Posts Tagged ‘Mexico’

Midterm Elections: Trump Wants To Energize Republicans on Migrants, Immigration

October 19, 2018

So far, GOP candidates’ ads don’t emphasize issue, and Democrats say it alienates independents

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Migrants, who have fled violence-prone Central America and are heading toward Mexico and the U.S., boarded a truck in Guatemala City on Thursday. President Trump called them an “onslaught.” PHOTO: JOHN MOORE/GETTY IMAGES
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WASHINGTON—President Trump is elevating the issue of immigration, which drove his 2016 campaign, with the aim of animating Republican voters in a midterm election that threatens to derail his agenda if Democrats retake the House.

Mr. Trump’s latest comments came Thursday as he warned about an “onslaught” of migrants reaching the southern U.S. border with Mexico and threatened to deploy the military if the caravan isn’t stopped.

Accusing Democrats of wanting “open borders and existing weak laws,” Mr. Trump foreshadowed a message he is likely to carry into a Western campaign swing on Friday in Arizona, a hotbed for immigration issues.

Mr. Trump and Republicans are working to build on momentum tied to the confirmation fight over Supreme Court Justice Brett Kavanaugh. “The president realizes he needs to keep that momentum going,” said Matt Moore, a GOP strategist in South Carolina and former chairman of the state party. “Illegal immigration animates the Republican Party base like few other issues.”

Democrats say the focus on immigration is backfiring by motivating progressives and independent voters.

A recent Washington Post/ABC News poll showed that among Democrats, 26% say it is one of the single most important issues, compared with only 13% of Republicans who said the same. A September Wall Street Journal/NBC News poll showed that, by a 61% to 28% margin, voters said immigration helps the U.S.

“He’s so polarized and racialized this debate that a lot of people for whom immigration was a secondary issue are really angry about what Trump is doing,” said Frank Sharry, executive director of America’s Voice, which seeks an overhaul of immigration policies. He cited the policy of separating families at the border as an example sparking anger.

At the same time, tougher immigration stances remain popular among Mr. Trump’s intended audience. A June Quinnipiac poll showed that while 66% of American voters oppose the family separation policy, Republican voters support it 55% to 35%. Voters in general oppose a border wall, the poll showed, but Republicans support it by 77%.

Immigration has bedeviled Republicans since Mr. Trump launched his campaign by calling Mexican immigrants criminals and demanding construction of a border wall. The GOP-controlled Senate and House this year rejected multiple immigration bills, including one backed by Mr. Trump that would have combined border-security funding with other measures sought by the Democrats.

On Thursday, White House chief of staff John Kelly and National Security Adviser John Bolton engaged in an “explosive” shouting match outside the Oval Office, according to people familiar with the matter. The argument was prompted by a recent report that said border crossings had increased in the past month, for which Mr. Bolton criticized Homeland Security Secretary Kirstjen Nielsen, a Kelly ally, according to one of the people.

Migrant Caravan Heads Toward Border

Migrant Caravan Heads Toward Border

A caravan of some 3,000 migrants fleeing Honduras is continuing to walk north to the U.S. border, as Trump threatened to deploy the military and close the U.S.-Mexico border. Photo: Reuters

Mr. Trump’s emphasis on immigration also coincides with reports of the migrant caravan from Honduras working its way toward the U.S. southern border.

Later Thursday, Mr. Trump called on his supporters to focus on the plight of the southern border, dubbing the 2018 midterms “an election of the caravan.”

“As you know, I’m willing to send the military to defend the southern border if necessary,” he said at a rally in Missoula, Mont. He blamed “the illegal immigration onslaught brought on by the Democrats, because they refuse to change the laws.”

Mr. Trump suggested the Democrats do little to prevent the caravan and other immigrants from crossing the border because they “think that everyone coming in is going to vote Democrat.” He also warned of “hardened, bad people” crossing into the U.S., and told the crowd of Montana voters that it is up to them to reverse course.

The caravan is the latest in a steady flow of people fleeing violence in Latin America and seeking to call attention to the problem. A record number of asylum-seeking families have recently overwhelmed border agents and immigration authorities.

Border Patrol facilities are crowded with newly arrived families, bed space at family detention centers in Texas is at a premium, and immigration-court backlogs are growing. Unrelenting violence in the region was widely accepted as having sparked the first wave of roughly 70,000 immigrant families, and nearly as many unaccompanied children, in 2014. Those flows have fluctuated in recent years.

On the border wall, Mr. Trump had a message Thursday night for Congress: “Give us the money and we’ll do it fast.”

Despite Mr. Trump’s focus on the issue, it is barely registering in political advertising by GOP candidates. Less than 11% of all ads in Senate, House and governor races through Tuesday had an anti-immigration message, according to Kantar Media/CMAG, a political ad tracker. GOP candidates have been playing up tax cuts and the economy.

