Citizen Cartwright

U.S.-China tariff deal still means higher tariffs and uncertainty

The agreement Monday to cut tariffs between the two countries 115 percent — reducing U.S. tariffs on China to 30 percent and China’s on U.S. goods to 10 percent — “leaves tariffs higher than before Trump started ramping them up last month. And businesses and investors must contend with uncertainty about whether the truce will last,” says The Associated Press.

The deal lasts 90 days, to give time for U.S. and Chinese negotiators to reach a more substantive agreement. 

But Wendy Cutler, vice president of the Asia Society Policy Institute, says three months is “an extremely short amount of time to address the range of contentious trade matters that remain between the U.S. and China, including dealing with excess manufacturing capacity, excessive subsidization of Chinese firms and transshipment efforts by Chinese companies. Similar negotiations typically take well over one year.”

Gene Seroka, executive director of the Port of Los Angeles, says 90 days is also a relatively brief time frame for companies to try to restart stopped shipments from China, given how long it can take to book space on cargo ships and move products by sea, The New York Times reports.

Many businesses delayed or canceled orders after President Trump put the 145 percent tariff on items made in China last month. Now they’re worried that a mad scramble to get goods on ships will lead to bottlenecks and increased shipping costs, says a separate AP article.

Marc Rosenberg, founder and CEO of The Edge Desk in Deerfield, Ill., invested millions of dollars to develop a line of $1,000 ergonomic chairs but delayed production in China that was to begin this month, hoping for a tariff reprieve.

Rosenberg says it's good that U.S.-China trade talks are ongoing but that he thinks the 90-day window is “beyond dangerous” since shipping delays could result in his chairs still being en route when the temporary deal ends.

“There needs to be a plan in place that lasts a year or two so people can plan,” he says.

Good news on malaria prevention, brain microrobots, violets for a landfill

As usual, I hope you’ll have time to scan the many items of good news that are free in our Fix the News edition for this week.

Among the items behind the paywall:

— Insecticide-treated malaria nets have helped prevent more than 2 billion cases and nearly 13 million deaths since 2000, says the World Health Organization. 

— The French startup Robeauté is developing microrobots the size of a grain of rice that can navigate inside the brain, delivering targeted treatments and collecting samples without invasive surgery, reports the online publication EU-Startups.com. 

— Staten Island's Freshkills Park, once the world's largest landfill, is planting 50,000 native violets to attract monarch butterflies and bees, says SILive.com. 

What consumers can expect amid China tariffs

"Trade experts say that companies have stockpiled enough inventory in recent months that, if the White House reverses course soon and significantly drops tariffs on China, much of the pain for the U.S. economy and consumers can be avoided," The New York Times reports.

Data from the Institute for Supply Management shows U.S. inventories at their highest level in more than two years.

Many firms say tariffs above 50 percent on Chinese imports are enough to stop trade entirely, the Times says. With tariffs now at a minimum of 145 percent, and in some cases much higher, that would mean the Trump administration likely would have to drop its China tariffs by at least 100 percentage points to meaningfully restart the flow of goods, says the Times.

The reason consumers haven’t felt many effects of tariffs yet is because it takes 20 to 40 days for a container ship to travel across the Pacific Ocean. Last month, the number of container ships departing China for the United States dropped by about a third, says the Times.

Then it takes another one to 10 days for Chinese goods to make their way by train or truck to various cities around the country, economists at Apollo Global Management said in a recent report. 

That means the higher tariffs on China that went into effect at the beginning of April have just started to result in a drop in the number of ships arriving at American ports.

By late this month or early June, consumers could start to see some empty shelves, with layoffs for retailers and logistics industries.

Also, on May 2, the Trump administration eliminated a loophole that had enabled Americans to buy goods directly from China without paying tariffs if the package was worth less than $800.

So American shoppers are seeing higher prices when they check out at Amazon, Shein and Temu, and Chinese exporters are scrambling to find buyers outside the United States.  

Here is a Times article on the effects of the tariffs on China’s factories and workers. 

Here is a Q-and-A on packages worth less than $800, from Wired.

Australia, like Canada, says no to Trumpism

In elections five days apart, centrists in both countries saw their fortunes revived, as parties that had borrowed from the MAGA playbook lost, says a New York Times analysis.

Canadians on April 28 gave the left-leaning Liberal Party a fourth term in office, after the party trailed badly in the polls at the beginning of the year. Canadians embraced the tough-talking approach of Prime Minister Mark Carney, a former central banker, while shying away from the conservative candidate, Pierre Poilievre, who was viewed as being too similar to Trump, says The Wall Street Journal.

