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    European Steel Plan Shows Biden’s Bid to Merge Climate and Trade Policy

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    A potential agreement on steel trade provides the clearest look yet at how the Biden administration plans to implement a trade policy that is both protectionist and progressiveWASHINGTON — President Biden has promised to use trade policy as a tool to mitigate climate change. This weekend, the administration provided its first look at how it plans to mesh those policy goals, saying the United States and the European Union would try to curb carbon emissions as part of a trade deal covering steel and aluminum.The arrangement, which American and European leaders aim to introduce by 2024, would use tariffs or other tools to encourage the production and trade of metals made with fewer carbon emissions in places including the United States and European Union, and block dirtier steel and aluminum produced in countries including China.If finalized, it would be the first time a U.S. trade agreement includes specific targets on carbon emissions, said Ben Beachy, the director of the Sierra Club’s Living Economy program.“No U.S. trade deal to date has even mentioned climate change, much less included binding climate standards,” said Mr. Beachy.The announcement was short on details, and negotiations with European leaders are likely to face multiple roadblocks. But it provided an outline for how the Biden administration hopes to knit together its concerns about trade and climate and work with allies to take on a recalcitrant China, at a time when progress on multicountry trade negotiations at the World Trade Organization has stalled.“The U.S. leads the world in our clean steel technology,” Gina Raimondo, the secretary of commerce, said in an interview on Monday. She said the United States would work with allies “to preference cleaner steel, which will create an incentive to make more investments in technology,” resulting in fewer carbon emissions and more jobs.In the same interview, Katherine Tai, the United States Trade Representative, said the potential agreement would restrict market access for countries that don’t meet certain carbon standards, or that engage in nonmarket practices and contribute to global overcapacity in the steel sector — accusations that are often levied at China.The effort would seek to build “a global arrangement that promotes not just fair trade in steel but also pro-climate and responsible trade in steel,” Ms. Tai said.Kevin Dempsey, the president of the American Iron and Steel Institute, said at an industry forum in Washington on Tuesday that the arrangement would be “positive for the U.S. industry,” which has the lowest carbon intensity per ton of steel of the major steel-producing countries.China accounts for nearly 60 percent of global steel production. Its use of a common steel-production method causes more than twice as much climate pollution as does the same technology in the United States, according to estimates by Global Efficiency Intelligence.In its announcement on Saturday, the Biden administration also said it had reached a deal to ease the tariffs that former President Donald J. Trump had imposed on European metals while the governments work toward the carbon accord.The United States would replace the 25 percent tariff on European steel and a 10 percent tariff on European aluminum with a so-called tariff-rate quota. In return, the European Union would drop the retaliatory tariffs it imposed on other American products, like bourbon and motorcycles.Under the new terms, 3.3 million metric tons of European steel would be allowed to enter the United States duty-free each year, with any steel above that volume subject to a 25 percent tariff.European producers would be allowed to ship 18,000 metric tons of unwrought aluminum, which often comes in the form of ingots, and 366,000 metric tons of wrought or semifinished aluminum into the United States each year, while volumes above that would be charged a 10 percent tariff, the commerce department said.To qualify for zero tariffs, the steel must be entirely made in the European Union — a provision designed to keep cheaper steel from countries including China and Russia from finding a backdoor into the United States via Europe.Supporters of free trade have criticized the Biden administration for relying on the same protectionist trade measures used by the Trump administration, which deployed both tariffs and quotas to protect domestic metal makers.Jake Colvin, the president of the National Foreign Trade Council, said the announcement would ratchet down trade tensions between the United States and Europe. But he called the trade barriers “an unwelcome form of managed trade” that would add costs and undermine American competitiveness.Ms. Tai said the administration had made a deliberate choice not to heed calls “for the president to just undo everything that the Trump administration had done on trade.”Mr. Biden’s plan, she said, “is that we formulate a worker-centered trade policy. And that means not actually going back to the way things were in 2015 and 2016, challenging us to do trade in a different way from how we’ve done it earlier, but also, critically, to challenge us to do trade in a way different from how the Trump administration did.”A factory in southern China that makes steel parts. The trade proposal would block dirtier steel and aluminum produced in countries including China.The New York TimesThe focus on carbon emissions differs from that of the Trump administration, which rejected any attempts to negotiate on carbon mitigation and withdrew the United States from the Paris Agreement on climate change.But negotiations with Europe will face challenges, among them developing a common methodology for measuring how much carbon is emitted as certain products are made. Still, the announcement suggests that the United States and Europe might be ready to work toward a collaborative approach on lowering carbon emissions, despite past differences on how the problem should be addressed.European leaders have long advocated an explicit price on the carbon dioxide that companies emit while making their products. In July, the European Union proposed a carbon border adjustment mechanism that would require companies to pay for carbon emissions produced outside Europe, to discourage manufacturers from evading Europe’s restrictions on pollution by moving abroad.An explicit tax on carbon has met with more resistance in the United States, where some politicians want to update regulatory requirements or put the onus on companies to invest in cleaner production technology.Todd Tucker, the director of governance studies at the Roosevelt Institute, said the latest announcement suggested that the European Union may be “a little bit more flexible” on how the United States and other partners would go about lowering emissions. Mr. Biden’s reconciliation bill, for example, contains a proposal for a “green bank” that could provide financing for firms to transition to cleaner technologies, he said.“If the U.S. ends up achieving decarbonization through more of an investments and industrial-policy approach, it seems like they’re OK with that,” Mr. Tucker said.Though the earliest negotiations over carbon emissions in the steel sector involve the European Union, the Biden administration says it wants to quickly extend the partnership to other countries.In twin announcements on Sunday, the Department of Commerce said it had begun close consultations with Japan and the United Kingdom “on bilateral and multilateral issues related to steel and aluminum,” with a focus on “the need for like-minded countries to take collective action.”Both Japan and the United Kingdom still face a 25 percent tariff on steel exports to the United States imposed by Mr. Trump.The talks suggest a template for how the Biden administration will try to engage allies to counter China’s growing economic heft and make progress on goals like climate and workers rights.The administration has rejected Mr. Trump’s “America First” approach to trade, saying the United States needs to work with like-minded countries. But they have also acknowledged that the inefficiency of negotiations at the World Trade Organization, and distanced themselves from broader, multicountry trade deals, like the Trans-Pacific Partnership.The announcements suggest that the Biden administration may not see comprehensive trade deals as the most effective way to accomplish many of its goals, but rather, industry-specific agreements among a limited number of democratic, free-market countries. That approach is similar to the cooperation the United States announced with the European Union for the civil aircraft industry in June.Ms. Raimondo said the agreement to ease the tariffs on the European Union was a “very significant achievement” that would help to alleviate supply chain problems and lower prices for companies that use steel and aluminum to make other products.“It’s all kind of a table setter to a global arrangement, whereby we work with our allies all over the world over the next couple of years,” she said. More

