After a shift by the C.D.C., employers withdrew mask policies that workers felt were protecting them from unvaccinated customers.The Kroger supermarket in Yorktown, Va., is in a county where mask wearing can be casual at best. Yet for months, the store urged patrons to cover their noses and mouths, and almost everyone complied. More
It is a delicate decision balancing employee health and personal privacy. Some companies are sidestepping the issue by offering incentives to those who get shots.As American companies prepare to bring large numbers of workers back to the office in the coming months, executives are facing one of their most delicate pandemic-related decisions: Should they require employees to be vaccinated?Take the case of United Airlines. In January, the chief executive, Scott Kirby, indicated at a company town hall that he wanted to require all of his roughly 96,000 employees to get coronavirus vaccines once they became widely available.“I think it’s the right thing to do,” Mr. Kirby said, before urging other corporations to follow suit. It has been four months. No major airlines have made a similar pledge — and United Airlines is waffling.“It’s still something we are considering, but no final decisions have been made,” a spokeswoman, Leslie Scott, said.For the country’s largest companies, mandatory vaccinations would protect service workers and lower the anxiety for returning office employees. That includes those who have been vaccinated but may be reluctant to return without knowing whether their colleagues have as well. And there is a public service element: The goal of herd immunity has slipped as the pace of vaccinations has slowed.But making vaccinations mandatory could risk a backlash, and perhaps even litigation, from those who view it as an invasion of privacy and a Big Brother-like move to control the lives of employees.A United Airlines vaccine clinic at O’Hare Airport in Chicago. Employers are using on-site vaccinations to encourage workers to get shots.Scott Olson/Getty ImagesIn polls, executives show a willingness to require vaccinations. In a survey of 1,339 employers conducted by Arizona State University’s College of Health Solutions and funded by the Rockefeller Foundation, 44 percent of U.S. respondents said they planned to mandate vaccinations for their companies. In a separate poll of 446 employers conducted by Willis Towers Watson, a risk-management firm, 23 percent of respondents said they were “planning or considering requiring employees to get vaccinated for them to return to the worksite.”That discrepancy, said Mara Aspinall, who led the Arizona State poll, may have to do with the timing of the surveys and the pace at which executives are growing comfortable with the vaccines. Arizona State conducted its survey in March, while Willis Towers led its survey between Feb. 23 and March 12.Despite what surveys have found, few executives have taken the step of mandating vaccines. It seems that most are hoping that encouragement, whether forceful or subtle, will be enough.“While legally in the United States, employers can mandate vaccines while providing accommodations for religious and for health reasons, socially, in terms of the social acceptability of these decisions, it’s much more tenuous,” said Laura Boudreau, a professor of public policy at Columbia University. “And so the reputational risks to these companies of getting this wrong are really high.”Douglas Brayley, an employment lawyer at the global law firm Ropes & Gray, warns clients of the implications of following through on a mandate, he said.“What if 10 percent of your work force refuses? Are you prepared to lay off that 10 percent?” he said he asked clients. “Or what if it’s someone high-level or in a key role, would you be prepared to impose consequences? And then they sometimes get more nervous.”He added, “Anytime you would have them putting out a mandate, but then carrying through the consequences unevenly, that would create a risk of potentially unlawful unfair treatment.”Companies that require vaccines may also be concerned about any side effects or medical issues that an employee might claim were caused by the vaccine.“They could be held liable for any sort of adverse effects that might happen a year or two down the road,” said Karl Minges, chair of health administration and policy at the University of New Haven.Some companies are sidestepping the problem and trying incentives instead. Amtrak is paying employees two hours’ worth of regular wages per shot upon proof of vaccination. Darden, which owns Olive Garden and other restaurants, told employees it would offer hourly employees two hours of pay for each dose they receive, while emphasizing it would not make doses mandatory. Target is offering a $5 coupon to all customers and employees who receive their vaccination at a CVS at Target location.For restaurants, making vaccinations mandatory could make hiring workers even more difficult.Philip Cheung for The New York TimesIn the United States, there’s nothing new about vaccines being required for participation in public life. The Supreme Court ruled about a century ago that states could require vaccinations for children attending public school. And universities like Rutgers have instituted mandatory Covid-19 vaccinations.But the pandemic brings up a host of complications that companies typically prefer to avoid, involving the private lives, religious preferences and medical histories of employees, such as whether an employee is pregnant, breastfeeding or immuno-compromised, information they may not want to reveal.Major union groups, like the A.F.L.-C.I.O., have not aggressively pushed the issue either. They are facing dueling forces — standing up for individual worker’s rights on the one hand and protecting one another on the other. Unions have also been arguing for stronger workplace safety measures, efforts that could be complicated by companies’ arguing that mandatory vaccinations reduce the need for such accommodations. The return to work protocols negotiated between the Alliance of Motion Picture & Television Producers and Hollywood’s unions, for instance, will not include mandatory vaccinations.