The Jury Talks Back

8/24/2019

Trump Asserts He Has Authority To Force U.S. Companies To Leave China

Filed under: Uncategorized — Dana @ 2:44 pm

[guest post by Dana]

President Trump isn’t letting up on the trade issues with China. This morning he pushed back against critics about his *order* to American companies to look for other alternatives to China:

As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally meant to enable a president to isolate criminal regimes, not sever economic ties with a major trading partner over a tariff dispute.

“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Mr. Trump wrote. “Case closed!”

The president’s threat to all but cut off one of America’s most important trading relationships amid a so-far-unsuccessful trade war could disrupt a global economy already on the edge of recession while further unsettling companies in the United States that rely on China in their production of everything from clothing to smartphones.

Mr. Trump has often made drastic threats as a negotiating ploy to extract concessions, as when he vowed to close the border with Mexico or impose tariffs on its goods to compel action to halt illegal immigration. But if he were to follow through in this case, it would be the most significant break with China since President Richard M. Nixon’s diplomatic opening to Beijing in the early 1970s.

Even if it never comes to that and Mr. Trump ultimately backs down, the threat itself could still have a long-lasting impact on relations with China and perhaps embolden hard-liners in Beijing pressing President Xi Jinping to take a more confrontational approach to the United States.

Critics are warning about the misapplication of the law:

“Any invocation of the International Emergency Economic Powers Act in these circumstances and for these purposes would be an abuse,” said Daniel M. Price, who was an international economic adviser to President George W. Bush. “The act is intended to address extraordinary national security threats and true national emergencies, not fits of presidential pique.”

Not only have China’s leaders warned about escalating the trade war but American business owners have done so as well, citing large financial losses and losing their competitive edge if forced to pull out of China:

“It’s difficult to move out of China, and any time they are forced to do so by tariffs, this is a momentous act,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai. ”We are in no position to give up the China market — it’s too large, it’s too important.”

Business leaders said the result could be a flurry of fire sales at greatly reduced prices as companies from other countries snap up American business interests.

Peter Baum of Baum-Essex, a firm that makes products like umbrellas for Costco and cotton bags for Walmart, said he had already moved much of his manufacturing to factories in Vietnam and Cambodia over the last year because of Mr. Trump’s tariffs.

As the trade war shows up in American cash registers, stock markets and retirement account statements, American shoppers and retirees will grow angry, Mr. Baum said.

“Both Trump and Xi have backed themselves into such a corner that this will go on through the U.S. election,” he said. “These two guys don’t realize that this could cause a global depression, not recession.”

[Ed. Hmm, call me crazy, but shouldn’t a savvy, successful businessman like Trump already understand the very real consequences that American businesses would face if he tried to force them to leave China??]

In spite of Trump *ordering* American businesses to look for alternatives to China, aides say no order has actually been drawn up, but rather, it was Trump “signaling” to American businesses that they need to “start disentangling themselves from China on their own”…yikes.

Here is some background on the law itself, and its prior use:

As of March 1, presidents had declared 54 emergencies under the law, of which 29 were still active, according to the Congressional Research Service. Presidents have used it to target international terrorists, drug kingpins, human rights abusers, cyber attackers, illegal arms proliferators and multinational criminal organizations.

Presidents invoked the law when Iraq invaded Kuwait in 1990, when Serbia sent troops into Kosovo in 1998 and when Russia annexed Crimea in 2014. Among the countries targeted have been international outliers like North Korea, Sudan, Somalia, Yemen, Syria, Congo and Venezuela.

Using it in a trade dispute with a country like China would be a drastic departure. But Mr. Trump could make the argument that China constitutes a national security threat through the theft of intellectual property or its military buildup in the South China Sea.

The Trump administration previewed this view of Beijing in its national security strategy in 2017, which described China as a “revisionist power” that has “expanded its power at the expense of the sovereignty of others.”

There are a wide range of opinions on whether Trump’s attempted use of the law would fly in this case.
Here are just a few:

[E]ven if an unprecedented stretch of the law, some international trade lawyers said it was written broadly enough that Mr. Trump could prevail.

“The statute gives the president the right to do just about anything if he or she first declares that here’s a national security threat to the United States,” said Judith Alison Lee, a lawyer at Gibson Dunn in Washington. “It would be hugely disruptive but, technically speaking, I think the statute gives him that authority.”

William A. Reinsch, an international business scholar at the Center for Strategic and International Studies, said that he did not think the act would allow Mr. Trump to order American companies to leave China, but that he might be able to block future investments, freeze Chinese assets and exclude Chinese financial institutions from the United States financial system.

