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    When Will Interest Rates Rise? Fed Chair Says ‘No Time Soon’

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyWhen Will Interest Rates Rise? Fed Chair Says ‘No Time Soon’Jerome H. Powell, chair of the Federal Reserve, said the central bank remained far from dialing back support for the economy.Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.CreditCredit…Pool photo by Greg NashJan. 14, 2021Updated 4:56 p.m. ETWith the incoming Biden administration pushing for more economic stimulus and with multiple coronavirus vaccines already approved, some investors have been wondering whether the Federal Reserve might soon start to ease off its support for the economy.Jerome H. Powell, the central bank’s chair, made it clear on Thursday that the central bank would be cautious in doing so — and that action was anything but imminent. During a webcast question-and-answer session, Mr. Powell said it would take time for the economy to recover from the pain of the pandemic era.“When the time comes to raise interest rates, we will certainly do that,” he said. “And that time, by the way, is no time soon.”Currently, dire short-term conditions — surging virus deaths, high unemployment, and partial state and local economic lockdowns — contrast sharply with the longer-term outlook. Economists think that the economy might come roaring back later in 2021 as vaccines allow normal life to resume and consumers spend money they saved during the pandemic.That split has led some investors to worry that the Fed might speed up its plans to reduce the pace of its enormous bond purchases, or even to lift interest rates from the near-zero setting that has been in place since March. The central bank has been buying about $120 billion in Treasury and mortgage-backed debt per month to keep markets operating smoothly and to help goose the economy.“We’ll let the world know” when it’s time to discuss plans for slowing purchases, Mr. Powell said, and that will happen only when it’s clear that they are well on their way toward their economic goals.“We’ll do so, by the way, well in advance of active consideration of beginning a gradual taper in asset purchases,” he added.Other top Fed officials, including Lael Brainard, who is a board governor, and Vice Chair Richard Clarida, had also struck a cautious tone when talking about the outlook for both economic growth and monetary policy in recent days. But their remarks had contrasted with more impatient ones from some of the Fed’s 12 regional bank presidents, a fact that had caught investor attention. Mr. Powell’s appearance put to rest any suggestion that the central bank is planning to hasten its return to a more normal policy setting.Mr. Powell and his colleagues must thread a needle. In 2013, markets gyrated wildly as the Fed made its initial moves away from huge bond purchases, in what became popularly known as the “taper tantrum.” Now, officials hope to offer investors plenty of information about what they are planning — to avoid spooking them — without signaling that a reduction in economic support is right around the corner.“They’re committed to ensuring that there is not another taper tantrum,” said Subadra Rajappa, head of U.S. rates strategy at Société Générale. The goal in reinforcing low rates and a steady course for asset purchases, she added, is “to talk down the market.”Fed officials and private forecasters are projecting a strong pickup in economic activity once vaccines become widely available. They have also acknowledged that inflation is likely to move higher in 2021, because of short-term technical factors, and that a short-lived spike in price increase would not necessarily worry Fed policymakers.Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in a Bloomberg television interview earlier on Thursday that temporary jumps in inflation would not necessarily signal that tepid price gains — the problem of the modern economic era — were a thing of the past.“It’s quite possible that we’ll see some spikes above 2 percent. In fact, the math of inflation would suggest that we’ll get some spikes in the middle of the year,” she said. “That’s not a victory on price stability.”Mr. Powell also acknowledged that inflation could increase temporarily, but said the bounce would be “very unlikely” to lead to persistently faster gains. If inflation does pick up substantially, the Fed knows how to use policy to counteract that.“Too-low inflation is the much more difficult problem to solve,” he said.He reiterated that the Fed, which has made a habit of lifting interest rates to prevent overheating in the labor market, would no longer do that — instead allowing the job market to continue to tighten so long as excesses do not appear.“We saw the social benefits that a strong labor market can and did bring,” Mr. Powell said, referring to the last business cycle, in which unemployment dropped to 3.5 percent but wage and price increases remained tame. “One of the big lessons of the last crisis was how much room there was in labor force participation.”And he said he believed that the economy could return to its pre-crisis levels.“I’m optimistic about the economy over the next couple of years, I really am,” Mr. Powell said. “We’ve got to get through this very difficult period this winter, with the spread of Covid.”AdvertisementContinue reading the main story More

