Tuesday, December 1, 2020

Reuters News - Bipartisan U.S. lawmakers seek fast approval of $908 billion COVID-19 relief

 WASHINGTON (Reuters) - A bipartisan group of U.S. lawmakers on Tuesday unveiled a $908 billion COVID-19 relief bill aimed at breaking a monthslong deadlock between Democrats and Republicans over new emergency assistance for small businesses, unemployed people, airlines and other industries during the pandemic.

The measure has not yet been written into legislation. Nor has it been embraced yet by the Republican Trump administration, Democratic President-elect Joe Biden or leaders in the Senate or House of Representatives, all of whom would be needed for passage.

But it comes with the backing of a group of conservatives and moderates who claim it will appeal to a broad swath of Congress.

Lawmakers are hoping to wrap up their work for the year by mid-December, but they still have a massive government-funding bill to approve or else risk agency shutdowns starting on Dec. 12.

If the bipartisan coronavirus aid bill gains traction in coming days, it could either be attached to the spending bill or advance on a separate track.

“It would be stupidity on steroids if Congress left for Christmas without doing an interim package,” said Democratic Senator Mark Warner.

Earlier this year, over $3 trillion in coronavirus aid was enacted, which included economic stimulus measures and money for medical supplies.

Unveiling of the plan at a Capitol Hill news conference came as the number of coronavirus cases surged in the United States, coupled with significant increases in deaths and many hospital resources at a breaking point.

Republican Senator Lisa Murkowski urged quick action on the bipartisan plan as she ticked off business closures mushrooming in her state of Alaska “during a pretty dark and cold time of year,” with many suffering job losses and “food insecurity.”

The bipartisan proposal would provide emergency aid through March 31, including $228 billion in additional Paycheck Protection Program funds for hotels, restaurants and other small businesses.

State and local governments would receive direct aid under the bipartisan bill, the lawmakers said.

Ohio Governor Mike DeWine, a Republican, appealed for help from Congress, noting in an interview on “CBS This Morning” that his state has more than 5,000 coronavirus patients in hospitals and not enough money to distribute the much-awaited COVID vaccines that are expected to be available beginning this winter.

U.S. airlines would receive $17 billion for four months of payroll support as part of $45 billion for the U.S. transportation sector that also includes airports, buses, and Amtrak passenger rail, according to two people familiar with the plan.

Overall, Senator Mitt Romney, a Republican, said it contains $560 billion in “repurposed” funding from the CARES Act enacted in March, with the remaining $348 billion in new money.

The measure includes provisions that Republicans have been pressing for, including new liability protections for businesses and schools grappling with the coronavirus pandemic.

But it is far more expensive than the $500 billion that Senate Majority Leader Mitch McConnell has been advocating.

House of Representatives Speaker Nancy Pelosi and her fellow Democrats would win a central demand with the aid to state and local governments, which face layoffs of front-line workers due to a lack of revenues.

A compromise $300 per week for four months in additional, unemployment benefits would also be in the package, according to the lawmakers. Democrats had been seeking $600.

Separately, a group of Democratic senators introduced legislation on Tuesday that would extend until October 2021 the $600 per week in jobless benefits for workers who lost their jobs due to COVID-19.

While it is significantly below the $2.2 trillion Pelosi sought in her last offer to the White House before the Nov. 3 elections, the $908 billion is for a relatively short period, potentially opening the door to additional requests for money once the Biden administration is in place.

Pelosi and Treasury Secretary Steven Mnuchin were expected to discuss coronavirus aid and the must-pass government funding bill later on Tuesday.

Reporting by Richard Cowan and Doina Chiacu; Additional reporting by Patricia Zengerle, David Morgan and David Shepardson; Editing by Franklin Paul, Chris Reese and Jonathan Oatis

Monday, November 30, 2020

BBC News - China slaps up to 200% tariffs on Australian wine


China will impose taxes on Australian wine of up to 212%, starting on Saturday.

Its commerce ministry said these were temporary anti-dumping measures to stop subsidised imports of Australian wine.

The duties will range from 107% to 212%, intensifying trade tensions between the two countries.

In recent months, Beijing has targeted Australian imports including coal, sugar, barley and lobsters amid political tensions.

Officials in China have argued that some Australian wine is being sold cheaper there (dumped) than in its home market through the use of subsidies. Australia has rejected that assertion.

China is the biggest destination for Australia's wine exports, accounting for 39% in the first nine months of 2020, according to Wine Australia.

China has been carrying out a year-long investigation into anti-dumping, looking at wines being sold in China at prices alleged to be lower than in Australia.

Following the announcement on Friday, Treasury Wine Estates (TWE), one of the world's biggest winemakers saw its share price slump more than 13%.

TWE, the maker of Penfolds and Wolf Blass, has built up a powerhouse business selling into China which analysts estimate is worth A$4bn (£2.2bn; $3bn) alone after six years of robust growth.

Other Australian winemakers have been singled out alongside TWE, including Casella Wines and Australian Swan Vintage.

