Did U.S. Start Computer Chip Spying?
The CIA secretly controlled a company that
provided encryption equipment to many foreign companies for decades, as detailed
in a fascinating
special report in the Washington Post.
agency first used the company, Crypto AG, to keep the most sophisticated
equipment out of the hands of some countries, before expanding its operations
into active surveillance of secret communications. It finally sold off the
company's assets in 2018. The story is particularly relevant as the Trump
administration continues to raise concerns about China using Huawei as a tool of
The White House 5G plan to build on efforts by some U.S. telecom and
technology companies to agree on common engineering standards that would
allow 5G software developers to run code on machines that come from
nearly any hardware manufacturer. This could include Nokia and Ericsson
because they have big
U.S. presences.” Huawei is the world’s top seller of telecom equipment
because of the quality of its equipment and technical support.
WSJ's Bob Davis and Drew FitzGerald
Now the Europeans are saying that, though they regret the
US withdrawal from the deal, they also can no longer ignore Iran's
non-compliance. France, Germany, and the UK can extend this process
indefinitely to prevent UN sanctions from coming into force. So, the
main impact of the move, for now, will be to pressure Iran to come back
to the negotiating table. We're watching for Tehran's next move.
Trump is threatening to
impose a 100
percent import tariff on $2.4 billion in French luxury products.
This adds to his September threat to do so on wine. This heightened fears in Europe that
follow through on his
threat to impose import tariffs
on European automobiles.
Also, his now
feels in no
hurry for a deal before the election which followed
his support of the Hong Kong protestors.
Adidas plans to close
its only sneaker factories in
the U.S. and Germany, shifting cutting-edge automated footwear
production to Asia and reversing an effort to make products closer to
in the West. The closure of the facilities in Ansbach, Germany, and
suburban Atlanta—both opened within the past three years—raises
questions about the feasibility of bringing manufacturing jobs back to
developed markets, Sara Germano reports.
China Regional Comprehensive Economic Partnership (RCEP) alternative to
the much more ambitious Trans Pacific Partnership (TPP) led by the
United States, without China, a hot ticket when
Trump ditched the TPP in early 2017. Beijing is hoping to move the deal
forward by getting India,
the main holdout, to agree to a "substantial conclusion" of the deal.
Trump signs limited deal with
Japan: “... that
would win back benefits American farmers lost when [Trump pulled] out of
a broader Asia-Pacific pact his first week in office,” “While
rewarding American farmers, the new U.S.-Japan mini-deal does not
resolve differences over trade in autos. Trump has said the two
countries continue to work on a more comprehensive agreement.”
The US blacklisted 28 Chinese state security bureaus and tech
companies for their alleged involvement in suppressing China's
Uighur Muslims and other ethnic minorities.
needs more than
interest rates to
is creating a
devaluation to maintain exports creates the real risk of capital flight
it more difficult for China to service its dollar denominated debt.
“Japan agreed to cut or eliminate
tariffs on beef, pork and other commodities on a level
similar to what Tokyo agreed to in the
Trans-Pacific Partnership — a trade deal that the president
withdrew from during his early days in office.
What about the auto tariffs: “...both
nations will refrain from taking measures against the spirit of these
agreements..." “Tokyo interprets that sentence..." "... that the U.S.
won’t pursue auto tariffs as long as the agreement is ‘faithfully
— WTO rules U.S. can tariff EU over Airbus aid. "The
U.S. duties, which could hit as soon as October...
The digital aspects:
The digital trade provisions will prohibit customs duties on digitally
transmitted videos, music, software and would also prohibit
barriers to cross-border data flows and data localization requirements. washingtonpost
unclear whether Mr. Trump believed that the agreement
tariffs truly represented new ... concessions, or whether
the president understood the limits of the deal but accepted it as a
face-saving way to escape from the political and economic consequences
of imposing tariffs."
As the president just demonstrated,
he is now willing to use tariffs as a cudgel to secure policy aims
outside the trade arena. That means a country could make painful
sacrifices to secure a trade pact only to be left staring down the
barrel of a fresh tariff threat over a non-trade matte
Landmark EU trade deals.6/30/19 The European Union has
signed its first free trade agreement with Vietnam, which could eliminate
nearly all tariffs between the country and its second-biggest export market.
Another free trade treaty between the European Union and the South American bloc
agreed last week after 20 years of negotiations. It will form the largest
global market for goods and services, by total population.
US beer jobs lost since 2016
because Trump's aluminum tariffs raised the price of beer cans cutting
China makes a veiled key exports threat:
5/28/19 China could use its dominance in rare earth minerals
as a weapon in the trade war intensified after a Chinese warned products
using rare materials should be excluded from negotiations
CNBC Patti Domm
Trump Hands China an Easy Win
in the Trade War
Rudd wrote in the NYT
May 5 when President Trump
tweeted the trade deal was off was 100 years after China’s 1919
“May Fourth Movement”.