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    The Business Rules the Trump Administration Is Racing to Finish

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionLatest UpdatesHouse Moves to Remove TrumpHow Impeachment Might WorkBiden Focuses on CrisesCabinet PicksAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Business Rules the Trump Administration Is Racing to FinishFrom tariffs and trade to the status of Uber drivers, regulators are trying to install new rules or reduce regulations before President-elect Joe Biden takes over.President Trump is rushing to put into effect new economic regulations and executive orders before his term comes to a close.Credit…Erin Schaff/The New York TimesJan. 11, 2021, 3:00 a.m. ETIn the remaining days of his administration, President Trump is rushing to put into effect a raft of new regulations and executive orders that are intended to put his stamp on business, trade and the economy.Previous presidents in their final term have used the period between the election and the inauguration to take last-minute actions to extend and seal their agendas. Some of the changes are clearly aimed at making it harder, at least for a time, for the next administration to pursue its goals.Of course, President-elect Joseph R. Biden Jr. could issue new executive orders to overturn Mr. Trump’s. And Democrats in Congress, who will control the House and the Senate, could use the Congressional Review Act to quickly reverse regulatory actions from as far back as late August.Here are some of the things that Mr. Trump and his appointees have done or are trying to do before Mr. Biden’s inauguration on Jan. 20. — Peter EavisProhibiting Chinese apps and other products. Mr. Trump signed an executive order on Tuesday banning transactions with eight Chinese software applications, including Alipay. It was the latest escalation of the president’s economic war with China. Details and the start of the ban will fall to Mr. Biden, who could decide not to follow through on the idea. Separately, the Trump administration has also banned the import of some cotton from the Xinjiang region, where China has detained vast numbers of people who are members of ethnic minorities and forced them to work in fields and factories. In another move, the administration prohibited several Chinese companies, including the chip maker SMIC and the drone maker DJI, from buying American products. The administration is weighing further restrictions on China in its final days, including adding Alibaba and Tencent to a list of companies with ties to the Chinese military, a designation that would prevent Americans from investing in those businesses. — Ana SwansonDefining gig workers as contractors. The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step toward endorsing the business practices of companies like Uber and Lyft. — Noam ScheiberTrimming social media’s legal shield. The Trump administration recently filed a petition asking the Federal Communications Commission to narrow its interpretation of a powerful legal shield for social media platforms like Facebook and YouTube. If the commission doesn’t act before Inauguration Day, the matter will land in the desk of whomever Mr. Biden picks to lead the agency. — David McCabeTaking the tech giants to court. The Federal Trade Commission filed an antitrust suit against Facebook in December, two months after the Justice Department sued Google. Mr. Biden’s appointees will have to decide how best to move forward with the cases. — David McCabeAdding new cryptocurrency disclosure requirements. The Treasury Department late last month proposed new reporting requirements that it said were intended to prevent money laundering for certain cryptocurrency transactions. It gave only 15 days — over the holidays — for public comment. Lawmakers and digital currency enthusiasts wrote to the Treasury secretary, Steven Mnuchin, to protest and won a short extension. But opponents of the proposed rule say the process and substance are flawed, arguing that the requirement would hinder innovation, and are likely to challenge it in court. — Ephrat LivniLimiting banks on social and environmental issues. The Office of the Comptroller of the Currency is rushing a proposed rule that would ban banks from not lending to certain kinds of businesses, like those in the fossil fuel industry, on environmental or social grounds. The regulator unveiled the proposal on Nov. 20 and limited the time it would accept comments to six weeks despite the interruptions of the holidays. — Emily FlitterOverhauling rules on banks and underserved communities. The Office of the Comptroller of the Currency is also proposing new guidelines on how banks can measure their activities to get credit for fulfilling their obligations under the Community Reinvestment Act, an anti-redlining law that forces them to do business in poor and minority communities. The agency rewrote some of the rules in May, but other regulators — the Federal Reserve and the Federal Deposit Insurance Corporation — did not sign on. — Emily FlitterInsuring “hot money” deposits. On Dec. 15, the F.D.I.C. expanded the eligibility of brokered deposits for insurance coverage. These deposits are infusions of cash into a bank in exchange for a high interest rate, but are known as “hot money” because the clients can move the deposits from bank to bank for higher returns. Critics say the change could put the insurance fund at risk. F.D.I.C. officials said the new rule was needed to “modernize” the brokered deposits system. — Emily FlitterNarrowing regulatory authority over airlines. The Department of Transportation in December authorized a rule, sought by airlines and travel agents, that limits the department’s authority over the industry by defining what constitutes an unfair and deceptive practice. Consumer groups widely opposed the rule. Airlines argued that the rule would limit regulatory overreach. And the department said the definitions it used were in line with its past practice. — Niraj ChokshiRolling back a light bulb rule. The Department of Energy has moved to block a rule that would phase out incandescent light bulbs, which people and businesses have increasingly been replacing with much more efficient LED and compact fluorescent bulbs. The energy secretary, Dan Brouillette, a former auto industry lobbyist, said in December that the Trump administration did not want to limit consumer choice. The rule had been slated to go into effect on Jan. 1 and was required by a law passed in 2007. — Ivan PennAdvertisementContinue reading the main story More