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    Retail Sales Rose in August, Highlighting Uneven Consumer Spending

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    Retail sales increased slightly in August, the Commerce Department reported Thursday, highlighting an uneven pace for the economic recovery as spending behavior swings month over month.The 0.7 percent climb in sales last month comes after a 1.8 percent decline in July and gains earlier in the summer. The gains in August, better than what economists expected, were prompted by a rise in spending on clothing, electronics and furniture and home goods.Sales at bars and restaurants fell, coming down after a steady rise in July.Prices of consumer goods continued to climb in August, albeit at a slower pace, according to data from the Labor Department released this week. The Consumer Price Index rose 5.3 percent in August from a year earlier, the data showed, suggesting inflationary pressures are starting to ease.The University of Michigan will publish its monthly consumer sentiment index on Friday, a key indicator regarding the economic recovery and consumer behavior. The index fell more than 13 percent in July because consumers expected price increases to continue.With more employers announcing mandates, the pace of coronavirus vaccinations had been trending steadily upward through the Labor Day holiday, giving economists reason for optimism if cases and hospitalizations level off or decline in September. More

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    Retail Sales Were Flat in April

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    Retail sales held steady in April after rising 10.7 percent the previous month, as Americans continued to spend government stimulus payments.Retail sales were flat last month after a buoyant March, the Commerce Department said on Friday, as Americans continued spending their latest round of government stimulus checks.April’s number was a slowdown from the prior month, when retail sales rose by 10.7 percent, as vaccinations increased and people became more comfortable outside of their homes, spending more money on clothing, restaurants, bars and sporting goods. Retail sales, which experienced record drops just over a year ago at the onset of the pandemic, have been closely watched as monthly gauges of the health of the economy and the mind-set of consumers.

