Trump Lifts Jones Act To Aid Puerto Rico
September 28, 2017
US Bombardier tax overshadows NAFTA trade talks; Trump lifts the Jones Act to speed aid to Puerto Rico; US proposed tax plan boosts dollar; Jobless claims spike on Irma.
- US Bombardier tax overshadows NAFTA trade talks. US taxes imposed on Bombardier’s CSeries jet sparked outcry from Britain and Canada, for whom Bombardier’s production efforts support thousands of jobs. The US Department of Commerce purportedly instituted these duties as an anti-subsidy effort to the frustration of Canada and the UK, as the 220% duty would effectively shut out Bombardier jets from the US market. The move prompted retaliation from Canada, whose Prime Minister declared the nation will not go through with its plans to buy 18 Boeing F-18 Super Hornet jets. Adding heat to the dispute, both Britain’s and Canada’s governments have specific political interest in areas where Bombardier has the bulk of its operations: Ottawa and Northern Ireland. The conflict cast a pall over the NAFTA negotiations currently underway, as the Trump administration imposes its second anti-Canadian duty, after a preliminary duty on Canadian lumber. [Reuters]
- Trump lifts the Jones Act to speed aid to Puerto Rico. The President temporarily lifted the restrictions of the Jones Act in order to expedite food and aid to Puerto Rico. The law mandates that American-made and-operated vessels transport cargo between U.S. ports. The President received criticism for delaying Puerto Rico’s reprieve from these restrictions, while waiving rules for Florida and Texas. Lawmakers asked for a 1 year break from the law, while the administration only waived the rule for 10 days. Relief from the Jones Act is key for speeding aid to the devastated island, which suffered 2 hurricanes this past month, knocking out all of the electricity on the island. [Bloomberg]
Economic Indicators & News
- US proposed tax plan boosts dollar. The US dollar rose for the fourth day in a row, pulled up mostly by the proposal of the GOP tax plan in the US, which President Trump promised at a rally in Indiana would reduce the tax burden on businesses and individuals alike. Traders expressed concerns, however, that the dollar has reached the top of recent trading ranges, and nothing fundamental about the US economy or its currency has changed. With details of the President’s tax plan still murky, a correction is likely ahead. [Reuters]
- Jobless claims spike on Irma. Jobless claims rose last week, particularly by about 8,000 in Florida and 3,000 in Georgia, as storm evacuations and damage to businesses and infrastructure disrupt work. Filings rose 12,000 over the week, but jobless claims remained well below the 300k benchmark, at 272k, slightly above estimates. Though some volatility is expected, economists fully expect claims to drop as people return to work after the storm. [Bloomberg]