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    Here Are The 8 Chinese Apps Trump Banned

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyTrump Bans Alipay and 7 Other Chinese AppsThe White House took a surprise parting shot at China on Tuesday by banning the popular Chinese payment service and other applications.An executive order signed by President Trump on Tuesday banned the payment apps Alipay and WeChat Pay.Credit…Greg Baker/Agence France-Presse — Getty ImagesJan. 5, 2021, 6:43 p.m. ETWASHINGTON — President Trump on Tuesday signed an executive order prohibiting transactions with eight Chinese software applications, including Alipay, the payment platform owned by Ant Group, and WeChat Pay, which is owned by Tencent.The move, two weeks before the end of Mr. Trump’s term, could help lock in his administration’s harsher stance toward China and is likely to further rankle Beijing.The executive order, issued late Tuesday, will bar any transactions with “persons that develop or control” the apps of Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office and their subsidiaries after a period of 45 days.In the order, the president said that “the pace and pervasiveness of the spread in the United States of certain connected mobile and desktop applications and other software developed or controlled by persons in the People’s Republic of China” continued to threaten American national security. “At this time, action must be taken to address the threat posed by these Chinese connected software applications,” he wrote.The Trump administration has ramped up tariffs and waged a trade war against China in recent years. It has also targeted Chinese-owned social media services, saying they provide a conduit for Chinese espionage and pose a national security risk to the American public. Last fall, the Trump administration issued executive orders banning two other popular Chinese-owned social media services, TikTok and WeChat.But both of those bans have become entangled in litigation, and the services continue to operate in the United States. That raises the question of whether American courts will issue an injunction to stop Mr. Trump’s latest bans on Chinese services as well.In a statement, Wilbur Ross, the commerce secretary, said he had directed his department to begin enacting the orders, “including identifying prohibited transactions related to certain Chinese connected software applications.”“I stand with President Trump’s commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party,” he added.The incoming Biden administration has not clarified whether it will continue to try to enforce Mr. Trump’s bans. Reuters earlier reported the signing.This is a developing story. Check back for updates.AdvertisementContinue reading the main story More

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    The Pandemic Sank Auto Sales. Vaccines Could Bring Buyers Back.

