Tag Archives: Trade barriers

Market for small businesses rebounds after 4 quarterly drops

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The market for small businesses rebounded in the last three months of 2019 after four straight quarterly declines caused in part by uncertainty about U.S. trade policy and rising employee pay

NEW YORK —
The market for small businesses rebounded in the last three months of 2019 after four straight quarterly declines caused in part by uncertainty about U.S. trade policy.

That’s the finding of a report analyzing business sales released by BizBuySell.com, an online marketplace for companies. BizBuySell.com counted 2,340 small businesses sold during October-December, up nearly 2.3% from 2,288 sold in the same period of 2018. For all of 2019, sales fell 5.5% to 9,746 from 10,312 the previous year. BizBuySell.com counts sales reported by brokers.

BizBuySell.com noted that sales activity is at high levels, but the Trump administration’s tariffs on goods imported from China and Europe have driven up companies’ overhead and lowered the number of transactions. Buyers are wary about the impact the tariffs can have on a company’s earnings, especially since it’s unclear how long the tariffs may remain in effect. Meanwhile, prospective sellers are concerned about how much the tariffs can affect their selling prices.

Owners have had to price companies conservatively to make a sale although their businesses are financially healthy. The median revenue of businesses sold in 2019 was up 7% at $567,000, compared to $531,653 in 2018, the report said. Yet the median sales price of a company rose a slim $1,000 to $250,000. Asking prices were flat at $275,000.

Besides tariffs, sales have also been affected by rising minimum wages and uncertainty about the November elections. But Bob House, BizBuySell.com’s president, expects strong sales this year “even if levels plateau a bit due to economic and political concerns.”

Nearly 40% of the reported sales were of service businesses, while retailers comprised nearly 24% and restaurants, 23%. Four percent of sales were of manufacturers, with other companies comprising the remaining 11%.

—————

Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg. Her work can be found here: https://apnews.com



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AP FACT CHECK: Trump’s fact-challenged week over impeachment

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Going through an impeachment inquiry, President Donald Trump is popping to a well-known playbook to defend himself: attacking his investigators , blasting the inquiry as unlawful and deriding the method as all-but-rigged.

Many information are getting misplaced within the course of.

He repeatedly lambasted Democratic Rep. Adam Schiff, the Home Intelligence Committee chairman who’s main the impeachment evaluate, as responsible of treason or defamation for mocking Trump’s July 25 cellphone name with Ukraine’s president, Volodymyr Zelenskiy. Neither cost is legitimate.

Trump additionally assailed the whistleblower criticism as improperly filed and “dishonest,” in contrast with a “phrase for phrase” transcript of the decision. Really, no precise transcript exists, and the appearing director of nationwide intelligence advised Congress that he believed the whistleblower criticism was “in alignment” with a tough transcript launched by the White Home.

Trump had the same playbook to dispute the Russia investigation by assailing particular counsel Robert Mueller as biased and saying the inquiry was illegally hatched by Democrats. These costs have been proven to be unfaithful.

In the meantime, amid indicators of producing weak point , Trump unfairly pointed a finger of blame on the Federal Reserve reasonably than his escalating commerce battle with China, and overstated his function in a World Commerce Group ruling for the USA.

A evaluate:

IMPEACHMENT

TRUMP: “As I study increasingly every day, I’m coming to the conclusion that what’s going down will not be an impeachment, it’s a COUP, meant to remove the Energy of the….Individuals.” — tweet Tuesday.

THE FACTS: No unlawful coup is afoot.

Home Speaker Nancy Pelosi, D-Calif., final month initiated impeachment proceedings towards Trump. She accused him of abusing presidential powers by in search of assist from a overseas authorities to undermine Democratic rival Joe Biden and assist his personal reelection. The transfer adopted a criticism by a whistleblower, a CIA officer, who made the costs.

A coup is often outlined as a sudden, violent and unlawful seizure of presidency energy. The impeachment course of is specified by the Structure, giving Congress the authority to question and check out a president as a part of its duties as a coequal department of presidency to offer a test on a president when she or he commits treason, bribery, or “different excessive crimes and misdemeanors.”

The usual of “excessive crimes and misdemeanors” is obscure and open-ended to embody abuses of energy even when they don’t seem to be, strictly talking, unlawful.

———

2016 ELECTION

TRUMP: “The Do Nothing Democrats must be targeted on build up our Nation, not losing everybody’s time and vitality on BULLSHIT, which is what they’ve been doing ever since I obtained overwhelmingly elected in 2016, 223-306.” — tweet Wednesday.

THE FACTS: Trump once more misstates the Electoral School vote. The official rely was 304 to 227, based on an Related Press tally of the electoral votes in each state.

———

UKRAINE

TRUMP: “I had a transcript executed by very, very gifted folks — phrase for phrase, comma for comma. … We had a precise transcript. And after we produced that transcript, they died.” — information convention Wednesday with Finland’s president.

TRUMP: “They by no means thought in one million years that I might launch the dialog … And that is a precise word-for-word transcript of the dialog, proper? Taken by very gifted stenographers.” — remarks Wednesday to reporters within the Oval Workplace.

THE FACTS: It isn’t a word-for-word transcript.

The memorandum of Trump’s July 25 cellphone name with Zelenskiy itself makes clear that it doesn’t symbolize a precise transcript of what was mentioned.

In response to the doc, it’s “not a verbatim transcript” and as an alternative “data the notes and recollections of Scenario Room Obligation Officers and NSC coverage employees assigned to hear and memorialize the dialog in written kind because the dialog takes place. Quite a lot of elements can have an effect on the accuracy of the file.” It cited potential elements comparable to the standard of the cellphone connection, variations in accent “and/or interpretation.”

NSC refers back to the Nationwide Safety Council.

The appearing director of nationwide intelligence, Joseph Maguire, advised a Home panel final month that he believed the whistleblower acted in “good religion” and the criticism was in keeping with the White Home’s tough transcript.

———

TRUMP, on the whistleblower: “He obtained his info, I assume, second or thirdhand. He wrote one thing that was complete fiction.” — remarks to reporters Thursday.

GOP HOUSE MINORITY LEADER KEVIN McCARTHY: “Whistleblowers have been required to offer direct, first-hand information of allegations…however simply days earlier than the Ukraine whistleblower got here ahead, the IC secretly eliminated the requirement from the criticism kind.” — tweet on Sept. 28.

TRUMP: “Who modified the lengthy standing whistleblower guidelines simply earlier than submittal of the pretend whistleblower report? Drain the swamp!” — tweet Monday.

THE FACTS: The method for submitting a whistleblower criticism was not rigged towards Trump.

There was nothing improper in how the criticism was submitted. No whistleblower legislation was modified and nothing underneath that legislation requires the complaints to have firsthand info. In a uncommon assertion this previous week , the inspector normal for the intelligence group additionally made clear that it had decided the whistleblower did have some firsthand, “direct information of sure alleged conduct.”

It isn’t true that the whistleblower may “present nothing greater than secondhand or unsubstantiated assertions,” the IG mentioned.

Intelligence company staff have lengthy been in a position to blow the whistle primarily based on secondhand or rumour info. The legislation solely requires federal staff to have a “cheap perception” of misconduct with a view to file a criticism, based on Debra D’Agostino, a federal employment lawyer.

On this case, the whistleblower flagged partly Trump’s July name to Zelenskiy in a typed, nine-page doc addressed to the Home Intelligence Committee. The watchdog mentioned that whereas the whistleblower was not a direct witness to the decision, the inspector normal individually obtained different info throughout its preliminary evaluate to deem the allegations credible.

Pointing to suspicious exercise, McCarthy, R-Calif., cites the elimination of some info from the standardized criticism kind, which beforehand burdened the necessity for firsthand info for an inspector normal to find out the criticism credible. The inspector normal’s workplace mentioned it had eliminated that language from the shape earlier this 12 months as a result of it decided that “it might be learn – incorrectly – as suggesting that whistleblowers should possess first-hand info with a view to file an pressing concern criticism with the congressional intelligence committees.”

In any occasion, the inspector normal’s workplace mentioned it had offered the whistleblower separate background materials on submitting a criticism that included that language.

