Confounding and confusing events 1/24/22
The ongoing debate with Russia seems to be escalating as Russia is issuing threats that could be very problematic to the US, Mr. Putin is now threatening to place nuclear missiles near the US which obviously means nuclear submarines off our coasts, and threats of more cyber warfare. Obviously, the US has the capacity to do both of those things in retaliation and, in fact, has nuclear missiles stationed in Europe much closer to Russia’s population centers than currently Russia has available other than through the use of nuclear submarines.
Our relationship with Canada and Mexico under the USMCA is becoming frayed as both of those countries are now teaming up to challenge us on a variety of issues regarding that agreement and our mutual trade relationship. The focus recently has been on the electric vehicle tax credit, but with auto parts comprising a huge part of international trade between the United States, Canada, and Mexico, particularly in the Detroit and Buffalo border crossing areas where car parts move back and forth with great frequency as we have often noted previously in these commentaries. The US seems to be drifting down even a more substantively contentious road than we were under Mr. Trump with those allies. Mr. Trump’s attacks were largely juvenile and nonsensical, Mr. Biden, unfortunately, is getting into substantive areas which could truly hurt the relationship. That is not something that we can afford to do when you see the development of the Asia/Pacific Trade Pact, of which China is a member, and of course, the EU, although that is somewhat been frayed by the withdrawal of Great Britain. Nonetheless, the Biden Administration seems to be walking down a path which is not fostering either trade, good relationships with our allies, nor, for that matter, jobs in the US.
The vaccination mandate for truck drivers has been instituted by Canada and now the US, which likely means we will start to see a slow down in the movement of goods in the very near term. Another trade problem.
Approximately a week ago, Congresswoman Stefanik decided that she would file an excuse with the House for missing votes by indicating it was due to the pandemic, when on the same day, she was at a fund-raiser with Mr. Trump at Mar-a-Lago. The fact that an individual Member misses a vote is not particularly concerning, the fact that a Member lied about it is very concerning. It will be interesting to see if anyone files an ethics complaint against her for this violation, or any other action is taken. Unfortunately, she continues to diminish herself as person of character. Maybe there is, however, a saving grace for her in that she might recommend, through an amendment to the various voting rights’ bills that are making their way through Congress, that voters might be able to vote by proxy since that is something she is very concerned about, but doesn’t seem to feel that her vote in the House is as sacrosanct.
The recent volcanic eruption near Tonga is being reported by scientists as the biggest explosion ever recorded. It surpasses the largest nuclear explosions by a significant magnitude as it equaled between 6 and 50 megatons.
Jobless claims rose by 55,000 for the week ending January 15, 2022 while the prior week increased by 20,000. This is usually a good indicator of where the economy is headed.
The Pandemic has not slowed China’s desire for US lobster. Exports of lobster increased by 6% in 2021 and exporters are gearing up for the Chinese New Year on February 1, 2022. Good news for New England.
Iceland has developed a process to extract Co2 from the atmosphere and imbed it in concrete. Scientists estimate we would need 10,000 more plants to make significant inroads in carbon reduction. The article did not disclose the cost of building a plant to perform this function. Assuming it’s cost effective, this looks like a reasonable idea.
US law makers, 140 of them, made a bipartisan request to the Biden Administration to expand tariff exclusions on Chinese goods. The reason; these tariffs hurt US businesses and consumers more than the Chinese. The obvious somehow effectively escapes us. My prediction is the Administration ignores this message.
The stock market has been volatile in recent weeks and it is no surprise, given the fact that we have increasing inflation, increasing job loss, the risk of the Fed moving rates, and of course the continued supply chain disruptions. It strikes me that this is something that the Biden Administration is going to have to take a careful look at, since many of these causes of the market’s activity are outside of the President’s control, irrespective of what the opposition says. Hopefully we will not see as dramatic of correction as one might expect after the stock market has sky rocketed over the last several years.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.]