worried about the economy being over heated and going too far past the steady state.  Going too far past could cause a recession or correction that would lead to a decrease in economic output and have a severe effect on the labor market.  Trying to tame the business cycle is a goal of the FED because as we have seen in history, the highest economic highs are followed by the lowest economic lows.

https://www.nbcnews.com/business/economy/new-fed-head-approves-first-rate-hike-2018-n858726

Tariff Battle: Where the U.S. and Chinese Moves May Lead

The tariffs on imported aluminum and steel enacted on Friday, a day after announcing levies up to $60 billion in Chinese goods and China made its response. China decided to add tariffs on $3 billion in more than 100 American products, including pork, wine, fruits and so on to balance the loss.

Compared to these two numbers, the American industry seems would not be affected too much, but I believe that this is a warning from China. If the tariff policy is not canceled or modified, China would find more way to against it.

The article mentioned that if Chinese could not export their steel, they have to consume domestically. And because there are so many different kinds of steel for different uses, American steel industries could not satisfy all the demand. In the short term, the price would go much higher but in the long term, the American might have the chance to develop their own steel industry.

The tariff battle, however, is harmful to all the countries because of the economic globalization. The economy of one country would affect others and for protecting its own benefit, the countries would publish some policy to react but it might hurt other countries' benefits as well. This is very complicated and I'd like to see how things go in the end.

https://www.nytimes.com/2018/03/23/business/economy/china-tariffs-explain.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=sectionfront

Fed’s Mission Improbable: Lift Unemployment—but Avoid Recession

We mentioned tradeoffs between economic outcomes earlier in the semester, and this article mentions possible tradeoffs between the goals of the Fed. Per the author, the Fed should aim to increase unemployment from 4.1% to the natural rate of 4.5% in order to combat inflation. However, doing so would most likely lead to a recession. It was interesting to note that the article mentioned that unemployment is on pace to reach 3.6% by the fourth quarter of 2019. In reality, the Fed's plan is to gradually raise interest rates so that unemployment and growth rates return to their long-run sustainable levels. In general, I felt that the author was very biased and critical of the current administration's handling of the economy. It is also evident that he fears a recession soon, as we are nearing the end of a business cycle.



https://www.wsj.com/articles/feds-mission-improbable-lift-unemploymentbut-avoid-recession-1521711004

Why Africa’s poor pay high prices

This article explains the problems faced by less developed countries regarding prices. Many people assume that richer countries have higher costs of living. However, this article shows that that is not the case. The dollar simply doesn't go as far in poorer countries because of the high prices of food. The article states that "cheaper food may boost manufacturing by making wages more competitive." This would help bring developing countries up to par in their standard of living compared to prices.

https://www.economist.com/news/middle-east-and-africa/21738911-africas-economic-paradox-why-africas-poor-pay-high-prices

Crisis in Congo

The ongoing humanitarian crisis in Congo that begin in August 2016 is predicted to be Africa's mega-crisis in 2018 with only more people uprooted and forced to leave everything behind. Not only does this displacement put a strain on Uganda's economy, with more than 34,000 refugees only in 2018- but also it has lead an increase in slum living conditions. On top of that there is also a food crisis where due to the political instability no crops can be planted nor harvested so that most people barely eat one meal a day. The shortage has only made the price of food and other basic necessities go up, with Congo's currency losing 55% of it's value in 2017. This is yet another example of how political unrest in a certain country affects the economy of the entire region.

https://www.nrc.no/opinions-all/congo-will-be-africas-mega-crisis-in-2018/

French President’s Next Target: The Railroads. Strikes Loom.

In France, the railroad system is very important for public transportation and for the people who work on the railroad. For now, the railroad system is controlled by the government, which provide great benefits to railroad workers. Emmanuel Macron, France's president, is proposing to reduce the worker's benefits in order to contain costs and improving service, which shifts the industry to treat its workers more like private-sector employees. France's prime minister said that the government has no intention of privatizing the rail system, but the state-owned rail company must be updated if it is to hold its own with the coming competition from private companies. 

https://www.nytimes.com/2018/03/21/world/europe/france-railways-strike.html?rref=collection%2Fsectioncollection%2Fworld&action=click&contentCollection=world&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront

China's powerful central bank has a new leader

China's parliament confirmed Monday that deputy governor Yi Gang has been promoted to the top job at the People's Bank of China. He replaces veteran governor Zhou Xiaochuan, who is retiring after leading China's central bank for more than 15 years. Yi, a US-educated economist who speaks English fluently -- had been deputy governor of the central bank for the last decade. He begins his first five-year term at the central bank immediately. Analysts viewed Yi's promotion as a sign of continuity for the world's second-biggest economy. Zhou's governorship saw the size of China's economy increase exponentially as well as several big moves to open up the country to more foreign investment. China's central bank -- like the US Federal Reserve -- plays a key role in the smooth running of the country's economy. Its responsibilities include setting interest rates and regulating China's huge financial sector. One of Yi's big priorities will be getting China's enormous levels of debt under control as economic growth continues to cool. Growth is expected to come in at 6.5% this year, a few notches below the 6.9% rate seen in 2017. The Chinese economy faces other immediate threats. President Donald Trump's decision to impose tariffs on imports of steel and aluminum and the impending results of a probe into alleged Chinese theft of intellectual property have prompted fears of a trade war between the world's top two economies.