“There are going to be some people who may have legitimate reasons for not getting the vaccine or for not wanting to talk about it,” said Carrie Altieri, who works in communications for IBM’s People and Culture business. “It’s not an easy issue at this point.” IBM is working with New York State on a digital passport linking a person’s vaccination records to an app to show businesses, like performance venues, that may require vaccination. It is not, though, requiring vaccinations for its employees.For some businesses like restaurants, which are already struggling to hire workers, mandating vaccinations could make hiring even more difficult. And there are questions of logistics and execution. How can companies confirm the veracity of those who say they’ve been vaccinated?Companies may need to hire additional staff, potentially with medical training, to handle such tasks, which could saddle businesses — particularly small ones — with burdensome costs.Vivint, a home security company based in Utah with 10,000 employees, began offering vaccines in its on-site clinic this week, after the state approved the company to distribute 100 shots a week to its staff. It paid $3,000 for the necessary medical-grade freezer.“We’re not requiring employees to get vaccinated, but we’re highly encouraging it,” said Starr Fowler, senior vice president for human resources. “For a lot of our employees, particularly those that are younger, the easier that we make it for them, the more likely they’re going to do it.”At Salesforce Tower park in San Francisco, up to 100 fully vaccinated employees can volunteer to work on designated floors.Jason Henry for The New York TimesOthers are experimenting with splitting up their work forces. Salesforce is introducing a policy in certain U.S. offices, including Salesforce Tower in San Francisco, where up to 100 fully vaccinated employees can volunteer to work on designated floors. The New York Stock Exchange issued a memo to trading firms saying they would be allowed to increase their staff on the floor, provided all the employees have been vaccinated.The Equal Employment Opportunity Commission issued guidance in December stating that employers were indeed legally permitted to require employees to be vaccinated before they return to offices. But the threat of litigation still looms.“To be concerned about the possibility of litigation seems to me to be a perfectly legitimate concern,” said Eric Feldman, a law professor at the University of Pennsylvania. He added, “It would seem to me that employers are going to find themselves in a fairly strong position legally — but that doesn’t mean they’re not going to get sued.”Legislation that would limit the ability to require vaccines for students, employees or the public in general has been proposed in at least 25 states, according to the National Conference of State Legislatures. Some of those restrictions pertain only to vaccines that, like those for Covid-19, have yet to be granted full approval by the Food and Drug Administration. (The coronavirus vaccines have been granted conditional approval for emergency use.)Pfizer is expected to file for full approval of its Covid-19 vaccine soon. Others are expected to follow.Speaking at a Wall Street Journal conference this week, Jamie Dimon, the chief executive of JPMorgan Chase, mentioned “legal issues about requiring vaccines” when asked about bringing workers back to the office. A press officer for the bank, which plans to open its offices on May 17 on a voluntary basis, said it strongly encouraged vaccines for employees — barring any religious or health restrictions — but would not require them. A spokeswoman for Goldman Sachs, which has not guided employees either way, declined to comment.One potential path for companies seeking a middle ground is to mandate the shots only for new hires. Still, there is a fine line between encouraging and requiring shots — sometimes resulting in conflicting messages to employees.The investment bank Jefferies sent a memo to employees in early February stating “verification of vaccination will be required to access the office.” On Feb. 24 came a follow-up memo. “We did not intend to make it sound as if we are mandating vaccines,” it said.Reporting was contributed by More
President Biden’s vow to work with China on issues like climate change is clashing with his promise to defend human rights.WASHINGTON — President Biden has repeatedly pledged to work with China on issues like climate change while challenging Beijing on human rights and unfair trade practices.But those goals are now coming into conflict in the global solar sector, presenting the Biden administration with a tough choice as it looks to expand the use of solar power domestically to reduce the United States’ carbon dioxide emissions.The dilemma stems from an uncomfortable reality: China dominates the global supply chain for solar power, producing the vast majority of the materials and parts for solar panels that the United States relies on for clean energy. And there is emerging evidence that some of China’s biggest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, programs often seen as a red flag for potential forced labor and human rights abuses.This week, Mr. Biden is inviting world leaders to a climate summit in Washington, where he is expected to unveil an ambitious plan for cutting America’s emissions over the next decade. The administration is already eyeing a goal of generating 100 percent of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from only 40 percent last year. To meet that target, the United States may need to more than double its annual pace of solar installations.That is likely to be an economic boon to China, since the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. Nearly half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.“It’s put the Democrats in a hard position,” said Francine Sullivan, the vice president for business development at REC Silicon, a polysilicon maker based in Norway with factories in the United States. “Do you want to stand up to human rights in China, or do you want cheap solar panels?”The administration is increasingly under pressure from influential supporters not to turn a blind eye to potential human rights abuses in order to achieve its climate goals.“As the U.S. seeks to address climate change, we must not allow the Chinese Communist Party to use forced labor to meet our nation’s needs,” Richard L. Trumka, the president of the A.F.L.