Could the trade skirmish set off by U.S. tariffs on Chinese imports lead to a full-blown trade war that might impact global growth?
Unfortunately, more people admit to binge drinking in these states than any other
12 марта Принцесса Элен Югославии вышла замуж за Станисласа Fougeron в гражданской церемонии в мэрии VIII округа Парижа .Это был 55-й день рождения принцессы.Принцесса Югославии Елена (р. 12 марта 1963 года) [дочь покойного принца Александра Югославского (1924-2016) и его первой жены, принцессы Марии Пии Савойской (род. 1934)] Станислас Fourgeron родился в 1975 году он сын Эрве Fougeron и Мари Кристин де Конни де Lafay.Религиозное бракосочетание пары состоится 15 сентября в городе Шато-де-Villeprévost, Tillay-Ле-Péneux.Ранее Элен была замужем за Тьерри Гаубертом (р.1951), от которого у нее трое детей: Милена (р. 8-7-1988), Настасья (р. 22-2-1991) и Леопольд (р. 19-7-1997). Ее старшая дочь вышла замуж за Джонатана Намиаса (р.1980) в прошлом году.Дочери принцессы Милена и Натасия не присутствовали на свадьбе, только сын. Среди гостей брат-близнец Елены принц Серж и его жена Элеонора, мать невесты принцесса Мария пия Савойская, её кузены принц Эммануэль Филиберто и принцесса Таня Бурбон-Пармская.Согласно LinkedIn, мистер Fourgeron работает в Xerox в Париже.Станислас Fougeron, Элен Югославии и ее сын Леопольд Гобер после свадьбы Мария-Пия Бурбон-Пармская и Принц Эммануэль Филиберто Савойский на свадьбе Элен Югославии и Станисласа Fougeron Элен Югославии и ее сын Леопольд Гобер до ее свадьбы с Станислас Fougeron Станислас Fougeron и Элен Югославии до свадьбы в Мэри Дю VIII 12 марта 2018Сергей Югославии и Элен Югославии после свадьбы Элен Югославии и Станисласа Fougeron Жанна д''Hauteserre, мэр мэрии в VIII округе (Р) поздравляет Станисласа Fougeron и Элен Югославии после их свадьбы в мэрии Принц Эммануэль Филиберто Савойский и Элен Югославии после свадьбы Элен Югославии и Станисласа Fougeron .Станислас Fougeron целует свою невесту Элен Югославии после их свадьбыTatiana of Bourbon-Parme, Eleonora Of Yugoslavia, Serge Of Yugoslavia, Stanislas Fougeron, Helene Of Yugoslavia and Maria-Pia de Bourbon-Parme pose together after the Wedding Of Helene Of Yugoslavia And Stanislas Fougeron At Mairie Du VIII On March 12, 2018 in Paris, France. (Photo by Luc Castel/Getty Images)Принцесса Элен и мистер Fougeron встречались с 2016 г.Источник:royalmusing blogspot
How 90 bottles of bourbon and 60 bottles of rum added up to Death & co's most popular spring drink last year, and notched over $50,000 in sales.
Trump’s Misunderstanding of Protectionism Michael Hudson Trump’s series of threats this week was a one-two punch. First, he threatened to impose national security tariffs on steel and aluminum, primarily against Canada and Mexico (along with Korea and Japan). Then, he suggested an alternative: He would exempt these countries IF they agree to certain U.S. demands.… The post Trump’s Misunderstanding of Protectionism — Michael Hudson appeared first on PaulCraigRoberts.org.
The beverage sector has long favored aluminum cans for being lighter, stronger and more easily recyclable than the alternatives, despite being up to three times more expensive than steel and twice more than PET. But the economics of the sector are changing, and soda producers such as Coca Cola are increasingly packaging their beverages in […] The post Will PET bottles change tastes of Japan’s aluminum can collectors? appeared first on The Barrel Blog.