“He clearly views it as one of the reasons for his political success,” GOP pollster David Winston said of Mr. Trump’s focus on immigration. “But it’s still all about the economy and jobs.”

Mr. Trump’s messaging could help some GOP Senate candidates who need his base to show up on Election Day. Its impact on House races seems more unpredictable, as most of the competitive seats are in suburban districts where his family-separation policies drew opposition from suburban woman, while a focus on threats of higher crime may resonate with voters, polls show.

Immigration as an issue has gained steam in a number of key House and Senate races, with Republicans calling opponents weak on crime and highlighting some liberal demands to “abolish ICE,” the U.S. Immigration and Customs Enforcement.

Rep. Barbara Comstock, a vulnerable Republican who represents the Virginia suburbs of Washington, has played up the threat of the MS-13 gang. “Barbara Comstock is fighting for our families,” says an ad featuring TV news reports about the gang and highlighting bipartisan legislation she has sponsored.

Some vulnerable Democrats are using the issue as well. Sen. Joe Donnelly (D., Ind.) has run ads promoting his support for Mr. Trump on immigration, including building a border wall, while taking a shot at the “radical left” over calls to abolish ICE.

David Bergstein, a spokesman for the Democratic Senatorial Campaign Committee, said that the No. 1 issue remains health care, and that Mr. Trump’s emphasis on immigration could hurt some GOP candidates, such as Martha McSally, who is running for the Senate in Arizona, a state that continues to diversify and become more politically competitive.

“It shows just how desperate Republicans are to talk about everything except the way their health-care agenda hurts working families,” Mr. Bergstein said.

Even some Republican groups are concerned that Mr. Trump isn’t advocating solutions, such as protecting young people brought illegally to the U.S. by their parents and securing more funding for the border wall.

“Bringing up immigration as an issue for elections has been done for far too long by Republicans and Democrats. We need real action and real solutions,” said Wadi Gaitan, a spokesman for the LIBRE Initiative, a pro-immigration group funded by the conservative brothers Charles and David Koch.

Write to Alex Leary at alex.leary@wsj.com

Appeared in the October 19, 2018, print edition as ‘Trump Uses Immigrants to Energize GOP.’

https://www.wsj.com/articles/trump-aims-to-fire-up-republican-voters-over-immigration-1539906051

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Brexit Provides Early Proof of Deglobalization’s Costs

October 17, 2018

Norwich Stays pro-EU anti-Brexit rally, 7 July

A study comparing Britain to peer economies finds its output is 2.1% below what it would be without Brexit

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A pro-EU demonstrator wore an EU flag styled as a hat, with a British Union flag pinned to it, outside the Palace of Westminster as the British government held a cabinet meeting on Brexit on Tuesday.
A pro-EU demonstrator wore an EU flag styled as a hat, with a British Union flag pinned to it, outside the Palace of Westminster as the British government held a cabinet meeting on Brexit on Tuesday. PHOTO: ALASTAIR GRANT/ASSOCIATED PRESS
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For outsiders, Brexit has the feel of a long-running soap opera: a mash-up of plot twists and tragic characters loaded with entertainment value but not much significance if you’re not British.

That complacency is a mistake. Never in the last 70 years has a major advanced economy left a free-trade area. Brexit is providing the first real-world evidence of the costs that come from undoing the intricate bonds of globalization.

It is of course an extreme case of deglobalization: The European Union’s single market for goods, services, capital and labor is much more integrated than other free trade zones. Yet many of the barriers that are bound to rise between Britain and its partners, such as on regulations, trade penalties and immigration, are similar to those cropping up in the wider world, such as between the U.S. and its partners.

Measuring the effect of Brexit is complicated by the fact it hasn’t happened yet. British and European leaders are meeting Wednesday in an effort to bridge differences on a post-Brexit deal. Without a deal, Britain could see tariff and nontariff barriers snap back to the maximum the World Trade Organization permits.

Yet without a single tariff going up, Brexit has clearly extracted a price. This can be seen by comparing Britain to a basket of peer economies whose performance closely tracked Britain’s until it voted to leave the EU in June 2016. Pierre Lafourcade, Arend Kapteyn and John Wraith of UBS construct such a synthetic Britain from a blend of other members of the Organization for Economic Cooperation and Development.

Actual and synthetic Britain track each other closely from 1995 to mid-2016, then diverge: Actual British output is now 2.1% below this counterfactual. UBS attributes this divergence primarily to household consumption, which is now 1.7% below its counterfactual, and investment, which is 4% lower.

