Economy

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The Biden administration must navigate the interests of U.S. companies and allied governments as it tries to close off China’s access to advanced chipsThe Biden administration is fighting to overcome opposition from allied nations and the tech industry as it prepares to expand restrictions aimed at slowing China’s ability to make the most advanced semiconductors, which could be used to bolster Beijing’s military capacity.The administration has drafted new rules that would limit shipments to China of the machinery and software used to make chips from a number of countries if they are made with American parts or technology, as well as some types of semiconductors, according to people who have seen or were briefed on a draft version of the rules.The rules are aimed at blocking off some of the newer routes that Chinese chipmakers have found to acquire technology, despite international restrictions.The United States has been pushing allies like Japan and the Netherlands to toughen their restrictions on technology shipments to China, during visits to those countries as well as a Japanese state visit to Washington in April. Those nations are home to companies that produce chip-making machinery, like ASML Holding N.V. and Tokyo Electron Limited. But industry in the United States and other countries has argued the rules could hurt them, and it remains unclear when or if foreign governments will issue limitations.In the meantime, some of the rules that the United States plans to impose would have significant carve-outs, the people said. The rules blocking shipments of equipment to certain semiconductor factories in China would not apply to more than 30 allied countries, including the Netherlands, South Korea and Japan.That has sparked pushback from U.S. firms, who argue that the playing field will be further tilted against them if the U.S. government stops their sales but not those of their competitors.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

The European Union imposed provisional tariffs of up to 37.6% on imports of electric vehicles (EV) made in China in July, keen to protect its domestic EV production, after an EU investigation found the cars were subsidised by China.China on Friday requested a WTO consultation, arguing the EU investigation results and the provisional tariffs lacked factual and legal basis and seriously violated the global body’s rules.The Commission, which handles all trade issues for the 27-nation EU, said it was carefully studying all the details of Beijing’s request to the WTO and would react to the Chinese authorities in due course according to the WTO procedures. “The Commission is confident of the WTO-compatibility of its investigation and provisional measures,” a Commission spokesperson said.”This request for WTO consultations does not affect the timeline of the anti-subsidy investigation, which in the meantime continues,” the spokesperson said.WTO cases typically take a very long time to resolve. The effectiveness of the WTO’s dispute settlement is now further undermined by the lack of a functioning Appellate Body, which has been blocked by the lack of new appointments since 2019.However, the EU and China are party to an appropriate Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which allows to adjudicate possible disputes pending the blockade of the appointment of the WTO Appellate Body. More

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MILAN (Reuters) – Italy’s doubling of a “flat” tax on the overseas income of wealthy new residents will curb its tax shelter appeal that risked becoming excessive, but the country’s inheritance tax set-up will continue to draw the ultra-rich, tax advisers said.Italy on Wednesday doubled the so-called flat tax it applies on the overseas income of wealthy individuals who transfer their tax residence to the country to 200,000 euros ($218,180) per year.Footballers, including Cristiano Ronaldo, and many finance professionals who left London for Milan after Britain’s departure from the European Union, have taken advantage of the flat tax regime, which was introduced in 2017. Designed to help the economy by attracting big spenders, the scheme has been blamed for heating up housing demand in Italy’s financial capital and increasing its social divide.Italy’s tax arrangements are also under the spotlight partly because of Britain’s decision to end in April 2025 its centuries-old “non-dom” tax regime that exempted from taxation the overseas income of UK residents with a foreign domicile, including for inheritance purposes.”Italy’s government, whilst in favour of the (flat tax)regime, also needs to avoid that the arrival of many new high net worth individuals triggers a political discussion about its fairness,” said Marco Cerrato, a partner at tax law firm Maisto e Associati.”The 200,000 euro flat tax may reasonably contain the regime to an acceptable overall number of non doms,” Cerrato said.With inflation soaring, the previous 100,000 euro figure had “started to be perceived as cheap”, he added. Italy is expected to be the top 2024 European destination for globally mobile millionaires, British investment migration consultancy Henley & Partners said, ahead of Switzerland, Greece and Portugal. Based on relocations up to June, Henley & Partners expected 2,200 individuals with at least $1 million in liquid investable wealth to move to Italy this year.Italy’s tax incentives had prompted 1,136 relocations at the end of 2022, and tax advisers estimate the total is currently close to 3,000. INHERITANCE Marco Palanca, a partner at international law firm Simmons&Simmons who heads its Italian tax department, said the changes could prompt some of their clients who work in the European fund management industry to reconsider Italy as a destination, given the fluctuating nature of their foreign earned income. But Italy’s move will have little impact on people with a net worth of at least 7 million euros, Vito Di Pede, a tax adviser at Milan’s Studio Rock tax and law firm, said.”Italy remains a very good option for such individuals,” he said pointing to the importance of its inheritance tax provisions.Britain’s new Labour government has proposed scrapping temporary relief measures for non-doms including one that would allow them to set up trusts to shield their foreign assets from inheritance tax.Outside the non-dom regime, Britain’s inheritance tax rate is 40% above a 325,000 pound threshold.By contrast, the Italian inheritance tax rate is between 4% and 8% applied above various thresholds, but the flat tax regime exempts foreign assets from inheritance tax.The regime is for a 15-year period and can be extended to family members paying 25,000 euros per person.Palanca said Italy was attracting new ultra-wealthy residents not just from the UK but also Switzerland, where a proposal has been put forward to impose a 50% inheritance tax on assets worth more than 50 million Swiss francs to fund the country’s green transition. Italy’s flat tax regime also works well in combination with a wide number of bilateral agreements Rome has in place to avoid double taxation of income and capital, unlike the situation in a number of other countries, Di Pede said.”It’s obvious the changes may have caused some alarm, but all in all Italy still offers a very advantageous set-up,” he added.($1 = 0.9167 euros)($1 = 0.7857 pounds) More

