Japan tops China as largest holder of U.S. Treasury debt
Kyodo, AP Dec 16, 2016 The Japane Times
WASHINGTON – Japan surpassed China as the largest holder of U.S. Treasury securities in October for the first time in a year and eight months, according to U.S. government data released Thursday.
Japan’s holdings of U.S. Treasury debt totaled $1.1319 trillion as of the end of October, down $4.5 billion from a month earlier. The tally compared to China’s $1.1157 trillion, down $41.3 billion, the Treasury Department said.
The large reduction by China appears to reflect the country’s dollar-selling, yuan-buying interventions to shore up the value of the Chinese currency, also known as the renminbi, according to financial experts.
Meanwhile, Chinese central bank data earlier this month showed the country’s foreign exchange reserves shrank $69.1 billion in November from October to $3.0515 trillion, suggesting that Beijing may have further cut its U.S. bond holdings.
The reduction in November has sent China’s foreign currency reserves to their lowest level in five years and eight months.
The dollar has risen against other currencies since Republican business mogul Donald Trump won the U.S. presidential election Nov. 8. In Asian trading Thursday, the yuan was at its lowest level against the dollar in 8½ years.
Trump, who will take office Jan. 20, has pledged to stimulate the U.S. economy with tax cuts, deregulation and increased spending on infrastructure.
China had been the largest U.S. debt holder since Japan overtook it in February 2015 for the first time since August 2008.
In October, Ireland was in the third spot in terms of total holdings with $271 billion in Treasury debt followed by the Cayman Islands, a Caribbean banking center, with $262 billion in Treasury debt.
Total federal government debt now stands at $19.8 trillion and is projected by the Congressional Budget Office to increase by $8.6 trillion over the next decade, underscoring America’s need to keep attracting foreign investors.
Trump threatens to tax Toyota if it builds U.S.-bound Corollas in Mexico
Reuters Jan 6, 2017
WASHINGTON – U.S. President-elect Donald Trump on Thursday targeted Toyota Motor Corp., threatening to impose a hefty fee on the Japanese automaker it if builds its Corolla cars for the U.S. market at a plant in Mexico.
“Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax,” Trump said in a post on Twitter.
Toyota, which announced its plan to build the Mexican facility in April 2015, had no immediate comment.
Following Trump’s tweet, the automaker’s American Depositary Receipts, its stock traded on the U.S. market, fell 0.5 percent to $120.45 on the New York Stock Exchange.
This was Trump’s latest broadside against automakers building cars in Mexico.
Toyota President Akio Toyoda said in Japan on Thursday that the automaker has no immediate plans to curb production in Mexico, preferring to wait until after Trump’s Jan. 20 inauguration before deciding whether to make any changes.
Automakers in the United States have been slammed by Trump for building cars in lower-cost factories south of the border, which he said costs American jobs. Pressure to curb that production intensified this week after Ford Motor Co. scrapped plans to build a $1.6 billion assembly plant in Mexico after Trump harshly criticized the investment.
Ford, however, still plans to shift production of small cars to Mexico from Michigan.
“We will consider our option as we see what policies the incoming president adopts,” Toyoda said at an industry gathering in Tokyo on Thursday, when asked whether his company was considering any changes to a production plant the automaker was building in Mexico.
Trump has also said General Motors Co. could become subject to tariffs on Mexico-made cars for the U.S. market, and that he would like to renegotiate terms of the North American Free Trade Agreement (NAFTA) signed with Canada and Mexico, or scrap it altogether.
Wonkblog
Donald Trump just threatened Toyota ― but it looks like he got the facts wrong
By Ylan Q. Mui January 5 at 4:37 PM
President-elect Donald Trump threatened to impose a hefty tax on Toyota Motor it if builds its Corolla cars for the U.S. market at a plant in Mexico. (Reuters)
President-elect Donald Trump continued his Twitter tirade against the auto industry on Thursday, slamming Toyota for investing in Mexico but appearing to misstate key details of the company’s operations.
Trump warned the Japanese carmaker over Twitter that it could face hefty fines for building a plant in Baja, Mexico, to sell the popular Corolla sedan to American consumers. But Trump’s tweet looks to be incorrect: Toyota’s factory in Baja assembles Tacoma trucks, according to the automaker. A new plant in Guanajuato, Mexico, will manufacture Corollas.