Dalmore’s legendary master distiller, Richard Paterson, is at it again. This year, the distillery is releasing a super 45 Year Old aged in American white oak ex-bourbon casks and Port Colheita Pipes—in the heels of some exceptional releases in the past few years, including a mindblowing 50 Year Old.
This is a very interesting whiskey. It is an artful blend of bourbon and rye, combining the sweetness of a corn-based mash bill with the spiciness of rye. The smoothness reflects the influence of the port cask finish. The result is a creamy sipping whiskey that offers both nuance and complexity.
There’s never a wrong time to be drinking bourbon—or rye (or any kind of whiskey for that matter). But when Kentucky Derby Season rolls around, it’d be a shame to not be drinking the spirits that the Bluegrass State is known for.
After Gary Cohn demonstratively resigned from the Trump administration last week in advance of Donald Trump's announcement of tariffs of 25% on steel imports and 10% on aluminum, some analysts panicked that what was coming was nothing short of Smoot-Hawley 2.0. So far, it has turned out to be a tempest in Jamie Dimon's proverbial teapot, with Canada, Mexico and Australia already exempted, and most European allies working hard to obtain footnotes too. It is also worth noting that the announced tariffs cover only a very small share of US trade. The chart below from Goldman shows that the relevant steel and aluminum imports into the US constitute only 1.8% of total US goods imports and would raise the average US import tariff by 0.3%. The trading partners most affected are (potentially) Canada, Brazil, and South Africa; but even for Canada, the tariffs would only cover 2.9% of total goods exports. What is more notable, and explains the market's initial panicked reaction, is that the tariffs, coupled with wider talk of greater protection for industries, go against a broad historical trend towards more free trade. The average effective US tariff rate has declined from around 20% in the 1930s to only 1½% in recent times. It is the fact that Trump is going against this grain that has sparked global anger among trade partners, many of whom have vowed to retaliate to the US should they not be granted exemptions too. And while the threats have so far not been very specific, retaliation seems highly likely according to Goldman, which believes that tariffs on a number of US goods—including jeans, bourbon whiskey, and motorcycles—are likely. This is summarized in the Goldman table below, which lays out both who is most likely to retaliate and how severe the response is likely to be: It is what happens next that is most interesting. According to Goldman's Jan Hatzius, "the pure trade effects of the announced tariffs and the expected retaliation are likely to be very small. For example, using estimates from the literature we find that the announced tariffs will result in a 0.2% fall in US imports when Canada and Mexico are exempt, and 0.4% when they are included." But this, the Goldman economist notes, focuses narrowly on the trade effects and ignores the broader macro repercussions of protectionism. He adds that the macro costs would rise notably if the trade war escalates. A severe trade war—in which everyone imposes a tariff on everyone else—leads to higher world inflation, tighter monetary policy and slower growth. This drag is amplified if equity prices drop around the world: financial conditions provide an important channel for negative spillovers. Open economies with trade surpluses—such as the Euro area—are hit hardest in this scenario. Goldman envisions 4 scenarios of what could happen next, in terms of rising severity: US tariffs without retaliation. We round up the announced tariffs to 1% of total imports, partly because the Trump administration has already announced a few specific tariffs (e.g. on Canadian lumber) and partly because some further restrictions are likely even in a mild conflict scenario. We allow interest rate and the exchange rate to respond endogenously to the tariffs, but assume that equity prices remain unchanged. A US-focused trade war. We assume that the US tariffs lead to retaliation from trading partners and further US tariff increases. In this scenario we assume that tariffs on all trade to and from the US rise by 5pp. But we assume that trading partners do not put up tariffs between each other; for example, the EU and China both put up a tariff against US imports but do not erect trade barriers between each other. A global trade war. We assume that each country imposes a 5% tariff on everyone else. For example, the EU puts up a tariff against China in response to the US steel tariffs in an effort to prevent Chinese steel from