———

SCHIFF

TRUMP: “Congressman Adam Schiff ought to resign for the Crime of, after studying a transcript of my dialog with the President of Ukraine (it was good), fraudulently fabricating a press release of the President of the USA and studying it to Congress, as if mine!” — tweet Wednesday.

TRUMP: “Rep. Adam Schiff illegally made up a FAKE & horrible assertion, pretended it to be mine as an important a part of my name to the Ukrainian President, and browse it aloud to Congress and the American folks. It bore NO relationship to what I mentioned on the decision. Arrest for Treason?” — tweet Monday.

THE FACTS: Trump is overstating Schiff’s exaggerations. The California Democrat, in what he mentioned was a parody throughout a committee listening to, mocked and overstated the president’s pleas in his July name to Zelenskiy, as Trump does together with his critics routinely.

Underneath the Structure, treason happens when a U.S. citizen, or a noncitizen on U.S. territory, wages battle towards the nation or gives materials help, not simply sympathy, to a declared enemy of the USA. It’s outlined narrowly as a part of an effort by the framers to stop the federal government from utilizing it as a purpose to suppress political speech, mentioned J. Richard Broughton, affiliate dean at College of Detroit Mercy and a member of the Republican Nationwide Attorneys Affiliation.

The chief department can solely deliver costs in extraordinarily restricted instances.

As an example, within the Chilly Warfare case of Julius and Ethel Rosenberg, who have been executed for giving atomic secrets and techniques to Russia, the Rosenbergs have been convicted of espionage, not treason, as a result of the U.S. and Russia weren’t formally at battle. Nobody has been convicted of treason for the reason that aftermath of World Warfare II, says Carlton F.W. Larson, a College of California legislation professor who has a guide on treason.

Throughout final week’s Home Intelligence Committee listening to, Schiff made clear he was offering an account that was in “essence” what he believed Trump was conveying to Zelenskiy, when “shorn of its rambling character.”

No precise transcript of Trump’s feedback with Ukraine’s president truly exists, only a tough transcript launched by the White Home.

———

TRUMP: “Liddle’ Adam Schiff … fraudulently and illegally inserted his made up & twisted phrases into my name with the Ukrainian President to make it appear to be I did one thing very improper. He then boldly learn these phrases to Congress and hundreds of thousands of individuals, defaming & libeling me.” — tweets on Sept. 28.

THE FACTS: Schiff’s remarks are usually not unlawful nor wouldn’t it be defamatory or libelous. Lawmakers are given vast protections from legal responsibility for feedback made in the midst of Congress underneath the “speech or debate” clause within the Structure, which seeks to foster political debate.

———

ECONOMY and TRADE

TRUMP, on a World Commerce Group ruling permitting the U.S. to tax impose tariffs on $7.5 billion value of European imports yearly: “You by no means had wins with different presidents, did you? However we’re having a number of wins on the WTO since I grew to become president.” — information convention Wednesday.

THE FACTS: Trump is improper that the U.S. by no means obtained any WTO victories underneath different presidents.

The U.S. has all the time had a excessive success price when it pursues instances towards different nations on the WTO. In 2017, commerce analyst Daniel Ikenson of the libertarian Cato Institute discovered that the U.S. had gained 91% of time it introduced a criticism that ended up being adjudicated by the Geneva-based commerce monitor. True, Ikenson famous, the nations bringing complaints are inclined to win overwhelmingly. That is as a result of they do not hassle going to the WTO within the first place if they do not have a reasonably robust case.

The WTO announcement culminated a 15-year battle over EU subsidies for Airbus — a battle that started lengthy earlier than Trump was in workplace.

———

TRUMP: “As I predicted, Jay Powell and the Federal Reserve have allowed the Greenback to get so robust, particularly relative to ALL different currencies, that our producers are being negatively affected. Fed Price too excessive.” — tweet Tuesday.

THE FACTS: Really, most economists and lots of manufacturing unit house owners level to Trump’s commerce insurance policies for the difficulties in U.S. manufacturing, not the Federal Reserve and Chairman Jerome Powell.

The Institute for Provide Administration reported on Tuesday that manufacturing unit exercise shrank in September for the second straight month. That report reveals that the manufacturing unit sector has been contracting largely due to the commerce battle towards China that Trump sparked by launching a salvo of tariffs.

The index is predicated on a survey of producers. Of the 10 quoted within the report, none blames the challenges they face on the Fed or the robust greenback. However three say the tariffs and commerce battle have harm their companies.

“The first offender right here is the commerce battle,” Eric Winograd, senior U.S. economist at AllianceBernstein, mentioned Tuesday.

Trump is true that the Fed’s choice to boost short-term rates of interest 4 occasions final 12 months contributed to a stronger greenback. However it wasn’t the one issue. The U.S. financial system is rising extra shortly than Europe’s or Japan’s, which attracts extra funding and boosts the greenback’s worth. And plenty of international traders choose to spend money on U.S. Treasury securities when the worldwide financial system slows, as it’s now, as a result of Treasuries are seen as a protected haven. That additionally pushes up the greenback.

The Fed has reversed itself this 12 months and minimize its benchmark rate of interest twice, however that hasn’t weakened the greenback, as a result of different central banks are additionally chopping charges. Trump has beforehand urged the Fed to slash its price to zero, however that might spook shoppers and companies, who would possibly see it as an indication {that a} recession is close to. Shopper spending may fall consequently and gradual the U.S. financial system.

The sort of sharp price cuts by the Fed that Trump is demanding would additionally probably encourage traders to position extra money in shares and different speculative investments. This might danger inflating a inventory market bubble to ranges that may finally destabilize the U.S. financial system.

———

AP Economics Writers Josh Boak and Christopher Rugaber in Washington and Related Press author Amanda Seitz in Chicago contributed to this report.

———

Discover AP Truth Checks at http://apne.ws/2kbx8bd

Comply with @APFactCheck on Twitter: https://twitter.com/APFactCheck

EDITOR’S NOTE _ A take a look at the veracity of claims by political figures



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AP FACT CHECK: Trump’s fact-challenged week over impeachment

[ad_1]

Going through an impeachment inquiry, President Donald Trump is popping to a well-known playbook to defend himself: attacking his investigators , blasting the inquiry as unlawful and deriding the method as all-but-rigged.

Many info are getting misplaced within the course of.

He repeatedly lambasted Democratic Rep. Adam Schiff, the Home Intelligence Committee chairman who’s main the impeachment overview, as responsible of treason or defamation for mocking Trump’s July 25 cellphone name with Ukraine’s president, Volodymyr Zelenskiy. Neither cost is legitimate.

Trump additionally assailed the whistleblower grievance as improperly filed and “dishonest,” in contrast with a “phrase for phrase” transcript of the decision. Truly, no actual transcript exists, and the appearing director of nationwide intelligence informed Congress that he believed the whistleblower grievance was “in alignment” with a tough transcript launched by the White Home.

Trump had the same playbook to dispute the Russia investigation by assailing particular counsel Robert Mueller as biased and saying the inquiry was illegally hatched by Democrats. These costs have been proven to be unfaithful.

In the meantime, amid indicators of producing weak point , Trump unfairly pointed a finger of blame on the Federal Reserve quite than his escalating commerce struggle with China, and overstated his position in a World Commerce Group ruling for the USA.

A overview:

IMPEACHMENT

TRUMP: “As I be taught increasingly more every day, I’m coming to the conclusion that what’s going down is just not an impeachment, it’s a COUP, supposed to remove the Energy of the….Individuals.” — tweet Tuesday.

THE FACTS: No unlawful coup is afoot.

Home Speaker Nancy Pelosi, D-Calif., final month initiated impeachment proceedings in opposition to Trump. She accused him of abusing presidential powers by in search of assist from a international authorities to undermine Democratic rival Joe Biden and assist his personal reelection. The transfer adopted a grievance by a whistleblower, a CIA officer, who made the fees.

