Aurelia Butler

It has also launched several probes into whether Chinese clean tech producers are dumping subsidised goods on EU markets and whether Chinese-owned companies unfairly benefit from subsidies while operating inside the European Union. The European Commission, which is carrying out the investigations, says its aim is to prevent unfair competition and market distortion.Here’s what you need to know about the investigations:TINPLATE STEELThe European Commission opened on May 16 an anti-dumping investigation into flat-rolled products of iron or steel plated or coated with Chinese tin.The EU’s official journal said the investigation follows a complaint from European steel association Eurofer.The investigation is to be concluded within 14 months, with the possible imposition of provisional duties in seven to eight months.WOOD FLOORING IMPORTSThe European Commission initiated on May 16 an anti-dumping investigation into wood flooring imports, following a complaint by the European Parquet Federation.Under investigation are assembled multilayered wood flooring panels. Panels of bamboo, or with at least the top layer of bamboo, are excluded as are panels for mosaic floors.MEDICAL DEVICES The European Commission launched a probe into Chinese public procurement of medical devices, the EU’s official journal said on April 24.The investigation is the first under the EU International Procurement Instrument, which aims to prevent countries from unfairly favouring domestic suppliers.If the Commission finds that European suppliers don’t have fair access to the Chinese market, it could place restrictions on Chinese medical device companies bidding in EU public tenders.The investigation is to be concluded within nine months, although the Commission can extend this period by a further five months.WIND TURBINES The EU is investigating subsidies received by Chinese suppliers of wind turbines destined for Europe, the bloc’s anti-trust commissioner Margrethe Vestager said on April 9.It will look into wind park development in Spain, Greece, France, Romania and Bulgaria, Vestager said without naming specific companies.China said the probe was “discriminatory” against Chinese enterprises and endorsed protectionism.SOLAR PANELSThe European Commission will close its investigation into Chinese bidders in a public tender for a solar park in Romania after the companies withdrew from the process, European Industry Commission Thierry Breton said on May 13. It launched two investigations on April 3 into whether the Chinese participants benefited excessively from subsidies in bidding for a contract.It first investigated a consortium comprising Romania’s ENEVO Group and a subsidiary of China’s LONGi Green Energy Technology Co. The second consortium investigated comprised subsidiaries of Chinese state-owned Shanghai Electric Group Co..Breton said that the Commission took note of the withdrawal of LONGi Solar and Shanghai Electric from bidding and would therefore close its investigation.ELECTRIC VEHICLESThe Commission said on Sept. 13, 2023 that it would launch an anti-subsidy investigation into Chinese electric vehicles to determine whether to impose punitive tariffs on them.It wants to find out if Chinese exports of EVs to the EU market are benefiting from excessive subsidies.China’s commerce minister Wang Wentao said in April that U.S. and European assertions of excess Chinese EV capacity were baseless, while a Chinese industry body said the probe was stacked against Chinese manufacturers.The investigation, officially launched on Oct. 4, will last up to 13 months. The Commission can impose provisional anti-subsidy duties nine months after the start of the probe. More