President Wilson had promised China, the return of German Shandong
colonies, but instead handed them to Japan. China exploded with
anti-American, nationalist sentiment. The establishment of the Chinese
Communist Party followed. Thus, Mr. Trump has handed Xi Jinping a much
needed nationalist card to counter pressure from a slowing economy.
Also, Mr. Xi visited
Jiangxi, the starting point of the Long March in 1934, in
which the Communist Party endured many hardships but emerged victorious.
Combined with Economic resilience and patriotism the media began the
tools to use against the US.
Emerging market economies.
Argentina and Turkey
are in the grips of full-blown
currency crises fueled by
political uncertainty. Iranian
economies are literally
collapsing because of as U.S.
Large Economies United
the world’s fifth-largest
could choose a
hard-Brexiter prime minister
meaning a hard October United
Kingdom exit with all of its
economic consequences. A
parliament forces election would
Italy, the Euro zone's
the far-right League Party's
crushing victory gives
Salvini the upper hand in
determining economic policy.
This raises the risk of another
round of its sovereign severe
debt problems centered on Italy
with its world’s third-largest
With an economy in recession, a
mountain of public debt mountain
and a shaky banking system,
Salvini's proposed income tax
cut which could undermine
Italian bond market confidence.
the world's second-largest
economy is in
an economic slowing trade war
the US, the
world's largest economy.
Korean and Iran
and Mexico economic
China has no desire to scale back its winner-take-all industrial
to make fundamental changes to its authoritarian
Any final agreement will have Chinese pledges to buy
more U.S. products
but few promises to restructure
A trade deal won’t end China-U.S. frictions. In
fact, the conflict has only just begun.
Three small numbers are making big waves in
The digits 9-9-6, a shorthand for 9am to 9pm, six days a week, have
become a rallying cry for tech workers frustrated with their
bruising work schedules
Xi's economic slowdown cause by trade related export decline and
non-trade related lower emphasis in internal private company
China will give Trump easier access to
agriculture and financial service industries,
Laws to slow Intellectual Property Theft which are difficult to
Aid to state owed companies compositing with US will not slow
they are part of China's economic structure.
Trump's Tariffs gave China a political
have increased the cost to middle class consumer,
and increased geopolitical tensions. See
Understanding Xi's China
Editor 6/20/19: Added to world wide
business uncertainty and lowering investment.
reportfrom Freedom House, a democracy watchdog, noted that 18
countries (so far)
now use Chinese-made intelligent monitoring systems
and 36 have received training in topics like
"public opinion guidance,"
a euphemism for censorship. The list of countries includes the UAE,
Zimbabwe, Uzbekistan, Pakistan, Kenya, and Germany.
The worldwide infrastructure-building
project "has pushed China’s huge construction,
shipping companies to go global at a time when a cooling
economy means less business at home."
Note: A common problem in centrally planned economies.
is the data on the cost of China's overbuilding housing at home.
rushed into HDTV while US, very profit dependent, waited for digital
Chinese competition on
US manufacturing had a striking regional variation from
In high-human capital
areas like West Coast or New England, manufacturing
job losses saw industry switching to services.
changed to research, design, management or wholesale. Hence,
redistributed of jobs went from manufacturing
income areas to services in higher income areas.
In the low
human-capital areas like the South and mid-West,
manufacturing plants closed without much increased service
Offshoring appears to
drive these manufacturing job losses.
impacts was strongest between from 2000 to 2007
6/17/19 UBS is suffering more fallout from
faux pas. China Railway Construction Corp. excluded the Swiss bank
from a bond deal after its global chief economist sparked a furor with
his use of the phrase "Chinese pig," people familiar said. The signaling
effect is potentially more concerning than lost fees as other Chinese
companies may follow suit. The response may seem a bit strong, but
cost of doing business in emerging markets, Shuli Ren writes for
6/10/19 Two bipartisan bills going after Chinese companies that don’t
comply with auditing rules in the U.S. listed Chinese firms three years to come in compliance
with oversight requirements of the PCAOB, a non-profit corporation Congress
created in 2002, in an effort to restore reporting credibility.”
Apple has a backup plan if
the trade war gets out of hand. There's enough capacity to make
all iPhone's bound for the U.S. outside of China if necessary, according to
its main manufacturing partner Hon Hai. Most are currently made in the Chinese
mainland. Hon Hai also said it will hire up to 13,000
in Wisconsin as promised.
Nintendo is moving some
production out of China: “Nintendo Co. is shifting some
production of its Switch video game console to Southeast Asia from China
to limit the impact of possible U.S. tariffs on Chinese-made
U.S. storage device maker
Western Digital froze its partnership with Huawei and halted shipments
to the company to comply with the U.S. ban
CEO Steve Milligan is considering a license to
resume trade with Huawei.
Electron, the world’s No. 3 supplier of semiconductor manufacturing equipment,
will not supply to Chinese clients blacklisted by Washington, a senior company
executive told Reuters,” Makiko Yamazaki