-C.I.O., wrote in a letter on March 12 urging the Biden administration to block imports of solar products containing polysilicon from the Xinjiang region.China’s hold over the global solar sector has its roots in the late 2000s. As part of an effort to reduce dependence on foreign energy, Beijing pumped vast amounts of money into solar technology, enabling companies to make multibillion-dollar investments in new factories and gain market share globally.China’s boom in production caused the price of panels to plummet, accelerating the adoption of solar power worldwide while forcing dozens of companies in the United States, Europe and elsewhere out of business.A solar equipment factory in China’s Jiangxi Province in January. China’s hold over the global solar sector has its roots in the late 2000s, when Beijing began pumping vast amounts of money into solar technology.CHINATOPIX, via Associated PressIn the past few years, Chinese polysilicon manufacturers have increasingly shifted to Xinjiang, lured by abundant coal and cheap electricity for their energy-intensive production.Xinjiang is now notorious as the site of a vast program of detention and surveillance that the Chinese government has carried out against Muslim Uyghurs and other minority groups. Human rights groups say the Chinese authorities may have detained a million or more minorities in camps and other sites where they face torture, indoctrination and coerced labor.In a report last year, Horizon Advisory, a consultancy in Washington, cited Chinese news reports and government announcements suggesting that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar had accepted workers transferred with the help of the Chinese government from impoverished parts of Xinjiang.Jinko Solar denied those allegations, as did the Chinese government. Zhang Longgen, a vice chairman of Xinjiang Daqo — a unit of one of the companies cited by Horizon Advisory — said that the polysilicon plants were not labor intensive, and that the company’s workers were freely employed and could quit if they wanted, according to Global Times, a Chinese Communist Party-owned newspaper. The report said that only 18 of the 1,934 workers at Xinjiang Daqo belonged to ethnic minorities, and that none were Uyghur.The other companies did not respond to requests for comment.Experts have had difficulty estimating how many laborers may have been coerced into working in Chinese solar facilities given restrictions on travel and reporting in Xinjiang. Many multinational companies have also struggled to gain access to the region’s factories to rule out the risk of forced labor in their supply chains.Mark Widmar, the chief executive of First Solar, a solar panel maker based in the United States, said exposure to Xinjiang was “the unfortunate reality for most of the industry.”“How the industry has evolved, it’s made it difficult to be comfortable that you do not have some form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, that’s going to be tough.”The revelations have attracted attention from lawmakers and customs officials, and prompted concerns among solar investors that the sector could be destined for tougher regulation.Under the Trump administration, American customs agents took a harder line against products reportedly made with forced labor in Xinjiang, including a sweeping ban on cotton and tomatoes from the region. Those restrictions have forced a reorganization of global supply chains, especially in the apparel sector.The Biden administration has said it is still reviewing the Trump administration’s policies, and it has not yet signaled whether it will pursue other bans on products or companies. But both Mr. Biden and his advisers have insisted that the United States plans to confront China on human rights abuses in Xinjiang.A spokeswoman for the National Security Council said that the draconian treatment of Uyghurs “cannot be ignored,” and that the administration was “studying ways to effectively ensure that we are not importing products made from forced labor,” including solar products.Congress may also step in. Since the beginning of the year, the House and Senate have reintroduced versions of the Uyghur Forced Labor Prevention Act, which would assume that imports from Xinjiang were made with forced labor and block them from American ports, unless the importer showed proof otherwise. The House version of the bill singles out polysilicon as a priority for enforcement.The legislation has broad bipartisan support and could be included in a sweeping China-related bill that Democrats hope to introduce this year, according to congressional staff members.Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has led an effort to help solar companies trace materials in their supply chain. It has also organized a pledge of 236 companies to oppose forced labor and encouraged companies to sever any ties with Xinjiang by June.Some Chinese companies have responded by reshuffling their supply chains, funneling polysilicon and other solar products they manufacture outside Xinjiang to American buyers, and then directing their Xinjiang-made products to China and other markets.Analysts say this kind of reorganization is, in theory, feasible. About 35 percent of the world’s polysilicon comes from regions in China other than Xinjiang, while the United States and the European Union together make up around 30 percent of global solar panel demand, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.John Smirnow, the general counsel for the Solar Energy Industries Association, said most solar companies were already well on their way toward extricating supply chains from Xinjiang.A high-security facility that is believed to be a re-education camp in the Xinjiang region of China in 2019. President Biden and his advisers have said that they plan to confront China on human rights abuses in Xinjiang.Greg Baker/Agence France-Presse — Getty Images“Our understanding is that all the major suppliers are going to be able to supply assurances to their customers that their products coming into the U.S. do not include polysilicon from the region,” he said.But it is unclear if this reorganization will quell criticism. Episodes of forced labor have also been reported in Chinese facilities outside Xinjiang where Uyghurs and other minorities have been transferred to work. And restrictions on products from Xinjiang could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.Human rights advocates have argued that allowing Chinese companies to cleave their supply chains to serve American and non-American buyers may do little to improve conditions in Xinjiang and have pressed the Biden administration for stronger action.“The message has to be clear to the Chinese government that this economic model is not going to be supported by governments or businesses,” said Cathy Feingold, the director of the A.F.L.-C.I.O.’s International Department.Chinese companies are also facing pressure from Beijing not to accede to American demands, since that could be seen as a tacit criticism of the government’s activities in Xinjiang.In a statement in January, the China Photovoltaic Industry Association and China Nonferrous Metals Industry Association condemned “irresponsible statements” from U.S. industries, which they said were directed at curbing Xinjiang’s development and “meddling in Chinese domestic affairs.”