flowing to Europe. A global trade war with a global equity sell-off. We assume that global equity markets drop by 10%, in addition to the global 5% tariff. Goldman's simulations of the impact of these 4 scenarios on the global economy are laid out below: Some further details on each scenario: First—so long as its trading partners do not retaliate—US import tariffs have small positive effects on US real GDP (scenario 1). The increase in import prices reduces imports, which boosts domestic production and hence GDP. The growth lift is enough to outweigh the negative effects from higher inflation, which leads to higher interest rates and a stronger dollar. If no retaliation is expected, the simulation highlights the US incentive for erecting tariffs. But it bears emphasizing that the effects are extremely small: US real GDP is around 0.01% stronger after one year and core inflation is 2bp higher. Second, everyone loses in a trade war (scenario 2). The effects are now negative for the US as the foreign tariffs slow US exports, inflation remains higher than in the no-tariff baseline, the Fed raises interest rates slightly more quickly in response and the dollar strengthens more. The retaliation of trading partners cushions the negative trade implications of the US tariffs, but growth is still lower due to higher interest rates. That said, the effects remain very small even for a 5% tariff on all trade from and to the US. The global cost of protectionism rises more notably if a severe trade war erupts, in which tariffs go up everywhere (scenario 3). Global inflation now rises somewhat more notably, which weighs on world consumer spending and forces central banks to raise interest rates. The dollar no longer appreciates in this scenario. Open economies and countries with trade surpluses are most adversely affected, especially Europe. This is consistent with our European team’s view that the Euro area has much to lose from a trade war. Third, the costs of a trade war rise further if risk asset markets fall (scenario 4). A drop in equity prices reinforces the negative effects of the trade war. As one would expect, the adverse market response has more severe consequences in countries with large equity markets, especially the US, and the dollar starts to weaken in this scenario. The chart below is a summary of the cascading effects of a global trade war. It decomposes the GDP effects in scenario 4 into the four transmission channels. Here's Goldman: We see that US tariffs (without retaliation) provide a small boost to the US, and are painful for Canada and Mexico given their large trade exposure to the US (dark blue bars). Retaliation hurts the US (making the net effect on output negative) but helps the trading partners, particularly Canada which has a trade deficit and large exposure to the US (light blue bars). An “all out” trade war (grey bars) is particularly painful for the surplus economies, including the Euro area, Japan and China. The 10% equity drop hurts everyone, but the DM economies more so than EM (green bars). Goldman concedes that for now its model of the world economy under trade war is "highly stylized", and as such it does not capture the microeconomic gains from free trade, including benefits for productive efficiency and productivity. Moreover, the estimated macro effects are subject to large uncertainties. On the one hand, our simulations might understate the true effects of a trade war because our model does not include adverse confidence, or financial stability effects. On the other hand, our model might overstate the effects of tariffs as we assume that the fiscal revenues from tariffs are not used to stimulate growth. Allowing governments to use the tariff revenues to expand government spending or cut taxes would cushion the tariff effects further. Nonetheless, Goldman can still conclude that the announced US tariffs and their expected retaliation "pose a modest risk to our optimistic outlook for the world economy. But the risk would rise sharply if a broad trade war erupted and financial conditions tightened in response." Incidentally, this is precisely what various Fed speakers said last week. Perversely, the adverse scenario may be precisely what Trump ordered: after all, with many forecasters predicting that Trump's fiscal stimulus will be the catalyst that sinks the market as it overheats the economy and forces the Fed to hike more than most expect, the one loophole would be a suddenly cautious Fed which decides that hiking rates is not so prudent if a major potential risk event is hiding just around the corner, keeping rates lower for longer and indefinitely delaying the worst-case scenario for markets. A risk event such as a global trade war.
