The News Memo
Stories this Week:
Government Shutdown on Verge of Becoming Longest in U.S. History; Border Wall Funding Debate Continues
What has happened this week?
Amid a contentious partial government shutdown, President Trump and Democratic leaders have not budged an inch from their opposing demands. If the shutdown continues to Saturday, January 12th, it will be the longest in U.S. history, at 22 days. President Trump, who has said he will not approve any spending bill unless it includes $5.7 billion for a border barrier, gave his first primetime TV address from the Oval Office on Tuesday, in which he portrayed the southern border as a humanitarian and security issue. The primetime address is seen as a way to appeal directly to the American public. Shortly following the address, Democratic leaders Chuck Schumer and Nancy Pelosi said they would not give the requested border funds. In the face of Democrat opposition, President Trump has discussed declaring a national emergency along the southern border, which would bypass the need for Congress to approve the funds.
President Trump met with Democratic leaders on Wednesday, in an attempt to find a compromise. Trump, frustrated with how the meeting was going, abruptly walked. After leaving the meeting, President Trump tweeted, “Just left a meeting with Chuck and Nancy, a total waste of time. I asked what is going to happen in 30 days if I quickly open things up, are you going to approve Border Security which includes a Wall or Steel Barrier? Nancy said, NO. I said bye-bye, nothing else works!” While most Republicans are standing by the President, some have begun to feel the pressure from their constituents and have advocated for a quick compromise.
What does it mean to declare a national emergency?
If President Trump declares a national emergency, the funds for the border barrier could be taken from the Pentagon (Department of Defense), and would not require Congressional approval. While this remains an option, and President Trump has said he is leaning this way if the Democrats do not give in, it is likely that legal battles will ensue, challenging whether President Trump has the authority to make such a declaration. Apart from declaring a national emergency, Trump’s team is exploring a variety of other ways to require the funds without Congressional approval.
Who is the shutdown affecting?
Some 800,000 federal employees have either been temporarily laid off, or are working without pay. Those employed in essential services, such as Border Patrol agents or TSA officers, must continue working without pay, and will not receive their first paycheck of 2019, which was scheduled for today, January 11th. The U.S. Senate approved a measure this week that ensures all federal employees, who are working without pay during the shutdown, will receive back pay when the government reopens. However, because many federal employees live paycheck to paycheck, it has been a financial strain for those who need the income immediately.
U.S. China Trade Talks Show Progress, Hurdles Remain
Quick Recap of the Trade War
The U.S. and China have been engaged in a tit-for-tat trade battle since early 2018. The U.S. has been frustrated for years with China’s trade practices, which they have claimed are unfair. Many U.S. officials view China as a threat for global influence, as the Chinese government has propped up many industries in an effort to be world leaders in robotics and other advanced technologies, a strategy which the U.S. views as a potential cybersecurity threat.
Over $250 billion worth of Chinese goods have been subject to tariffs ranging from 10-25%. Similarly, $110 billion worth of U.S. goods have been subject to similar tariffs from China. President Trump and President Xi Jinping of China agreed to a temporary 90-day trade truce on December 1. All tariff increases are suspended until March 1, unless a wider agreement can be reached, which may permanently do away with the tariffs.
The trade war has brought a lot of volatility to global financial markets, due to the increased uncertainty. Apart from the volatility in financial markets, one tangible effect you may have experienced as a U.S. consumer is the rising price of consumer products. For example, Coca-Cola announced in July 2018 that they were increasing the price of their sodas, in part due to the tariffs on imported metal. Although the economic outlook in the U.S. has remained strong, the tariff war has weakened growth in China more substantially, giving China a strong incentive to come to an agreement.
New developments this week
U.S. and Chinese trade officials met in Beijing this week for three days of midlevel trade negotiations. While the response to the meetings have been quite optimistic, the path forward remains somewhat unclear. Higher-level trade talks are expected to commence over the course of the coming weeks.