“It is widely known that the ‘forced labor’ issue is in its entirety the lie of the century that the United States and certain other Western countries have concocted from nothing,” they said.On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.But bringing solar manufacturing back to the United States could be a challenge, analysts said, given the time needed to significantly bolster American production, and it could also raise the price of solar panels in the short term.The United States still has a handful of facilities for manufacturing polysilicon, but they have faced grim prospects since 2013, when China put retaliatory tariffs on American polysilicon. Hemlock Semiconductor mothballed a new $1.2 billion facility in Tennessee in 2014, while REC Silicon shut its polysilicon facility in Washington in 2019.China has promised to carry out large purchases of American polysilicon as part of a trade deal signed last year, but those transactions have not materialized.In the near term, tensions over Xinjiang could be a boon for the few remaining U.S. suppliers. Ms. Sullivan said some small U.S. solar developers had reached out to REC Silicon in recent months to inquire about non-Chinese products.But American companies need the promise of reliable, long-term orders to scale up, she said, adding that when she explains the limited supply of solar products that do not touch China, people become “visibly ill.”“This is the big lesson,” Ms. Sullivan added. “You become dependent on China, and what does it mean? We have to swallow our values in order to do solar.”Chris Buckley More
Some big employers are giving up square footage as they juggle remote work. That could devastate building owners and cities. More
The plan detailed by the Treasury Department would make it harder for companies to avoid paying taxes on both U.S. income and profits stashed abroad.WASHINGTON — Large companies like Apple and Bristol Myers Squibb have long employed complicated maneuvers to reduce or eliminate their tax bills by shifting income on paper between countries. The strategy has enriched accountants and shareholders, while driving down corporate tax receipts for the federal government.President Biden sees ending that practice as central to his $2 trillion infrastructure package, pushing changes to the tax code that his administration says will ensure American companies are contributing tax dollars to help invest in the country’s roads, bridges, water pipes and in other parts of his economic agenda.On Wednesday, the Treasury Department released the details of Mr. Biden’s tax plan, which aims to raise as much as $2.5 trillion over 15 years to help finance the infrastructure proposal. That includes bumping the corporate tax rate to 28 percent from 21 percent, imposing a strict new minimum tax on global profits and cracking down on companies that try to move profits offshore.The plan also aims to stop big companies that are profitable but have no federal income tax liability from paying no taxes to the Treasury Department by imposing a 15 percent tax on the profits they report to investors. Such a change would affect about 45 corporations, according to the Biden administration’s estimates, because it would be limited to companies earning $2 billion or more per year.“Companies aren’t going to be able to hide their income in places like the Cayman Islands and Bermuda in tax havens,” Mr. Biden said on Wednesday during remarks at the White House. He defended the tax increases as necessary to pay for infrastructure investments that America needs and to help reduce the federal deficit over the long term.Still, his 15 percent tax is a narrower version of the one he proposed in the 2020 campaign that would have applied to companies with $100 million or more in profits per year.Mr. Biden’s proposals are a repudiation of Washington’s last big tax overhaul — President Donald J. Trump’s 2017 tax cuts. Biden administration officials say that law increased the incentives for companies to shift profits to lower-tax countries, while reducing corporate tax receipts in the United States to match their lowest levels as a share of the economy since World War II.Treasury Secretary Janet L. Yellen, in rolling out the plan, said it would end a global “race to the bottom” of corporate taxation that has been destructive for the American economy and its workers.“Our tax revenues are already at their lowest level in generations,” Ms. Yellen said. “If they continue to drop lower, we will have less money to invest in roads, bridges, broadband and R&D.”The plan, while ambitious, will not be easy to enact.Some of the proposals, like certain changes to how a global minimum tax is applied to corporate income, could possibly be put in place by the Treasury Department via regulation. But most will need the approval of Congress, including increasing the corporate tax rate. Given Democrats’ narrow majorities in the Senate and the House, that proposed rate could drop. Already, Senator Joe Manchin III of West Virginia, a crucial swing vote, has said he would prefer a 25 percent corporate rate.Mr. Biden indicated he was willing to negotiate, saying: “Debate is welcome. Compromise is inevitable. Changes are certain.” But he added that “inaction is not an option.”At the core of the tax proposal is an attempt to rewrite decades of tax-code provisions that have encouraged and rewarded companies who stash profits overseas.It would increase the rate of what is essentially a minimum tax on money American companies earn abroad, and it would apply that tax to a much broader selection of income. It would also eliminate lucrative tax deductions for foreign-owned companies that are based in low-tax countries — like Bermuda or Ireland — but have operations in the United States.