A key driver of the divergence is the plunge in the British pound after the referendum, which sharply raised inflation. Adjusted for inflation, British wages are down 1.4% since June 2016, undercutting purchasing power. (In the U.S., where unemployment has behaved similarly to Britain, real wages are up 1.2%.)

Why did the pound fall? Because tariffs and nontariff barriers will create new costs that British exporters must absorb, and currencies adjust to compensate for such costs. UBS estimates the pound has fallen about 10% because of Brexit. Coincidentally, that’s about enough to offset the 10% tariff the EU imposes on autos, which may be why no auto manufacturer is yet contemplating leaving Britain. The losers are British consumers whose standard of living has gone down because of inflation.

If Britain leaves the EU without some kind of deal, Oxford Economics estimates its output would suffer an additional 2% hit. Nontariff barriers actually account for more than half the costs, it estimates.

Pharmaceuticals illustrate why. Once licensed for sale in the EU, a British-made drug would still require separate testing and certification for each batch. Clinical trials would be disrupted as testing material takes additional weeks to clear customs and reach patients. Slower deliveries may leave some medicines with too little remaining shelf life for wholesalers. These barriers lengthen delivery times and increase inventories throughout the supply chain. GlaxoSmithKline PLC expects added costs of 70 million pounds a year initially, and 50 million pounds a year thereafter.

There are other, unquantifiable costs: Britain won’t enjoy the lower tariffs the EU negotiates in new free trade agreements. Fewer immigrants from the EU may make it harder to fill key jobs and undercut housing demand.

One lesson of Brexit is that smaller countries suffer more from deglobalization than large; the EU has yet to show much effect from Brexit. That’s to be expected since smaller countries gain more from free trade as their firms and consumers access vastly expanded markets. A study by the Bank for International Settlements concluded Mexico and Canada would each suffer a 2% hit to output from an end to Nafta, versus 0.2% for the U.S.

Why a Brexit Deal Between the U.K. and the EU Remains Elusive

Why a Brexit Deal Between the U.K. and the EU Remains Elusive

The U.K. is set to leave the European Union in March 2019. But despite more than two years of negotiations, they still can’t agree on the terms of their separation. The WSJ explains the key sticking points ahead of a set of crucial negotiations. Image: Reuters

Yet this doesn’t mean deglobalization is costless for big players like the EU. The fact that Britain’s trade deficit has actually narrowed since the referendum shows that in a narrow arithmetic sense it’s contributing less to its trading partners’ output. To be sure, the pain is spread out over a larger economy; but someone still bears it.

Similarly, the BIS study found that in absolute dollars, the U.S. would lose more from the demise of Nafta than Canada or Mexico. Small countries like Vietnam and Malaysia are worse off because the U.S. is not in the Trans Pacific Partnership, but the U.S. also loses without the preferential access to those markets that Canada and Japan will enjoy.

A reversal of globalization is not a catastrophe. Life in Britain was not nasty, brutish or short before it joined the EU, and predictions of panic and recession now look silly. There will also be benefits: Some production will move to the U.K. to avoid British tariffs, and the British will have more control over immigration and their laws. But a 2%-plus hit to their standard of living is not a rounding error. It should remind everyone that turning back globalization comes with a price.

Write to Greg Ip at greg.ip@wsj.com

https://www.wsj.com/articles/brexit-provides-early-proof-ofdeglobalizationscosts-1539766800?mod=hp_lead_pos9

Immigrant caravan organizer detained after Trump threatens Honduras

October 16, 2018

The organizer of a migrant caravan from Honduras was detained on Tuesday in Guatemala after U.S. President Donald Trump threatened to withdraw funding and aid from Honduras if the flow of migrants north to the United States was not stopped.

Guatemalan police officers detained Bartolo Fuentes, a former member of the Honduran Congress, from the middle of a large crowd he and three other organizers had led from San Pedro Sula, Honduras, since Saturday, bound for Mexico.

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The Honduran security ministry said Fuentes was detained because he “did not comply with Guatemalan immigration rules” and would be deported back to Honduras in the coming hours.

Up to 3,000 migrants, according to organizers’ estimates, crossed from Honduras into Guatemala on Monday on a trek northward, after a standoff with Guatemalan police in riot gear and warnings from Washington that migrants should not try to enter the United States illegally.

Guatemala’s government has not given official figures for how many migrants are in the group.

“The United States has strongly informed the President of Honduras that if the large Caravan of people heading to the U.S. is not stopped and brought back to Honduras, no more money or aid will be given to Honduras, effective immediately!” Trump wrote on Twitter.

It was Trump’s latest effort to demonstrate his administration’s tough stance on immigration.

The message was driven home by Vice President Mike Pence, who wrote in a tweet that he had spoken to Honduran President Juan Orlando Hernandez.