China's commerce ministry didn't specify how long the measures would last for.

'Extremely disappointed'

Australia's agriculture minister David Littleproud reacted to the announcement via Twitter, saying the government was "extremely disappointed".

"The Australian government categorically rejects any allegation that our wine producers are dumping product into China," he said.

"Australian wine is hugely popular both in China and across the globe due to its high quality and we are confident that a full and thorough investigation will confirm this."

Australia's trade minister Simon Birmingham said the new tariffs make Australian wine unviable and unmarketable in China.

"This is a very distressing time for many hundreds of Australian wine producers, who have built, in good faith, a sound market in China," he said.

Mr Birmingham has raised the idea of taking China to the World Trade Organisation (WTO) over the restrictions.

Growing tensions

Political relations between China and Australia have deteriorated this year to their lowest point in decades, experts say.

Australia backed a global inquiry into the origins of the coronavirus in April, and effectively singled out China, according top Chinese diplomat.

Since then, Australian imports have been under the spotlight while Chinese students and tourists were warned against travelling to Australia citing fears of racism.

Thursday, November 26, 2020

Reuters News - A third of England face toughest COVID curbs, London spared for now

 LONDON (Reuters) - More than 20 million people across large swathes of England will be forced to live under the toughest category of COVID-19 restrictions when a national lockdown ends on Dec. 2, while London was placed in the “high alert” second-toughest tier.

Health minister Matt Hancock on Thursday announced final details of a regional system set to take effect when blanket restrictions on England’s 55 million population end after a month-long lockdown - dictating the terms of daily life for the country’s citizens and businesses.

“Hope is on the horizon but we still have further to go so we must all dig deep. The end is in sight, we mustn’t give up now,” Hancock told parliament, alluding to growing prospects for a vaccine against the coronavirus in the coming months.

Britain has Europe’s highest official death toll from the COVID-19 pandemic and has been hit hard by a second wave. The government’s response on lockdown rules, procurement and testing has been criticised as disjointed, expensive and slow.

“We must follow these new rules and make sure that our actions today will save lives in future and help get our country through this,” Hancock said.

Thursday’s decision had been keenly awaited by businesses across the country whose ability to trade in the critical pre-Christmas period will be affected. Hospitality is one of the large sectors that will suffer the most in higher tiers.

Hancock said cases were rising in parts of the capital and needed to be brought under control.

London will be in tier 2; it was also in tier 2 before the national lockdown was imposed, although a tighter set of rules for each tier was announced earlier this week.

For London, this means no mixing of households indoors and a maximum of six people permitted to meet outdoors, hospitality venues can only offer alcohol alongside a substantial meal, and attendance will be tightly limited at sporting events.


“Many businesses across London and the Square Mile will be breathing a collective sigh of relief now that they will be able to trade in the run up to Christmas,” said City of London Corporation Policy Chairwoman Catherine McGuinness.

However some large regions of England, including the northern city of Manchester and the prosperous southeastern county of Kent, were placed in tier 3, the most restrictive, where the rate of infection is highest.

In tier 3, hospitality venues must remain closed, except for takeaway services.

“This will cause real hardship for people whose jobs will be affected and risk the loss of many businesses,” Mayor of Greater Manchester Andy Burnham said.

The decisions have been made according to five criteria, including the pressure on health services in each region and the rate of change in positive coronavirus cases.

The announcement angered some local and regional politicians in the hardest hit areas, goading a rebellious core within the ruling Conservative Party who feel the government is overreacting and unjustifiably restricting daily life.

“The authoritarianism at work today is truly appalling. But is it necessary and proportionate to the threat from this disease?” Conservative lawmaker said on Twitter, demanding the government publish their evidence.

Only three regions in England were placed in the lowest tier 1 category: the Isle of Wight, Cornwall and the Isles of Scilly - all far removed from more heavily populated metropolitan areas of the country.

Tiers will be reviewed on Dec. 16, making it possible for areas that slow the spread of the virus to be moved down a notch before Christmas.

Reporting by William James; Editing by Guy Faulconbridge and Mark Heinrich

Wednesday, November 25, 2020

BBC News - Rishi Sunak warns 'economic emergency has only just begun'

 The "economic emergency" caused by Covid-19 has only just begun, according to chancellor Rishi Sunak, as he warned the pandemic would deal lasting damage to growth and jobs.

Official forecasts now predict the biggest economic decline in 300 years.

The UK economy is expected to shrink by 11.3% this year and not return to its pre-crisis size until the end of 2022.

Government borrowing will rise to its highest outside of wartime to deal with the economic impact.

The government's independent forecaster, the Office for Budget Responsibility (OBR) expects the number of unemployed people to surge to 2.6 million by the middle of next year.

It means the unemployment rate will hit 7.5%, its highest level since the financial crisis in 2009.

However, fewer jobs are expected to be lost than predicted this summer.

Setting out his Spending Review detailing how much would be spent on public services, Mr Sunak said the government was dealing with an "economic emergency".