WELCOME TO THE NEW CLASS WARFARE. The Democratic Party was once considered the home of working people. That changed as mainstream liberals of the 1960s such as Hubert Humphrey, John and Bobby Kennedy, and AFL-CIO leader George Meany were replaced by radicals and their ideological offspring. A key moment in that transition came during Barack […]
Sometimes a beer or wine won't cut it. For the days you need a little bit more than a standard beverage, try one of these strong alcoholic drinks.
As we pointed out yesterday, according to Deutsche Bank's Jim Reed who was commenting on the results of last weekend's Italian election, "it's hard to get away from the fact that the overall result was another resounding vote for populism. Indeed over 50% of votes submitted was for a populist party, including of course the party with the largest percentage - the Five Star Movement - and a possible kingmaker in subsequent coalition talks - the Northern League." Furthermore, as Deutsche Bank's populism index showed, the percentage of votes for populist parties on a population weighted basis was now around 32% - a level its largely held since the Trump inspired surge in 2016. In fact, you had to go all the way back to the WWII period to find the last time that populism had such support. A focus just on Europe showed that the continent with the high double-digit youth unemployment has become a hotbed for anti-establishment sentiment, which has everything to do with the economy, and lack of opportunities, and nothing to do with Russian operatives, much to Samantha Power's chagrin. Reid's troubling conclusion is that "it's hard to get away from the fact that populism is currently going through an explosion in support at present." Reid also notes that while the above index excludes a vote for Jeremy Corbyn's Labour party but "one could certainly argue that some of his more radical views and policies are populist in nature." And if DB were to include Corbyn's support in the 2017 UK General Election "then our index edges above 35%, eclipsing the 1940s highs, and to the highest since the turn of the 20th century." What are the implications: As of now the rise in populism hasn't yet destabilised markets however we find it difficult to get away from the fact that uncertainty levels are bound to remain high while such power brokers remain in major elections. Indeed the unpredictability of Trump's policies is such an example, with the recent tariff threats which have subsequently escalated market concerns about a trade war being one. At a time when global central banks are moving towards an unprecedented era of tightening and dealing with years of massive asset purchases, risks from rising populist support has the ability to seriously disturb the prevailing equilibrium of the last few years and subsequently markets. While Reid notes that this is more of a slow burning issue over the next few years, he concedes that populism remains the biggest threat "to the post-1980 globalisation/liberalism world order." * * * One day later, it was Bank of America's turn to opine on the topic of growing populism, which as chief equity strategist Savita Subramanian writes in a piece titled "From Globalism to looming trade war" is "gaining momentum around the world, exacerbated by mass population displacements and surging income inequality." She writes that "concerns over immigration, autonomy and global competition have played a role in political campaigns across the globe." In this context, the Trump administration’s latest announcement to levy tariffs on steel and aluminum imports is consistent with anti-globalist shifts seen in this presidency. Since Trump's inauguration, BofA sumamrizes, the US has also: imposed travel restrictions, withdrawn from the Paris Agreement on climate change, backed out of Trans-Pacific Partnership discussions, threatened to exit the North America Free Trade Agreement (NAFTA), and imposed tariffs on Canadian paper, imported washing machines and solar panels. So how did the US go from the paragon of globalization to the instigator of a looming trade war, and what happens next? The following 12 charts from BofA provide some context. 1. Natural disasters, violence and conflicts have led to a record number of persons being displaced. This has put pressure on other countries to absorb more immigrants, adding to social tensions. 2. Income and wealth inequality continues to rise globally. 3. While President Trump announced temporary tariff exemptions for Canada and Mexico, the implication was that permanent exemptions would be contingent on a successful renegotiation of NAFTA, which just wrapped up its seventh round of negotiations with agreement on just six of the 30 chapters. 