“We are being quite explicit: We don’t think profit-shifting is advantageous from a U.S. perspective,” David Kamin, the deputy director of the National Economic Council, said in an interview. “It is a major problem,” he said, adding that with the proposed changes, “We have the opportunity to lead the world.”Treasury Secretary Janet L. Yellen said that the plan would end a global “race to the bottom” of corporate taxation that has been destructive for the American economy and its workers.Al Drago for The New York TimesThe corporate income tax rate in the United States is currently 21 percent, but many large American companies pay effective tax rates that are much lower than that. Corporations that have operations in multiple countries often shift assets or income — sometimes in physical form, but other times, simply in their accountants’ books — between countries in search of the lowest possible tax bill.Companies also shift jobs and investments between countries, but often for different reasons. In many cases, they are following lower labor costs or seeking customers in new markets to expand their businesses. The Biden plan would create tax incentives for companies to invest in production and research in the United States.Previous administrations have tried to curb the offshoring of jobs and profits. Mr. Trump’s tax cuts reduced the corporate rate to 21 percent from 35 percent in the hopes of encouraging more domestic investment. It established a global minimum tax for corporations based in the United States and a related effort meant to reduce profit-shifting by foreign companies with operations in the country, though both provisions were weakened by subsequent regulations issued by Mr. Trump’s Treasury Department.Conservative tax experts, including several involved in writing the 2017 law, say they have seen no evidence of the law enticing companies to move jobs overseas. Mr. Biden has assembled a team of tax officials who contend the provisions have given companies new incentives to move investment and profits offshore.Mr. Biden’s plan would raise the rate of Mr. Trump’s minimum tax and apply it more broadly to income that American companies earn overseas. Those efforts would try to make it less appealing for companies to book profits in lower-tax companies.That includes discouraging American companies from moving their headquarters abroad for tax purposes, particularly through the practice known as “inversions,” where companies from different countries merge, creating a new foreign-located firm.Under current law, companies with headquarters in low-tax countries can move some of their profits earned by subsidiaries in the United States and send them back to headquarters as payments for things like the use of intellectual property, then deduct those payments from their American income taxes. The Biden plan would disallow those deductions for companies based in low-tax countries.Treasury Department officials estimate the proposed changes to offshore taxation would raise about $700 billion over 10 years.Companies defend their decisions to locate profits and operations offshore, saying they do so for a variety of reasons, including so that they can compete globally.Business groups blasted the proposal on Wednesday, saying that while they agreed that the United States needed to invest in infrastructure, the tax plan would put American firms at a significant competitive disadvantage.Neil Bradley, an executive vice president and the chief policy officer of the U.S. Chamber of Commerce, said in a statement on Wednesday that the proposal would “hurt American businesses and cost American jobs” and that it would hinder their ability to compete in a global economy.And members of the Business Roundtable, which represents corporate chief executives in Washington, said this week that Mr. Biden’s plan for a global minimum tax “threatens to subject the U.S. to a major competitive disadvantage.”Republican lawmakers also denounced the plan as bad for business, with some on the House Ways and Means Committee saying that “their massive tax hikes will be shouldered by American workers and small businesses.”Still, some companies expressed an openness to certain tax hikes.John Zimmer, the president and a founder of Lyft, told CNN on Wednesday that he supported Mr. Biden’s proposed 28 percent corporate tax rate.“I think it’s important to make investments again in the country and the economy,” Mr. Zimmer said. “And as the economy grows, so too does jobs and so too does people’s needs to get around.”Mr. Biden’s team hopes the proposals will ultimately spur a worldwide change in how and where companies are taxed, which could resolve some of the global competitiveness concerns.The administration is supporting an effort through the Organization for Economic Cooperation and Development to broker an agreement on developing a new global minimum tax. Ms. Yellen threw her support behind that effort on Monday, and the Biden plan includes measures meant to force other countries to go along with that new tax. Global negotiators are aiming to come to an agreement by July. More
As Americans buy more, they are expected to spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts and French fashions.Washington’s robust spending in response to the coronavirus crisis is helping to pull the United States out of its sharpest economic slump in decades, funneling trillions of dollars to Americans’ checking accounts and to businesses.Now, the rest of the world is expected to benefit, too.Global forecasters are predicting that the United States and its record-setting stimulus spending could help haul a weakened Europe and struggling developing countries out of their own economic morass, especially when paired with a rapid vaccine rollout that has poised the U.S. economy for a faster recovery.As Americans buy more, they should spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts and French fashions.The anticipated economic rebound in the United States is expected to join China’s recovery, adding impetus to world output. China’s economy is forecast to expand rapidly this year, with the International Monetary Fund predicting 8.1 percent growth. That is good news for countries like Germany, which depends on Chinese demand for cars and machinery.Yet the United States is particularly important to the world economy because it has long spent more than it makes or sells, spreading dollars globally. China is one of the major beneficiaries of Washington’s largess because many Americans have spent their stimulus checks on video game consoles, exercise bicycles or other products made in China.The United States’ comparatively fast recovery was neither guaranteed nor expected: It was the result of a little bit of luck — new variants of the virus that have coursed through other countries have just begun to push infections higher in the United States — and a large policy response, including more than $5 trillion in debt-fueled pandemic relief spending passed into law over the past 12 months. Those trends, paired with the accelerating spread of effective vaccinations, seem likely to leave the American economy in a stronger position.