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    Monthly retail sales
    Seasonally adjusted advance monthly sales for retail and food services.Source: Commerce DepartmentBy The New York TimesEconomists at Morgan Stanley had anticipated a smaller increase in retail sales in April compared with March based on stimulus check distribution, with roughly 83 percent of this latest round distributed in the back half of March. More

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    The Agency at the Center of America’s Tech Fight With China

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    Washington lawmakers, lobbyists and other parties have been vying to influence how the Bureau of Industry and Security, under the Biden administration, will approach a technology relationship with China.WASHINGTON — As tensions between the United States and China escalate, a little-known federal agency is at the center of a debate in the Biden administration about how tough an approach to take when it comes to protecting American technology.The Bureau of Industry and Security, a division of the Commerce Department, wields significant power given its role in determining the types of technology that companies can export and that foreign businesses can have access to.In recent months, Washington lawmakers, lobbyists and other interested parties have been vying to influence how the agency, under the Biden administration, will approach a technology relationship with China that is both crucial for American industry and national security.China hawks, including a collection of national security experts, congressional Republicans and progressive Democrats, say that in the past, American industry has held too much sway over the bureau. They have been pressing the administration to select a leader for the agency who will take a more aggressive approach to regulating the technology that the United States exports, according to people familiar with the discussions.Their opponents, including some current and former Commerce Department employees, and many in industry and Washington think tanks, caution that putting a hard-liner at the helm could backfire and harm U.S. national security by starving American industry of revenue it needs to stay on the cutting edge of research and encouraging it to relocate offshore.“It’s a very complicated relationship between the economic and national security interest,” said Lindsay Gorman, a fellow for emerging technologies at the German Marshall Fund. “The fine line the Commerce Department has to walk is protecting against national security risks that may not be top of mind for the industry in the short run, without killing the golden goose.”The bureau’s powers became clear during the Trump administration, which wielded its authority aggressively, though somewhat erratically, using the agency to curb exports of advanced technology goods like semiconductors to the telecommunications company Huawei and other Chinese businesses. It weaponized the bureau’s so-called entity list, adding hundreds of Chinese companies to a list that blocks exports of American products to companies or organizations that pose a national security threat.But many of these regulations were enacted haphazardly and often did less to restrict Chinese access to American technology than the Trump administration intended. And at times, President Donald J. Trump offered Chinese companies concessions from these punishments to try to advance a trade deal with China, including offering a reprieve for the Chinese telecom company ZTE and licenses so companies could continue supplying goods to Huawei and Semiconductor Manufacturing International Corporation.The Biden administration is still carrying out a review of its China policies and has not indicated how it plans to use the bureau’s powers. Its initial engagement with China got off to an acrimonious start last week at a meeting in Anchorage, and President Biden, in his first news conference on Thursday, emphasized investing heavily in new technologies to compete with Beijing.“The future lies in who can, in fact, own the future as it relates to technology, quantum computing, a whole range of things, including in medical fields,” Mr. Biden said.“I see stiff competition with China,” he added. “They have an overall goal to become the leading country in the world, the wealthiest country in the world and the most powerful country in the world. That’s not going to happen on my watch because the United States are going to continue to grow and expand.”Last week, the Commerce Department said it had issued subpoenas to multiple Chinese technology companies asking them to provide more information on their activities, potentially presaging tighter restrictions on their use and transfer of American data.U.S. officials will soon need to make difficult choices about specific policy actions. That includes how to use the Commerce Department’s powers, including whether to block more exports of American technology, whether to keep or scrap Mr. Trump’s tariffs on foreign metals, and how to set the standards for national security reviews of foreign investments.The complication stems from China’s position as both the largest export market for many multinational companies, and America’s biggest acknowledged security threat.China’s authoritarian leaders have proposed plans to expand their market share in emerging industries like semiconductors, artificial intelligence and quantum computing, while easing the country’s dependence on foreign energy and technology. And as Beijing’s economic influence and technological capacities grow, so will its military and geopolitical influence.