For the first time since before World War II, Americans chose a president who promised to reverse the internationalism practiced by predecessors of both parties and to build walls both physical and metaphorical. Mr. Trump’s win foreshadowed an America more focused on its own affairs while leaving the world to take care of itself.
The outsider revolution that propelled him to power over the Washington establishment of both political parties also reflected a fundamental shift in international politics evidenced already this year by events like Britain’s referendum vote to leave the European Union. Mr. Trump’s success could fuel the populist, nativist, nationalist, closed-border movements already so evident in Europe and spreading to other parts of the world.In Germany, where American troops have been stationed for more than seven decades, the prospect of a pullback seemed bewildering. “It would be the end of an era,” Henrik Müller, a journalism professor at the Technical University of Dortmund, wrote in Der Spiegel. “The postwar era in which Americans’ atomic weapons and its military presence in Europe shielded first the west and later the central European states would be over. Europe would have to take care of its own security.”
TheEconomicTimes: In a move to curb the black money menace, PM Narendra Modi declared that from midnight currency notes of Rs 1000 and Rs 500 denomination will not be legal tender.
In his 40-minute address, first in Hindi and later in English, the Prime Minister said the notes of Rs 500 and Rs 1000 “will not be legal tender from midnight tonight” and these will be “just worthless piece of paper.”
This is a big deal as these notes account for at least 80% of all cash in circulation! Ken Rogoff has argued for eliminating cash but this doesn’t seem to be a move in that direction since the notes will be replaced with new Rs 500 and Rs 2000 notes. Rather it seems to be a wealth tax on the black market. Old notes can be turned into a bank for replacement so ordinary people won’t lose money. People in the black market, however, probably have a lot of cash that they are unwilling to turn into a bank because they don’t want to reveal their wealth. Imagine walking into a bank and depositing a million dollars in cash–that is going to create a record that the tax authorities can follow. The wealth tax on the black market interpretation is consistent with the surprise–if people knew that this was coming they could have laundered the money but that is going to be more difficult and costly now.
It’s impressive that a government could pull off this level of secrecy. Good for Modi’s image as competent, uncorrupt and technocratic. Indians are calling it a “surgical strike on black money” which is the imagery Modi wants. But what will happen tomorrow when people don’t have enough cash to buy goods and services?
And there is another issue. Why is the black market so large to begin with? The wealth tax will punish current holders of cash but if the policies that generate the black market aren’t addressed the black market will grow again perhaps using gold, USD or bitcoin (see my addendum). It would be better to reduce barriers to entry and encourage more economic activity to move out of the black market and into the formal sector.
Read Donald J. Trump’s Plan to Make America Safe and Respected Again, here.
Read Donald J. Trump’s Detailed Plan to Defe
1. Withdraw from the Trans-Pacific Partnership, which has not yet been ratified.
2. Appoint tough and smart trade negotiators to fight on behalf of American workers.
3. Direct the Secretary of Commerce to identify every violation of trade agreements a foreign country is currently using to harm our workers, and also direct all appropriate agencies to use every tool under American and international law to end these abuses.
4. Tell NAFTA partners that we intend to immediately renegotiate the terms of that agreement to get a better deal for our workers. If they don’t agree to a renegotiation, we will submit notice that the U.S. intends to withdraw from the deal. Eliminate Mexico’s one-side backdoor tariff through the VAT and end sweatshops in Mexico that undercut U.S. workers.
5. Instruct the Treasury Secretary to label China a currency manipulator.
6. Instruct the U.S. Trade Representative to bring trade cases against China, both in this country and at the WTO. China's unfair subsidy behavior is prohibited by the terms of its entrance to the WTO.
7. Use every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets - including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.
09 November 2016 by Staff
A second round of environmental inspections put China’s aluminium capacity in the state’s crosshairs yet again, resurrecting fears that punitive capacity shutdowns may be in the offing.
Xinhua reported earlier this week that the Ministry of Environmental Protection of China initiated a new round of inspections in October, sending out ten teams of inspectors to evaluate the progress of clean-up operations and the administration of environmental laws in twenty provinces. The targeted provinces include the homes of China’s aluminium industry – Shangdong, Guangdong, Hunan, and Jiangxi. The inspections are to focus upon plants that are less than two years old (specifically plants that were built before January 1, 2015) and that previously passed environmental inspection.
Environmental enforcement in China’s industrial sector has been spotty at best, but there are now legitimate concerns that significant swaths of capacity may be in serious jeopardy. Two of Xinfa’s smelters in Shandong province were fined CNY2 million earlier this summer for emissions infractions, and China Hongqiao was issued notices of fines and ordered to cease production on over half of its 5.9 million metric tons of capacity over the course of this year.
Industry experts have taken notice of the increasing focus on environmental enforcement, and some wonder if this could ultimately lead to significant permanent capacity closure in China.
“I don’t know exactly what they are looking at this time around, but it’s clear that there will be more inspections and that they will look harder each time,” a seasoned aluminium expert told Metal Bulletin. He went on to say that such actions will put the provincial government in a tight spot as it will be forced to choose between mandates from Beijing and local economic interests.
In addition, industry associations like the China Nonferrous Metals Industry Association will likely step in and insure that smelters bring down pollution levels and fall in line with environmental standards, he explained.
“I would call CNIA to lead an audit on emission monitoring equipment to see if aluminium smelters have been equipped with such environment monitors, and if the equipment is operating and finally if it is achieving results,” he concluded.