He added: "That's why we have taken, and continue to take, extraordinary measures to protect people's jobs and incomes."

The government has subsidised the wages of employees unable to work due to the pandemic, in an effort to protect jobs.

It said extending these schemes to next March meant 300,000 fewer people would be out of work.

What about public sector pay?

The chancellor said he could not justify an across-the-board increase when many in the private sector had seen their pay and hours cut in the crisis.

But Mr Sunak said lower-paid public sector workers would be guaranteed at least a £250 pay rise next year.

The shadow chancellor, Anneliese Dodds, criticised the pay freeze.

She said: "Earlier this year the chancellor stood on his doorstep and clapped for key workers. Today, his government institutes a pay freeze for many of them. This takes a sledgehammer to consumer confidence."

Robert, a 25-year-old civil servant and representative for the PCS Union, said he was "deeply disappointed".

"[Civil servants] have spearheaded the response to the pandemic and worked tirelessly to deliver Brexit. We've stepped up and delivered... and I'd like to be recognised for that."

Having worked for various government departments since graduating from university a few years ago, he says he feels "let down".

What else was announced?

The minimum wage - which has been rebranded as the National Living Wage - will increase by 2.2% - or 19p - to £8.91 an hour, with the rate extended to those aged 23 and over.

Other rates were also increased. From next April, 16 and 17 year-olds will see their pay go up to £4.62 per hour, from £4.55 today.

The UK also ditched its policy of spending 0.7% of national income on overseas aid to help deal with the coronavirus crisis at home.

Mr Sunak said the new 0.5% target - which adds up to about £4bn in savings - will be "temporary".

And millions of retirees will see the future value of their pension cut owing to a planned change in the way payments are calculated from 2030.

How much will this cost?

Mr Sunak said the government had already spent £280bn to help support the economy through the coronavirus.

It will spend a further £55bn next year as part of a package of measures to support the recovery. This includes billions of pounds to help people find jobs.

The UK is expected to borrow £393.5bn this financial year to help pay for economic relief measures.

Borrowing is also forecast by the OBR to remain above £100bn-a-year - or 4% of the size of the UK economy - in five years time.

In recent years, the government has been able to borrow easily at very low interest rates, which makes its debt more affordable.

At the moment it pays just 0.32% interest to borrow for ten years.

However, Mr Sunak said long-term scarring meant the economy would be 3% smaller in 2025 than expected in the March budget.

How will the UK get debt under control?

The OBR said the coronavirus pandemic had "delivered the largest peacetime shock to the global economy on record", while recent restrictions across the UK had taken "the wind out of an already flagging recovery".

It said the UK's later and longer lockdown this spring meant it had experienced "a deeper fall and slower recovery in economic activity" than some of its European neighbours.

The independent forecaster also warned that tax rises or spending cuts would be needed in future years to stabilise the UK's growing debt pile.

Richard Hughes, the OBR's chairman said: "The chancellor will need to find £20bn to £30bn in spending cuts or tax rises if he wants to balance revenues and day-to-day spending, and stop debt rising by the end of this parliament."

Is this the end of government support?

Analysis box by Dharshini David, global trade correspondent

Is that the end of it? The official forecasts assume that 2 December spells the end of lockdown, that we remain in the equivalent of Tier 3 restrictions until the spring - and then the vaccine becomes widely adopted in the second half of 2021. Too cautious - or optimistic? If anything, 2020 has taught us that assumptions can last as long as a disposable face covering.

But it'll take longer for economic life to spring back to rude health. Reviving job prospects, investment and consumption will take TLC. Even when the official crystal ball gets misty, in 2025, output is still 3% lower than it was previously expected to be.

And that's without the risk of a no-deal; the OBR says that could mean that output is a further 1.5% by 2025. Some economists think the hit could be greater (indeed, the Governor of the Bank of England says the long term impact of a no- deal could exceed that of a virus).

Rishi Sunak has to decide when to turn off the support to the convalescing economy - and when to start patching up the public finances by firing up tax rises. The extreme uncertainty underlines how fraught - and costly - that decision could be.


What's will happen to house prices?

House prices are expected to fall in 2021 and 2022.

The OBR expects a recent revival in the market to end next year when a stamp duty holiday stops in March and more people lose their jobs as government support schemes are pared back.

However, the end of the tax break is expected to contribute to a 3.5% fall in house prices next year and a further 2.6% drop in 2022.

The OBR added: "Despite a steady recovery from 2022 onwards, the level of house prices remains around 17% lower (in 2025) compared to our March forecast."

What about Brexit?

The OBR said the "unresolved nature" of the negotiations between the UK and EU over a Brexit deal had "further clouded" the economic outlook.

It said failure to secure a deal would reduce the size of the UK economy by a further 2% in 2021, with permanent damage to growth and living standards in future years.

Under this no-deal scenario, the economy would not return to the size it was before the pandemic hit until the second half of 2023, while unemployment would peak at a higher rate of 8.3%.