“When the U.S. economy is strong, that strength tends to support global activity as well,” Jerome H. Powell, the chair of the Federal Reserve, said at a recent news conference.A year ago, it was not at all certain that the United States would gain the strength to help lift the global economy.The International Monetary Fund forecast last April that the U.S. economy might expand 4.7 percent this year, roughly in line with forecasts for Europe’s growth, after an expected slump of 5.9 percent in 2020. But the actual contraction in the United States was smaller, and in January, the I.M.F. upgraded the outlook for U.S. growth to 5.1 percent this year, while the euro area’s expected growth was marked down to 4.2 percent.Germany has extended its lockdown to April 18, and there is a good chance restrictions will be extended further.Lena Mucha for The New York TimesSince then, the U.S. government has passed a $1.9 trillion relief package, and the I.M.F. has signaled that the estimates for the country’s growth will be marked up further when it releases fresh forecasts on Tuesday.The recent relief package continues a trend: America has been willing to spend to combat the pandemic’s economic fallout from the start.America’s initial pandemic response spending, amounting to a little less than $3 trillion, was 50 percent larger, as a share of gross domestic product, than what the United Kingdom rolled out, and roughly three times as much as in France, Italy or Spain, based on an analysis by Christina D. Romer at the University of California, Berkeley.Among a set of advanced economies, only New Zealand has borrowed and spent as big a share of its G.D.P. as the United States has, the analysis found.In Europe, where workers in many countries were shielded from job losses and plunging income by government furlough programs, the slow pace of the European Union’s vaccination campaign will probably hurt the economy, said Ludovic Subran, the chief economist of German insurance giant Allianz.On Wednesday, France announced its third national lockdown as infected patients fill its hospitals.Mr. Subran also questioned whether the European Union can distribute stimulus financing fast enough. The money from a 750 billion-euro, or $880 billion, relief program agreed to by European governments in July has been slow to reach the businesses and people who need it because of political squabbling, creaky public administration and a court challenge in Germany.Karen Dynan, a former U.S. Treasury Department chief economist who is now at the Peterson Institute for International Economics, estimated that economic output would take at least a year longer to return to prepandemic levels in Europe than it would in the United States.“Fiscal policy has differed across countries in ways that are really shaping the experience they have now,” Ms. Dynan said.Vaccine supplies are limited in many developing economies, including Venezuela.Ariana Cubillos/Associated PressPoorer and smaller countries, facing severely limited vaccine supplies and fewer resources to support government spending, are likely to struggle to stage an economic turnaround even if the U.S. recovery increases demand for their exports. Places including Venezuela, Iraq and Namibia have administered only about 1 vaccine dose per 1,000 people, if that, based on New York Times data. In the United States, the rate is more than 400 doses per 1,000 people.Still, a booming American economy poses some hazard to other nations — and especially emerging markets — as economic fates diverge.Market-based interest rates in the United States are already climbing, as investors, sensing faster growth and quicker inflation around the corner, decide to sell bonds. That could make financing more expensive around the globe: If investors can earn higher rates on U.S. bonds, they are less likely to invest in foreign debt that offers either lower rates or higher risk.If the United States lures capital away from the rest of the world, “the rose-colored view that we are helping everyone is very much in doubt,” said Robin Brooks, chief economist at the Institute of International Finance.Philip Lane, chief economist of the European Central Bank and a member of the policymaking Governing Council, said the strength of the U.S. economy was generally good news for Europe. But, in an interview on Monday, he warned that rising market interest rates could be a burden for the eurozone economy.Imported goods at a cold storage port in China.Yao Jianfeng/Xinhua, via Associated Press“We do think it’s net positive for the European economy — positive for G.D.P., positive for inflation,” Mr. Lane said of the economic rebound in the United States. “But that’s based on the assumption that the increase in bond yields is very limited.” He noted that bond yields had so far risen faster than expected.Trans-Atlantic trade should get help from warmer relations between the United States and the European Union. The Biden administration has already moved to defuse trade tensions with Europe, which the Trump administration treated as an adversary. President Biden met online with European leaders last week.The U.S. stimulus packages “will be part of the water that lifts all boats,” said Selina Jackson, senior vice president for global government relations and public policy at Procter & Gamble, during a recent panel discussion organized by the American Chamber of Commerce to the European Union. “We are hoping for a calm slide out of this economic situation.”Keith Bradsher More
The president is hoping to make electric vehicles more affordable to turn a niche product into one with mass appeal.President Biden is a muscle-car guy — one of his most prized possessions is a 1967 Corvette that he got from his father. But he’s trying to make this an electric vehicle world.The $2 trillion infrastructure plan that he unveiled on Wednesday is aimed at tackling climate change in part by spending up to $174 billion to encourage Americans to switch to cars and trucks that run on electricity, not gasoline or diesel. That is a large investment but it might not be enough to push most Americans toward E.V.s.Despite rapid growth in recent years, electric vehicles remain a niche product, making up just 2 percent of the new car market and 1 percent of all cars, sport-utility vehicles, vans and pickup trucks on the road. They have been slow to take off in large part because they can cost up to $10,000 more than similar conventional cars and trucks. Charging E.V.s is also more difficult and slower than simply refilling the tank at far more prevalent gas stations.Mr. Biden hopes to address many of those challenges through federal largess. He aims to lower the cost of electric vehicles by offering individuals, businesses and governments tax credits, rebates and other incentives. To address the chicken-and-egg problem of getting people to try a new technology before it is widely accepted, he hopes to build half a million chargers by 2030 so people will feel confident that they won’t be stranded when they run out of juice. And he is offering help to automakers to get them to build electric vehicles and batteries in the United States.