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccination StrategiesVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Pandemic Sank Auto Sales. Vaccines Could Bring Buyers Back.Carmakers say new models should also help lift the industry in 2021, after a 15 percent decline in its slowest year since it recovered from the Great Recession.Sales of Chevrolets and other makes in the fourth quarter offset a 10 percent drop in sales of Buicks, General Motors reported on Tuesday.Credit…David Zalubowski/Associated PressJan. 5, 2021, 6:06 p.m. ETThe auto industry sputtered through its weakest year in nearly a decade in 2020 as the pandemic kept buyers away from dealerships and forced companies to shut down factories for two months last spring.But automakers are counting on a rebound in 2021, and foresee possibly strong growth in the second half, as they roll out a parade of new sport utility vehicles, pickup trucks and electric cars. Those hopes rest in large part on the expectation that the distribution of Covid-19 vaccines will accelerate this spring and summer after a slow start in recent weeks.“I am as optimistic as one can be,” Scott Keogh, president and chief executive of Volkswagen of America, told reporters in a conference call on Tuesday. “What is weighing on everything is how quickly can we get those shots rolled out.”Automakers estimate the industry sold 14.5 million cars and light trucks last year. That amounts to a 15 percent decline from 2019, and the lowest level since 2012, when the industry was still recovering from the financial crisis that forced General Motors and Chrysler to seek government assistance and bankruptcy protection.Unlike that recession, the difficulties caused by the pandemic did not hit manufacturers and different regions of the country equally. The industry was most severely affected last spring when all North American auto plants were shut down to slow the spread of the coronavirus and many consumers stayed home.But sales bounced back later in the year in part because of pent-up demand.G.M. said on Tuesday that its vehicle sales in the United States fell 12 percent in 2020, but increased 5 percent in the fourth quarter from a year earlier. The automaker reported solid performances from its Chevrolet, GMC and Cadillac brands in the final three months of the year. They offset a 10 percent drop in Buick sales.Over all, G.M. sold 2.5 million cars and light trucks in 2020, down from nearly 2.9 million a year earlier. But the company described its 771,323 sales in the final three months as its strongest fourth quarter since 2007.“We look forward to an inflection point for the U.S. economy in spring,” G.M.’s chief economist, Elaine Buckberg, said in a statement. “Widening vaccination rates and warmer weather should enable consumers and businesses to return to a more normal range of activities, lifting the job market, consumer sentiment and auto demand.”Also on Tuesday, Toyota Motor said it sold 2.1 million cars and light trucks in the United States last year, 11 percent fewer than in 2019. In December, however, its sales jumped more than 20 percent, lifted by strong demand for S.U.V.s and pickup trucks. Fiat Chrysler said that its 2020 sales fell 17 percent, to 1.8 million cars and trucks, but that the decline in the fourth quarter narrowed to 8 percent.Tesla, the world’s most valuable automaker by far, said on Saturday that globally it sold 500,000 cars in 2020, up 36 percent from the year before. The company does not break its sales down by country or continent.The Coronavirus Outbreak More

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    27 Places Raising the Minimum Wage to $15 an Hour

