The Biden administration could face an even more difficult task in reaching any trade agreement with China than the Trump administration did four years ago. Republican lawmakers are ready to pounce on any perceived weakness on China from Mr. Biden, and diplomatic and economic relations between the two countries have deteriorated.

The U.S. release of Meng Wanzhou, a Huawei executive who had been detained in Canada at the request of the United States, and China’s subsequent release of two Canadians and two Americans have done little to cool tensions.

Mr. Trump’s tariffs have discouraged imports of some Chinese goods, but exports to the United States have grown strongly through the coronavirus pandemic, as Americans purchased workout equipment, furniture, toys and other products during lockdown.

China’s leaders have also doubled down on the kinds of domestic industrial subsidies that the United States has long objected to. They have greatly expanded programs, started more than a decade ago, aimed at eliminating their need to buy computer chips and passenger jets — two of the United States’ main exports to China — among other industrial products.

The Biden administration has been exploring ways to persuade China to limit its broad industrial subsidies, but that will be difficult. China’s leader, Xi Jinping, has called for making sure that other countries remain dependent on China for key goods, so that they will not threaten to halt their own sales to China. The United States has done so over issues like surveillance, forced labor and the crackdown on democracy advocates in Hong Kong.

“The dependence of the international industrial chain on our country has formed a powerful countermeasure and deterrent capability for foreign parties to artificially cut off supply,” Mr. Xi said in a speech last year.

In her speech, Ms. Tai highlighted industries like steel, solar panels and semiconductors, where China has used generous government financing and state-directed purchases to corner global markets and squeeze American competitors.

Article source: https://www.nytimes.com/2021/10/04/business/economy/us-china-trade.html

BlackRock, the world’s largest asset manager, wants the businesses it invests in to eventually remove as much carbon dioxide from the environment as they emit, reaching what is known as net-zero emissions. The New York State Common Retirement Fund, which manages the pension funds of state and local government workers, has said it will stop investing in companies that aren’t taking sufficient steps to reduce carbon emissions.

But even some investors pushing for emissions reductions express concern that the transition from fossil fuels could drive up energy prices too much too quickly.

Mr. Dell said limited supply of oil and natural gas and the cost of investing in renewable energy — and battery storage for when the sun is not shining and the wind is not blowing — could raise energy prices for the foreseeable future. “I am a believer that you’re going to see a period of inflating energy prices this decade,” he said.

Laurence D. Fink, chairman and chief executive of BlackRock, said this could undermine political support for moving away from fossil fuels.

“We risk a supply crisis that drives up costs for consumers — especially those who can least afford it — and risks making the transition politically untenable,” he said in a speech in July.

There are already signs of stress around the world. Europe and Asia are running low on natural gas, causing prices to rise even before the first winter chill. Russia, a major gas supplier to both regions, has provided less gas than its customers expected, making it hard for some countries to replace nuclear and coal power plants with ones running on gas.

OPEC, Russia and others have been careful not to raise oil production for fear that prices could fall if they flood the market. Saudi Arabia, the United Arab Emirates, Russia and a few other producers have roughly eight million barrels of spare capacity.

Article source: https://www.nytimes.com/2021/10/04/business/energy-environment/oil-and-gas-prices-clean-energy.html

“I respectfully submit that it is time for you to engage directly with congressional Democrats on this matter,” Mr. McConnell wrote in a letter to Mr. Biden. “Your lieutenants in Congress must understand that you do not want your unified Democratic government to sleepwalk toward an avoidable catastrophe when they have had nearly three months’ notice to do their job.”

Democratic leaders in the Senate, along with Mr. Biden, have bristled at Mr. McConnell’s stance, saying Republicans bear responsibility for having approved spending that now requires more government borrowing, and have no right to stand in the way of a Senate vote.

“Why? Why are we doing this?” Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, said on Monday. “Because McConnell wants to make a point.”

Senator Jon Tester, Democrat of Montana, visibly frustrated, said the brinkmanship “speaks to how broken this country is.”