A coup is often outlined as a sudden, violent and unlawful seizure of presidency energy. The impeachment course of is specified by the Structure, giving Congress the authority to question and take a look at a president as a part of its tasks as a coequal department of presidency to supply a test on a president when she or he commits treason, bribery, or “different excessive crimes and misdemeanors.”

The usual of “excessive crimes and misdemeanors” is obscure and open-ended to embody abuses of energy even when they don’t seem to be, strictly talking, unlawful.

———

2016 ELECTION

TRUMP: “The Do Nothing Democrats must be centered on build up our Nation, not losing everybody’s time and vitality on BULLSHIT, which is what they’ve been doing ever since I received overwhelmingly elected in 2016, 223-306.” — tweet Wednesday.

THE FACTS: Trump once more misstates the Electoral Faculty vote. The official depend was 304 to 227, in keeping with an Related Press tally of the electoral votes in each state.

———

UKRAINE

TRUMP: “I had a transcript completed by very, very proficient folks — phrase for phrase, comma for comma. … We had a precise transcript. And once we produced that transcript, they died.” — information convention Wednesday with Finland’s president.

TRUMP: “They by no means thought in one million years that I would launch the dialog … And that is a precise word-for-word transcript of the dialog, proper? Taken by very proficient stenographers.” — remarks Wednesday to reporters within the Oval Workplace.

THE FACTS: It is not a word-for-word transcript.

The memorandum of Trump’s July 25 cellphone name with Zelenskiy itself makes clear that it doesn’t signify a precise transcript of what was stated.

In line with the doc, it’s “not a verbatim transcript” and as an alternative “data the notes and recollections of Scenario Room Obligation Officers and NSC coverage employees assigned to pay attention and memorialize the dialog in written kind because the dialog takes place. A lot of elements can have an effect on the accuracy of the report.” It cited potential elements corresponding to the standard of the cellphone connection, variations in accent “and/or interpretation.”

NSC refers back to the Nationwide Safety Council.

The appearing director of nationwide intelligence, Joseph Maguire, informed a Home panel final month that he believed the whistleblower acted in “good religion” and the grievance was according to the White Home’s tough transcript.

———

TRUMP, on the whistleblower: “He received his data, I suppose, second or thirdhand. He wrote one thing that was complete fiction.” — remarks to reporters Thursday.

GOP HOUSE MINORITY LEADER KEVIN McCARTHY: “Whistleblowers had been required to supply direct, first-hand data of allegations…however simply days earlier than the Ukraine whistleblower got here ahead, the IC secretly eliminated the requirement from the grievance kind.” — tweet on Sept. 28.

TRUMP: “Who modified the lengthy standing whistleblower guidelines simply earlier than submittal of the pretend whistleblower report? Drain the swamp!” — tweet Monday.

THE FACTS: The method for submitting a whistleblower grievance was not rigged in opposition to Trump.

There was nothing improper in how the grievance was submitted. No whistleblower legislation was modified and nothing beneath that legislation requires the complaints to have firsthand data. In a uncommon assertion this previous week , the inspector common for the intelligence group additionally made clear that it had decided the whistleblower did have some firsthand, “direct data of sure alleged conduct.”

It is not true that the whistleblower may “present nothing greater than secondhand or unsubstantiated assertions,” the IG stated.

Intelligence company employees have lengthy been in a position to blow the whistle based mostly on secondhand or rumour data. The legislation solely requires federal employees to have a “cheap perception” of misconduct with a purpose to file a grievance, in keeping with Debra D’Agostino, a federal employment lawyer.

On this case, the whistleblower flagged partially Trump’s July name to Zelenskiy in a typed, nine-page doc addressed to the Home Intelligence Committee. The watchdog stated that whereas the whistleblower was not a direct witness to the decision, the inspector common individually obtained different data throughout its preliminary overview to deem the allegations credible.

Pointing to suspicious exercise, McCarthy, R-Calif., cites the elimination of some data from the standardized grievance kind, which beforehand harassed the necessity for firsthand data for an inspector common to find out the grievance credible. The inspector common’s workplace stated it had eliminated that language from the shape earlier this yr as a result of it decided that “it might be learn – incorrectly – as suggesting that whistleblowers should possess first-hand data with a purpose to file an pressing concern grievance with the congressional intelligence committees.”

In any occasion, the inspector common’s workplace stated it had supplied the whistleblower separate background materials on submitting a grievance that included that language.

———

SCHIFF

TRUMP: “Congressman Adam Schiff ought to resign for the Crime of, after studying a transcript of my dialog with the President of Ukraine (it was good), fraudulently fabricating a press release of the President of the USA and studying it to Congress, as if mine!” — tweet Wednesday.

TRUMP: “Rep. Adam Schiff illegally made up a FAKE & horrible assertion, pretended it to be mine as an important a part of my name to the Ukrainian President, and browse it aloud to Congress and the American folks. It bore NO relationship to what I stated on the decision. Arrest for Treason?” — tweet Monday.

THE FACTS: Trump is overstating Schiff’s exaggerations. The California Democrat, in what he stated was a parody throughout a committee listening to, mocked and overstated the president’s pleas in his July name to Zelenskiy, as Trump does along with his critics routinely.

Below the Structure, treason happens when a U.S. citizen, or a noncitizen on U.S. territory, wages struggle in opposition to the nation or supplies materials assist, not simply sympathy, to a declared enemy of the USA. It’s outlined narrowly as a part of an effort by the framers to stop the federal government from utilizing it as a motive to suppress political speech, stated J. Richard Broughton, affiliate dean at College of Detroit Mercy and a member of the Republican Nationwide Legal professionals Affiliation.

The manager department can solely carry costs in extraordinarily restricted circumstances.

For example, within the Chilly Warfare case of Julius and Ethel Rosenberg, who had been executed for giving atomic secrets and techniques to Russia, the Rosenbergs had been convicted of espionage, not treason, as a result of the U.S. and Russia weren’t formally at struggle. Nobody has been convicted of treason because the aftermath of World Warfare II, says Carlton F.W. Larson, a College of California legislation professor who has a e-book on treason.

Throughout final week’s Home Intelligence Committee listening to, Schiff made clear he was offering an account that was in “essence” what he believed Trump was conveying to Zelenskiy, when “shorn of its rambling character.”

No actual transcript of Trump’s feedback with Ukraine’s president truly exists, only a tough transcript launched by the White Home.

———

TRUMP: “Liddle’ Adam Schiff … fraudulently and illegally inserted his made up & twisted phrases into my name with the Ukrainian President to make it appear like I did one thing very mistaken. He then boldly learn these phrases to Congress and tens of millions of individuals, defaming & libeling me.” — tweets on Sept. 28.

THE FACTS: Schiff’s remarks should not unlawful nor would it not be defamatory or libelous. Lawmakers are given large protections from legal responsibility for feedback made in the middle of Congress beneath the “speech or debate” clause within the Structure, which seeks to foster political debate.

———

ECONOMY and TRADE

TRUMP, on a World Commerce Group ruling permitting the U.S. to tax impose tariffs on $7.5 billion price of European imports yearly: “You by no means had wins with different presidents, did you? However we’re having quite a lot of wins on the WTO since I grew to become president.” — information convention Wednesday.

THE FACTS: Trump is mistaken that the U.S. by no means received any WTO victories beneath different presidents.

The U.S. has at all times had a excessive success fee when it pursues circumstances in opposition to different international locations on the WTO. In 2017, commerce analyst Daniel Ikenson of the libertarian Cato Institute discovered that the U.S. had received 91% of time it introduced a grievance that ended up being adjudicated by the Geneva-based commerce monitor. True, Ikenson famous, the international locations bringing complaints are inclined to win overwhelmingly. That is as a result of they do not trouble going to the WTO within the first place if they do not have a fairly sturdy case.

The WTO announcement culminated a 15-year combat over EU subsidies for Airbus — a combat that started lengthy earlier than Trump was in workplace.

———

TRUMP: “As I predicted, Jay Powell and the Federal Reserve have allowed the Greenback to get so sturdy, particularly relative to ALL different currencies, that our producers are being negatively affected. Fed Price too excessive.” — tweet Tuesday.