That factory broke ground in November, and production is expected to begin in 2019. The work is being shifted to the plant from a facility in Canada. In a statement Thursday, Toyota said that there is no change in employment and production in the United States as a result of the new operations.
“Toyota has been part of the cultural fabric in the U.S. for nearly 60 years,” the company said. “Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry.”
Trump has repeatedly threatened to slap American manufacturers with a border tax if they move jobs and production out of the country and then sell goods back to the United States. But this appears to be the first time that Trump has warned that a foreign company could face similar repercussions, and his tax proposal does not lay out a framework for how a border tax might be implemented.
Trade experts said it is unlikely that the White House has the power to punish individual companies through a border tax, though there is debate over whether Trump could unilaterally fulfill his campaign promises to levy blanket double-digit tariffs on imports from Mexico and China. Generally, that authority lies with Congress, and House Speaker Paul D. Ryan (R-Wis.) voiced staunch opposition to such measures earlier this week.
“No, we’re not going to be raising tariffs,” he told conservative talk show host Hugh Hewitt on Wednesday. “We think tax reform is the better way of addressing imbalances, leveling the playing field without starting trade wars, without having the adverse effects that you get with protectionism or trade wars.”
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Trump’s tweet came shortly after Toyota Motor President Akio Toyoda told reporters that his company is “oriented in the same direction” as the United States, according to the Wall Street Journal. Toyota said it has invested nearly $22 billion into its operations here and employs about 136,000 workers.
Earlier this week, Trump lashed out at General Motors on Twitter for assembling some of its Chevrolet Cruzes in Mexico. The company said that nearly all of the 190,000 Cruze models sold in the United States last year were made at a factory in Lordstown, Ohio. GM makes Cruze hatchbacks at a factory in Mexico and shipped 4,500 across the border.
On Twitter this week, Trump also celebrated a decision by Ford to cancel a new $1.6 billion plant in Mexico to build the Focus ― a business move that he had frequently criticized on the campaign trail. But Ford said the work will move instead to an existing factory in Mexico, a decision driven by declining demand for small cars in the United States. The company said it would use roughly half the money saved to create 700 U.S. jobs and invest in its factories in Michigan and Illinois.
“If American companies stay in the United States and continue to hire American workers to grow our manufacturing base, then there is no tariff,” Trump spokesman Sean Spicer said Thursday.
Trump’s protectionist stance runs counter to Republicans’ historic embrace of free trade, and even Trump’s top advisers appear to be conflicted over the merits of globalization. His choice to lead the National Economic Council, Gary Cohn, is a Wall Street veteran with extensive international experience. But the head of the newly established National Trade Council, Peter Navarro, has been an outspoken critic of China. Robert Lighthizer, Trump’s pick to lead U.S. trade negotiations, has also been skeptical of free trade’s benefits.
In a statement following Lighthizer’s nomination this week, Sen. Ron Wyden (D-Ore.), ranking member of the finance committee, called for clarity on the new White House’s policies.
“It is well past time for the incoming administration to explain its approach toward international trade beyond 140 characters,” he said.
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Technology
Google, in Post-Obama Era, Aggressively Woos Republicans
By CECILIA KANGJAN. 27, 2017 The New York Times
WASHINGTON ― Few companies have been as intimately tied to the Democratic Party in recent years as Google. So now that Donald J. Trump is president, the giant company, in Silicon Valley parlance, is having to pivot.
The shift was evident a day after Congress began its new session this month. That evening, about 70 lawmakers, a majority of them Republicans, were feted at the stately Smithsonian Arts and Industries Building, where they clinked champagne and bourbon glasses and posed for selfies with the 600 guests assembled in their honor.
The event’s main host was not from the Republican establishment. Instead, the party was primarily financed and anchored by Google.
“We’ve partnered with Google on events before, but nothing like this party,” said Alex Skatell, founder of The Independent Journal Review, a news start-up with a right-leaning millennial audience, which also helped host the event.
The event was emblematic of an about-face by Google. Over the last eight years, the company was closely associated with former President Barack Obama. Google employees overwhelmingly supported Mr. Obama’s presidential campaigns and some later took roles in his administration. Eric Schmidt, the chairman of Alphabet, Google’s parent company, advised the Obama White House. And last year, Google employees gave $1.3 million to Hillary Clinton’s campaign to succeed Mr. Obama, compared with $26,000 to the Trump campaign, according to federal filings.