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Honduran President Juan Orlando Hernandez

“Delivered strong message from @POTUS: no more aid if caravan is not stopped. Told him U.S. will not tolerate this blatant disregard for our border & sovereignty,” Pence tweeted.

The move could further encourage Honduras to move closer to China because of what the Central American country sees as weak U.S. support, amid intensified efforts by Beijing to win recognition from Central American countries currently aligned with Taiwan.

Hernandez said last month that cuts in U.S. support for Central America would hinder efforts to stem illegal immigration. He welcomed China’s growing diplomatic presence in the region as an “opportunity.”

In an interview with Reuters, Hernandez lamented that prior U.S. commitments to step up investment in Honduras, Guatemala and El Salvador had been scaled back since Trump took office.

Honduras is one of a dwindling number of countries that still have formal diplomatic ties with Taiwan, an island nation off the Chinese coast that Beijing views as a renegade province.

Last week, Pence told Central American countries the United States was willing to help with economic development and investment if they did more to tackle mass migration, corruption and gang violence. Thousands of migrants have left the impoverished region in recent years.

GROWING GROUP

The current group making their way north plan to seek refugee status in Mexico or pass through to the United States, saying they are fleeing poverty and violence.

The group more than doubled in size from Saturday, when it set off from northern Honduras in what has been dubbed “March of the Migrant,” an organizer said.

“What Trump says doesn’t interest us,” organizer Fuentes said in an interview shortly before his detention. “These people are fleeing. These people are not tourists.”

He was traveling with hoards of men, women and children, packs in hand, walking northward on a Guatemalan highway about 55 miles (89 km) from the border with Honduras.

Widespread violence and poverty prompt thousands of Central Americans, mainly from El Salvador, Honduras and Guatemala, to make the arduous journey north toward Mexico and the United States in search of a better life.

Guatemala said in a statement on Sunday that it did not promote or endorse “irregular migration.” Guatemalan police initially blocked migrants from reaching a customs booth, Reuters images showed.

Trump ran for president in 2016 on promises to toughen U.S. immigration policies and build a wall along the 2,000-mile(3,220-km) border with Mexico.

Illegal immigration is likely to be a top issue in Nov. 6 U.S. congressional elections, when Democrats are seen as having a good chance of gaining control of the House of Representatives from Trump’s fellow Republicans.

Reporting by Doina Chiacu in Washington and Jorge Cabera in Esquipulas, Guatemala; additional reporting by Frank Jack Daniel in Mexico City; editing by Frances Kerry and Jonathan Oatis

Reuters

US sets new trade talks with EU, Japan, Britain

October 16, 2018

US officials announced Tuesday negotiations for separate trade agreements with Britain, the European Union and Japan as part of efforts by President Donald Trump’s administration to rebalance global commerce.

US Trade Representative Robert Lighthizer said the administration notified Congress of its intent to negotiate the three separate trade agreements.

“We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers and businesses,” Lighthizer said in a statement.

© AFP/File | US Trade Rep. Robert Lighthizer seen with US President Donald Trump, said trade talks will seek to end imbalances with the EU and Japan

The move follows the Trump administration’s renegotiation of the North American Free Trade Agreement with Canada and Mexico and its push to correct what Trump maintains is an unbalanced trade picture.

In the notifications to Congress on Japan and the EU, Lighthizer cited “chronic US trade imbalances” and said that US exporters have been long “challenged” by tariff and non-tariff barriers in Japan and in Europe.

The goal, he said, is to achieve “fairer, more balanced” trade with the US trading partners.

Lighthizer said the US would seek a trade agreement with Britain as soon as it exits the European Union in 2019.

The letter to Congress said Washington would seek to address tariff and non-tariff barriers and achieve “free, fair and reciprocal trade” with the United Kingdom.

– Playing hardball –

Trump has been playing hardball with US trading partners, using tariffs and threats in an effort to boost US exports and curb the longstanding deficit in merchandise trade, despite warnings from many US lawmakers and the International Monetary Fund.

Trump in May had ordered Commerce to investigate the possibility of imposing tariffs of up to 25 percent on foreign autos and auto parts, a prospect that alarmed the industry and could have serious repercussions for Japan and Europe.

“We need to work together to de-escalate and resolve the current trade disputes,” IMF chief Christine Lagarde said at an IMF and World Bank gathering in Bali last week.

Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies such as the European Union.

More tariffs and their countermeasures “could lead to a broader tightening of financial conditions, with negative implications for the global economy and financial stability,” the fund warned.

The new talks, if successful, would address trade with Europe and Japan but leaves the thornier challenge of China, which accounts for more than half the US trade deficit.

The US trade deficit ballooned in August to its highest level in six months, according to government figures showing American consumers snapped up more imported cars and mobile phones.