http://money.cnn.com/2018/03/19/news/economy/china-new-pboc-governor/index.html

A stronger yen is bad news for Japan's inflation target

A recent article published by CNBC discussed the difficulties that Japan is facing in it's economic policy. The country's central bank aims to increase the inflation rate to 2% by fiscal year 2019, but this goal is not very likely due to current trends, according to Hiro Shirawaka, Credit Suisse's chief economist for Japan. Shirawaka stated that this inflation goal is not likely if the yen continues to strengthen. The appreciation of the yen is counter-intuitive to this desired higher inflation rate. Japan's current inflation rate is 0.9% as of January. This is relevant to the course because it shows some of the difficulties that governments face in trying to achieve certain economic goals.

Source: https://www.cnbc.com/2018/03/20/japans-inflation-rate-may-not-be-2-percent-if-yen-strengthens-credit-suisse.html

Backlash to Facebook revelations

This article deals with the ways politicians are reacting to the revelation that Cambridge Analytica stole personal date from over 50 million Facebook accounts to try to predict how people would vote and what could change how they vote. It is largely unlikely that the actions of one data firm or another were the sole factor that tipped a US Presidential election, but this news raises questions about how or if Facebook is preventing data breaches and what the ethical way to use personal data is. In the era of big data, when we're all posting our every move on Facebook, it's important to question how we think about how our information is used.

https://www.politico.com/story/2018/03/19/angry-democrats-facebook-424456

Trump keeps focusing on goods instead of services in the economy

President Trump has long been focused on the US' ability to produce goods when compared to foreign countries since his campaign began.  He has continually emphasized that the US is operating at deficits that are a bit off because he fails to focus on the service-side of the economy.  For example, just last week he said we are at a trade deficit with Canada, which is true if you look strictly at goods production, but we are actually running at a surplus when services are included.  Additionally, he states we are running at a $800 billion/year deficit, which is true if you exclude services, but that number is actually $556 billion/year.

One thing has been consistently true for President Trump, however, and that is that he wants to see manufacturing in this country, specifically cars and coal mining, to increase.  If the President had not made this concept a big idea throughout his campaign, his approach to these numbers would be a tad different.

http://www.businessinsider.com/trump-keeps-focusing-on-goods-instead-of-services-in-the-economy-2018-3

Trade war would wipe out gains from tax cuts, Penn analysis says

 After conducting a hypothetical study of a trade war, experts at the University of Pennsylvania claim that a trade war could potentially wipe out the gains from the tax cuts offered by the Trump administration. So far the US has offered exceptions to Canada and Mexico to be exempted from tariffs temporarily. However, China and the European Union have already said that any tariffs imposed by the US are likely to be met with retaliation. The Trump administration seems to be pretty confident about the unlikelihood scenario of a trade war and is optimistic that even if there is such a situation "Trade wars are good and easy to win". Analysis indicates that this could cause losses to the economy of up to 200 billion dollars over the next 10 years and about 1.4 trillion dollars by the year 2040. Of course, this is just an analysis of a hypothetical situation, the results could be much worse than what is predicted.

http://money.cnn.com/2018/03/14/news/economy/trade-war-economic-cost/index.html

Rule Based Response To Trump On Tariffs

I was expecting to wake up Monday morning with the news that Europe had secured an exception to the tariffs on aluminum and steel that Trump announced last week. I didn't, and this article is the newest update on the European response to potential US tariffs.

Just about every major leader of the EU has put out a catch sound bite against the tariffs -- this article quotes Jean Claude Juncker as saying "Make trade, not war" and another leader as referencing the European-US "special relationship." The article also says that the first counter tariffs that the EU will institute will be orange juice, bourbon, denim, peanut butter and cranberries. This article reports a tense exchange between Trump and the EU Trade Commissioner, pointing out that the EU has a 10% tariff on US cars, but the US has a 25% tariff on trucks and pickups. What comes across in this article is a communication breakdown between the two bureaucratic bodies and the European wish to settle the disagreements without having to take it to the WTO.

Another though I had was if Europe, Canada and Mexico all end up exceptions -- what state would actually be seriously effected by these tariffs? We know there are already tariffs targeting China, and that the US isn't in the top 10 countries that China exports steel and aluminum to.... so if Europe successfully gets an exception, who do these effect?

https://www.euractiv.com/section/economy-jobs/news/meps-back-commission-on-rule-based-response-to-trump-on-tariffs/