A similar dynamic played out in Australia’s election on Saturday. Prime Minister Anthony Albanese was down in the polls at the start of the year, though by a narrower margin than Canada’s Liberals. As the election grew closer, the polls flipped. Much of the campaign centered on how best to address the high cost of living, inflation and affordable housing, but Albanese and his main conservative opponent, Peter Dutton, also sparred frequently over who could best negotiate with Trump, the WSJ says.

Australians also watched with alarm as the balance of their mandated retirement accounts fluctuated wildly with the markets in reaction to Trump’s policy announcements, says a second Times analysis.

“The Trump tariff decisions that were seen as mad by Australians, that really accelerated the process of people looking at Dutton, and at Trump, and going, ‘No,’” says Chris Wallace, a professor of political history at the University of Canberra. “It’s a victory for sensible, centrist politics.”

Australians’ repudiation of Dutton and the campaign he waged was most apparent in his defeat in the parliamentary seat he had held for 24 years, says the Times. And that was another parallel with Canada’s election, in which Conservative leader Pierre Poilievre lost the parliamentary seat he'd held for 20 years.

Trump’s crypto conflicts

The president's return to the White House “has opened lucrative new pathways for him to cash in on his power, whether through his social media company or new overseas real estate deals. But none of the Trump family’s other business endeavors pose conflicts of interest that compare to those that have emerged since the birth of World Liberty,” says The New York Times.

World Liberty, “has erased centuries-old presidential norms, eviscerating the boundary between private enterprise and government policy in a manner without precedent in modern American history,” the Times says.

A Trump business entity owns 60 percent of World Liberty, according to the company’s website, and is entitled to 75 percent of some revenue from coin sales, which could be converted into cash, the Times says.

“It’s one of the more successful things we’ve ever done,” Eric Trump, the president’s son who runs the family business, told the Times.

Trump now is not only a major crypto dealer; he's also the industry’s top policy maker, the Times says.

The range of conflicts of interest amid “World Liberty’s rapid ascent from fledgling startup to international force” include, according to the Times:

— World Liberty has directly benefited from Trump’s official actions, such as his announcement of a federal crypto stockpile that would include a digital currency the company has invested in.

— World Liberty has sold its cryptocurrency to investors overseas, including in Israel and Hong Kong, according to interviews and data obtained by the Times, creating a new way for foreign businesses to try to curry favor with Trump.

— Several investors in World Liberty’s coin managed companies that the federal government accused of wrongdoing.

— World Liberty proposed swapping cryptocurrencies with at least five start-ups, and often used the Trump name to solicit large payments as part of the deals. “Even in an industry with a disreputable history, the deals raised alarm among veteran executives,” the Times says.

Canada’s election surprise after surprise aggression from U.S.

In elections on Monday, "Mark Carney achieved what seemed like an impossible feat just a few months ago, leading the Liberals to another victory after an election that was shaped by U.S. President Donald Trump's trade war and threats of annexation," says CBC News, Canada’s public broadcaster.

"It is a stunning political turnaround for a party who were widely considered dead and buried just a few months ago," says BBC News.

"The Liberals looked headed for a crushing defeat until the American president started attacking Canada’s economy and threatening its sovereignty, suggesting it should become the 51st state," says The Associated Press.

At the beginning of this year, Carney was a former central banker with no experience as a politician, says BBC News. By mid-March, he was being sworn in as prime minister — the first to never have held elected public office — after a resounding win in the Liberal leadership race.

Carney tried to define himself as a steady, mature outsider who's best to deal with the unpredictable president and map out a new economic and security relationship, says CBC News. Heading into the campaign, Carney didn't have a seat in the House of Commons. That changed on Monday as CBC News projected he's won the Ottawa riding (parliamentary seat) of Nepean.

During the campaign, Carney pointed to his time as the governor of the Bank of Canada during the 2008 global financial crisis and head of the Bank of England during the Brexit years as evidence that Canadians should trust him to steer the country's economy through turbulent times, CBC News says.

For the Conservative leader, Pierre Poilievre, the party’s stinging defeat was compounded by the fact that he lost his parliamentary seat, which he'd held continuously for 20 years, to the Liberal candidate, says The New York Times.