The total US trade deficit rose 6.4 percent over July to $53.2 billion, overshooting analyst forecasts.

Despite Trump’s efforts to attack the trade deficit, so far this year it has risen 8.6 percent over the same period in 2017.

The gap in goods trade with China rose to $38.6 billion for August and with Mexico hit $8.7 billion — both the highest monthly totals ever.

The August figures suggested retaliatory tariffs imposed by China continued to whipsaw American farmers, whose rural counties Trump’s Republican Party traditionally counts on for political support.

AFP

China’s Response to Latest Trump Tariffs May Determine Course of Trade War

October 14, 2018

U.S. tariffs on around $200 billion in Chinese imports are set to jump to 25% on Jan. 1, up from the 10% implemented last month. That works out to around $30 billion in new taxes to be paid by U.S. importers, many of whom will pass at least some of the costs on to U.S. consumers.

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Be smart: Economics differ on the degree to which increased tariffs will affect things like GDP, corporate earnings, and inflation, but few of the predictions are broadly cataclysmic.

Axios
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The bigger wildcard is how China will respond. Trump, buoyed by his self-described trade successes with Canada and Mexico, is unlikely to back down before January.

  • If Republicans continue to run Congress, Trump will maintain free reign on trade, even if it violates traditional GOP orthodoxy.
  • If Democrats gain power, trade may be one area where they largely agree with the White House.

China cannot simply apply 25% tariffs to an equal amount of U.S. imports, because they don’t total $200 billion. Other possible options (and, no, this is not an exhaustive list):

  • Devalue the yuan, thus turning them into the currency manipulator Trump already says they are.
  • Severely restrict Chinese tourism to the U.S., which generated $33 billion in 2016.
  • Sell down its trillion dollar-plus stockpile of U.S. Treasury bills, or stop buying new ones. Either one could possibly increase U.S. government borrowing costs.
  • Make it much more difficult for U.S. businesses to operate in China, well beyond current concerns about IP theft and requirements that U.S. tech companies form joint ventures with local partners.

The bottom line: Trump has made America’s policy known. China’s response will determine if this becomes a full-blown trade war.

https://www.axios.com/the-next-phase-of-the-china-trade-war-f207604e-ce65-4fa5-a445-63fd2ef110c5.html

Mnuchin Says He’s Not Worried China Would Unload Treasuries

October 13, 2018
  • ‘We have plenty of buyers for Treasuries,’ Mnuchin Says
  •  Treasury chief speaks to reporters at IMF talks in Indonesia
Steven Mnuchin in Bali on Oct. 13 Photographer: Goh Chai Hin/AFP via Getty Images

Treasury Secretary Steven Mnuchin isn’t worried that China would use its $1.2 trillion pile of Treasuries holdings as a bargaining chip for a better trade deal.

“I am not losing any sleep over this issue. The Treasuries market is very liquid, this has never come up in any of our discussions whatsoever,” Mnuchin told reporters during a briefing on Saturday in Bali, Indonesia, where he’s attending the annual International Monetary Fund meetings.

“We have plenty of buyers for Treasuries,” he said, adding that China is “free to do what they want to do.”

An escalating tit-for-tat tariff war has fueled speculation that China could threaten to draw down its Treasury holdings, potentially sending yields higher and adding to volatility for the greenback. The country’s ownership of U.S. bonds, bills and notes slipped to a six-month low in July — the latest data available — just as the U.S.-China trade war was kicking off with the first round of U.S. tariffs on Chinese goods, and in-kind retaliation.

The U.S. can ill-afford to see weaker demand for its debt from its major buyers. With budget deficits rising in coming years and tax cuts approved in December expected to hurt revenue, the Treasury has to sell more securities to pay the government’s expenses. Some observers have said a wide-scale sell-off is unlikely given that China has few alternatives to invest in.

Mnuchin said no decision has been made over whether President Donald Trump will meet Chinese President Xi Jinping next month. White House economic adviser Larry Kudlow has said the leaders may meet at the Group of 20 meeting in Argentina from Nov. 30-Dec. 1.

The Trump administration is increasingly turning its attention to currencies as a tool to address improvements in trade deals.

The U.S.’s new trade deal with Canada and Mexico adds a currency provision that commits them to maintain market-determined exchange rates and refrain from competitive devaluations of their currencies. The pledge won’t have much effect on policy-making in the three nations, all of which have free-floating exchange rates. But it could serve as a template for future trade deals, giving the U.S. leverage over countries such as China.

“The currency issues are something that we would like to include in future trade agreements with everybody,” Mnuchin said on Saturday.

In an interview on Thursday in Bali, Mnuchin said the U.S. wants to make sure the depreciation in China’s currency isn’t a “competitive devaluation.” The yuan has fallen more than 6 percent this year against the dollar. People’s Bank of China Governor Yi Gang on Saturday said the country won’t use its currency as a weapon in a trade conflict.