THE FACTS: Truly, most economists and plenty of manufacturing unit house owners level to Trump’s commerce insurance policies for the difficulties in U.S. manufacturing, not the Federal Reserve and Chairman Jerome Powell.

The Institute for Provide Administration reported on Tuesday that manufacturing unit exercise shrank in September for the second straight month. That report reveals that the manufacturing unit sector has been contracting largely due to the commerce struggle in opposition to China that Trump sparked by launching a salvo of tariffs.

The index relies on a survey of producers. Of the 10 quoted within the report, none blames the challenges they face on the Fed or the sturdy greenback. However three say the tariffs and commerce struggle have harm their companies.

“The first wrongdoer right here is the commerce struggle,” Eric Winograd, senior U.S. economist at AllianceBernstein, stated Tuesday.

Trump is correct that the Fed’s resolution to lift short-term rates of interest 4 occasions final yr contributed to a stronger greenback. Nevertheless it wasn’t the one issue. The U.S. financial system is rising extra rapidly than Europe’s or Japan’s, which attracts extra funding and boosts the greenback’s worth. And lots of international traders choose to spend money on U.S. Treasury securities when the worldwide financial system slows, as it’s now, as a result of Treasuries are seen as a protected haven. That additionally pushes up the greenback.

The Fed has reversed itself this yr and minimize its benchmark rate of interest twice, however that hasn’t weakened the greenback, as a result of different central banks are additionally reducing charges. Trump has beforehand urged the Fed to slash its fee to zero, however that would spook customers and companies, who would possibly see it as an indication {that a} recession is close to. Client spending may fall consequently and sluggish the U.S. financial system.

The sort of sharp fee cuts by the Fed that Trump is demanding would additionally doubtless encourage traders to put extra money in shares and different speculative investments. This is able to threat inflating a inventory market bubble to ranges which may finally destabilize the U.S. financial system.

———

AP Economics Writers Josh Boak and Christopher Rugaber in Washington and Related Press author Amanda Seitz in Chicago contributed to this report.

———

Discover AP Reality Checks at http://apne.ws/2kbx8bd

Observe @APFactCheck on Twitter: https://twitter.com/APFactCheck

EDITOR’S NOTE _ A have a look at the veracity of claims by political figures



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How Tim Cook dinner Received Donald Trump’s Ear

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With the specter of tariffs on iPhones approaching in August,

Apple Inc.

stood to lose billions of {dollars} in revenue. Chief Govt

Tim Cook dinner

reached out to one among his most essential contacts in Washington,

Jared Kushner.

Mr. Kushner organized a name between Mr. Cook dinner and his father-in-law, President Trump, individuals accustomed to the decision mentioned, giving the Apple chief an opportunity to elucidate how tariffs would improve iPhone costs and impair Apple’s means to compete in opposition to rivals corresponding to

Samsung Electronics Co.

Inside days, the Trump administration scaled again its tariff plan to exempt a swath of electronics merchandise, together with iPhones, saying it wished to guard customers forward of the vacation procuring season. The decision from Mr. Cook dinner influenced the choice, an individual near the administration mentioned.

A day after that transfer, Apple issued a press launch trumpeting job development, saying that since 2011 it had quadrupled the variety of jobs its enterprise helps within the U.S. Later, Mr. Trump publicly praised Mr. Cook dinner’s energy of persuasion, saying the CEO had made a compelling argument about tariffs.

The occasions encapsulated Mr. Cook dinner’s diplomacy within the Trump period. To guard his firm’s pursuits, individuals near the corporate and administration mentioned, the Apple CEO has cultivated a relationship with the president and his household, an unlikely alliance given their contrasting personalities and divergent views on many points.

The rapport between Mr. Cook dinner, a

Hillary Clinton

supporter in 2016 who customary Apple’s outsourcing technique, and Mr. Trump, a Republican who campaigned in opposition to Apple’s China-based manufacturing, has served every man’s pursuits in such areas as commerce and tax reform, at the same time as they continue to be divided over immigration and local weather change.

The nascent impeachment inquiry is unlikely to have a right away impact on the connection, in line with individuals near Apple. Mr. Cook dinner is anticipated to proceed to interact on points associated to the corporate’s enterprise whereas steering away from politics and pushing again on social points.

Mr. Cook dinner serves as an adviser to the administration’s workforce coverage board, and the 2 have dined collectively the previous two summers at Mr. Trump’s golf membership in Bedminster, N.J. Mr. Trump refers back to the Apple CEO as a pal and lauds his enterprise chops. He has known as Mr. Cook dinner to want him a Comfortable Thanksgiving, an individual accustomed to the matter mentioned.

“He’s an excellent government,” Mr. Trump mentioned not too long ago. “Others exit and rent very costly consultants. Tim Cook dinner calls

Donald Trump

instantly.”

Mr. Trump has spent extra of his working time than predecessors with company leaders, mentioned presidential historian

Jeremi Suri,

a professor on the College of Texas at Austin. He mentioned these relationships are inclined to focus extra on administration priorities corresponding to commerce and tariffs than the broader financial system, a focus of previous administrations.

Mr. Cook dinner is without doubt one of the few executives in a hyperpolarized political period who has managed to each assist and problem the president’s agenda in a means that has stored him in Mr. Trump’s good graces whereas avoiding any public backlash from both staff or prospects.

Such engagement has proved dangerous for different chief executives. Dealing with public stress,

Beneath Armour Inc.

’s

Kevin Plank,

Tesla Inc.

’s

Elon Musk

and

Uber Applied sciences Inc.

’s

Travis Kalanick

resigned from presidential advisory councils over disagreements with the administration. An analogous resignation by

Merck

& Co. CEO

Kenneth Frazier,

who publicly criticized the president’s dealing with of violence in Charlottesville, Va., led Mr. Trump to unleash a barrage of tweets castigating the drugmaker for prime costs.

“There are solely a handful [of executives] who’ve been in a position to thread the needle,” mentioned

Jeffrey Sonnenfeld,

a Yale College administration professor who has informally suggested Mr. Trump over time earlier than he turned president. “This can be a newfound functionality for Apple.

Steve Jobs

didn’t have affect in Washington, and Tim Cook dinner has supplied it.” He added that Mr. Trump’s volatility means the connection with Mr. Cook dinner may change, however that was unlikely within the close to time period.

Apple declined to make Mr. Cook dinner out there for an interview. The White Home mentioned Mr. Trump declined to remark. (Dow Jones & Co., writer of The Wall Avenue Journal, has a industrial settlement to produce information by way of Apple providers.)

Mr. Cook dinner’s private diplomacy stands out amongst tech giants. Others have sharply elevated their outlays on lobbying lately however haven’t cast shut ties to the administration. Apple’s $18 million in lobbying since 2017 is half of what both

Amazon.com Inc.

or Google’s

Alphabet Inc.

have spent, in line with the Heart for Responsive Politics.

Mr. Cook dinner fostered shut ties with Mr. Kushner and his spouse,

Ivanka Trump,

giving him a backchannel to the White Home. He additionally meets frequently with administration officers corresponding to financial adviser

Larry Kudlow.

Regardless of his private choice for privateness, he has attended publicly promoted dinners and conferences with Mr. Trump, mentioned individuals near Apple and the administration.

Almost 97% of Apple worker donations to candidates within the 2018 midterm elections went to Democrats, in line with the Heart for Responsive Politics, citing public disclosures. But staff haven’t publicly criticized Mr. Cook dinner for partaking with the president. Mr. Cook dinner has challenged the president on some social points. His private lobbying benefited the corporate on the tariff difficulty, and tax modifications that led to worker bonuses.

After the president mistakenly known as him Tim Apple, Mr. Cook dinner up to date his identify on Twitter to make use of the Apple emblem instead of his final identify.


Photograph:

stringer/Agence France-Presse/Getty Photos

At a March assembly, President Trump launched Mr. Cook dinner as “Tim Apple”—a mistake that ricocheted throughout social media. Trump supporters laughed, whereas critics painted it as one more presidential gaffe. Mr. Cook dinner responded by updating his identify on Twitter to make use of the Apple emblem instead of his final identify. Presidential supporters learn it as an inside joke between the 2 leaders, whereas opponents interpreted it as a jab on the president.