It's not yet clear if the Liberals — who’ve been in power for almost a decade — will be able to secure a majority in Parliament as election results continue to come in. If they don’t win a majority, the Liberals may need to rely on one of the smaller parties to stay in power and pass legislation. The Bloc Québécois, which seems set to finish third, is a separatist party from French-speaking Quebec that seeks independence from Canada, says AP. The Liberals relied on the New Democrats to stay in power for four years, but that progressive party did poorly on Monday and its leader, Jagmeet Singh, said he was stepping down after eight years in charge.

Trump’s latest proposal for Ukraine

The president and his top aides demanded on Wednesday that Ukraine accede to a U.S.-designed proposal that would essentially grant Russia all the territory it's gained in the war, while offering Ukraine only vague security assurances, says The New York Times.

The plan, which also would explicitly block Ukraine from ever joining NATO, was rejected by Ukraine President Zelensky.

It isn't clear whether the U.S. announcements are part of a pressure campaign to force Zelensky to make territorial concessions or whether they're intended to create a pretext for abandoning U.S. support for Ukraine, the Times says.

Vice President Vance said while traveling in India that the United States would “walk away” from the peace process if both Ukraine and Russia refused to accept the American terms. But Zelensky clearly was the target, says the Times.

European allies, who in recent weeks have been promising more military and economic support for Zelensky, have said Trump is essentially switching sides in the war, and that his real goal is to cast Ukraine aside and to find a way to normalize American relations with Russia. Trump and his top aides already have started discussing the prospect of lifting sanctions on Russia and entering energy and mineral deals with Russian President Putin, the Times says.

Whatever Trump’s motives, what happened Wednesday signaled the possible abandonment of the American commitment to Zelensky that the United States never would engage in talks that excluded the country from determining its own fate, the Times says.

The United States didn't release a text of its proposal, but European officials who've seen it say that under its terms the United States would recognize Crimea — which Russia seized illegally in 2014 — as Russian territory. Crimea was part of Russia for hundreds of years, but it was given to Ukraine by Soviet leader Nikita Khrushchev nearly seven decades ago, the Times says.

Here is a detailed rundown from historian Heather Cox Richardson.

What Americans can do to avoid authoritarianism

Twenty years ago, Garry Kasparov, world chess champion from 1985-2000, retired from professional chess to help Russia resist what he calls Vladimir Putin’s "budding dictatorship."

Now, he writes in The Atlantic, "Putin is still in the Kremlin, and I’m writing this from New York City — my family has made its home there, as well as in Croatia, since we were forced to leave Russia in 2013."

And "President Donald Trump and his allies in power are trying to erect an authoritarian Mafia state like the one Vladimir Putin and his cronies established in Russia," he says.

"Never lose sight of the fact that the Trump administration’s aim is to weaken and devalue the machinery of government, on one hand, and privatize the levers of power on the other," Kasparov says.

Americans have a "well-stocked toolbox" with which to defend democratic institutions, he says: a free press, strong economy, separation of powers, and federalism (power shared by the national government and the states).

So "political pressure must be brought to bear — through the courts, the press, and the states, but also applied to legislators," he says.

"Americans should invest their time and money fighting in the arena where political power still lies: with the American people and in Washington, D.C., with the handful of Republican representatives who could put a stop to the power grab. Go after the weakest links and call them out. Promise to support them against Musk’s threats to fund primary challenges if they defy him—and to raise millions against them if they don’t."

"Four votes in the Senate. Three votes in the House. That’s all it takes," Kasparov says.

How Americans can take action right now:

The House Energy and Commerce Committee could meet as soon as the week of May 5 to work on making $880 billion in spending cuts from the programs under its jurisdiction — including Medicaid, the joint federal-state safety net program for health care, says Politico.

Twelve House Republicans have sent a letter to the House leadership opposing potential Medicaid cuts. They are, according to the American Hospital Association: Reps. David Valadao, R-Calif., Don Bacon, R-Neb., Jeff Van Drew, R-N.J., Rob Bresnahan Jr., R-Pa., Juan Ciscomani, R-Ariz., Jen Kiggans, R-Va., Young Kim, R-Calif., Robert Wittman, R-Va., Nicole Malliotakis, R-N.Y., Nick LaLota, R-N.Y., Andrew Garbarino, R-N.Y., and Jeff Hurd, R-Colo.

In the Senate, Josh Hawley, R-Mo., says he won’t support any proposal that would lead to cuts in Medicaid benefits for people in his state, Roll Call reports.

Why it matters that foreign investors are selling U.S. government bonds

Investors traditionally have bought U.S. Treasuries on the assumption that, no matter what, the U.S. government will be there and will stand by its debts, says The New York Times.