— With assistance by Andrew Mayeda

https://www.bloomberg.com/news/articles/2018-10-13/mnuchin-says-he-s-not-worried-china-would-unload-treasuries

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Steve Scalise bullish on GOP: ‘I think we hold the House’ — Washington Examiner

October 12, 2018

“I think we hold the House,” Scalise, R-La., told Fox News Friday.

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Scalise said the decision by Democrats to resort to violent rhetoric during the Kavanaugh confirmation shows they have no ideas, and said this would turn off voters.

“Margaret Thatcher used to say, first you win the argument, then you win the vote,” he said. “They’re not winning the argument if they’re resorting to violence, and ultimately they’ll lose the vote if they continue to call on violence.”

He said the people he’s seen in swing districts shows they’re excited about the direction of the country, and the job growth seen over the last two years.

“You feel a lot of momentum right now our way,” he said. “I think people are angered by what they saw in the Senate the last few weeks. And frankly, when you talk to them about the economy, they like what they’re seeing.”

“People are working, they’re getting higher wages now because of the work we did with President Trump to cut taxes,” he added.

“You’re seeing an economy that’s booming, and yet Democrats want to raise taxes, they want to abolish ICE,” Scalise said. “They’ve got a very leftist agenda that’s out of touch with the people I’m talking to when I go to swing districts.”

https://www.washingtonexaminer.com/news/steve-scalise-bullish-on-gop-i-think-we-hold-the-house

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Steve Scalise: Republicans will hold U.S. House

October 12, 2018

U.S. House Majority Whip Steve Scalise, R-Louisiana, believes that despite a Democratic push to take control of the House in this fall’s election, Republicans will remain in charge.

“I think we’re going to maintain the House, and I think it’s because people like the job that we’ve done in terms of tackling tough problems,” Scalise said by telephone as he was traveling to Springfield to appear at a fundraiser at Illini County Club for U.S. Rep. Rodney Davis, R-Taylorville.

“And you look at the tax cut bill especially,” Scalise said. “The economy had been struggling for 10 years, and we finally confronted some of the problems to get it back on track. And that’s being done by putting more money in the pockets of hardworking taxpayers and making sure that we’re competitive.”

Asked about the decision by U.S. House Speaker Paul Ryan, R-Wisconsin, not seek re-election, Scalise said it will be “a loss.”

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Rep. Steve Scalise of Louisiana throws out a ceremonial first pitch before Game 1 of the NLDS in Washington. (AP)

But, he added, “he’s leaving at a time when he’s got some important accomplishments and he’s done a lot for our team to lead us in terms of an agenda — but especially to raise the money necessary to allow us to keep the House majority.” He noted that Ryan didn’t seek to be speaker and now will be able to do something so important to him — spend time with his young family.

“So I applaud him for his decision,” Scalise said.

Scalise thinks President Donald Trump is “doing a really good job.

“I enjoy working with him because he’s focused on following through on the promises he made during the campaign,” Scalise said. “One of the things he said he would do is lower taxes rates, and to stand up for the United States and our allies” while “pushing back” on countries like North Korea and Iran.

While there has been some concern about Trump’s talk of tariffs on foreign imports leading to retaliation that could affect American agriculture, Scalise believes good will come out of the controversy.

“I think we’ve seen the president be selective and strategic” about the focus of the tariff policy, Scalise said.

“Primarily, it’s on China, who’s abused a lot of the trade rules,” Scalise said. “And that’s, I think, where the focus ought to stay. Let’s maintain our friendships around the world and trade with countries who are fair to us, but if China’s cheating, which most countries would agree they are, then they ought to be held accountable.”

“Just the fact that President Trump has put the threat of tariffs on the table, it’s brought China to the table,” Scalise said. “And so I think it’s ultimately going to end up in a positive result for the United States. I think a lot of the threats of retaliation are not going to be followed through. It’s just going to be fairer treatment for American jobs.”

Scalise and Davis were both at a House GOP practice for a charity baseball game in June 2017 when a gunman who had grievances against Trump and the GOP opened fire at the Alexandria, Virginia, field. Scalise was seriously injured, with a shot to his hip shattering bone and damaging internal organs. Two Capitol police officers were also shot, but they were able to return fire and kill the 66-year-old gunman. Davis, who was at bat when the shooting started, wasn’t seriously hurt.

“I’m doing really well,” Scalise said. “I’m fully back at work.” He said he had the last of nine surgeries two weeks ago. He said he has rehabilitation three days a week, and is “just glad to be able to get back to work and do the things I love.”

The experience doesn’t make Scalise think more gun laws are needed.