(Reuters) -Wall Street was set for a lower open on the last day of a turbulent week, as futures erased early gains, while Federal Reserve officials’ dovish signals following a report of a resilient labor market kept losses in check.The so-called ‘Magnificent Seven’ stocks were in the red during premarket trading on Friday. In the previous session, U.S. stocks had jumped after jobless claims last week fell more than expected, easing worries of a prolonged slowdown in the United States that were spurred after July’s dour jobs data.The CBOE Volatility Index, Wall Street’s “fear gauge”, stood at 24.52 points, far below the 65.73 at the start of the week, which witnessed a global stocks rout triggered by a surge in yen as a surprise rate hike by the Bank of Japan resulted in unwinding of currency carry trades. But all major indexes were set for weekly losses, with both the S&P 500 and the Nasdaq headed for a fourth straight week of fall. “In general, we’re still in this environment where the economy is slowing if not grinding to a halt, inflation is coming down, which is not suggestive at all of recession. We’re still growing, just not as much,” said Christopher Jackson, senior vice president at UBS Wealth Management.Fed policymakers said on Thursday they were confident that inflation was cooling enough to allow interest-rate cuts ahead, and will take their cues on the size and timing of those cuts from the economic data.Money markets are evenly split between the Fed cutting rates by 50-basis points and 25-basis points in September, according to CME’s FedWatch Tool. Investors are now focusing on next week’s readings on the consumer prices and retail sales for July, which could provide fresh evidence on chances of a soft landing for the American economy.At 8:30 a.m. ET, S&P 500 E-minis were down 18 points, or 0.34%, Nasdaq 100 E-minis were down 92.5 points, or 0.5%, Dow E-minis were down 82 points, or 0.21%Among individual stocks, Elf Beauty fell 9% after it forecast annual sales and profit below estimates, and said it would raise product prices if Republican presidential candidate Donald Trump comes to power and hikes tariffs on imports from China.Paramount Global jumped 4.9% as investors cheered strong growth at the media group’s streaming business, even as the company joined rival Warner Bros Discovery (NASDAQ:WBD) in writing down the value of its TV assets.Take-Two (NASDAQ:TTWO) Interactive Software climbed 6.6% as it expects net bookings to grow in fiscal years 2026 and 2027, as the videogame publisher gears up for the launch of its long-awaited “Grand Theft Auto VI” next year. Expedia (NASDAQ:EXPE) advanced 8% after the online travel agency beat analysts’ expectations for second-quarter profit, helped by sustained demand for international travel.The Trade Desk (NASDAQ:TTD) jumped 3.3% after the ad tech firm forecast third-quarter revenue above analysts’ estimates, signaling strong demand for automated ad-buying technologies from connected TV companies.Of the 455 companies in the S&P 500 that have reported earnings so far, 78.2% have reported above analyst expectations. More

OTTAWA (Reuters) -Canada’s economy unexpectedly shed a net 2,800 jobs in July, as gains in full-time work were offset by part-time job losses, while the unemployment rate remained at a 30-month high of 6.4%, data showed on Friday.Analysts polled by Reuters had forecast a net gain of 22,500 jobs and the unemployment rate to rise to 6.5% from 6.4% in June. An increase in unemployment was largely expected due to rapid population growth which the labor market has not able to absorb.The average hourly wage growth of permanent employees slowed to an annual rate of 5.2% from 5.6% in June, Statistics Canada data showed. The pay growth rate is closely tracked by the Bank of Canada (BoC) because of its effect on inflation.July was the second consecutive month of job losses and added to signs of easing in Canada’s labor market, which would support the case for the central bank to lower interest rates again at its next announcement in September. The unemployment rate, highest since 6.5% in January 2022, has been on an upward trend and has risen 0.7% percentage points since January.The participation rate of Canada’s labor force also declined to a 26-year low of 65% in July, largely reflecting a cohort of people not looking for jobs. The Canadian dollar extended loses slightly and weakened 0.12% to 1.3744 against the U.S. dollar, or 72.76 U.S. cents. Yields on the Canadian government’s two-year bonds dropped by 2.5 basis points to 3.451%.Friday’s data follows a dismal jobs report last week from the United States, which ignited worries about Canada’s biggest trading partner slipping into a recession.Citing progress towards achieving its 2% inflation target, the bank has lowered its key overnight rate twice in as many months and indicated it was now increasingly concerned about the chances of weaker-than-expected growth.Ahead of its last rate cut announcement on July 24, the bank noted that economic growth had been slower than population growth, leading to an excess supply in the economy and slack in the labor market. Money markets have priced in another 25 basis point cut at the bank’s next rate announcement on Sept. 4, and some even see a slim chance of a 50 basis point cut.The job losses in July were entirely in part-time work, which shed 64,400 positions and more-than offset a gain of 61,600 full-time jobs – the highest since February.Employment in goods-producing sectors increased by a net 12,000 jobs, led by construction and utilities, while the services sector lost a net 14,800 jobs, mostly in wholesale and retail trade and in some finance-related jobs. More