Evelyn Reynolds

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    Global Trade Grows but Remains Vulnerable to War and Geopolitics

    New reports from the World Trade Organization and a Washington think tank showed how robust global trade could quickly be derailed by violence.The global system of container ships and tankers that move tens of billions of dollars of products around the world each day mostly functions fluidly and without notice. But in a few parts of the world, shipping lanes shrink to narrow straits or canals, geographical choke points where an isolated disruption can threaten to throw much of international trade out of whack.One of those is the Taiwan Strait, a 100-mile-wide strip of water between Taiwan and mainland China, which has become a critical shipping lane for countries across the globe.New research from the Center for Strategic and International Studies, a Washington think tank, has found that the strait is a conduit for more than a fifth of the world’s seaborne trade, with $2.45 trillion worth of energy, electronics, minerals and other goods transiting the channel in 2022, the most recent year for which data is available.The findings are significant given that the strait is at the center of a geopolitical dispute between Taiwan and China, which views the island as part of its territory. A blockade or military action from China that halted traffic in the strait could have dramatic implications for the global flow of goods, and the Chinese economy in particular, the researchers say.The estimates come at a moment when geopolitics is upending years of relative complacency about global trade dynamics. Wars in Ukraine and the Middle East, as well as pandemic-era lockdowns, have reshuffled global trade patterns and alerted consumers to the idea that disruptions in one part of the world can directly affect economic activity in another.In a report also released Thursday, the World Trade Organization said that the pace of global trade has been ticking up, but that rising geopolitical tensions and uncertainty over economic policy could drag it down.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Amazon Could Be Forced to Treat Drivers as Employees

    Amazon’s delivery system depends on third-party companies. But labor regulators have challenged that model, possibly opening the way for unionization.Vans marked with Amazon’s arrow logo have become ubiquitous on residential streets, a symbol of the nearly instantaneous delivery that has transformed online shopping.But behind the wheel, that image of high-tech efficiency is being overshadowed by drivers’ complaints about working conditions. Recent federal labor rulings could pave the way for unionization in the company’s last-mile delivery network and change how it does business.Hundreds of thousands of drivers who deliver Amazon packages don’t work directly for the e-commerce giant; instead, they’re employed by third-party logistics companies, called delivery service partners. Last year, Amazon ended a contract with a delivery company in Palmdale, Calif., after drivers started organizing with the Teamsters union.A regional director for the National Labor Relations Board in Los Angeles issued the first formal complaint last week targeting the company’s delivery model, arguing in the Palmdale case that Amazon is a joint employer of the drivers and, as such, must bargain with the union.Last month, another N.L.R.B. regional director issued a preliminary finding that Amazon is a joint employer of drivers in Atlanta seeking to unionize with the Teamsters, and that it must be held liable for unlawfully discouraging unionization.Amazon contracts over 3,000 delivery service partners, which determine pay, schedules and work conditions for drivers, the company said.By Christopher Smith For The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Officials Debated Whether a Big Rate Cut Was Smart in September