Given that Congress is currently in recess, there hasn’t been much of a response to Trump’s *order*. It will be especially interesting to see how free-market Republicans respond to Trump’s threat to essentially, intervene in the economy. And it will be interesting to see what the market does tomorrow when it opens. It’s not hard to guess…

And this observation from Andy Mok, a trade and geopolitics analyst in Bejing, captures not only a cultural difference between China and the U.S. but also one between President Trump and President Xi’s individual approaches to the situation:

“In negotiations, and especially in high-stakes negotiations, the side that reacts emotionally generally is the side that does not do well,” he said. “The U.S. side is approaching this from a more emotional side, while China is more calm and calculating.”

–Dana

Hong Kong Protesters Topple “Smart” Lamppost In Fear Of Facial Recognition Software

Filed under: Uncategorized — Dana @ 12:11 pm

[guest post by Dana]

In spite of the Hong Kong government claiming that “smart” lampposts only collect data on weather and traffic, protesters in Hong Kong were so worried about Bejing being able to surveil them through cameras on the post, the protesters took it down altogether:

Protesters used an electric saw to slice through the bottom of the lamppost, while others pulled ropes tied around it.

The demonstrators, who were holding up umbrellas to hide their identities, cheered as it toppled over.

They were part of a larger group marching to demand the removal of the lampposts over worries they could contain high-tech cameras and facial recognition software used for surveillance by Chinese authorities.

There are currently 40 of these smart lampposts in Hong Kong. Soon, however, they will become a familiar part of the cityscape:

The semiautonomous Chinese city has said it plans to install about 400 of the smart lampposts in four urban districts, starting with 50 in the Kwun Tong and Kowloon Bay districts that were the scene of Saturday’s protest march.

Given what we know about Bejing, it would seem that organizer Ventus Lau is absolutely right:

“Hong Kong people’s private information is already being extradited to China.

“We have to be very concerned.”

In an interesting contrast to protester’s worries about the smart lampposts in Hong Kong, the EU is aiming to upgrade 10 million aging lampposts into smart lampposts:

There are as many as 90 million lampposts in Europe, according to the EU and three quarters of them are over 25 years old. Street lighting accounts for up to half of some cities’ energy budgets and simply installing energy-saving bulbs would save almost €2 billion ($2.3 billion) a year.

Under the slogan “a dozen things you can do with a humble lamppost that has nothing to do with light” the EU wants to upgrade 10 million lampposts, making them solar-powered smart lampposts able to deliver a range of smart city services.

As well as providing bases for a city-wide network of 5G connected sensors to monitor vehicle and pedestrian traffic flows, the now far-from-humble smart lampposts could host a free public WiFi network.

The EU says smart lampposts will improve citizen safety by delivering public information through digital displays and speakers as well as measuring air quality and monitoring streets for flooding.

Their sensors will have multiple uses from helping visually impaired people to navigate the city to alerting drivers to vacant parking spaces.

City authorities will be able to offset the cost of smart lampposts by using them to host digital advertising or provide charging points for electric vehicles.

On a side note: CCTV is already popular in parts of Europe. England alone has an estimated 500,000 CCTV cameras around London.

–Dana

The Kindness Of Others Is Making A Little One’s Life Better

Filed under: Uncategorized — Dana @ 10:12 am

[guest post by Dana]

Reading about the kindness of friends and strangers in the life of a sick little boy makes for a nice way to begin the weekend.

Three-year old Quinn Waters has brain cancer. As result of getting a stem cell transplant to treat the cancer, his natural immunity was temporarily suspended. Parents Jarlath and Tara Waters said that because even something like a common cold could land him back in the hospital, he now lives in a protected bubble. Confined to the house with only his parents for company, and limited to seeing the world through the front window, Quinn’s parents say that there are “days when Quinn is literally pounding to get out.”

Queue the kindness of neighbors and strangers:

For the last two months, Quinn’s connection to the outside world has been limited to whoever passes by, which hasn’t been all that limiting, actually.

“It started out with family members coming to the window,” Jarlath said.

Then the neighbors started showing up to entertain with non-contact art projects and other stupid human tricks. Next, the police caught wind — and pretty soon top-notch performers were just showing up on Quinn’s front lawn.

Today, you never know what might happen. One minute it could be a dog parade — the next, a team of Irish step dancers — everyone brought together by word of mouth and a will to help Quinn get better, which his parents say is happening.

“It’s the positive energy from all these people that we believe has gotten him through his sickness, you know,” Jarlath explained. “You can never repay, you know — just maybe pay it forward.”

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Make sure to watch the video at the link. It’s so good to be reminded of how kind and generous people can be in an effort to make someone less fortunate happy.

–Dana


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