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyOnce a Fringe Idea, the $15 Minimum Wage Is Making Big GainsThe new year brings another round of increases, nearly a decade after workers started campaigning for higher pay.Demonstrators calling for a $15 minimum hourly wage outside a Marriott hotel in Des Moines in 2016. Credit…Gabriella Demczuk for The New York TimesDec. 31, 2020, 5:34 p.m. ETIt started in 2012 with a group of protesters outside a McDonald’s demanding a $15 minimum wage — an idea that even many liberal lawmakers considered outlandish. In the years since, their fight has gained traction across the country, including in conservative states with low union membership and generally weak labor laws.On Friday, 20 states and 32 cities and counties will raise their minimum wage. In 27 of these places, the pay floor will reach or exceed $15 an hour, according to a report released on Thursday by the National Employment Law Project, which supports minimum-wage increases. The movement’s strength — a ballot measure to increase the minimum wage in Florida to $15 by 2026 was passed in November — could put renewed pressure on Congress to increase the federal minimum wage from $7.25 per hour, where it has been since 2009. President-elect Joseph R. Biden Jr. has endorsed $15 an hour at the federal level and other changes sought by labor groups, like ending the practice of a lower minimum wage for workers like restaurant workers who receive tips.But even without congressional action, labor activists said they would keep pushing their campaign at the state and local levels. By 2026, 42 percent of Americans will work in a location with a minimum wage of at least $15 an hour, according to an Economic Policy Institute estimate cited in the NELP report.“These wages going up in a record number of states is the result of years of advocacy by workers and years of marching on the streets and organizing their fellow workers and their communities,” said Yannet Lathrop, a researcher and policy analyst for the group.The wage rates are increasing as workers struggle amid a recession caused by the coronavirus pandemic that has left millions unemployed.“The Covid crisis has really exacerbated inequalities across society,” said Greg Daco, chief U.S. economist for Oxford Economics. “This has given more strength to these movements that try to ensure that everyone benefits from a strong labor market in the form a sustainable salary.”Workers during the pandemic have been subject to furloughs, pay cuts and decreased hours. Low-wage service workers have not had the option of working from home, and the customer-facing nature of their jobs puts them at greater risk for contracting the virus. Many retailers gave workers raises — or “hero pay” — at the beginning of the pandemic, only to quietly end the practice in the summer, even as the virus continued to surge in many states.“The coronavirus pandemic has pushed a lot of working families into deep poverty,” said Anthony Advincula, director of communications for Restaurant Opportunities Centers United, a nonprofit focused on improving wages and working conditions. “So this minimum wage increase will be a huge welcome boost for low-wage workers, especially in the restaurant industry.”Mary Kay Henry, international president of the Service Employees International Union, said the labor movement would make getting even more workers to $15 an hour or more a priority in 2021.“There’s millions more workers who need to have more money in their pockets,” she said, adding that the election of Mr. Biden and Vice President-elect Kamala Harris would bolster the effort. “We have an incredible opportunity.”Because many hourly service workers are Black, Hispanic, Native American and Asian, people of color stand to gain the most from minimum-wage increases. A 2018 study from the Economic Policy Institute found that workers of color are far more likely to be paid poverty-level wages than white workers.“It’s the single most dramatic action to create racial equality,” Ms. Henry said.Some economists say lifting the minimum wage will benefit the economy and could be an important part of the recovery from the pandemic recession. That is partly because lower-income workers typically spend most of the money they earn, and that spending primarily takes place where they live and work.Kate Bahn, director of labor market policy at the Washington Center for Equitable Growth, said that after the 2007-9 recession, growth was anemic for years as pay stagnated and the job market slowly clawed its way back.A shopkeeper in Los Angeles waited for customers. Business groups say increasing the minimum wage can hurt small businesses, already beleaguered by the coronavirus pandemic.Credit…Philip Cheung for The New York Times“There’s been a broader acknowledgment that the lackluster wage growth we’ve seen in the past 30 years and since the Great Recession reflects structural imbalances in the economy, and structural inequality,” Ms. Bahn said.Many business groups counter that increasing the minimum wage will hurt small businesses, already beleaguered by the pandemic. More than 110,000 restaurants have closed permanently or for the long term during the pandemic, according to the National Restaurant Association.Increasing the minimum wage could lead employers to lay off some workers in order to pay others more, said David Neumark, an economics professor at the University of California, Irvine.“There’s a ton of research that says increasing minimum wages can cause some job loss,” he said. “Plenty workers are helped, but some are hurt.”A 2019 Congressional Budget Office study found that a $15 federal minimum wage would increase pay for 17 million workers who earned less than that and potentially another 10 million workers who earned slightly more. According to the study’s median estimate, it would cause 1.3 million other workers to lose their jobs.In New York, State Senate Republicans had urged Gov. Andrew M. Cuomo, a Democrat, to halt increases that went into effect on Thursday, arguing that they could amount to “the final straw” for some small businesses.While increases to the minimum wage beyond a certain point could lead to job losses, Ms. Bahn of the Washington Center for Equitable Growth argued that “we are nowhere near that point.”Economic research has found that recent minimum-wage increases have not had caused huge job losses. In a 2019 study, researchers at the Federal Reserve Bank of New York found that wages had increased sharply for leisure and hospitality workers in New York counties bordering Pennsylvania, which had a lower minimum, while employment growth continued. In many cases, higher minimum wages are rolled out over several years to give businesses time to adapt.Regardless of whether there is federal action, more state ballot initiatives will seek to raise the minimum wage, said Arindrajit Dube, an economics professor at the University of Massachusetts Amherst.“At a basic level, people think that this is an issue of fairness,” Mr. Dube said. “There’s broad-based support for the idea that people who are working should get a living wage.”Jeanna Smialek More

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    Unemployment Claims Expected to Have Remained High Last Week