    Freshly released minutes from the central bank’s September meeting show that policymakers were divided on how much to cut rates.Federal Reserve officials were divided over how much to lower interest rates in September, minutes from their last meeting showed, although most officials favored the large half-point rate cut that central bankers ultimately made.“Noting that inflation was still somewhat elevated while economic growth remained solid and unemployment remained low, some participants observed that they would have preferred” a quarter point reduction, according to the minutes from the Sept. 17 and 18 gathering released on Wednesday. And “a few others indicated that they could have supported such a decision.”While one Fed governor, Michelle Bowman, did vote against the Fed’s big rate cut in favor of a smaller move, the fresh minutes showed that she was not alone in her misgivings. They suggested that the merits of a smaller move were debated.“A few participants” thought that a smaller move “could signal a more predictable path of economic normalization,” the minutes showed.The revelation that there was a spirited discussion about how much to cut rates at the Fed’s last meeting underscores what an uncertain juncture the central bank is facing. Officials are trying to calibrate policy so that it is cooling the economy enough to wrangle inflation fully, without slowing it so much that it plunges America into a recession. But that is an inexact science.The Fed’s ultimate decision — to start of its rate-cutting campaign with a big reduction — came in response to a few economic trends. Inflation has been cooling substantially, job gains had slowed, and the unemployment rate had recently moved up. Those factors suggested that it might be time to remove the Fed’s foot from the economic brakes by lowering rates decisively.Now, though, it looks increasingly unlikely that Fed officials will make another large rate cut this year.Hiring picked up in September, data released last week showed, and the unemployment rate ticked back down. When that is combined with recent evidence of solid consumer spending and healthy household balance sheets, risks of a big economic pullback now seem less pronounced.Given the progress, Fed officials have been signaling that the economic projections that they released after their September meeting are probably a good guide for the rest of 2024. Those suggested that policymakers will cut rates at both their November and December meetings, but by only a quarter point each time.The next big question facing the Fed is when it will stop shrinking its balance sheet of bond holdings. Policymakers bought bonds in huge sums during the early part of the 2020 pandemic, swelling their holdings. They have been shrinking their balance sheet steadily by allowing securities to expire without reinvesting them.Officials appear inclined to stick with that plan, at least for now, based on the minutes.“Several participants discussed the importance of communicating that the ongoing reduction in the Federal Reserve’s balance sheet could continue for some time even as the committee reduced its target range for the federal funds rate,” the minutes showed. More

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    Boeing and Workers Dig In for a Long Fight, Despite Strike’s Cost

    Nearly a month into a union walkout, the aerospace giant withdrew its latest contract offer, and the two sides exchanged blame over the breakdown.Boeing and its largest union appear to be digging in for a long fight — even as some striking workers start to look for temporary jobs and the company risks having its credit rating downgraded to junk status.Nearly a month into the strike, negotiations between Boeing and the union resumed this week under federal mediation after a long break. But they collapsed on Tuesday with the company withdrawing its latest offer. The two sides traded blame for the breakdown.In a message to employees, Stephanie Pope, the chief executive of Boeing’s commercial airplane unit, said the union had made “demands far in excess of what can be accepted if we are to remain competitive as a business.”The union accused Boeing of being “hellbent” on sticking to the offer that labor leaders had previously rejected for being insufficient to garner the support of most of its more than 33,000 members.A long strike is the last thing Boeing needs. The company, which hasn’t reported a full-year profit since 2018, is now losing tens of millions of dollars more every day that striking workers are not building planes. Boeing is also trying to persuade regulators to let it produce more 737 Max jets, its best-selling plane. And on Tuesday, S&P Global Ratings said it was considering lowering the company’s credit rating, which sits just above junk status, depending on the strike’s length.The walkout, which began on Sept. 13, is also difficult for workers, many of whom are living off savings and have had to find health coverage after Boeing dropped them from its plan this month.Do you work with Boeing?We want to hear from people who have experience working at or with Boeing to better understand what we should be covering. We may use your contact information to follow up with you. We will not publish any part of your submission without your permission. If you have information that you want to share with The New York Times using tools that can help protect your anonymity, visit: https://www.nytimes.com/tips.

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    Hurricane Milton could cause as much as $175 billion in damage, according to early estimates

    Hurricane Milton’s once-in-a-century potential could cause damage of more than $50 billion, with the potential to leave behind devastation approaching $175 billion or more in a worst-case scenario.
    “A 1-in-100 year event is estimated by some to result in $175 [billion] in losses for landfall in the Tampa region, and $70 [billion] in losses in the [Fort] Myers region,” Jefferies analysts said.

    Heavy traffic begins to back up on Interstate 275 South as residents evacuate St. Petersburg, Florida, ahead of Hurricane Milton, U.S., October 7, 2024. 
    Octavio Jones | Reuters

    Hurricane Milton’s once-in-a-century potential could cause damage of more than $50 billion, with the potential to leave behind devastation approaching $175 billion or more in a worst-case scenario, according to leading Wall Street analysts.
    That would be on top of the carnage already left behind by Hurricane Helene, posing a potential record-breaking path of wreckage.