“Our founding fathers believed strongly in the right of Americans to be able to defend themselves,” he said. “That’s a hallmark of our country.”

Gun control advocates have called for banning bump stocks — devices that make semi-automatic guns repeat fire like automatic weapons.

“The president asked that his agencies go back and look at some of the regulations like bump stocks, and that is happening as we speak,” Scalise said. “But he’s also been clear that taking away the rights of law-abiding citizens is not the direction.”

Scalise said he was happy to be visiting Springfield again and said he has named a room in his whip office in Washington for Springfield’s most famous citizen.

When President Abraham Lincoln served one term in the U.S. House, Scalise said, “he used to sit in this little office by a fireplace. And now it’s one of my offices, and I renamed it the Lincoln Room. So, a lot of neat history.”

Scalise said Davis is a “great member” of his whip team — helping round up votes to move the agenda.

“And he’s had a real successful track record himself of passing legislation and working across the aisle, which is real important,” Scalise said. “We need good people like him to come back.”

Davis, also by telephone while traveling with Scalise, said he “couldn’t ask for a better guy and a better friend” to come to the 13th Congressional District to campaign for him.

“He has always been a supporter,” Davis said, “but this year is much more special. Watching him recover from what he experienced … on the baseball field that day, it’s really great to be able to see the courage and the strength that he’s shown, and I’m proud to introduce him to a lot of my friends and family and supporters.”

Davis faces Democrat Betsy Dirksen Londrigan of Springfield in the Nov. 6 election.

Contact Bernard Schoenburg: bernard.schoenburg@sj-r.com, 788-1540, twitter.com/bschoenburg.

http://www.sj-r.com/news/20180501/rep-steve-scalise-republicans-will-hold-us-house

Wall Street bloodbath spills over to Hong Kong, China stocks

October 11, 2018

Chinese internet giant Tencent plunges 7.5 per cent as benchmark Hang Seng Index loses more than 1,000 points

South China Morning Post

PUBLISHED : Thursday, 11 October, 2018, 9:54am
UPDATED : Thursday, 11 October, 2018, 12:51pm

Hong Kong and Shanghai stocks plunged on Thursday morning as a sell-off on Wall Street spread to Asia after rising bond yields and interest rate increases spooked investors and caused a broad market rout.

The Chinese yuan was also hit hard, sinking to a 19-month low.

Hong Kong’s benchmark Hang Seng Index briefly tanked 1,033 points, or 3.9 per cent, to 25,159.69, the lowest intraday level since May last year. By the mid-session close, it was down 986.04 points, or 3.8 per cent, at 25,207.03.

As investors dumped stocks, turnover spiked. The half-day turnover for the main board increased to HK$74.8 billion, nearly 90 per cent of Wednesday’s volume for the entire day, HK$86 billion.

Index heavyweight Tencent Holdings was trading 7.43 per cent lower at HK$265.240 by lunchtime, having briefly plunged 7.5 per cent earlier to hit a 15-month low of HK$265.00.

Trading was exceptionally active for shares of the Chinese social media and gaming giant, whose half-day turnover reached a whopping HK$9.3 billion. The stock single-handedly accounted for 12 per cent of the entire main board’s trading volume, with the half-day turnover higher than Tencent’s average full-day turnover of HK$8 billion from Monday to Wednesday of this week.

All 50 component stocks on the Hang Seng Index dropped. Tencent, Sunny Optical Technology, and AAC Technologies were the only three stocks losing more than 7 per cent.

The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors
STEPHEN INNES, HEAD OF TRADING ASIA PACIFIC, OANDA

The Hang Seng China Enterprises Index, which tracks Hong Kong-listed Chinese companies, slid 4.1 per cent to 10,015.01 by the noon break.

“The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors at the open as equity deleveraging and liquidation intensifies,” said Stephen Innes, head of trading for Asia Pacific at Oanda.

“If the Feds are crazy, this market reaction is bordering on insanity, as so many negative cross-currents collide that is merely impossible to find a glint of optimism.”

He was referring to comments made by President Trump on Wednesday in which he called the US Federal Reserve “crazy” for raising interest rates.

“The US market sell-off has a lot to do with rising Treasury yields. But upcoming corporate earnings announcements are also a concern, as investors worry the trade-war effect will start to emerge in US companies’ third-quarter results,” said Stanley Chik, head of research at Hong Kong-based Smart Securities.

“Hong Kong stocks are likely to test new lows today.”

Chik said Tencent’s continued weakness is a key challenge for the Hong Kong market. The Chinese gaming giant has been hamstrung since regulators stopped approving new games as part of an apparent crackdown on internet addiction and content deemed inappropriate.

In mainland China, the benchmark Shanghai Composite Index tumbled 4.5 per cent to 2,603.89 by the lunch break, having briefly touched a four-year low of 2,601.84 during the morning.