4. EU is the US’s single-biggest trading partner. EU officials have called out US steel, bourbon, motorcycles, jeans and various food/agricultural products as likely targets for retaliation. 5. Aside from metal producers, the industries most impacted by the steel and aluminum tariffs appear to be Electric Equipment, Machinery, Miscellaneous Manufacturing and Autos. 6. Since 1983, the S&P 500 has been down following the announcement of a trade action 35% of the time in the first seven days, but just 20% of the time in the first 30 days 7. Large caps tend to outperform small caps following the announcements, but small caps tend to outperform once the tariffs are enacted. And in general, stocks tend to do better than bonds and commodities. 8. Tech has among the highest outperformance rates in the 30 days following the announcement, the implementation and the ending of trade actions. Industrials, Telecom and Materials have the worst track record. 9. Growth-At-a-Reasonable-Price (GARP) and Quality tend to do better, while Value and Growth perform in-line. 10. The S&P 500 derives 30% of its revenues from outside the US vs. 21% for the Russell 2000 small cap index. This explains the recent outperformance of small caps and further supports our tactically bullish view on small caps over large caps. 11. Tech has the highest foreign sales exposure and a globally integrated supply chain, making a trade war a key risk for the sector, particularly if the next round of trade actions are aimed at China. 12. BEA data suggests that imports represent 6% of total operating costs for US private industries. Using that as a proxy, we estimate the impact of a trade war that resulted in a 2% drag on foreign sales growth and a 15% rise in import costs would result in a 6% drag on earnings. Source: DB, BofA
The maker of Jack Daniel's Tennessee Whiskey is emerging as an unlikely opponent of President Trump's protectionist tilt. During a phone call with analysts on Wednesday, Paul Varga the chief executive of Brown-Forman Corp. confirmed that the European Union's threats of retaliatory tariffs against "distinctly American products" is rattling leaders of the American business community. Brown-Forman, the maker of Jack Daniels Tennessee Whiskey, could become "an unfortunate and unintended victim of the policy," Varga warned. "The overwhelming majority of our products are made here in America and over the last few years, I'd just cite, we've been investing heavily in our American manufacturing expansion." After Trump surprised markets by announcing his plans to impose the aluminum and steel tariffs late last week, the EU fired back on Monday by threatening to impose tariffs on (a relatively modest) €2.8 billion ($3.5 billion) of American goods, with Brussels aiming to apply a 25% tit-for-tat levy on a range of consumer, agricultural and steel products imported from the US. The list of targeted US goods includes motorcycles, jeans and bourbon whiskey, and was intended to send a political message to Washington about the potential domestic economic costs of making good on the president’s threat. As Bloomberg points out, Jack Daniel's anxieties are an example of how the tariffs could impact US industries that don't directly rely on imports of aluminum and steel. And as BBG reminds us, this isn’t the first time that the maker of Jack Daniel’s and Woodford Reserve bourbon has been pulled into the political fray. In 2014, the company found itself in the middle of a spat between the US and Russia. Varga assured analysts that his company is speaking up about the potential threat to its business. "It’s not new to Brown-Forman to periodically have things in the macroenvironment arise," Varga said. "We’re going to monitor the potential for retaliatory tariffs closely. And of course, we’re sharing our point of view in Washington, as well." In the meantime, Varga can hopefully take some comfort in the fact that, should a "hot" trade war erupt, the US is considerably less exposed than other G-10 economies, as the chart below shows:
The New York Public Library In a White House signing ceremony on Thursday, March 8, President Donald Trump announced he was imposing import tariffs of 25% on steel and 10% on aluminum. After invoking a rarely-used Cold War-era law last year, Commerce Secretary Wilbur Ross had spent nine months investigating whether imports of steel and aluminum posed a threat to American national security. Ross concluded imports were a threat, and he recommended Trump impose new restrictions covering an estimated $46.1 billion of imports, or about 2% of total U.S. goods imports in 2017. Just a week earlier, Trump had issued the surprise announcement that he was going to impose these tariffs on all trading partners. The tariffs would have eliminated an estimated $14.2 billion of foreign steel and aluminum from the American market. Tariffs would increase metal prices, thereby