    “While too early to make insured loss estimates, a major hurricane impact in one of Florida’s most heavily populated regions could result in mid-double-digit billion dollar loss,” Jefferies equity analyst Yaron Kinar and others said in a note. “A 1-in-100 year event is estimated by some to result in $175 [billion] in losses for landfall in the Tampa region, and $70 [billion] in losses in the [Fort] Myers region.”
    The extent of the potential is hard to pin down and will depend on timing and location, with a landfall closer to Fort Myers being less costly.
    For a historical comparison, analysts need only to look back two years, when Hurricane Ian hit near the Fort Myers area as a Category 4 storm and left behind more than $50 billion in losses. Ian was considered a 1-in-20-year event.

    “Should Milton’s path through the more developed Tampa region hold, potential losses could be greater,” Kinar said.
    Milton is currently at Category 4 as well, though it could weaken by the time its full force is felt.

    Wells Fargo noted that the “market seems to be factoring in a loss of over $50 billion (greater than Ian) at this point.” The firm set a wide range for potential damage, from $10 billion to $100 billion.
    The region already has been rocked — Helene barreled through the region 12 days ago, and left behind devastation that Moody’s on Tuesday estimated at some $11 billion. In addition to the property damage, Moody’s figures that the National Flood Insurance Program likely will see losses approaching $2 billion.
    The firm’s analysts have not yet estimated potential damage from Milton.

    Kiki Keen and his father Clinton Keen walk among the debris of their family’s beach house, following Hurricane Helene in Horseshoe Beach, Florida, U.S., September 28, 2024. 
    Marco Bello | Reuters

    “Hurricane Helene is by far the most impactful event of the current 2024 hurricane season thus far, though this may quickly change with Major Hurricane Milton due to impact Florida in the coming days,” said Mohsen Rahnama, chief risk modeling officer at Moody’s.
    Moody’s also noted that many in the worst-affected regions of where Helene hit do not have flood insurance, “meaning most of the damage will be uninsured, and economic property losses will far outweigh insured losses,” said Firas Saleh, the firm’s director of U.S. inland flood models.
    Milton weakened a bit Tuesday but was still carrying winds of 145 mph. It is expected to hit Tampa on Wednesday morning and bring 10- to 15-foot storm surges to Tampa Bay.
    While the danger and damage to the region are expected to be enormous, the storm does not pose the same danger to adjoining states that Helene pummeled.

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    As Hurricanes Persist, Soaring Insurance Costs Hit Commercial Real Estate

    Struggling landlords and developers are seeking leeway on coverage from their lenders — mostly in vain.Postpandemic vacancies and surging debt payments have eaten away at commercial real estate for more than two years. Even as those threats start to fade, owners of strip malls, apartment buildings and office towers face a problem that could last much longer: soaring insurance costs.The problem is familiar to homeowners across the country. The rise in climate-related natural disasters has insurance companies pushing rates substantially higher, or pulling out of markets. The rate increases have been fastest in coastal cities and towns vulnerable to damage from big storms or coastal floods, but insurers and banks are coming to terms with the notion that no area is truly safe from increasingly extreme and unpredictable weather events.Hurricane Helene, which hit Florida’s gulf coast before leaving a trail of deadly floods and landslides through Georgia and the western parts of the Carolinas, most likely caused at least $35 billion in economic losses along the way, according to an estimate by the reinsurance broker Gallagher Re.Building owners are also trapped between their insurers and lenders, who are afraid of being on the hook for catastrophic damage and won’t allow the smallest changes to policies — even those that might give a struggling borrower some breathing room.It isn’t possible to know comprehensively how many properties have gone into foreclosure solely because of insurance costs, but people in the industry say they know of deals that have fallen apart over the matter. Developers and investors say that in an industry grappling with higher interest rates and materials and labor expenses, insurance costs can tip the scales.“This current interest-rate environment has exposed the people that know what they’re doing and those that don’t,” said Mario Kilifarski, the head of asset management at Fundamental Advisors, a New York-based investor with $3.5 billion in assets.The insurance brokerage Marsh McLennan estimated that premiums on commercial properties rose an average of 11 percent across the country last year but as much as 50 percent in storm-vulnerable places like the Gulf Coast and California. This year, premiums may have doubled in some of those places, the brokerage said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Plans Could Increase National Debt Twice as Much as Harris’s Proposal