On the tech-heavy Shenzhen exchange, the Shenzhen Composite Index and the start-up board, the ChiNext, both lost more than 5 per cent by noon.

Capital fled mainland China for overseas. Net outflows from the Shanghai and Shenzhen exchanges totalled 3.5 billion yuan on Thursday morning, according to data from the Stock Connect scheme linking mainland and Hong Kong markets.

Combined half-day turnover for Shanghai and Shenzhen markets stood at 222.1 billion yuan, almost equal to Wednesday’s full-day turnover of 236 billion yuan.

Elsewhere in Asia, Japan’s Nikkei 225 dropped heavily, falling 4.2 per cent to 22,514.14. Australia’s S&P/ASX200 lost 2.5 per cent to 5,899.20. South Korea’s Kospi fell 3.7 per cent to 2,145.42.

On the currency front, the Chinese authorities set the yuan’s daily guidance rate at 6.9098 per US dollar, the lowest in 19 months. It is the eighth straight day the central bank has lowered the reference rate.

On Thursday morning, the onshore yuan weakened 0.1 per cent to 6.9317 against the US dollar, while the offshore rate dropped 0.3 per cent to 6.9420.

Innes said the Chinese yuan’s decline is likely to continue.

“The PBOC (People’s Bank of China) appears to be in little rush to stem the weakening tide, despite the apparent risk from capital outflows and more equity liquidations,” he said.

Overnight in the US, the Dow Jones Industrial Average and the S&P 500 both slid more than 3 per cent, their worst days since February. The Nasdaq logged a 4.1 per cent loss, the biggest decline of 2018.

The yield on the US 10-year Treasury note briefly jumped to 3.23 per cent, before dropping back slightly.

US President Donald Trump on Wednesday lashed out at the Federal Reserve’s tightening policy again, reiterating his preference for lower interest rates.

“The Fed is making a mistake. They’re so tight. I think the Fed has gone crazy,” he told a group of reporters in Pennsylvania, according to the Financial Times.

“It’s a correction that we’ve been waiting for, for a long time. But I really disagree with what the Fed is doing, OK?”

On the same day, US Treasury Secretary Steven Mnuchin warned China against “competitive devaluation” of the yuan as the US-China trade war escalated, according to a Financial Times report.

https://www.scmp.com/business/companies/article/2167983/us-stock-rout-spreads-asia-hang-seng-tumbles-3-cent-start

U.S. Stock Market Sell-Off Explained: The Fed, Trade War, Trump Administration

October 11, 2018

The Fed’s liquidity injections no longer underpin asset prices, leaving a greater role for fundamentals.

Back to basics.  Photographer: Spencer Platt/Getty Images

The 3 percent to 4 percent plunge in the major American indexes on Wednesday is unsettling for investors who have grown accustomed to low U.S. market volatility in recent years. What’s more disturbing is that most of the traditional hedges against such a large equity selloff, both within and across market segments, did not work well.

Yet neither of these developments should come as a great surprise given the following five factors that also point to what’s ahead:

  1. After years of seemingly unquestioned central bank support – including the so-called “Fed Put” – stock and bond markets are transitioning away from a world where liquidity injections underpin asset prices and moving toward a greater role for fundamentals. Almost by definition, this is a volatile process: Think of a plane changing engines while flying at a high altitude. Turbulence is to be expected.
  2. Unusual divergence in economic performance and policies within the advanced world is complicating this liquidity-to-fundamentals market transition. U.S. growth is increasingly outpacing other countries’, powered by the combination of higher household income, increasing business investment and government spending. In addition, the Federal Reserve is well ahead in normalizing monetary policy, after ending quantitative easing, hiking interest rates eight times, publishing the timetable for reducing its balance sheet, and signaling further rate increases for both this year and next.
  3. The resulting dispersion in asset prices has placed some extra strains on markets. And it’s not strictly a matter of divergence. There are also a wide range of views on whether other countries will eventually converge with the U.S. in achieving higher growth or whether the U.S. will be pulled down.
  4. Trade tensions are adding to the uncertainties about the market transition. Specifically, it’s not yet clear how long it will take China to realize that the least bad alternative for its development is to pursue the same path that other countries (South Korea, Mexico and Canada) ultimately followed — that is, make concessions to the U.S. It also isn’t clear what concessions would satisfy the Trump administration.

Finally, technical conditions in markets are not helping by amplifying large moves in the short term rather than tempering them.

Over the longer term, success in the ongoing transition in the liquidity-fundamentals paradigm will place markets on a more solid footing. So will repricing that allows traditional stock-bond diversification to provide better risk mitigation. The short term, however, is likely to be quite volatile.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.