“There are a whole lot of of us in Silicon Valley who reek of disdainfulness for politics,” mentioned

Sen. Mark Warner

(D., Va.), who frequently meets with Mr. Cook dinner. “They usually presume they’re a lot smarter than anybody in coverage…Tim doesn’t have that strategy. He truly listens.”

Mr. Cook dinner grew up outdoors Cell, Ala., the son of a shipyard employee, and earned an engineering diploma at Auburn College and an M.B.A. from Duke. He’s an operations wizard, expert at minimizing prices. In his earlier function at Apple, he shifted manufacturing from the U.S. to China, and helped construct a enterprise there that accounts for one-fifth of Apple’s income.

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Mr. Trump was elected president after promising to rebuild American manufacturing and place tariffs on Chinese language items. “We’re going to get Apple to construct their rattling computer systems on this nation as an alternative of different international locations,” he mentioned throughout a 2016 marketing campaign speech.

The month after his election, Mr. Trump summoned Mr. Cook dinner to satisfy in New York. Apple executives debated skipping the summit, frightened Mr. Trump would air grievances about manufacturing and Apple’s dedication to encrypted iPhones, in line with an individual accustomed to the corporate. However individuals who knew Mr. Trump inspired Mr. Cook dinner to attend, this particular person mentioned.

Mr. Trump was pleasant and charming, mentioned individuals accustomed to the assembly. He informed Mr. Cook dinner he seemed ahead to working collectively and inspired the CEO to contact Mr. Kushner with any points.

Apple CEO Tim Cook dinner, middle, speaks with President Trump whereas White Home adviser Jared Kushner appears to be like on throughout an American Expertise Council assembly in 2017.


Photograph:

Alex Brandon/Related Press

Mr. Cook dinner spoke about Apple’s manufacturing practices, drawing a distinction between smartphone manufacturing and car manufacturing, in line with these individuals. A lot of the worth within the iPhone got here from the design and engineering, he mentioned, and the Chinese language staff who did the meeting obtained low wages, so how may these jobs be good for U.S. staff?

He informed Mr. Trump {that a} commerce battle with China can be a giant drawback for main American corporations corresponding to Apple.

Messrs. Trump and Kushner appreciated Mr. Cook dinner’s strategy, and felt he was somebody they might work with, a former senior administration official mentioned.

Mr. Cook dinner got here away from the assembly with a way that Mr. Trump listened and that they might work collectively, one of many individuals accustomed to the corporate mentioned. When Mr. Cook dinner was in Washington the next month, he had dinner with Mr. Kushner and his spouse at Ristorante Tosca.

Their early rapport was examined a month later when Mr. Trump signed an government order suspending entry to the U.S. from a number of Muslim-majority nations. The order disrupted airports and triggered protests at Google, the place 1000’s of individuals staged a walkout.

Mr. Cook dinner, an immigration advocate, was stunned. Apple later informed the administration it disapproved of the measure. Mr. Cook dinner emailed Apple staff, saying he made clear to officers in Washington that the corporate and nation wouldn’t exist with out immigration.

His ties to the White Home, although, remained intact. A number of months later, present and former administration officers mentioned, Ms. Trump known as on Mr. Cook dinner for assist: Would he communicate to her father about his plan to exit from the Paris Local weather Accord?

Mr. Trump declares in 2017 that the U.S. will withdraw from the Paris Local weather Accord.


Photograph:

kevin lamarque/Reuters

Mr. Cook dinner’s enchantment to protect the U.S. dedication to the local weather settlement didn’t succeed, these individuals mentioned, nevertheless it allowed him to convey his emotions to the president instantly earlier than sending an e mail to staff that criticized exiting the local weather settlement.

Mr. Cook dinner has mentioned he depends on a easy formulation earlier than weighing in, asking himself: Does Apple have a proper to speak about this? Do we’ve got standing? He speaks out about training, privateness, human rights, immigration and the setting. “I don’t suppose enterprise ought to solely deal in industrial issues,” he mentioned at a convention final yr.

Earlier than difficult Mr. Trump’s insurance policies publicly, although, usually he or a member of Apple’s public-affairs staff alerts the White Home by way of Mr. Kushner or different senior White Home officers, former administration officers mentioned.

At different instances, Mr. Cook dinner holds his tongue. When the president informed the Journal in July 2017 that Mr. Cook dinner promised to construct “three massive vegetation, lovely vegetation” within the U.S., the corporate declined to remark, pointing to previous statements about its reliance on U.S. suppliers for parts.

Whereas Mr. Cook dinner had spoken with the president about manufacturing round that point, the CEO hadn’t mentioned three vegetation within the U.S., an individual accustomed to the corporate mentioned. The CEO didn’t problem Mr. Trump as a result of “it could have been a tweet battle,” the Journal reported final yr, citing one other particular person accustomed to the corporate.

“In being measured and considerate, he doesn’t create disaster when there doesn’t have to be one, or antagonism when there doesn’t have to be any,” one of many former administration officers mentioned of Mr. Cook dinner.

When Mr. Trump started working towards a deliberate tax minimize in 2017, Mr. Cook dinner informed the president that Apple would make investments extra within the U.S. if it may carry its $250 billion in abroad money again to the U.S. at a decrease tax fee, one of many former administration officers mentioned. Mr. Trump later cited Mr. Cook dinner and Apple as he promoted a tax overhaul, this particular person added.

In early 2018, lower than a month after the tax invoice was signed, Apple introduced it could contribute $350 billion to the U.S. financial system over 5 years—a determine that included spending on elements and providers, capital spending and tax funds. Regardless that that was according to Apple’s earlier spending ranges within the U.S., Mr. Cook dinner went on ABC Information to tout the dedication, in addition to Apple’s promise to develop a brand new Apple campus, which it later awarded to Austin, Texas.

Mr. Trump praised Apple later that month throughout the State of the Union tackle, saying its spending was an instance of the advantages of tax cuts.

Over time, the administration started to depend on Mr. Cook dinner for perception into commerce and enterprise points all over the world, together with in China, Brazil and Europe, former and present senior administration officers mentioned.

Commerce remained a significant sticking level. Mr. Cook dinner informed Mr. Trump frequently {that a} commerce battle would hurt U.S. corporations. Mr. Trump usually informed Mr. Cook dinner he wished Apple so as to add jobs within the U.S.

To keep at bay criticism of its abroad manufacturing, Apple rebranded commitments to U.S. manufacturing as spending from an “Superior Manufacturing Fund” program, one of many individuals near the corporate mentioned. Beforehand, comparable spending commitments with suppliers weren’t publicized.

Early this yr, Mr. Cook dinner joined the American Workforce Coverage Advisory Board led by Ms. Trump. The group, which incorporates the CEOs of

Lockheed Martin Corp.

and Siemens USA, goals to assist U.S. employers and the federal government higher prepare staff.

Final yr, when the White Home introduced duties on $200 billion of Chinese language-made items, it exempted a gaggle of merchandise together with Apple’s smartwatch and wi-fi earbuds. However the tariff menace re-emerged in Might when Mr. Trump threatened tariffs on one other $300 billion in Chinese language items. The tariffs would have elevated the value of recent iPhones, on common, by about $40, and lowered Apple’s per-share earnings by greater than 20%, in line with analysts.

Mr. Cook dinner with the brand new Mac Professional, which Apple determined to proceed making in Austin, Texas.


Photograph:

mason trinca/Reuters

Regardless of the tariff menace, Apple made plans to fabricate a brand new model of its Mac Professional in China. The present model of the pc was produced in Austin, Texas.

After the president mentioned in August he deliberate to maneuver ahead with the tariffs, Mr. Cook dinner reached out to Mr. Kushner, who arrange the cellphone name with the president that helped persuade the Trump administration to spare iPhones and different merchandise from tariffs.

The president later mentioned Mr. Cook dinner made the case that tariffs would give Samsung a bonus over Apple as a result of the South Korean firm wouldn’t need to pay duties.