“China is the only country with the economic, diplomatic, military, and technological power to seriously challenge the stable and open international system — all the rules, values, and relationships that make the world work the way we want it to,” Secretary of State Antony J. Blinken said this month in his first major address, in which he called the U.S. relationship with China “the biggest geopolitical test of the 21st century.”The Commerce Department is responsible for promoting the interests of American business and has always had a close relationship with industry. But as the China tech competition has intensified, the department has taken on a larger role in regulating company activity, as well. In 2018, Congress updated its laws governing export controls, giving the Bureau of Industry and Security more power to determine what kind of emerging technologies cannot be shared with China and other geopolitical rivals.A semiconductor factory in Nantong, China. The country accounts for about one-third of the industry’s revenue.Agence France-Presse — Getty ImagesBut critics say the bureau has given companies and industry groups too much influence over its regulatory process and failed to adopt to the new realities of global competition.“The industry viewpoint has been the commerce viewpoint since the fall of the Soviet Union, and they’re not able to make the adjustment that the world has changed,” said Derek Scissors, a resident scholar at the American Enterprise Institute who advocates stronger export restrictions.“The industry capture is not, in my view, industry saying, ‘Hey, meet me at the Jefferson Memorial and I have a suitcase of money for you.’ It’s that these guys have been trained for 30 years to think that exports are good for America and that’s that,” Mr. Scissors said. “So surprise, they don’t want tighter export controls.”But distancing the bureau from industry may have repercussions, too. Critics say that without the guidance of industry on complex technological issues, regulations can easily backfire, harming the American economy while doing little to combat security threats from China. And any policy that hamstrings innovation could in turn hold back the American military, which acquires most of its technology from the private sector.John Neuffer, the chief executive of the Semiconductor Industry Association, said that China accounted for about one-third of his industry’s revenue, and that it would be “disastrous” for semiconductor companies to not have access to such a huge and growing market.“When you start cutting off capital profits that can flow into R&D, many of them coming from the huge Chinese market, you really undermine our ability to stay at the tip of the spear in terms of semiconductor innovation,” Mr. Neuffer said.“The sense of urgency in recent years inclined our leadership to make decisions without reference to what industry thought,” said Daniel H. Rosen, a founding partner of Rhodium Group. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”The Biden administration has already run into the political minefield surrounding the bureau. In her confirmation hearing in January, Gina Raimondo, the new secretary of commerce, attracted criticism from Republicans when she declined to commit to keeping Huawei on the bureau’s entity list. Ms. Raimondo later said that she would use the entity list “to its full effect,” and that Huawei and ZTE should be on the list.With Ms. Raimondo sworn in to her post this month, the Biden administration is considering candidates to lead the Bureau of Industry and Security. It has become a contentious process, a kind of proxy battle among trade advisers, industry groups and lawmakers of both parties for the future of the United States’ tech strategy.One early contender, Kevin Wolf, a partner in the international trade group at the law firm Akin Gump, has run into resistance from some China hawks in Washington over his industry ties. Mr. Wolf, who was previously assistant secretary at the bureau, issued the sanctions against ZTE. He has consistently argued that restrictions that are unclear and unpredictable can backfire, “harming the very interests they were designed to protect.”But critics have found fault with his work on behalf of industry since leaving the government, including counseling clients on what is permitted under Mr. Trump’s regulations, and trying to obtain licenses for his clients to supply products to Huawei and S.M.I.C.Mr. Wolf said that he had merely helped companies understand the new rules, as other export control lawyers do, and that it was the Trump administration that was responsible for creating a new process to grant companies licenses to supply products to listed entities. Some who believe the Bureau of Industry and Security requires a more fundamental transformation have instead pushed for James Mulvenon, an expert on the Chinese military at research firm Defense Group, who has publicly called for refocusing the bureau’s mandate to place national security interests before those “of Silicon Valley, Wall Street and other multinationals.”The administration may also be considering less prominent candidates for the bureau’s three Senate-confirmed posts, like Brian Nillson, a former employee of the Bureau of Industry and Security and the State Department, or export control lawyers like Douglas Jacobson and Greta Lichtenbaum, people familiar with the deliberations say.Whoever leads the bureau, officials at the National Security Council are likely to play a guiding role, according to people familiar with the deliberations. More