    A new analysis finds that Vice President Kamala Harris and former President Donald J. Trump’s plans would both add to the deficit, but Mr. Trump’s proposals could create a fiscal hole twice as big.Former President Donald J. Trump’s economic proposals could inflame the nation’s debt burden while ultimately raising costs for a vast majority of Americans, according to a pair of new economic analyses that are among the most in-depth studies to date of the Republican nominee’s plans.The Committee for a Responsible Federal Budget, a nonpartisan group that seeks lower deficits, found that Mr. Trump’s various plans could add as much as $15 trillion to the nation’s debt over a decade. That is nearly twice as much as the economic plans being proposed by Vice President Kamala Harris.And an analysis from the Institute on Taxation and Economic Policy, a liberal think tank, found that Mr. Trump’s tax and tariff plans would, on average, amount to a tax increase for every income group except the top 5 percent of highest-earning Americans.The two new studies differ in some respects. The budget group looked at the cost of both candidates’ tax and spending plans over 10 years, while the tax institute focused on what the impacts of Mr. Trump’s tax and tariff plans would be in 2026. But together they show that Mr. Trump’s agenda could be both costly and regressive by placing a greater burden on those making the least amount of money.Over the course of his campaign, Mr. Trump has floated a flurry of potentially far-reaching policies, including exempting certain forms of pay from taxes and levying broad tariffs on nearly all imports to the United States. He also wants to extend elements of the tax law he enacted in 2017 that are set to expire after next year.“It’s almost difficult to come up with a tax plan that would raise taxes on most Americans, but still increase the deficit by hundreds of billions of dollars a year — and that’s what this does,” said Steve Wamhoff, the federal policy director at I.T.E.P.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    E.V. Tax Credits Are a Plus, but Flaws Remain, Study Finds

    The Inflation Reduction Act was a compromise between competing priorities. Evaluating the law on the effectiveness of the $7,500 tax credit for E.V.s is tricky.A team of economists has taken on a central component of the Inflation Reduction Act: the $7,500 tax credit for U.S.-made electric vehicles.The challenge in evaluating it is that the policy has sometimes conflicting goals. One is getting people to buy electric vehicles to lower carbon emissions and slow climate change. The other is strengthening U.S. auto manufacturing by denying subsidies to foreign companies, even for better or cheaper electric vehicles.That’s why totaling those pluses and minuses is complex, but overall the researchers found that Americans have seen a two-to-one return on their investment in the new electric vehicle subsidies. That includes environmental benefits, but mostly reflects a shift of profits to the United States. Before the climate law, tax credits were mainly used to buy foreign-made cars.“What the I.R.A. did was swing the pendulum the other way, and heavily subsidized American carmakers,” said Felix Tintelnot, an associate professor of economics at Duke University who was a co-author of the paper.Those benefits were undermined, however, by a loophole allowing dealers to apply the subsidy to leases of foreign-made electric vehicles. The provision sends profits to non-American companies, and since those foreign-made vehicles are on average heavier and less efficient, they impose more environmental and road-safety costs.Also, the researchers estimated that for every additional electric vehicle the new tax credits put on the road, about three other electric vehicle buyers would have made the purchases even without a $7,500 credit. That dilutes the effectiveness of the subsidies, which are forecast to cost as much as $390 billion through 2031. “The I.R.A. was worth the money invested,” said Jonathan Smoke, the chief economist at Cox Automotive, which provided some of the data used in the analysis. “But in essence, my conclusion is that we could do better.”How the Environmental and Safety Costs of Gas- and Electric-Powered Cars Stack UpMeasuring the cost to society of carbon emissions from driving and manufacturing, local air pollutants and the danger of crashes, a new economic analysis finds that some gas-powered vehicles are less damaging than electric and hybrid vehicles.

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    The five least and most costly gas- and electric-powered vehicles
    Averages are weighted by the number of each model registered within each powertrain category. Total costs subtract fiscal benefits from gas taxes and electricity bills.Source: Hunt Allcott, Stanford; Joseph Shapiro, U.C. Berkeley; Reigner Kane and Max Maydanchik, University of Chicago; and Felix Tintelnot, Duke UniversityBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More