But turmoil in the bond markets last week showed the extent to which President Trump’s trade war has damaged American credibility as a responsible steward of peace and prosperity, the Times says.

“The whole world has decided that the U.S. government has no idea what it’s doing,” says Mark Blyth, a political economist at Brown University and co-author of the forthcoming book “Inflation: A Guide for Users and Losers.”

The Trump administration promotes tariffs as bringing manufacturing jobs back to the United States, saying short-term turbulence will be followed by long-term gains. 

“But as most economists describe it, global trade is being sabotaged without a coherent strategy,” the Times says. “And the chaotic way in which tariffs have been administered — frequently announced and then suspended — has undercut confidence in the American system.

“For years, economists have worried about an abrupt drop in the willingness of foreigners to buy and hold United States government debt, yielding a sharp and destabilizing increase in American interest rates. By many indications, that moment may be unfolding,” the Times says.

“For Americans, that reassessment threatens to revoke a unique form of privilege,” says the Times. “Because the United States has long served as the global economy’s safe harbor, the government has reliably found takers for its debt at lower rates of interest. That has pulled down the cost of mortgages, credit card balances and auto loans. And that has allowed American consumers to spend with relative abandon.”

“At the same time, foreigners buying dollar-denominated assets pushed up the value of the American currency, making products imported to the United States cheaper in dollar terms,” the Times says.

“Critics have long argued that this model is both unsustainable and destructive,” says the Times. “The flow of foreign money into dollar assets has permitted Americans to gorge on imports — a boon to consumers, retailers and financiers — while sacrificing domestic manufacturing jobs. Chinese companies have gained dominance in key industries, making Americans dependent on a faraway adversary for vital goods like basic medicines.”

When large numbers of investors sell bonds at one time, that forces the government to offer higher interest rates to entice others to buy its debt. And that tends to increased interest rates throughout the economy — for mortgages, car loans and credit card balances.

Last week, the yield on the closely watched 10-year Treasury bond increased to about 4.5 percent from just below 4 percent — the most pronounced spike in nearly a quarter century, according to the Times. 

At the same time, the value of the U.S. dollar has been dropping, even though tariffs normally would be expected to push it up.

Other factors are at work in the sell-off, the Times notes. Hedge funds and others have sold holdings as they exit a complex trade that seeks to profit from the gap between existing prices for bonds and bets on their future values. Speculators have been unloading bonds in response to losses from plunging stock markets, to amass cash to stave off insolvency.

And some people fear that China’s central bank, which has $3 trillion in foreign exchange reserves, including $761 billion in U.S. Treasury debt, could be selling as a form of retaliation for American tariffs.

For years, foreign holders of U.S. bonds have wanted to diversify into other storehouses for savings. But the dollar and U.S. government bonds have maintained their status as the ultimate repository, the Times says.

“If the Europeans decide to issue a ‘sanity bond,’ the world might jump at it,” Blyth says.

The Chinese government long has wanted to elevate the place of its currency, the renminbi. But foreign investors don’t see China as a having sufficient transparency or rule of law, limiting its utility as an alternative to the United States, says the Times.

So, for now, the Times says: “The old sanctuary no longer seems so safe. Yet no other place looks immediately capable of standing in.”

Good news on health, energy, planets

It seems you can read the first 15 of this Fix the News edition without a password. And I’ve got tears of exhilaration as I go through them. For example:

"The world has made remarkable progress in reducing child mortality," says UNICEF. Since 2000, the global mortality rate of children under five has dropped by 52 percent. Clicking through to the UNICEF article and seeing the photo of the baby — whose eyes show such excited intelligence — could not be a better way to start my day.

And congratulations, California, on your win-win effort to generate energy while combatting drought. A pilot project is covering canals with solar panels, simultaneously generating clean energy and preventing water evaporation, says PV Magazine. 

Among the 28 items behind Fix the News’ paywall:

— A tiny magnetic robot that can take 3D scans deep inside the body could revolutionize early cancer detection. Researchers at Britain’s University of Leeds say they’ve generated the first high-resolution three-dimensional ultrasound images taken by a probe moving through the colon. 

— In 1990, there wasn’t a single planet known beyond our solar system. We’ve now discovered nearly 6,000 confirmed exoplanets. And a proposed telescope could find Earth-like exoplanets using just one pixel of data, says BigThink.

— California, Illinois, Maryland, Michigan, Minnesota, New York and Pennsylvania have joined in a Clean Rides Network. The group is working on environmentally friendly transportation projects it says the federal government has abandoned, The Associated Press reports.