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    In Between Stimulus Payments, Retail Sales Decline

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    A 3 percent drop in February followed a rise the month before, putting a spotlight on how stimulus money is affecting consumer spending as the economy recovers.Retail sales slid in February after a jump the month before, the Commerce Department said on Tuesday, putting a spotlight on the effect of stimulus money on consumer spending, which is likely to move in fits and starts as the economy recovers.Sales for February dropped 3 percent, government data showed, as consumers grappled with waning stimulus effects and severe winter storms in parts of the country. The decline was sharper than some economists had expected, but sales for the month were still higher than a year before, when the pandemic began to squeeze the economy. Retail sales sharply declined in March 2020 amid widespread shutdowns.Sales in January had surged 7.6 percent — a gain that was most likely fueled by stimulus checks deposited at the end of last year. The increase in January, revised upward on Tuesday, benefited a broad array of retailers. Consumers spent more on goods, including at furniture sellers and department stores, as well as in restaurants, offering a positive sign for an economy that has been battered by the coronavirus outbreak.The data suggests that the recovery in consumer spending is likely to be bumpy as the retail sector recovers from shifts in consumer spending and a new round of stimulus payments arrives in Americans’ bank accounts. Retailers saw largely uneven sales for the better part of last year, as consumers flocked to big-box chains and grocery stores and spent less at many apparel retailers and restaurants. Balancing out those categories is likely to take a combination of stimulus money, vaccinations, improvements in unemployment numbers and warm weather.“It was obviously going to slow down a bit,” Mickey Chadha, a retail analyst at Moody’s Investors Service, said of the February sales.“Going forward, the new stimulus checks that are going out as we speak are definitely going to be a positive for retail sales in March and through April,” he added. “All indications are, as the vaccines roll out through the country and the pandemic gets under control, this capacity to spend is only going to fuel further sales in retail.”Economists at Morgan Stanley had forecast a 0.7 percent gain in February sales based on the outsize gains in January, and predicted that new stimulus money arriving in late March and early April would drive a spending surge in coming months.Robert Frick, corporate economist at the Navy Federal Credit Union, which is able to track credit card spending across its members, said that “we’re really in the eye of the retail spending hurricane right now,” with the stimulus effects from last month and the package yet to come. He said he expected that the economy would come back this year, but that retail spending was “going to be very much a jagged line” as it increased.“The crucial thing that we’re all looking at is when do we go from stimulus life support to the economy walking on its own two feet and people getting jobs and employment really surging?” Mr. Frick said. “That’s an open question.”President Biden signed into law a nearly $1.9 trillion relief plan last week, and direct payments of $1,400 per person are already making their way to the bank accounts of low- and middle-income Americans.The law, known as the American Rescue Plan, also extends $300 weekly federal jobless benefits through Sept. 6 and provides billions of dollars to distribute coronavirus vaccines and relief for schools, states, tribal governments and small businesses struggling during the pandemic.“Some of that money is bound to flow into retail — it just has to,” Mr. Chadha said.The major changes in consumer habits during the pandemic have been on display in recent weeks as retailers have reported their holiday and full-year earnings results. (Most retailers end their fiscal year at the close of January to fully capture holiday spending.)For example, Walmart reported fourth-quarter revenue that hit a record of $151 billion, up 7.3 percent from a year earlier, while Target also reported an increase in the same period, including a surge in digital sales. Consumers have gravitated to the chains in the past year, both in person and online, and increasingly used services like curbside pickup.But the story was different at Macy’s and Gap, one of the country’s biggest operators of mall stores, which posted sales declines in the fourth quarter and grim annual revenue drops as many consumers stayed away from malls and had fewer reasons to buy new clothes in an isolated environment. Gap, which also owns Old Navy and Banana Republic, pointed to stay-at-home restrictions and store closures as reasons for its tumbles.Still, Gap had a positive outlook for the back half of this year. “As vaccines roll out and stimulus checks begin, we currently view the second half of 2021 favorably, reflecting a likely return to a more normalized prepandemic level,” Katrina O’Connell, Gap’s chief financial officer, said on an earnings call this month.Jeff Gennette, Macy’s chief executive, said in an interview this month that the company was looking for “clues on what’s going on with wedding dates, what’s going on with restaurant reservations, what are the signs that communities are starting to open up.” That would help the company determine how consumers were planning “wearing occasions” this year, he said.The retail sales data for February showed declines from January across the board, including in categories like furniture, electronics and appliances, building materials and apparel. But Mr. Frick of the Navy Federal Credit Union said the decline, which was affected by the cold weather, needed to be read in context.“You have to factor in that it was a decline from an exceptionally strong January,” he said. “It was still $33 billion above February of last year, which of course was the last month before retail spending fell of a cliff.” More