The plea clicked with Mr. Trump, in line with former senior administration officers. He desires to cease international locations corresponding to China from competing unfairly in opposition to the U.S., and for American multinationals to succeed world-wide.

A number of weeks later, Apple reversed its plan for the Mac Professional, asserting it could proceed to make it in Austin, after the administration granted exclusions on tariffs for some Chinese language-made parts within the desktop laptop.

“The explanation I communicate to Tim Cook dinner: He’s the one which calls me,” Mr. Trump mentioned in August.

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The Newest: Airbus warns US in opposition to tariff retaliation

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The Newest on the World Commerce Group’s ruling over EU’s Airbus subsidies (all occasions native):

4:20 p.m.

Boeing competitor Airbus says the Trump administration would solely harm the USA if it slaps tariffs on the EU over its unlawful monetary assist to the European plane producer.

Airbus CEO Guillaume Faury stated following the World Commerce Group’s ruling that the Trump administration can slap as much as $7.5 billion-worth of tariffs on EU merchandise would have a “unfavorable impression” on U.S. airways in addition to U.S. jobs, suppliers, and air vacationers.

He says “your entire international trade shall be harmed.”

Faury says “near 40%” of Airbus’ aircraft-related procurement comes from U.S. suppliers, supporting “275,000 American jobs in 40 states by way of spending that has totaled $50 billion within the final three years alone.”

———

4:15 p.m.

The European Union’s prime commerce official says the bloc would like to achieve a settlement with the USA and keep away from a tariff struggle over plane subsidies however that it’s going to reply ought to President Donald Trump impose new duties on EU merchandise.

After the World Commerce Group cleared Trump to take motion over unlawful EU subsidies to plane-maker Airbus, EU Commerce Commissioner Cecilia Malmstrom stated “our readiness to discover a truthful settlement stays unchanged.”

However Malmstrom warned that “if the U.S. decides to impose WTO approved countermeasures, it is going to be pushing the EU right into a scenario the place we may have no different possibility than to do the identical.”

The EU expects an analogous WTO ruling on U.S. subsidies to Boeing in coming months.

Malmstrom says a tariff struggle “would solely inflict harm on companies and residents on either side of the Atlantic, and hurt international commerce and the broader aviation trade at a delicate time.”

———

4:05 p.m.

The World Commerce Group says the USA can impose tariffs on as much as $7.5 billion value of products from the European Union as retaliation for unlawful subsidies to European plane-maker Airbus — a file award from the commerce physique.

The transfer green-lights the Trump administration to slap countermeasures on the 28-member bloc and follows a WTO ruling in Could 2018 on the Airbus subsidies.

Wednesday’s award does not finish the long-running trans-Atlantic dispute over plane: WTO arbitrators are anticipated to rule subsequent 12 months on how a lot the EU can impose in tariffs following a separate choice that went in opposition to Boeing.

The U.S. has already introduced plans to impose tariffs on EU cheeses, olives, whiskey, in addition to plane and plane elements. Wednesday’s choice might require fine-tuning of that listing.

———

1:30 p.m.

The European Union is interesting to U.S. President Donald Trump to keep away from any tit-for-tat tariff struggle as world commerce’s governing physique prepares to subject a ruling that might permit him to impose billions in duties on EU produce.

The World Commerce Group dominated in Could that Europe illegally sponsored planemaker Airbus, hurting U.S. competitor Boeing. The EU received an analogous WTO case accusing the U.S. of illegally subsidizing Boeing, however a ruling permitting potential retaliation remains to be months off.

European Fee spokeswoman Mina Andreeva stated Wednesday that “we must always keep away from imposing tariffs on each other.”

She says “we’re nonetheless prepared and keen to discover a truthful settlement, but when the U.S. decides to impose approved countermeasures, the EU will do the identical.”

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China to elevate punitive tariffs on US soybeans, pork

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China will elevate punitive tariffs imposed on U.S. soybeans and pork in a commerce warfare with Washington, a state information company stated Friday, including to conciliatory gestures by the 2 sides forward of negotiations.

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China will droop tariff hikes on soybeans, pork and another farm items, the Xinhua Information Company stated, citing the Cupboard planning company and the Commerce Ministry. Beijing “helps home firms in buying a specific amount of U.S. farm produce,” it stated, however it gave no particulars.

The transfer follows President Donald Trump’s determination Wednesday to postpone a deliberate Oct. 1 tariff hike on Chinese language imports to Oct. 15.

Hopes are rising that the 2 sides may defuse the extended dispute that’s threatening world financial progress. However there was no signal of progress on the principle points of their sprawling battle over commerce and know-how.

Beijing’s determination to revive entry to low-cost U.S. soybeans additionally would assist Chinese language pig farmers who use soy as animal feed. They’re reeling from an epidemic of African swine fever that has precipitated pork costs to soar.

Telephone calls to the commerce and finance ministries weren’t answered on Friday, a nationwide vacation in China.

“China has an enormous market, and the prospects for importing high-quality U.S. farm produce are broad,” Xinhua stated. “China hopes the USA shall be true to its phrase, make progress on its commitments and create favorable circumstances for bilateral agricultural cooperation.”

Beijing imposed 25% tariffs on American farm items final 12 months in response to Trump’s tariff hikes on Chinese language items. Importers have been ordered to cease shopping for soybeans, the largest U.S. export to China.

China focused farm items, hurting rural areas that supported Trump within the 2016 presidential election.

Secretary Steven Mnuchin known as Wednesday’s tariff delay by Trump a “goodwill gesture to the Chinese language.”

The Commerce Ministry stated Thursday importers have been asking American suppliers for costs of soybeans and pork. It gave no indication whether or not they deliberate to put orders.

Washington needs Beijing to roll again plans for state-led growth of leaders in robotics and different applied sciences. The US, Europe and different buying and selling companions argue these violate China’s free-trade commitments.

Some American officers fear they’ll erode U.S. industrial management.

Negotiations broke down in Could over implement any deal. Beijing says Trump’s tariff hikes have to be lifted as quickly as an settlement takes impact. Washington needs to maintain some in place to make sure Chinese language compliance.

Trump and Chinese language President Xi Jinping agreed in June to renew talks however the final spherical in Shanghai in July produced no progress.

Chinese language negotiators are as a consequence of fly to Washington in early October to fulfill with Mnuchin and U.S. Commerce Consultant Robert Lighthizer, in accordance with the treasury secretary. He stated mid-level U.S. and Chinese language officers have been as a consequence of meet subsequent week or the next week to arrange.

By delaying his tariff hike, Trump allowed for the likelihood the talks may make sufficient progress to avert the rise indefinitely. Nevertheless, economists say a closing settlement is unlikely this 12 months.

Tariff hikes by each side on billions of {dollars} of products have disrupted enterprise for farms and factories in each international locations, weighing on world financial progress.

China’s announcement Friday additionally fine-tunes commerce penalties to cut back injury to its personal economic system at a time of slowing progress.

Lack of entry to American soybeans pushed up prices for Chinese language pig farmers after African swine fever precipitated the lack of greater than 1 million pigs and disrupted provides of China’s staple meat, inflicting costs to soar.

Authorities have informed soybean importers to seek out new sources however the USA is the largest and lowest-cost exporter. Patrons want to Brazil and Argentina however their output can’t fill the entire hole and their costs are larger.

On Wednesday, Beijing introduced exemptions from punitive duties for 16 classes of American merchandise.

The Chinese language exemptions apply to uncooked supplies wanted by farmers and factories and a few medicines.

The Commerce Ministry stated Thursday that exemptions have been granted if no different suppliers may very well be discovered or the rise would damage Chinese language trade or the economic system.

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The Newest: Retailers say name to exit China ‘unrealistic’

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The Newest on the escalating commerce warfare between the U.S. and China, the world’s two largest economies (all occasions native):

2:30 p.m.

The nation’s largest retail commerce group says that it will be unrealistic for U.S. retailers to exit China.

The Nationwide Retail Federation made its remark in response to President Donald Trump’s name Friday for U.S. companies with operations in China to search for options, as commerce tensions between the world’s two largest economies intensified.

The NRF famous that its members have lengthy been diversifying their provide chains however discovering options to China can be expensive and take years.