“I mean it’s crazy — we’re offering a way to do it, where he doesn’t have to have any members vote for it, and he said that’s not good enough,” Mr. Tester said. “It’s got to be on this piece of legislation or we’re out.”

Senator Chuck Schumer of New York, the majority leader, told Democrats that a bill that would raise the debt limit would need to reach Mr. Biden’s desk within days, not weeks, and threatened to hold members in Washington over the weekend and cancel an upcoming recess to do it.

Article source: https://www.nytimes.com/2021/10/04/business/economy/biden-republicans-debt-limit.html

The National Pig Association has warned that about 120,000 pigs are backed up on farms because of a lack of slaughterhouse workers, and the British Poultry Council said it expected to cut Christmas turkey production by 20 percent. On Monday, protesters gathered outside of the Conservative Party conference in Manchester with signs that said “All we want for Christmas is our pigs in a blanket” and “#saveourbacon.”

Consumers are already anticipating shortages. One farmer in Leeds said that by last month, customers had already ordered all 3,500 turkeys she was raising for Christmas — a first.

A lack of truck drivers has also caused sporadic shortages for staples including eggs, milk and baked goods. One in six people in Britain said that in recent weeks they had not been able to buy certain essential food items because they were unavailable, according to a report by the Office for National Statistics, which surveyed about 3,500 households.

Some consumers interviewed in recent days said they had not had any trouble finding what they wanted at grocery stores. But Meriem Mahdhi, 22, who moved from Italy to Colchester in southeast England last month to attend college, said she had struggled to find essential items at her local grocery store, Tesco, Britain’s largest supermarket chain.

“All the dried foods like pasta, canned fruit, it’s all gone, every day,” she said. Tesco did not respond to a request for comment.

Seeking a quick fix, 200 military personnel in fatigues on Monday arrived at refineries to help deliver fuel to gas stations. About half of them drove civilian vehicles and the others provided logistical support. “As an extra precaution we have put the extra drivers on,” Mr. Sunak said.

Over the weekend, the government said it had extended thousands of temporary visas for foreign workers to work in Britain until the first few months of next year. But economists said the temporary visas were unlikely to be enough to make much of a difference, since there are shortages at every link in the supply chain.

Article source: https://www.nytimes.com/2021/10/04/world/europe/uk-christmas-turkey-shortage.html

“Against the backdrop of worldwide opposition against Cold War and division, the United States blatantly violated its policy statement of not seeking a new Cold War and ganged up to form an Anglo-Saxon clique,” Wang Yi, the Chinese foreign minister, said on Sept. 28 in response to the Australian submarine deal.

The U.S. release of Meng Wanzhou, a Huawei executive who had been detained in Canada at the request of the United States, and China’s subsequent release of two Canadians and two Americans, have done little to cool tensions.

Mr. Trump’s tariffs have discouraged imports of some Chinese goods, but exports to the United States have grown strongly through the coronavirus pandemic, as Americans purchased workout equipment, furniture, toys and other products during lockdown.

China’s leaders have also doubled down on the kinds of domestic industrial subsidies that the United States has long objected to. They have greatly expanded programs, started more than a decade ago, aimed at eliminating their need to buy computer chips and passenger jets — two of the United States’ main exports to China — among other industrial products.

The Biden administration has been exploring ways to persuade China to limit its broad industrial subsidies, but that will be difficult. The George W. Bush, Obama and Trump administrations all tried with little success for ways to coax China to abandon its long-running use of subsidies to domestic producers as a tool to wean itself from any reliance on imports.

China’s leader, Xi Jinping, has called for making sure that other countries remain dependent on China for key goods, so that they will not threaten to halt their own sales to China. The United States has done so over issues like surveillance, forced labor and the crackdown on democracy advocates in Hong Kong.

“The dependence of the international industrial chain on our country has formed a powerful countermeasure and deterrent capability for foreign parties to artificially cut off supply,” Mr. Xi said in a speech last year.