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    Biden Gains Two Key Economic Advisers

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Gains Two Key Economic AdvisersThe Senate confirmed Gina Raimondo as President Biden’s commerce secretary and Cecilia Rouse as the head of the Council of Economic Advisers.Gina Raimondo, left, brings experience as Rhode Island governor and a venture capitalist to her role as commerce secretary, and Cecilia Rouse, a Princeton economist, has previously been a member of the council she is about to lead.Credit…Kriston Jae Bethel for The New York TimesAna Swanson and March 2, 2021, 7:11 p.m. ETWASHINGTON — The Senate confirmed two key members of President Biden’s economic team on Tuesday, ushering in Gina Raimondo, the governor of Rhode Island and a former venture capitalist, as the next secretary of commerce, and Cecilia Rouse, a Princeton University economist, as chair of the White House Council of Economic Advisers.Dr. Rouse will become the first Black chair of the economic council in its 75-year history. She was approved by a vote of 95 to 4.Ms. Raimondo was confirmed 84 to 15. A moderate Democrat with a background in the financial industry, Ms. Raimondo is expected to leverage her private- and public-sector experience to oversee a sprawling bureaucracy that is charged with both promoting and regulating American business.Under Ms. Raimondo, the Commerce Department is likely to play a crucial role in several of Mr. Biden’s policy efforts, including spurring the American economy, building out rural broadband and other infrastructure, and leading America’s technology competition with China. The department also carries out the census and oversees American fisheries, weather monitoring, telecommunications standards and economic data gathering, among other activities.Senator Maria Cantwell, Democrat of Washington, said that she thought Ms. Raimondo’s private-sector experience would help her facilitate new investments and create jobs in the United States, and that she was “counting on Governor Raimondo to help us with our export economy.”Ms. Cantwell also said she believed Ms. Raimondo would be a departure from President Donald J. Trump’s commerce secretary, Wilbur Ross. “I think he and the president spent a lot more time shaking their fists at the world community than engaging them on policies that were really going to help markets and help us move forward with getting our products in the door,” she said.A graduate of Yale and Oxford, Ms. Raimondo was a founding employee at Village Ventures, an investment firm backed by Bain Capital. She also co-founded her own venture capital firm, Point Judith Capital, before being elected treasurer and then governor of Rhode Island.The first female governor of the state, she was known for introducing a centrist agenda that included training programs, fewer regulations and reduced taxes for businesses. She also led a restructuring of the state’s pension programs, clashing with unions in the process.Ms. Raimondo drew criticism from some Republicans in her nomination hearing in January, when she declined to commit to keeping certain restrictions in place on the exports that could be sent to the Chinese telecom firm Huawei, which many American lawmakers see as a threat to national security.Speaking on the Senate floor on Tuesday, Senator Ted Cruz, Republican of Texas, denounced those remarks and urged his colleagues to vote against Ms. Raimondo. “There has been a rush to embrace the worst elements of the Chinese Communist Party in the Biden administration. And that includes Governor Raimondo,” he said.Under Mr. Trump, the Commerce Department played an outsize role in trade policy, levying tariffs on imported aluminum and steel for national security reasons, investigating additional tariffs on cars and placing a variety of curbs on technology exports to China.Ms. Raimondo and other Biden administration officials have not clarified whether they will keep those restrictions, saying they will first carry out a comprehensive review of their effects.Dr. Rouse is the dean of the Princeton School of Public and International Affairs, and a former member of the council under President Barack Obama. Her academic research has focused on education, discrimination and the forces that hold some people back in the American economy. She won widespread praise from Republicans and Democrats alike in her confirmation hearing, with senators voting unanimously to send her nomination from the Banking Committee to the full Senate.She will assume her post amid an economic and public health crisis from the coronavirus pandemic, and in the waning days of congressional debate on a $1.9 trillion economic aid package that Mr. Biden has made his first major legislative priority.But in interviews and her hearing testimony, Dr. Rouse has made clear that she sees a larger set of priorities as council chair: overhauling the inner workings of the federal government to promote racial and gender equity in the economy.“As deeply distressing as this pandemic and economic fallout have been,” she said in her hearing, “it is also an opportunity to rebuild the economy better than it was before — making it work for everyone by increasing the availability of fulfilling jobs and leaving no one vulnerable to falling through the cracks.”One of her initiatives will be to audit the ways in which the government collects and reports economic data, in order to break it down by race, gender and other demographic variables to improve the government’s ability to target economic policies to help historically disadvantaged groups.“We want to design policies that will be economically effective,” Dr. Rouse said in an interview this year. Asked how she would judge effectiveness, she replied, “It’s by keeping our eye on this ball, and asking ourselves, every time we look at a policy: What are the racial and ethnic impacts?”AdvertisementContinue reading the main story More