“It’s unrealistic for American retailers to maneuver out of the world’s second largest financial system,” mentioned NRF Senior Vice President of Authorities Relations David French. He famous that retailers’ presence in China permits them to succeed in Chinese language clients and likewise develop abroad markets.

“This, in flip, permits us to develop and broaden alternatives for American employees, companies and customers,” French mentioned in a ready assertion.

———

1:55 p.m.

Small enterprise homeowners are baffled by President Donald Trump’s suggestion that each one U.S. companies with operations in China discover another.

Trump lashed out at Beijing Friday after it introduced retaliatory tariffs on $75 billion in U.S. merchandise.

Peter Horwitz, the proprietor of Tiger Packaging, a paper and plastic merchandise provider based mostly in Boca Raton, Florida, says there are provides that he can get solely in China, like vinyl gloves.

He says we’re dwelling in a world financial system and it makes unhealthy enterprise sense to chop out the world’s second largest financial system in China.

—————

1:35 p.m.

The U.S. Chamber of Commerce is urging the Trump administration and Beijing to return to the negotiating desk with commerce tensions escalating quickly.

China on Friday mentioned that it was placing into place tariffs on $75 billion in U.S. merchandise in retaliation for the Trump administration’s newest deliberate tariff hikes.

President Donald Trump lashed out at China and on Twitter is urging U.S. corporations to contemplate an alternative choice to doing enterprise in China.

The enterprise group mentioned, “We don’t wish to see an additional deterioration of US-China relations. We urge the administration and the federal government of China to return to the negotiating desk to finish an settlement that addresses considerations over know-how switch practices, mental property enforcement, market entry, and the globally damaging impression of Chinese language home subsidies.”

—————

11:46 a.m.

Shares are falling sharply on Wall Road after President Donald Trump mentioned he would reply to China’s newest tariff improve and known as on U.S. corporations to contemplate options to doing enterprise in China.

Trump on Friday additionally ordered UPS, Federal Specific and Amazon to dam any deliveries from China of the highly effective opiod drug fentanyl.

The Dow Jones Industrial Common sank greater than 300 factors after the president made the bulletins on Twitter.

The shares of all three corporations the president talked about additionally dropped as merchants tried to know what the implications for them had been.

Shares had been wavering between positive aspects and losses earlier after China mentioned it will retaliate in opposition to the most recent spherical of tariffs imposed by Washington with duties on $75 billion of U.S. merchandise.

—————

11:30 a.m

President Donald Trump says he desires U.S. corporations with operations in China to start on the lookout for options in response to retaliatory tariffs from Beijing.

Trump on Friday mentioned that he’ll reply in hours to an announcement Friday that China was retaliating to U.S. tariffs with a slate of its personal protecting measures.

Trump can be ordering Fed Ex, Amazon, UPS and the united statesPostal Service to start trying to find fentanyl in all packages from China.

Early on Friday, China mentioned it will put into place tariffs on $75 billion in U.S. merchandise in retaliation for the Trump administration’s newest deliberate tariff hikes.

—————

10:10 a.m.

China is placing into place tariffs on $75 billion in U.S. merchandise in retaliation for the Trump administration’s newest deliberate tariff hikes.

China mentioned Friday that it’ll additionally improve import duties on U.S.-made autos and auto components. The retaliation pulled world markets into damaging territory

Tariffs of 10% and 5% will take impact on two batches of products on Sept. 1 and Dec. 15. Beijing gave no particulars of what items can be affected however the timing matches Trump’s deliberate hikes.

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Apple Inventory Faces Dangers from the Commerce Conflict and Fading iPhone Gross sales

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Apple

bulls swooned final week over the corporate’s better-than-expected reported earnings. All it took was a return to income progress after two quarters of declines. The definition of success has modified for the iPhone maker, which spent a decade rising gross sales greater than 20% a 12 months on common.

A return to gross sales progress within the newest quarter was an vital inflection level for Apple (ticker: AAPL), however the negativity might return as traders dig into the underlying realities.

On Tuesday, Apple reported June-quarter income of $53.eight billion, up 1% 12 months over 12 months and above the consensus forecast of $53.three billion. Earnings per share have been $2.18, down from $2.34 the prior 12 months however increased than the $2.09 common analyst estimate. The shares rose 2% the next day, with a number of analysts elevating their Apple inventory worth targets.

The upside got here from stunning areas. Gross sales from the Mac enterprise beat Wall Road’s estimate by about $400 million, whereas the Wearables, Dwelling, and Equipment operation crushed estimates by $700 million. That section contains the Apple Watch and AirPods. Whereas the tech large doesn’t disclose gross sales within the section, Prepare dinner did say final week that wearables grew “properly over 50%” within the quarter. AirPods gross sales in all probability benefited from a revised model launched in late March.

However traders ought to be cautious in evaluating the shifting narrative. The long-term driver of Apple shares has been pleasure in regards to the firm’s providers companies. The inventory transfer is evident on that: Apple is up practically 30% this 12 months, at the same time as iPhone gross sales have declined markedly.

The inventory now trades at 16.four instances projected earnings for the subsequent 12 months, properly above its five-year common of 13.7 and close to a five-year peak of 17.7. Buyers have been paying up for the inventory on the concept Apple is transferring away from its {hardware} focus towards a extra predictable services- and software-driven mannequin.

The issue is that Apple’s providers enterprise stays a query mark and will nonetheless disappoint. The section really missed analyst estimates by $200 million within the June quarter, with gross sales up 13% 12 months over 12 months, versus 16% within the prior quarter.

Furthermore, KeyBanc Capital Markets Andy Hargreaves expects Apple’s providers progress fee to subside over the subsequent 12 months. “Providers enterprise is tied to progress within the person base,” he says. “And the person base is certainly decelerating.”

The dynamic places much more stress on Apple’s subsequent wave of providers, anticipated to be launched by the tip of the 12 months, together with Apple TV+ (video subscription), Apple Arcade (gaming subscription), and Apple Card (bank card). In every space, Apple is becoming a member of a crowded subject. “What Apple is providing just isn’t going to be higher than what’s available in the market,” Hargreaves says.

Amid the joy about wearables, iPhone gross sales got here in beneath expectations for the quarter. The iPhone’s income of $26 billion missed the Road consensus by $300 million, with gross sales down 12% 12 months over 12 months. IPhone unit gross sales, which Apple now not discloses, would possibly look even worse. IDC estimates that iPhone unit shipments have been down 18% 12 months over 12 months within the quarter, the worst exhibiting among the many prime 5 international smartphone makers. Apple didn’t reply to a request for touch upon IDC’s knowledge.

“The core controversy of normalized iPhone progress stays unresolved,” Bernstein analyst Toni Sacconaghi wrote on Wednesday. “We remind traders that iPhones are nonetheless down, [and] huge questions on substitute cycles [are] nonetheless excellent.”

Apple’s new iPhone lineup, due this fall, is unlikely to vary the story considerably. “This [coming] cycle, I consider, might be difficult, as I’m not anticipating dramatically new designs,” Patrick Moorhead, principal analyst at Moor Insights & Technique, wrote in an e mail.

After which there’s commerce. Apple is arguably extra uncovered to China than some other giant U.S. tech agency.

On the latest earnings name, CEO Tim Prepare dinner downplayed reviews that the corporate is transferring manufacturing out of China, the place it largely manufactures its merchandise, to keep away from potential tariffs. “There was loads of hypothesis across the subject,” he mentioned. “I wouldn’t put loads of inventory into these.”

Apple is clearly anxious about tariffs, nonetheless. In June, it despatched a letter to U.S. Commerce Consultant Robert Lighthizer, noting that the subsequent spherical of proposed tariffs would harm it as a result of it might cowl all of Apple’s main merchandise, together with the iPhone, iPad, Mac, and AirPods. “We urge the U.S. authorities to not impose tariffs on these merchandise,” Apple wrote. “U.S. tariffs would additionally weigh on Apple’s international competitiveness.”

