Morning Call: July 11th, 2018

NATIONAL

You Get A Tariff, And You Get A Tariff…

200 BILLION: The White House said it would assess tariffs on a further $200 billion in Chinese goods.  The new tariffs won’t take effect for at least two months, administration officials said, giving U.S. industry time to comment on the products selected for levies.  Hearings on the products are scheduled for Aug. 20-23.

SENDING A MESSAGE: U.S. industry officials said the tariffs were bound to be seen as a warning to Europe that the U.S. wouldn’t back off in a trade fight. It also could be a specific warning to German Chancellor Angela Merkel, who this week met with Chinese Premier Li Keqiang in Berlin.

CONSUMER PAIN: The administration has tried to limit the impact on consumers. For instance, President Donald Trump had earlier said he would impose 25% tariffs on an additional $100 billion of Chinese goods, but then switched to 10% tariffs on $200 billion of imports, which would ease any price increase. However, The new tariffs are expected to have a more direct consumer impact and could produce a reaction against the trade fight.

CHINA’S NOT BACKING DOWN: Danielle Paquette reports at the WaPo that, “Less than a week after the United States and China struck each other with steep tariffs, Beijing has unveiled a basic outline to help Chinese companies absorb the blows, pledging to funnel money collected from levies to firms and workers tangled in the escalating trade war.” https://wapo.st/2L373En

ANTI-AMERICA: China is also encouraging businesses to roll back their reliance on U.S. goods, urging them to shift orders for products such as soybeans and auto­mobiles to suppliers in China or countries other than the United States.

IMPACT IN US: The Pose & Courier is reporting that “Automaker BMW says it will build more of its popular SUVs overseas to offset the higher cost of sending cars to China due to recently enacted tariffs. BMW also said it will raise the price of South Carolina-built vehicles sold in China to help offset that country’s new 40 percent import tax on cars from the U.S., retaliation for higher tariffs on Chinese goods imposed by President Donald Trump.” http://bit.ly/2ucXYm0

Tyler’s Thoughts

“It doesn’t look like either side is backing down anytime soon.  While I do agree that Trump could one day get some concessions from China.  The bigger questions are how long and at what cost?  BMW announced last year that they would begin a 4 year 600 million dollar expansion in Spartanburg that would create an extra 1,000 jobs.  I’m assuming with the latest news from BMW those plans are off.  Unlike Xi Jinping, Donald Trump has elections to worry about.  Trump voters will stick with him.  But once again the question is, for how long and what cost”


In Other News

President Trump signals he is ready for fight with NATO, “President Trump signaled Tuesday that he was ready for a transatlantic brawl as he embarked on a consequential week of international diplomacy, taking aim at vulnerable British Prime Minister Theresa May and suggesting that meeting with Russian President Vladi­mir Putin might be easier than talking with Western allies at the NATO summit here.” https://wapo.st/2KPbtTq

Lisa Page’s attorney says Page will not appear for Capitol Hill interview despite a subpoena, “In a statement, Amy Jeffress said her client did not have enough time to prepare and had asked the the House Judiciary and Oversight and Government Reform Committees to schedule another date.  ‘The Committees have not honored this request,” Jeffress said. “As a result, Lisa is not going to appear for an interview at this time.'” LINK

NORTH CAROLINA

Solar Subsidy Scam

Dan Way has a great piece at the Carolina Journal on the tax credits offered to renewable energy projects that are still paying out three years after they expired…http://bit.ly/2L0NEaj

STRUCTURE: It was structured to issue tax credits equaling 35 percent of the money companies invested in renewable projects. Investors also have up to five years to claim the credits against the taxes they owe.

815 MILLION: In 2017 the state paid $209 million in credits, including $1 million or more to 41 entities, based on state Department of Revenue data. Of the recipients, 31 were large insurance companies, four were big banks, and two were electric utilities. Only three were people. Apple rounded out the list.

2020 & BEYOND: Lawmakers said some developers made substantial investments as the deadline approached but the state couldn’t complete the permitting process before the program ended.  So The General Assembly passed a “Safe Harbor Act” extending the program for some projects to the end of 2016, and generating another pile of renewable tax credits.

UNCLAIMED CREDITS: Former Representative Chris Millis provided Carolina Journal with a Revenue Department document showing $1.64 billion in available tax credits were generated for the years 2010-15.  Subtracting $815,292,020 in credits claimed to date from the $1.6 billion figure would leave $823,220,906 in unclaimed tax credits.

Tyler’s Thoughts

“Folks are giddy over a possibly 200 million dollar windfall in tax income from the recent Supreme Court decision.  Last year we paid 209 million in solar credits.  You do the math.”


In Other News

Governor Roy Cooper is upset that lawmakers did not include the 2 billion dollar school bond on the ballot in November, “They are forcing people to vote for constitutional amendments that are bad for our state and that are unnecessary, but they refuse to let people vote on a school bond,” he said, noting people will remember that when they head to the polls. “People are tired of the legislature shortchanging public education, clean air and water and health care, and I think that this will be a big year for challengers against incumbents.” http://bit.ly/2KNacwc

Governor seems more upset about the school bond and less upset that his administration missed another deadline with Hurricane Matthew recovery, “Late April, at a meeting of the North Carolina House Committee on Disaster Recovery. Nick Burk, then a deputy director for recovery with the North Carolina Emergency Management office, told lawmakers his agency hoped to begin construction using a pot of federal money from the US Department of Housing and Urban Development by June 30.  That date has come and gone with no sign of construction starting in the immediate future. This is the second self-imposed deadline Burk presented to the committee in April that has been missed.” http://bit.ly/2JdIbbl

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