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    Stimulus Checks Helped Personal Income Surge in January

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyIncome and Spending Gains Are Latest Sign of Economic RecoveryPersonal income and spending both surged in January as a new round of government checks hit Americans’ bank accounts.A Los Angeles mall this week. Money spent on goods rose 5.8 percent in January, but spending on services rose only 0.7 percent.Credit…Philip Cheung for The New York TimesSydney Ember and Feb. 26, 2021Updated 5:00 p.m. ETThe American economic recovery came perilously close to falling off a cliff at the end of last year. But government aid arrived just in time to prevent a disaster — and possibly paved the way for a dynamic rebound.Personal income surged a remarkable 10 percent in January, the Commerce Department reported on Friday. Spending increased last month, too, by a healthy 2.4 percent, largely fueled by a rise in purchases of goods.The report was the latest sign of the economy’s slow but steady march forward after a series of setbacks.Yet the data also underscored the extent to which government aid is buoying the economy. The rise in income last month was almost entirely attributable to the $600 government relief checks approved in December and to unemployment insurance payments. And while spending ticked up, purchases of services remained depressed as the pandemic continued to weigh heavily on the leisure and hospitality industries even as coronavirus cases fell.“Technically, you could say we’re recovering,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “But the patterns in both income and spending point out the fragility of the recovery without aid to bridge these waters that are poisonous.”That the economy remains reliant on government aid is all the more resonant as Democrats in Washington try to push through President Biden’s $1.9 trillion relief measure, which would provide a round of $1,400 checks that could further power consumer spending.Although the data on Friday indicated that the recovery was still fragile, it provided fresh evidence that it was no longer in danger of moving in reverse, a trend also seen in recent reports on retail sales and orders of durable goods.Yields on government bonds, the basis for mortgage rates and corporate borrowing, have risen sharply this month as investors anticipate a quick pickup in growth. Yields on 10-year Treasury notes, below 1 percent for much of 2020, have climbed to roughly 1.5 percent in recent days.The encouraging data led Morgan Stanley on Friday to raise its forecast of first-quarter economic growth to 2 percent (8.1 percent on an annualized basis) from 1.8 percent. Before Congress passed the round of aid that produced the January checks, many economists thought G.D.P. might shrink in the first quarter.There is a possible downside to a robust, stimulus-powered recovery. Some economists have warned in recent weeks that inflation could become a problem, which could prompt the Federal Reserve to cut back on its measures to bolster the economy. A change of posture from the Fed would probably be seen as bad news for stocks, and trading on Wall Street has been turbulent this week as investors react to the sudden moves in bond yields.But the report on Friday gave no indication that inflation was spinning out of control. Consumer prices were up 1.5 percent in January from a year earlier, well below the Fed’s 2 percent target. More

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    Biden Reinstates Aluminum Tariffs, Reversing Trump's Decision