The letter wasn’t convincing sufficient. On Thursday, President Donald Trump introduced plans to impose a 10% tariff on Sept. 1 overlaying $300 billion in imports from China—together with Apple’s key merchandise. Investor response was swift; Apple closed down 2% on Thursday and one other 2% on Friday, to $204.02.

Whereas the newest tariffs could be a negotiating tactic, any chance of commerce levies doesn’t appear mirrored in Apple inventory.

So the place do Apple shares go from right here?

In early January, a number of days after the corporate had issued a gross sales warning and with its inventory reeling, we mentioned the pessimism had gone too far, arguing that the shares might rise 30%, to $194. The bullish name proved right, with the inventory hitting that mark in March.

From there, we warned that the inventory’s 2019 features might fade as traders returned their give attention to the declining iPhone gross sales. Our view hasn’t modified. Apple is richly priced, simply as circumstances appear to be deteriorating. 

Write to Tae Kim at tae.kim@barrons.com

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Apple’s inventory takes a ‘intestine punch’ from Trump’s tariff menace

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Shares of Apple Inc. sank once more Friday, as President Trump’s plan for brand new tariffs on China-made items provides a conundrum to the know-how large, which has to resolve whether or not to eat the additional prices or go them on to customers.

Both method, Wall Avenue analysts say the end result is more likely to be unhealthy for earnings and iPhone demand, to not point out buyers.

The inventory












AAPL, -1.99%










dropped 2.4% in afternoon buying and selling, after shedding 2.2% on Thursday instantly after Trump tweeted his tariff plan.

It has now misplaced 4.6%, or $44.Zero billion in market capitalization, for the reason that inventory closed Wednesday at a nine-month excessive after a fiscal third-quarter earnings beat and upbeat steerage. In the meantime, the Dow Jones Industrial Common












DJIA, -0.60%










 was down 250 factors in afternoon buying and selling Friday, after falling 281 factors on Thursday. See Market Snapshot.

Analyst Dan Ives at Wedbush stated the tariff information is “a transparent intestine punch” to Apple, because it brings again a “darkish cloud” over the outlook for iPhone demand and for buyers.

“After [Chief Executive] Prepare dinner & Co. have navigated vital noise and headwinds the very last thing the bulls wished to see…was this information from the Trump administration as Apple is clearly caught within the crossfires between D.C. and Beijing,” Ives wrote in a notice to purchasers.

Don’t miss: Trumps ramps up China commerce struggle as he heads to Ohio rally.

Ives stated if Apple decides to soak up the added prices, it could scale back fiscal 2020 earnings per share by about 4%, which based mostly on the FactSet 2020 EPS consensus of $12.67, can be about 51 cents a share. With 4.52 billion Apple shares excellent as of July 19, that might signify about $2.29 billion.

If Apple chooses to go the 10% tariff alongside to customers by elevating costs, Ives believes it is going to scale back iPhone demand by about 6 million to eight million iPhones within the U.S.

Even when Apple tries to keep away from the tariffs by transferring iPhone manufacturing out of China, Ives estimates that the corporate would seemingly solely be capable of transfer 5% to 7% to India and/or Vietnam over the subsequent 18 to 24 months.

“Whereas many U.S. corporations are impacted by this newest commerce pressure, the ‘poster little one’ for the U.S.-China ‘UFC’ commerce battle continues to be Apple within the eyes of the Avenue, with fears working rampant that these newest tariffs might considerably improve the price of iPhones globally and have a serious unfavorable impression on Avenue numbers throughout the board,” Ives wrote.

See associated: New Trump tariffs threaten U.S. shopper, spelling wider hassle for shares, analysts say.

The analyst reiterated his outperform score, saying exterior of the near-term impression on the inventory worth he believes the impression on manufacturing and price will increase are containable. His $245 inventory worth goal is about 20% above present ranges.

Financial institution of America Merrill Lynch analyst Wamsi Mohan’s “again of the envelope math” relating to the tariff impression included a extra dire state of affairs.

Assuming expectations that Apple would have bought 50 million iPhones within the U.S. in fiscal 2020, Mohan offered two attainable situations:

If Apple decides to not take up the upper prices from the tariffs, and due to this fact will increase iPhone costs by roughly 10%, he believes there could possibly be a 20% hit to demand, which might equate to about 10 million iPhones. Since every million iPhones bought is valued at roughly 30 cents a share to earnings, that lowered demand might reduce fiscal 2020 EPS by 30 cents. Add within the decrease demand for Apple’s different merchandise, the hit to earnings could possibly be 50 cents a share, or $2.26 billion.

If Apple absorbs your complete blow from tariffs, Mohan stated he expects a fiscal 2020 EPS headwind of 50 cents on 50 million iPhones alone. Including within the estimated impacts on different services, he estimates the full EPS impression to be 75 cents, or roughly $3.39 billion.

Additionally learn: Opinion: Tech-spending alarms are ringing amid Trump’s newest China-trade volley.

However even at $3.Four billion, that represents simply 5.9% of anticipated earnings subsequent yr. Mohan stated that shouldn’t concern buyers an excessive amount of given expectations that progress in Apple’s companies enterprise will speed up.

“Within the broader context of the tailwinds that [Apple] has, we view this as a comparatively small quantity over the subsequent a number of quarters and would use the pullback as an particularly enticing alternative to purchase shares of Apple,” Mohan wrote.



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World shares larger, Korean Kospi falls after missile launch

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World shares are principally larger as traders look ahead to coverage strikes by the European Central Financial institution. The beneficial properties observe report excessive closes for the S&P 500 and Nasdaq in a single day.

South Korea’s Kospi declined, nonetheless, after rival North Korea launched two brief vary missiles into the ocean.

The missiles fired early Thursday have been the primary weapons launches in additional than two months and an obvious tactic to strain Washington as North Korean and U.S. officers wrestle to restart nuclear negotiations.

The ECB, which units rates of interest for the 19 international locations that use the euro, is assembly Thursday to debate how you can greatest help development because the area faces a doable departure of Britain from the EU and different uncertainties.

It’s anticipated by many analysts to a minimum of tweak its promise to maintain rates of interest at rock-bottom ranges into subsequent yr. However a price reduce is feasible, even with one of many price benchmarks already beneath zero.

In Asia, Japan’s Nikkei 225 index added 0.2% to 21,756.55 whereas the Kospi misplaced 0.4% to 2,074.48. In Hong Kong, the Hold Seng gained 0.3% to 28,594.30. The Shanghai Composite index climbed 0.5%, to 2,937.36. Australia’s S&P ASX 200 superior 0.6% to six,818.00. India’s Sensex edged 0.2% larger to 37,911.43. Shares additionally rose in Taiwan and Southeast Asia.

Regionwide, sentiment acquired a lift from information that the U.S. and China plan to renew commerce talks subsequent week, this time within the industrial hub of Shanghai.

The White Home mentioned the talks will cowl a spread of points, together with mental property, pressured expertise transfers, non-tariff limitations, agriculture, the U.S.-China commerce deficit and enforcement.

The tariff battle between Washington and Beijing has disrupted commerce and forged a pall over the financial outlook for Asia and past. Talks collapsed in early Could, with President Donald Trump ordering an extra enhance in punitive import duties. Trump and Chinese language President Xi Jinping agreed to work to renew negotiations in late June.

In any other case, there was little in the best way of latest developments to drive buying and selling, with many traders awaiting coverage bulletins by the European Central Financial institution later within the day and from the Federal Reserve and Financial institution of Japan later within the month.

“The principle subject going through coverage makers is that now a few of their actions didn’t bear the anticipated fruit and economies lie close to recession regardless of exhausting their financial coverage toolkit,” Alfonso Esparza of Oanda mentioned in a commentary.

ENERGY: Benchmark crude oil added 38 cents to $56.26 per barrel in digital buying and selling on the New York Mercantile Change. It fell 89 cents to settle at $55.88 a barrel on Wednesday. Brent crude oil, the worldwide normal, picked up 48 cents to $63.66 per barrel. In a single day, it fell 65 cents to shut at $63.18 a barrel.

CURRENCIES: The greenback fell to 108.09 Japanese yen from 108.10 yen. The euro weakened to $1.1133 from $1.1142.

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