Article source: https://www.nytimes.com/2021/10/04/business/economy/us-china-trade.html

It is “frustrating to see the bottlenecks and supply chain problems not getting better — in fact, at the margin, apparently getting a little bit worse,” Jerome H. Powell, the Fed’s chair, said while speaking on a panel on Wednesday. “We see that continuing into next year, probably, and holding inflation up longer than we had thought.”

Phil Levy, the chief economist at the logistics firm Flexport, said his company expected supply chain issues to begin easing next summer at the earliest. But as labor issues bubble up at long-overburdened ports, that could take even longer.

And in the near term, trouble finding shipping space could translate to shortages of toys and trinkets during the holiday season, causing companies to lift prices to make sure their supply lasts, Mr. Levy said.

“Ports are under strain, with ships backed up. We are short on truckers. We have warehouses that are packed full,” he said, later adding: “There was a sense a year ago that this would be a short-lived thing — there would be a craze, a squeeze, and then it would let up. The interpretation of ‘transitory’ has changed.”

While central bankers have long expected price gains to slow down, their guesses at how quickly that moderation will happen have been increasingly glum. In their latest economic projections, Fed officials forecast that the Personal Consumption Expenditures index will average 4.2 percent in the final quarter of 2021 — up from 3.4 percent in their June estimates — before declining to 2.2 percent by the end of next year.

The Fed aims for 2 percent inflation on average over time, though it is happy to tolerate higher periods as long as they are not expected to last.

Today’s price problem is a surprising one. Central bankers across advanced economies had spent most of the last decade wrestling with too-low, rather than too-high, inflation. That’s one of the reasons officials expect price gains to cool — once the pandemic shock recedes, long-running forces like population aging and technology should dominate.

Article source: https://www.nytimes.com/2021/10/01/business/economy/inflation-supply-chain.html

“Of course, as allies and friends, we do not always agree on everything, and we have seen this in recent weeks,” Mr. Dombrovskis said, adding that there had been more engagement from the Biden administration than the Trump administration.

In meetings this week, Secretary of State Antony J. Blinken; Gina Raimondo, the commerce secretary; Katherine Tai, the U.S. trade representative; and their European counterparts pledged to collaborate on a variety of 21st-century issues, such as controlling exports of advanced technology, screening investments for national security threats and offering incentives to manufacture chips in Europe and the United States as a semiconductor shortage continues.

Though official documents did not explicitly mention China, the partnership is clearly aimed in part at countering the country’s authoritarian practices. Among other goals, the council promised to combat arbitrary and unlawful technological surveillance and the trade-distorting practices of nonmarket economies.

U.S. and European officials in June announced an agreement ending a 17-year dispute over aircraft subsidies given to Airbus and Boeing.

But a lingering fight over Mr. Trump’s metal tariffs on imports from Europe and elsewhere could prove harder to resolve. Mr. Biden is under intense pressure to maintain barriers to imports from domestic steel makers and labor unions that supported his campaign.

In a virtual round table on Thursday, industry executives and labor leaders said that cheap steel produced in Europe could still damage the U.S. industry.

While China is best known for subsidizing its steel industry, European makers have also been major recipients of government subsidies, giving them an unfair advantage over U.S. competitors, said Lourenco Goncalves, the chief executive of Cleveland-Cliffs Inc., an American iron ore mining company.

Article source: https://www.nytimes.com/2021/10/01/business/economy/us-europe-trade.html

With fewer vehicles rolling off assembly lines, dealers’ inventories have become skimpy. On Friday, Kenosha Toyota in Wisconsin had a single new vehicle for sale — a two-wheel-drive Tacoma pickup. Suburban Chevrolet of Ann Arbor in Michigan was displaying just 11 new models for sale on its website.

Despite the shortage, automakers and dealers alike are reaping hefty profits because tight inventories have forced consumers to pay higher prices. J.D. Power estimated that the average selling price of a new vehicle in September was $42,802, up more than $12,000 from the same month in 2020.

“It’s a bonanza for the dealers and the factories, despite the shortage of inventory,” Mr. Haig said.