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Reinstates Aluminum Tariffs in One of His First Trade MovesThe move suggests the Biden administration may be inclined to maintain President Trump’s hefty tariffs, a decision that will please unions but disappoint manufacturers.President Biden at the Wisconsin Aluminum Foundry in Manitowic, Wis., in September. The tariffs on foreign aluminum, which were imposed by the Trump administration, aim to protect American producers.Credit…Erin Schaff/The New York TimesFeb. 2, 2021Updated 5:36 p.m. ETWASHINGTON — President Biden reinstated tariffs on aluminum exported from the United Arab Emirates on Monday evening, reversing President Donald J. Trump’s decision to lift them on his last day in office.The decision is one of Mr. Biden’s first significant moves on trade and suggests that his administration may be inclined to maintain the type of hefty tariffs Mr. Trump imposed on foreign metals to protect domestic industry. That position found favor with unions, but disappointed industries and businesses that have argued the tariffs raise costs.Mr. Biden and his deputies have so far declined to say whether they would keep or remove the spate of tariffs Mr. Trump imposed on a range of products, from steel and aluminum to Chinese imports. Instead, his top officials have said that the administration plans to carry out a comprehensive review of the tariffs’ economic effects before making any decisions.The tariffs on foreign aluminum are designed to protect American producers, which have struggled to compete with low-priced foreign products and been forced to shut down many domestic smelters.In March 2018, Mr. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates, saying their metal exports had put American aluminum producers out of business and therefore threatened national security. He subsequently exempted aluminum from Argentina, Australia, Canada and Mexico and, just hours before his term ended, lifted the aluminum tariffs on the UAE.Mr. Trump’s decision appeared to be motivated more by political than economic considerations. The decision to lift tariffs on the United Arab Emirates was led by White House officials, including Mr. Trump’s son-in-law, Jared Kushner, who had just carried out extensive negotiations to normalize relations between Israel and the United Arab Emirates. It was made without the support of many specialists in the Commerce Department and the United States Trade Representative, according to a person familiar with the deliberations.Before coming into office, Mr. Trump also pursued various real estate projects in the United Arab Emirates, including hotels and golf courses. The Trump International Golf Club in the city of Dubai opened for business in early 2017, soon after Mr. Trump became president.Jen Psaki, the White House press secretary, said in a briefing on Tuesday that Mr. Trump’s decision to lift the tariffs on the U.A.E. “at the last hour was made clearly, in our view, on the basis of foreign policy issues unrelated to trade.” She said the Biden administration was still reviewing other tariffs to determine what steps need to be taken.In lifting the tariffs, Mr. Trump said the United States and the U.A.E., a major exporter of aluminum, had an important security relationship, and had carried out talks to find another way to address the threat to American national security. The Trump administration replaced the tariffs on aluminum with a quota, which would limit export surges from the country.But in a proclamation issued late Monday evening, Mr. Biden said the concerns that had fueled the tariffs in the first place still existed. “In my view, the available evidence indicates that imports from the U.A.E. may still displace domestic production, and thereby threaten to impair our national security,” Mr. Biden said.Tom Conway, the president of the United Steelworkers International union, applauded the move, saying that Mr. Trump’s actions had constituted “a blatant attack on American workers.”“Trump’s plan to lift tariffs on imports from the United Arab Emirates would undermine the effectiveness of the program and essentially exempt the vast majority of aluminum imports,” Mr. Conway said.The United Arab Emirates is one of the world’s largest aluminum exporters, the result of an abundant petroleum supply that keeps the cost of the energy-intensive aluminum production process low. Between January and November of last year, it exported more aluminum to the United States than any other country except Canada.American aluminum producers have struggled to compete with a surge in production from state-funded factories in countries like China, Russia and the United Arab Emirates, as well as growing aluminum production in countries with a lower cost of energy, like Canada. Because of various trade curbs, the United States imports a limited amount of aluminum directly from China, but China’s massive production still pushes down metal prices worldwide, making it harder for American businesses to compete.The United States went from being the world’s top producer of aluminum two decades ago to to being surpassed by China, Russia, the U.A.E., Canada and other countries. It produced 741,000 metric tons of primary aluminum in 2017, the lowest level since 1951 and just 1.2 percent of the global supply.But the tariffs have sparked an outcry from downstream American industries that use steel and aluminum to make products like cars, boats, recreational vehicles and cans. These producers say the tariffs have increased their costs, narrowing their profit margins and making it more difficult for their products to compete on the global market.Some critics have also denounced the national security rationale for the tariffs, pointing out that the bulk of American aluminum imports come from Canada, a close military ally.AdvertisementContinue reading the main story More