“We find ourselves at a unique moment here where most American businesses and many states are looking toward a decarbonized future, but recognize there’s a big lift on the infrastructure side,” said Bob Perciasepe, president of the Center for Climate and Energy Solutions, an environmental research group. “This investment alone obviously won’t solve the climate problem or fix all of the infrastructure in the United States but it will be a huge boost.”Automakers see the writing on the wall and many, including General Motors, Volkswagen and Ford Motor, have made big E.V. promises. But even they acknowledge that they will need federal help.A charging station at a housing complex in Utah.Lindsay D’Addato for The New York Times“This transformation is greater than any one policy, branch or level of government, or industry sector,” a group representing manufacturers, suppliers and automotive workers said in a letter to Mr. Biden on Monday. “It will require a sustained holistic approach with a broad range of legislative and regulatory policies rooted in economic, social, environmental and cultural realities.”The letter called for grants, loans, tax credits and tax deductions to promote research and manufacturing. The authors of the letter, which included industry groups and the United Auto Workers union, called for investment in job training programs and federal help in promoting development of minerals and other raw materials in the United States.But production is only one piece of the puzzle. The transition away from gas-powered vehicles rests on convincing consumers of the benefits of electric vehicles. That hasn’t been easy because the cars have higher sticker prices even though researchers say that they cost less to own. Electricity is cheaper on a per mile basis than gasoline, and E.V.s require less routine maintenance — there is no oil to change — than combustion-engine cars.The single biggest cost of an electric car comes from the battery, which can run about $15,000 for a midsize sedan. That cost has been dropping and is widely expected to keep falling thanks to manufacturing improvements and technical advancements. But some scholars believe that a major technological breakthrough will be required to make electric cars much, much cheaper.“There’s a good sense that at least for the next maybe five years or so they’re going to keep declining, but then are they going to level off or are they going to keep declining?” Joshua Linn, a professor at the University of Maryland and a senior fellow with Resources for the Future, an environmental nonprofit, said about battery costs. “That won’t be enough, so then that’s given rise to a lot of attention to infrastructure.”The federal government and some states already offer tax credits and other incentives for the purchase of electric cars. But the main such federal incentive — a $7,500 tax credit for the purchase of new electric cars — begins to phase out for cars once an automaker has sold 200,000 E.V.s. Buyers of Tesla and G.M. electric cars, for example, no longer qualify for that tax credit but buyers of Ford and Volkswagen electric cars do.Mr. Biden described his incentives for electric car purchases as rebates available at the “point of sale,” presumably meaning at dealerships or while ordering cars online. But the administration has not released details about how big those rebates will be and which vehicles they would apply to.Another big concern is charging. People with dedicated parking spots typically charge their E.V.s overnight at home, but many people who live in apartments or have to drive longer distances need to use public charging stations, which are still greatly outnumbered by gas stations.“The top three reasons consumers give for not buying E.V.s are lack of charging stations, time to charge, and the cost of E.V.s,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “They seem to be really emphasizing all three. So, over all, it looks very promising.”There are well over 100,000 gas stations in the United States, most with multiple pumps. Mr. Biden’s plan calls for a national network of 500,000 electric vehicle chargers within the decade, up from about 41,000 charging stations with more than 100,000 outlets today, according to the Energy Department.“One of the things that needs to be addressed is getting chargers into places where people only have on-street parking, like in cities and urban areas where you don’t have a driveway or garage,” Mr. Abuelsamid said. “If they can address that, it will make E.V.s available to a lot more people.”The government in China, which leads the world in the use of electric cars, has done much more than the United States to speed up the installation of chargers.“It is, famously, one of the ways that China has become the No. 1 country in E.V.s on most dimensions,” John Paul MacDuffie, a professor of management at the Wharton School at the University of Pennsylvania, said in an email.Even with incentives for manufacturers, a robust charging network and a willing public, the transition to electric cars may take a few decades. Carmakers have improved vehicle reliability in recent years, so many cars stay on the road a long time. The average age of cars and light trucks in the United States is approaching 12 years, up from 9.6 years in 2002, according to IHS Markit, an economic forecasting firm.Neal E. Boudette More
As global trade has grown, shipping companies have steadily increased ship sizes — but the Suez Canal blockage showed that bigger is not always better.The traffic jam at the Suez Canal will soon begin easing, but behemoth container ships like the one that blocked that crucial passageway for almost a week and caused headaches for shippers around the world aren’t going anywhere.Global supply chains were already under pressure when the Ever Given, a ship longer than the Empire State Building and capable of carrying furnishings for 20,000 apartments, wedged itself between the banks of the Suez Canal last week. It was freed on Monday, but left behind “disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” according to A.P. Moller-Maersk, the world’s largest shipping company.The crisis was short, but it was also years in the making.For decades, shipping lines have been making bigger and bigger vessels, driven by an expanding global appetite for electronics, clothes, toys and other goods. The growth in ship size, which sped up in recent years, often made economic sense: Bigger vessels are generally cheaper to build and operate on a per-container basis. But the largest ships can come with their own set of problems, not only for the canals and ports that have to handle them but for the companies that build them.