With new cars scarce, prices of used cars have also shot up. And the latest sales figures raise concerns that the inventory shortage is worsening and crimping sales.

“There are simply not enough vehicles available to meet consumer demand,” said Thomas King, president of J.D. Power’s data and analytics division.

At General Motors, sales were down 33 percent in the quarter. The automaker sold 446,997 vehicles, compared with 665,192 light trucks and cars a year earlier. In the same quarter of 2019, G.M. sold 738,638.

Honda’s sales were down 11 percent in the quarter, to 354,914 cars and trucks. But a decline in September of nearly 25 percent from the prior year showed the increasing squeeze on production. Stellantis, which was formed by the merger of Fiat Chrysler and France’s Peugeot, reported a 19 percent drop in third-quarter sales. At Nissan, the decline was 10 percent.

Article source: https://www.nytimes.com/2021/10/01/business/auto-sales-gm-honda-toyota.html

For example, when inflation has been low in the recent past, workers might not demand raises as they would in a world where inflation was high; after all, their existing paychecks go pretty much as far as they used to. You don’t need some theory involving inflation expectations to get there.

Some economists who are sympathetic to the idea that central bankers have overly fetishized precise measurements of inflation expectations aren’t ready to fully dismiss the idea.

For example, Mr. Posen, a former Bank of England policymaker, says there remains a simple and hard-to-dispute idea about inflation expectations supported by lots of history: that if people distrust a country’s monetary system, inflation shocks can spiral upward. Economic policy credibility matters. But that isn’t the same as assuming that some survey or bond market measure of what will happen to inflation in the distant future is particularly meaningful for forecasting the near future.

“It has been a noble lie that has become a critical part of the catechism of global monetary policy, that long-term inflation expectations are not just interesting but are a decisive determinant of real-time inflation,” said Paul McCulley, a former Pimco chief economist, commenting on Mr. Rudd’s paper.

This isn’t the only way in which basic precepts underlying economic policy are shifting beneath economists’ feet.

Particularly prominently, for years central bankers believed there was a tight relationship between the unemployment rate and inflation, known as the Phillips Curve. Over the course of the 2000s, though, that relationship appeared to weaken and become a less reliable guideline for how to set policy.

Similarly, interest rates and inflation fell worldwide, for reasons that scholars are still trying to understand fully. That implied a lower “neutral interest rate,” or the rate that neither stimulates nor slows the economy, than was widely believed to be the case as recently as the mid-2010s.

Article source: https://www.nytimes.com/2021/10/01/upshot/inflation-economy-analysis.html

Mr. Mushkin said of Dollar Tree: “They have everything going the wrong way.”

Dollar General said it had hired 50,000 additional workers between mid-July and Labor Day, but acknowledged in August that its labor costs were adding to expenses. Analysts say some of these additional expenses are driven by the pressure to raise wages.

Still, the higher pay may not be enough to encourage employees to stay on the job. Workers say the stores are chronically understaffed and rely on part-time workers who are given unpredictable schedules and cannot afford the required employee contribution for health care benefits.

In a statement, Dollar General said, “We pay competitive wages, which are determined based on several factors including the relevant labor market.” The company added that “our operating standards are designed to provide stores with sufficient labor hours, and it is not our expectation that store managers should work 70 to 80 hours per week.”

Part-time workers sometimes encounter the opposite problem of not having enough work. As a store manager, Ms. Beadling said, she was constantly trying to find additional hours to give to her employees who needed the money, including one worker who was living in a tent because she couldn’t afford rent.

But the allotted hours for the store were limited by higher-up managers, she said.

This summer, social media buzzed with photos of dollar stores, from Lincoln, Neb., to Pittsburgh and beyond, where employees had taped up signs in the front door announcing that they had walked off the job.

“Capitalism will destroy this country,” read one sign in the window of a Dollar General in Eliot, Maine, this spring. “If you don’t pay people enough to live their lives, why should they slave away for you?”

Article source: https://www.nytimes.com/2021/09/30/business/dollar-stores-struggling-pandemic.html