Now, the tech giant is scrambling to forge ties with Mr. Trump’s new administration and to strengthen its relationship with a Republican-dominated Congress. Most important, Google is trying to change the perception that it is a Democratic stronghold.
That has led to events like the party at the Smithsonian, which the institution said cost at least $50,000. Mr. Schmidt has embarked on an East Coast charm offensive of Republican political leaders, including twice visiting Mr. Trump and his advisers at Trump Tower. Last month, Google also posted an opening to fill a position for a “conservative outreach” employee in its Washington office.
“Google has a target on its back because it is fundamentally viewed as a Democratic company,” said Gigi Sohn, a former senior adviser to Tom Wheeler, who was chairman of the Federal Communications Commission. “Even though it has reached out to Republicans, it can’t shake the image.”
Google said it had long had Republican lobbyists and had not changed its strategy.
“We’ve worked with both Republicans and Democrats for over a decade, advocating policies to encourage economic growth, innovation and entrepreneurialism,” the company said in a statement. “We’ll continue to do exactly that.”
A spokesman for Mr. Schmidt added, “Eric has a long record of working constructively and energetically on important technology issues with American and world leaders across the political spectrum.”
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Other Silicon Valley tech companies like Facebook are in a similar predicament. The perception is that they lean left and their executives backed Mrs. Clinton. Many are now also pledging to work with Mr. Trump and paid court to the new president at a December tech summit meeting.
Google has much at stake as it repositions itself. During the Obama years, Google avoided American antitrust charges, even as European regulators accused the firm of antitrust violations in search and in its mobile business. Google also successfully pushed a policy agenda that included the creation of net neutrality rules in 2015 and the defeat of online piracy laws in 2012.
Now warning shots against Google have been fired by those in Mr. Trump’s circle. Some of the president’s advisers have debated whether the tech behemoth deserved more antitrust scrutiny, according to two people briefed by the new administration’s transition team, who spoke on the condition of anonymity.
In a recent interview with The New York Times, Peter Thiel, a venture capitalist and Trump transition adviser, also compared the power that Google had under Mr. Obama to that which the oil giant Exxon Mobil had under President George W. Bush. Under President Bush, the administration largely agreed with Exxon’s skeptical stance on climate change policy.
Mr. Trump’s team is particularly wary of one Google executive ― Mr. Schmidt ― who has been allied with Democrats. During last year’s presidential campaign, Mr. Schmidt counseled Mrs. Clinton on strategy. A photo of him wearing a staff badge at her election-night party circulated widely in the conservative media.
Mr. Trump’s advisers, including his chief strategist, Steve Bannon, have complained about Mr. Schmidt’s funding of a start-up called the Groundwork that provided data and other technology for Mrs. Clinton’s campaign. They also suspected Google was skewing search results in favor of Mrs. Clinton, said Barry Bennett, a former senior adviser for Mr. Trump’s campaign.
“Mr. Schmidt spent millions and millions of his personal money to defeat Donald Trump,” Mr. Bennett said. “It takes a particular amount of gumption to pretend that never happened.”
Google has denied it tweaked its search results, which are determined by algorithms, and the company declined to comment on Mr. Schmidt. White House officials did not respond to a request for comment.
For many years, Google’s support of Democrats was plain. Google’s PAC and employees ranked third in all donations to Mr. Obama’s 2012 campaign at $804,240, according to the Center for Responsive Politics. In 2008, Google’s PAC and employees were sixth with $817,855. The company did not rank in the top 20 for donations to Mr. Obama’s Republican opponents in either of those elections.
About five years ago, Google began diversifying its bets. The company forged ties with the Republican-dominated House of Representatives and started addressing the beginning of an antitrust investigation into whether the company was using its search dominance to suppress competing travel, map and restaurant sites.
In 2011, Google hired Stewart Jeffries, a former member of the House Judiciary Committee, to lobby Republicans on Capitol Hill. That same year, it quadrupled its number of outside lobbying firms ― including many with Republican lobbyists ― to 24, from six in 2010. In 2012, Google named a former Republican congresswoman, Susan Molinari of New York, to lead its Washington office.
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