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyUnemployment Claims Expected to Have Remained High Last WeekThe weekly report, which will be published Thursday morning, might show a drop in claims because of the Christmas holiday.Victor Lopez-Lucas plays with his daughter Kenya, 1, as they wait in line to receive food donations in Bradenton, Fla., on Tuesday.Credit…Eve Edelheit for The New York TimesDec. 31, 2020, 7:00 a.m. ETNew clues to the economy’s trajectory heading into 2021 will come Thursday morning when the government reports the latest data on initial claims for jobless benefits.While the Christmas holiday might cause a dip in the numbers, with state unemployment offices that process claims closed for at least one day last week, new filings are expected to stay at a very high level, in the range of more than 800,000 per week, said Greg Daco, chief economist at Oxford Economics. “That’s very elevated and we are facing an economy that has slowed down significantly.”Applications for benefits declined during Thanksgiving week, only to move higher later, and a similar catch-up phenomenon could happen after Christmas and New Years, too.In California, widening restrictions on restaurants and other businesses and an uptick in coronavirus infections may cause filings to jump, said Scott Anderson, chief economist at Bank of the West in San Francisco.“California has locked down even more, and there is no end in sight in terms of cases and hospitalizations,” he said. “We’re seeing more layoffs and that hasn’t shown up in the numbers yet.”The $900 billion stimulus package that President Trump signed into law Sunday comes too late to affect the jobless claims data. It will take months for the impact of the aid to be felt, and most economists expect the rate of layoffs to remain high.When fresh monthly jobs data is released by the Labor Department next week, Mr. Anderson expects that it will show a rise in the unemployment rate to 6.9 percent in December, up from 6.7 percent last month. The unemployment rate has fallen sharply since peaking at 14.7 percent in April but hiring has slowed as the economy has faltered in recent months.What’s more, the pace of layoffs has been persistently high, as sectors like dining, travel and entertainment are struggling while the pandemic has kept many people at home.The introduction of vaccines is a bright spot, as are positive economic signs, like surging stock prices and a booming housing market. But it will be months before enough Americans can be inoculated to allow people to go to restaurants, events and movie theaters without fear of being infected.“The trend is not good with the additional closures implemented around the country,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago.AdvertisementContinue reading the main story More

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    U.S. Companies to Face China Tariffs as Exclusions Expire

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyU.S. Companies to Face China Tariffs as Exclusions ExpireMany American companies could see their exemptions from President Trump’s China tariffs expire at midnight on Thursday.The Port of Oakland this month. Companies will have to again pay a tax to the government to import a variety of goods from China as the bulk of tariff exclusions are set to expire at midnight on Thursday.Credit…Jim Wilson/The New York TimesDec. 31, 2020, 5:00 a.m. ETWASHINGTON — American companies are facing the prospect of higher taxes on some of the products they import from China, as the tariff exclusions that had shielded many businesses from President Trump’s trade war are set to expire at midnight on Thursday.Mr. Trump began placing tariffs on more than $360 billion of Chinese goods in 2018, prompting thousands of companies to ask the administration for temporary waivers excluding them from the levies. Companies that met certain requirements were given a pass on paying the taxes, which range from 7.5 percent to 25 percent. Those included firms that import electric motors, microscopes, salad spinners, thermostats, breast pumps, ball bearings, fork lifts and other products.But the bulk of those exclusions, which could amount to billions in revenue for businesses based in the United States, are set to automatically expire at midnight on Thursday. After that, many companies will have to again pay a tax to the government to import a variety of goods from China, including textiles, industrial components and other assorted products.The Trump administration could still extend the exclusions, but has not given any indication of whether it will, leaving many companies in limbo. The Office of the United States Trade Representative did not respond to requests for comment about the exclusions.The United States has announced some extensions — on Dec. 23, the trade representative announced that it would extend exclusions until March 31 for a small category of medical care products, including hand sanitizer, masks and medical devices, to help with the battle against the coronavirus pandemic.But Ben Bidwell, the director of U.S. customs at the freight forwarder C.H. Robinson, who has been helping clients apply for exclusions, said that “the large majority” of those that had been granted would expire at the end of the year, leaving importers with either an additional 7.5 percent or 25 percent tariff, depending on their product.The United States trade representative had been “rather silent about any type of extension,” Mr. Bidwell said.Lawmakers have lobbied the administration to extend the waivers. On Dec. 11, more than 70 members of Congress, including Representative Jackie Walorski, a Republican from Indiana, and Ron Kind, a Democrat from Wisconsin, sent a letter urging Robert E. Lighthizer, the United States trade representative, to extend all of the active exclusions to help businesses that have been hurt by the pandemic.“Our economy remains in a fragile state due to the ongoing Covid-19 pandemic,” the letter states. “Extending these exclusions will provide needed certainty for employers and help save jobs.”Mr. Trump has wielded tariffs to protect some American industries from foreign competition and encourage others to move their supply chains from China. The tariffs have partly accomplished those goals, though most companies have moved operations to other low-cost countries like Vietnam or Mexico, rather than the United States.The Coronavirus Outbreak More