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TORONTO (Reuters) – The Bank of Canada would be willing to cut interest rates three times ahead of the Federal Reserve’s first move before a declining currency threatens to endanger the inflation outlook, the median estimate of seven analysts in a straw poll showed.A weaker Canadian dollar versus the greenback this year has sparked debate among investors about how much the BoC would be prepared to diverge from its U.S. counterpart.Investors expect the Canadian central bank to begin rate cuts in June or July, with next Tuesday’s inflation reading seen as a key input. But the Fed is seen on hold until September, even after cooler-than-expected U.S. inflation data on Wednesday.The BoC’s benchmark interest rate, at 5%, already sits 38 basis points below the midpoint of the range set by the Fed for its policy rate. Further widening in the differential could add to pressure on the loonie.Still, analysts say it would take a large move in the currency to drive up import costs enough to put at risk the central bank’s efforts to lower inflation to a 2% target.A higher cost of imported goods tends to raise the prices that businesses charge to consumers.”Although there’s a theoretical limit to how far the Bank of Canada can set its own policy rate beneath the Fed funds rate, it’s likely well below current levels,” said Karl Schamotta, chief market strategist at Corpay.”The exchange rate could weaken if interest differentials were to widen further … but the passthrough to inflation should be relatively modest.”The latest data shows inflation at an annual rate of 2.9% in March, down from an 8.1% peak in June 2022.The Canadian dollar has already weakened nearly 3% against its U.S. counterpart since the start of the year, to 1.3640 per U.S. dollar, or 73.31 U.S. cents, as the greenback climbed against a basket of major currencies.”As a rule of thumb, a 10% fall in the loonie would boost core goods prices by 2.5%,” Olivia Cross, North America economist at Capital Economics, said in a note, adding that core goods make up about 30% of the Canadian CPI basket.There is a limit to how far U.S. and Canadian interest rates can diverge, but “certainly we’re not close to that limit,” Bank of Canada Governor Tiff Macklem said earlier this month.The Canadian economy has lagged the U.S. economy in recent quarters, weighed by weaker productivity growth as well as higher levels of household debt and a shorter mortgage cycle, a factor some economists argue should see the BoC move ahead of the Fed. The OECD projects Canada’s economy will grow 1% this year, much less than the 2.6% rate it forecasts for the United States.The interest rate gap has stayed within 100 basis points since the global financial crisis of 2008-09. Still, that level may not be a binding constraint if the Canadian outlook deteriorates over the second half of 2024, said Robert Both, a senior macro strategist at TD Securities.”A larger-than-expected drag on the household sector from mortgage renewals could give the Bank more license to diverge from the Fed,” Both said. More

WASHINGTON (Reuters) – The U.S. Supreme Court’s decision safeguarding the Consumer Financial Protection Bureau – the nation’s consumer finance watchdog – earned plaudits from supporters of robust federal regulation. But their praise for the court may prove short-lived. Powered by its 6-3 conservative majority, the court has emerged in recent years as something of an ally in what has been called the “war on the administrative state,” a longstanding conservative effort to weaken federal agencies that regulate key aspects of American business and life.The court on Thursday upheld the CFPB’s funding mechanism – drawing money annually from the Federal Reserve rather than from budgets passed by Congress – in a challenge by the payday loan industry, handing a win to President Joe Biden’s administration and a setback to the agency’s conservative critics.Despite that ruling, pending decisions in cases that the justices heard during their current term, which began in October, could substantially curb federal agency powers in areas ranging from finance to fish conservation. Those rulings are expected by the end of June.”It’s always perilous to predict the outcome of Supreme Court decisions, but I anticipate the agencies will still face a net-loss record this year at the court,” George Mason University law professor Jennifer Mascott said after the CFPB ruling.The 7-2 decision, authored by conservative Justice Clarence Thomas, reversed a lower court’s ruling that the CFPB’s funding design violated a provision of the U.S. Constitution called the “appropriations clause,” giving Congress the power of the purse. Afterward, Biden lauded the work being done by the agency, blasted its Republican critics and said the CFPB’s “strong record of consumer protection will not be undone.”Brianne Gorod, chief counsel at the Constitutional Accountability Center liberal legal group, welcomed the CFPB ruling but emphasized that the challenge to the agency represented just one front in a “multifaceted conservative attack on the ability of the federal government to function effectively.””The full story regarding this court and whether it is willing to enable the conservative attack on the administrative state very much remains to be written,” Gorod said.Key rulings are pending in cases involving the Securities and Exchange Commission (SEC), National Marine Fisheries Service (NMFS) and Environmental Protection Agency (EPA).The justices on Nov. 29 heard arguments over the legality of proceedings conducted by in-house judges at the SEC to enforce investor-protection laws. The challenge was brought by a Texas-based hedge fund manager who the SEC fined and barred from the industry after determining he had committed securities fraud. Biden’s administration appealed a lower court’s decision striking down the SEC enforcement proceedings at issue for violating the right to a jury trial and infringing on presidential and congressional powers under the Constitution.’CHEVRON DEFERENCE’The justices heard arguments on Jan. 17 in lawsuit by fishing companies over a government-run program to monitor for overfishing of herring off New England’s coast.The case is particularly important because the companies have asked the court to rein in or overturn a precedent established in 1984 that calls for judges to defer to federal agency interpretation of U.S. laws deemed to be ambiguous, a doctrine called ” Chevron (NYSE:CVX) deference.” Some legal scholars have said that a ruling limiting or eliminating Chevron deference would likely harm Democratic presidential administrations more than Republican ones, as Democrats are typically more interested in regulating industry.Erwin Chemerinsky, dean of the University of California Berkeley Law School, said CFPB’s legal victory should not be seen as predictive of how the court will rule in other cases testing agency powers.”I think this was the most radical of the administrative law decisions (by lower courts) being reviewed by the court this term because it involved changing a way of funding agencies that has been used since the time of George Washington,” Chemerinsky said of the CFPB ruling by the conservative-leaning New Orleans-based 5th U.S. Circuit Court of Appeals.  Regarding the cases involving the SEC’s authority and Chevron deference, Chemerinsky added: “Those issues are quite different and involve administrative law issues much more generally.”In the EPA-related case, the court on Feb. 21 heard arguments in a bid by Republican-led Ohio, Indiana and West Virginia and several energy companies to block a regulation issued by the agency aimed at reducing ozone emissions that may worsen air pollution in neighboring states. The plaintiffs are seeking to avoid complying with the EPA’s “Good Neighbor” plan restricting ozone pollution from upwind states, while they contest its legality in a lower court. More

