Budget Deal Nearly Done; China’s Export Boom; Trump’s Own Worst Enemy
Author: Greg Valliere
March 19, 2024
THE BRUISING BUDGET BATTLE which tore the House apart in recent months seems close to resolution. Not without a little more drama, of course, as staffers frantically write legislative language ahead of a March 22 deadline. There could be a two or three day extension, but the budget deal is nearly finished — raising the issue of what comes next.
FIRST, LAWMAKERS WILL HAVE TO PASS A FINAL BILL, which will require at least 40 votes from House Democrats. Speaker Mike Johnson faces the usual rancor from the right wing, but this deal looks done, and once again Johnson is on thin ice. His next task isn’t any easier — getting money to Ukraine, Israel and Taiwan. That looks do-able, probably in April.
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WE HIGHLY RECOMMEND an article in this morning’s Washington Post by David Lynch, detailing China’s export boom, which could cost the U.S. jobs, keep inflation low — and produce fresh U.S.-China trade tensions.
CHINESE FACTORIES ARE FLOODING global markets with cars, appliances, computer chips and electronics. And prices for its goods are falling. In February, U.S. imports from China cost 3.1 percent less than one year ago, the Bureau of Labor Statistics said on Friday.
CHINA’S FACTORY OUTPUT in the first two months of the year rose 7% over the same period in 2023. The combination of weak consumer demand and robust factory production leaves China with a surplus of goods that it needs to unload on global markets, Lynch writes.
SINCE THE END OF 2019, China’s manufacturing output, already No. 1 in the world, has expanded by roughly one-quarter, according to Capital Economics in London. U.S. factory production over the same period was flat and remains 7% percent below its 2007 peak. Chinese factories can churn out 40 million cars each year, 15 million more than are needed to satisfy domestic demand. The 5 million cars China exported last year were roughly five times its 2020 total.
CHINESE AUTOMAKERS already are Mexico’s top supplier. China’s automaker BYD, backed by Warren Buffett, sells one electric model for about $15,000, which helped it overtake Tesla late last year as the world’s largest EV producer.
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DONALD TRUMP — HIS OWN WORST ENEMY: He damaged his own campaign in the past three days. Trump called illegal immigrants “animals” and “not real people.” He said his supporters who are in jail are “hostages,” demeaning real hostages. He said Jews who vote for Democrats “hate Israel” and their religion. And who knows what he really meant by threatening a “bloodbath?”
WE SUSPECT AMERICANS will tire of this daily dose of outrageous comments, from a man who faces nearly $500 million in legal penalties that soon may lead to the seizure of his property and the inevitable speculation about him begging foreign governments for money. Trump is skilled at making himself the martyr, but after seven more months of this legal chaos Joe Biden may look better by default.
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