raising costs for downstream industries like auto and appliance manufacturers and making them less competitive. Indeed, the European appliance maker Electrolux reportedly shelved a $250 million investment in Tennessee because of the tariffs. These would be President Trump’s largest trade restrictions to date, swamping the imports covered by the levies he had slapped on solar panels and washing machines in January. Except Trump did not announce that he was imposing new tariffs on everyone after all. His announcement was full of not only exceptions, but threats, incentives, and uncertainty. In short, it was characteristic of his administration’s departure from a consistent rules-based approach to global affairs. His March 8 proclamations began with the news that Canada and Mexico were being excluded from the tariffs, “at least at this time.” And then, during his remarks, he left open the possibility of reversing course and imposing tariffs if the hemispheric partners did not renegotiate the terms of the North American Free Trade Agreement to his liking. As a result, there is no end in sight to the extraordinarily contentious NAFTA talks that Trump instigated last summer. Thus, whether Canada and Mexico are eventually hit remains a very important unknown – they are America’s first and fourth largest foreign suppliers of the metals, respectively. The law under which Trump has invoked the tariffs provides the President tremendous authority to make these sorts of changes quite arbitrarily, which means the President could change his mind and include Canada and Mexico in the tariffs. But this is not all. Trump’s two proclamations do not go into effect until March 23. And, in his remarks on Thursday, the President invited other trading partners – security allies in particular – to begin negotiating with U.S. Trade Representative Robert Lighthizer if they also wished to be excluded from the tariffs. Partners have every incentive to try; not only do Trump’s tariffs disadvantage them relative to U.S. companies, but the Canadian and Mexican exclusions mean allies are less competitive relative to steel and aluminum from all North America. Lighthizer heads next to Brussels to meet with European Commissioner for Trade Cecilia Malmström. The European Union was the second largest foreign source of U.S. steel and aluminum – after Canada – with imports at $7.3 billion in 2017. The EU has already lined up its retaliatory tariff response if hit with Trump’s tariffs – including taxes on U.S. exports of cranberries, blue jeans, and bourbon. Also scheduled to attend the Brussels meeting is Hiroshige Seko, the trade minister from Japan, another military ally of the U.S.. With Canada and Mexico exempted, Japan becomes the six largest U.S. source of steel and aluminum that could face Trump’s tariffs, at $1.8 billion in exports in 2017. South Korea elevates to the second biggest target at $2.9 billion. Trump may well use these tariffs to exert leverage and somehow adjust the terms of the six-year-old South Korea – U.S. Free Trade Agreement (KORUS). The irony is that Trump’s linking of trade and national security has thus far has ended up targeting more allies than foes. Trump’s tariffs will ultimately affect very few imports from China. That is because a legacy of earlier U.S. special tariffs – under antidumping and anti-subsidy trade laws rather than national security exemptions – implies that the U.S. currently imports very little steel and aluminum from China directly. China is the source of only about 6% of U.S. imports of those products. This is all despite the fact that the well-acknowledged source of concern for the steel and aluminum industries is excess global capacity. And much of that has been pinned on China, which increased its share from less than a third in 2005 to roughly half of world global steel capacity today. After only a year in office, Trump has introduced major changes to the course of American trade policy. The imposition of U.S. tariffs under this national security law is among the most controversial trade policy moves in decades. But Thursday’s tariff announcement is far from the end of this story. Trump has now made an even larger statement by tying these tariffs to the NAFTA talks, security alliances, and existing trade relations with traditional American partners. The revelations at Thursday’s announcement were just the latest Trump movement away from a predictable, rules-based approach to American trade policy.
The protectionist trade policy also threatens jobs in industries from Kentucky bourbon to Wisconsin cranberries.
Canada and Mexico will initially be excluded from the tariffs, which go into effect in 15 days.
We have selected four stocks that should head higher despite what plays out in the geopolitical space in the wake of Cohn's resignation