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    Most Americans Are Expected to Save, Not Spend, Their $600 Check

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyMost Americans Are Expected to Save, Not Spend, Their $600 CheckWhile lawmakers debate increasing the stimulus payments to $2,000, experts say it would make far more sense to give more money to the unemployed.Galen Gilbert, a 71-year old lawyer who lives in a Boston suburb, plans to deposit his stimulus check into savings. “I’m not really suffering financially,” he said.Credit…Katherine Taylor for The New York TimesNelson D. Schwartz and Dec. 30, 2020Updated 4:49 p.m. ETGalen Gilbert knows just what he will do with the check he gets from Washington as part of the pandemic relief package, whatever the amount: put it in the bank.“I’ve got more clients than I can handle right now and I’ve made more money than I usually do,” said Mr. Gilbert, a 71-year-old lawyer who lives in a Boston suburb. “So I’m not really suffering financially.”Cheryl K. Smith, an author and editor who lives in Low Pass, Ore., isn’t in a rush to spend the money, either. She plans to save a portion, too, while donating the rest to a local food bank. “I’m actually saving money right now,” Ms. Smith said.President Trump’s demand to increase the already-approved $600 individual payment to $2,000, with backing from congressional Democrats, has dominated events in Washington this week and redefined the debate for more stimulus during the pandemic. Mitch McConnell, the Senate majority leader, said on Wednesday he would not allow a vote on a standalone bill increasing the checks to $2,000, dooming the effort, at least for now.Whatever the amount, the reality is that most Americans right now are much more likely to save the money they receive.Of course, the money will be a lifesaver for the roughly 20 million people collecting unemployment benefits and others who are working reduced hours or earning less than they used to. Yet, for the majority of the estimated 160 million individuals and families who will receive it, spending the money is expected not to be a high priority.After an earlier round of $1,200 stimulus checks went out in the spring, the saving rate skyrocketed and remains at a nearly 40-year high. That largely reflects the lopsided nature of the pandemic recession that has put some Americans in dire straits while leaving many others untouched.Economists on the right and left of the political spectrum said that when otherwise financially secure people receive an unexpected windfall, they almost invariably save it. The free-market economist Milton Friedman highlighted this phenomenon decades ago.Many experts said a truly stimulative package would have earmarked the payments for those who need it most — the unemployed.“We know where the pockets of need are,” said Greg Daco, chief economist at Oxford Economics. “Putting it there would be a much more efficient use of the stimulus.”And because the money will immediately be put to work — the jobless don’t have the luxury of saving it — it would also have a much bigger impact on the overall economy, through what experts refer to as the multiplier effect. In essence, each dollar given to a person in need is likely to benefit the economy more because it would be used to pay for, say, groceries or rent.“Providing $2,400 to a family of four in the same financial situation as they were at the end of 2019 doesn’t do much to boost the overall economy right now,” Mr. Daco said. “It’s not whether it’s a positive or not. It’s their potency that’s in question.”Individuals with an adjusted gross income in 2019 of up to $75,000 will receive the $600 payment, and couples earning up to $150,000 a year will get twice that amount. There is also a $600 payment for each child in families that meet those income requirements. People making more than those limits will receive partial payments up to certain income thresholds.A more effective approach, experts say, would have raised unemployment insurance benefits to the jobless by $600 a week, matching the supplement under the stimulus package Congress passed last spring, rather than the $300 weekly subsidy the new legislation provides. Democrats had pushed for larger payments to the jobless and included it in legislation that passed the House, which they control. But the measure met stiff resistance from Republicans, who control the Senate, and was not included in the final compromise bill.The Coronavirus Outbreak More