“They did what they thought was most efficient for themselves — make the ships big — and they didn’t pay much attention at all to the rest of the world,” said Marc Levinson, an economist and author of “Outside the Box,” a history of globalization. “But it turns out that these really big ships are not as efficient as the shipping lines had imagined.”Despite the risks they pose, however, massive vessels still dominate global shipping. According to Alphaliner, a data firm, the global fleet of container ships includes 133 of the largest ship type — those that can carry 18,000 to 24,000 containers. Another 53 are on order.The world’s first commercially successful container trip took place in 1956 aboard a converted steamship, which transported a few dozen containers from New Jersey to Texas. The industry has grown steadily in the decades since, but as global trade accelerated in the 1980s, so did the growth of the shipping industry — and ship size.One container ship among many that were anchored in February outside the Port of Los Angeles, where congestion kept ships waiting to unload for days. Coley Brown for The New York TimesIn that decade, the average capacity of a container ship grew 28 percent, according to the International Transport Forum, a unit of the Organization for Economic Cooperation and Development. Container ship capacity grew an additional 36 percent in the 1990s. Then, in 2006, Maersk introduced the Emma Maersk, a massive vessel that could hold about 15,000 containers, almost 70 percent more than any other vessel.“Instead of this pattern of small increases in capacity over time, all of a sudden we had a quantum leap, and that really set off an arms race,” Mr. Levinson said.Today, the largest ships can hold as many as 24,000 containers — a standard 20-foot box can hold a pair of midsize sport utility vehicles or enough produce to fill one or two grocery store aisles.The growth of the shipping industry and ship size has played a central role in creating the modern economy, helping to make China a manufacturing powerhouse and facilitating the rise of everything from e-commerce to retailers like Ikea and Amazon. To the container lines, building bigger made sense: Larger ships allowed them to squeeze out savings on construction, fuel and staffing.“Ultra Large Container Vessels (U.L.C.V.) are extremely efficient when it is about transporting large quantities of goods around the globe,” Tim Seifert, a spokesman for Hapag-Lloyd, a large shipping company, said in a statement. “We also doubt that it would make shipping safer or more environmentally friendly if there would be more or less-efficient vessels on the oceans or in the canals.”Maersk said it was premature to blame Ever Given’s size for what happened in the Suez. Ultra-large ships “have existed for many years and have sailed through the Suez Canal without issues,” Palle Brodsgaard Laursen, the company’s chief technical officer, said in a statement on Tuesday.But the growth in ship size has come at a cost. It has effectively pitted port against port, canal against canal. To make way for bigger ships, for example, the Panama Canal expanded in 2016 at a cost of more than $5 billion.That set off a race among ports along the East Coast of the United States to attract the larger ships coming through the canal. Several ports, including those in Baltimore, Miami and Norfolk, Va., began dredging projects to deepen their harbors. The Port Authority of New York and New Jersey spearheaded a $1.7 billion project to raise the Bayonne Bridge to accommodate mammoth ships laden with cargo from Asia and elsewhere.Three large cranes arrived at the Port of Oakland in January, allowing it to receive the biggest ships in North America.Jim Wilson/The New York TimesThe race to accommodate ever-larger ships also pushed ports and terminal operators to buy new equipment. This month, for example, the Port of Oakland erected three 1,600-ton cranes that would, in the words of one port executive, allow it to “receive the biggest ships.”But while ports incurred costs for accommodating larger ships, they didn’t reap all of the benefits, according to Jan Tiedemann, a senior analyst at Alphaliner.“The savings are almost exclusively on the side of the carrier, so there was an argument that the carriers have been in the driving seat and have just pushed through with this big tonnage, while terminal operators, ports and, in some cases, the taxpayer have footed the bill,” he said.The shift to bigger ships also coincided with and contributed to industry consolidation that has both limited competition among shipping giants and made the world more vulnerable to supply disruptions. Buying and maintaining large vessels is expensive, and shippers that couldn’t afford those costs had to find ways to become bigger themselves. Some firms merged, and others joined alliances that allowed them to pool their ships to offer more frequent service.Those trends aren’t necessarily all bad. The alliances allow shippers to offer expanded service and help keep costs low for customers. And the fact that bigger ships cut fuel costs has helped the industry make the case that it is doing its part to reduce planet-warming emissions.But the argument for even bigger ships may finally be fading, even for container lines themselves — a concept known in economics as the law of diminishing returns.For one, the benefits of building bigger tend to shrink with each successive round of growth, according to Olaf Merk, the lead author of a 2015 International Transport Forum report on very big ships. According to the report, the savings from moving to ships that can carry 19,000 containers were four to six times smaller than those realized by the previous expansion of ship size. And most of the savings came from more efficient ship engines than the size of the ship.“There’s still economies of scale, but less and less as the ships become bigger,” Mr. Merk said.The bigger vessels can also call on fewer ports and navigate through fewer tight waterways. They are also harder to fill, cost more to insure and pose a greater threat to supply chains when things go wrong, like Ever Given’s beaching in the Suez Canal. Giant ships are also designed for a world in which trade is growing rapidly, which is far from guaranteed these days given high geopolitical and economic tensions between the United States and China, Britain and the European Union, and other large trading partners. More
