EU Plans Retaliatory Tariffs On US Exports
March 07, 2018
South Dakota sales tax case rises to the US Supreme Court; US juice and peanut butter face retaliatory EU tax; US Trade deficit over 9-year high; Private sector jobs continue to grow, beating estimates.
- South Dakota sales tax case rises to the US Supreme Court. The US Supreme Court will hear arguments beginning in April in South Dakota v. Wayfair, a case that questions the legality of state sales taxes on e-commerce businesses not physically based in the state in which they do business. The case deals with a South Dakota law which requires out of state online retailers to collect state sales taxes. Currently, online retailers must only collect state sales taxes if the retailer has a physical present in the state: the law would change the standard to a “significant economic presence,” of 100,000 in sales or 200 or more transactions. Retail and real estate groups, along with state governments, have filed friend of the court briefs in support of South Dakota, while Wayfair and other e-commerce players have expressed support of existing law. [The Hill]
- US juice and peanut butter face retaliatory EU tax. In response to an announcement by President Trump that the US intends to levy taxes on imported aluminum and steel, the European Union has announced its plans to institute retaliatory tariffs on US exports of bourbon, peanut butter, cranberries, orange juice, steel, and industrial products. Cecilia Malmstrom, the EU trade commissioner, said the economic bloc would take measures to match the economic loss suffered by the EU. She added, a “trade war has no winners,” and that she was “intensively” talking to US counterparts to persuade Washington not to go through with the tariffs. [BBC]
Economic Indicators & News
- US Trade deficit over 9-year high. Commerce department data released Wednesday indicated the US trade deficit, the amount it imports more than it exports, has jumped 5% to $56.5 billion, spurred by decreases exports from China. The shortfall is at its highest level since October 2008, beating economists’ estimates by a few billion dollars. The Chinese trade surged 16.7%, mostly due falling exports to China, which dropped 28.1%. [CNBC]
- Private sector jobs continue to grow, beating estimates. According to figures released by Moody’s/ADP, he US economy added 235,000 jobs in February, beating expectations handily by 40,000 jobs. February is the 4th month in a row that private payrolls hit 200,000+ new jobs. The gains were broad-based, spread across hospitality, services, construction and manufacturing, and were also spread across businesses of various sizes. January figures were also revised upward, in January the economy added 244,000 jobs rather than 234,000. Chief economist at Moody’s Mark Zandi expressed concern that the “red hot job market threatens to overheat,” especially spurred by government spending and low taxes. [CNBC]