The investment firm notes that the probability of extreme outcomes, such as significant hikes or deep cuts, has diminished since the last Federal Open Market Committee (FOMC) meeting.Despite moderated inflation uncertainty, the wide distribution of gross domestic product (GDP) growth forecasts keeps the economic outlook unclear, analysts said.“Our density forecasts of key macroeconomic variables are too fat, still,” they said.“Yes, the distribution of inflation outcomes has narrowed meaningfully this cycle. But as we’ve said over and over, the same isn’t so for real GDP growth. Meaningful odds on recession, yet also on brisk growth, cannot bolster much ‘confidence’ about the Fed.”The analysts also point to the market’s pricing of short-term interest rates, which they believe may increase relative to longer-dated yields, implying that a steeper yield curve remains a distant prospect.They emphasize that the nominal yield curve isn’t inverted enough based on fundamental models, hinting at potential rallies in 2-year and 10-year yields by year-end.“True, the signals are hardly unprecedented. Even so, the results suggest that a steeper curve remains a ways off,” Piper continued. More

Xpeng co-President Brian Gu said he hopes the United States can become more open, allowing global products to enter and compete in the U.S. market.He was speaking in Hong Kong where Xpeng has teamed up with Malaysia’s Sime Darby Motors to sell its electric sports utility vehicle, the G6, and flagship seven-seater, X9, as it expands beyond mainland China’s overcrowded car market.A cut-throat price war in China and slowing demand at home are hurting Chinese car makers, which are looking to cushion the blow by ramping up expansion overseas.Their overseas expansion is overshadowed, however, by an anti-subsidy probe launched by the EU into EV imports from China, the world’s largest car market, as well as U.S. tariff hikes announced earlier this week.”What are the flexibility or room for margins that we can have in order to meet changes in tariffs in other regimes,” Gu said, adding it that was still assessing the level of EU tariffs that would make the company shift production overseas.XPeng already sells EVs in the Netherlands, Norway and Germany and has said it plans to enter other European markets including, Italy and the UK.The company said earlier this week that it was entering the French market despite the looming tariffs. More