Officials made progress in many areas, including China agreeing to remove punitive automobile tariffs, and also agreeing to purchase more soybeans and other agricultural and energy products. While these were positive developments, major disagreements remain about structural issues, including domestic subsidies to Chinese firms and rules regarding forced technology transfers. Washington is also deciding how to hold Beijing accountable, as it has been difficult in the past to ensure they are fulfilling their promises.
What are domestic subsidies and forced technology transfers?
China’s domestic economy is heavily regulated and overseen by the Communist Party of China. Subsidies are given to firms to reduce the cost of producing goods and services. This reduction in production costs gives domestic firms an advantage to be more competitive against their foreign rivals. For example, if an American firm was to enter China to sell vehicles, the Chinese government may subsidize one of their own domestic car companies to ensure they can sell their cars cheaper than the American company. President Trump has been adamant that the playing field be more equal in this regard.
Forced technology transfers occur when the Chinese government pressures American companies to release manufacturing or production technology secrets in exchange for access to Chinese markets. This can be done in a number of ways, including excessive red tape and joint ventures. In the case of joint ventures, the government may require a U.S. firm to partner with a Chinese firm when they establish themselves in China. This partnership inevitably means that the two companies will share production techniques and any cutting edge technologies.
U.S. To Draw Troops Out of Syria, Slowly
What’s going on?
The U.S. will continue with its plan to pull troops from Syria as announced by President Trump in December. At first, President Trump said that troops would begin returning home right “now,” but later said that troops would be pulled at a proper, slower pace that allows the U.S. to continue fighting ISIS in the region. Although ISIS has largely been defeated in the region (they hold about 2% of the territory they once had), there are roughly 2,000 fighters cornered in the southeastern part of Syria that have proven difficult to eliminate.
White House Security Advisor, John Bolton, said recently that the U.S. will not leave until the Turkish government promises to not fight the U.S.’ Kurdish allies in the region. Turkey reacted to Bolton’s announcement with furor, as Turkey views the Kurds as a terrorist insurgency group.
While the decision to pull the troops has remained firm, the timetable for the removal is less clear, primarily due to the rift between the U.S. and Turkey. Instead of a hard and fast deadline for the withdrawal, it will now be based on certain conditions being met. “There are objectives that we want to accomplish that condition the withdrawal,” said Mr. Bolton, which include protecting the Kurdish allies and further defeating ISIS.
Controversy Surrounding Pulling Troops
Many military officials, political allies and foes of President Trump, are wary of pulling troops out of Syria. In fact, Defense Secretary James Mattis recently resigned due to his disagreement with President Trump on this decision. Many argue that withdrawing troops now could clear another path for ISIS to regain control of the region.
Further, many see the withdrawal as an abandonment of the Kurdish forces, and are concerned that removing U.S. military presence will pave the way for Turkey to go on the offensive. The Kurds are an ethnic minority group spread out across Turkey, Syria, Iraq and Iran, who are fighting for increased human and political rights that have largely been denied.
Why is the U.S. withdrawing troops?
President Trump has repeatedly voiced his dislike for American casualties and the financial burden of military engagements. Additionally, President Trump promised repeatedly during his campaign that he would bring U.S. troops home after defeating ISIS.
U.S. Fertility Rates at 30 Year Low, Rates Differ State-to-State
Fertility rates have been dropping for a while. But a new study released by The Wall Street Journal shows they are dropping more quickly than we might have expected. The study also shows that having children is more popular in the midwest and south in comparison to both coastal regions in the U.S. Let’s take a closer look at what the report shows:
What are the stats?
3.87 Million babies were born in 2017, making it the lowest fertility rate since 1987. In order to replace the current population, 2,100 children must be born per 1,000 women. In 2017, 1,765 children were born per 1,000 women.
How does it vary by state?
One of the most interesting aspects of the study is the variation in fertility rates in different regions of the country. Women who live in more rural areas tend to have more kids than those in suburban areas. South Dakota and Utah were the only two states hitting the 2,100 children threshold in 2017 to sustain the current population.
How does it vary by race and ethnicity?
Another interesting aspect of the study is the differences in childbearing among different race and ethnicities. Black and Hispanic women have far more children, on average than white women, for example.
Below are the key findings from the Wall Street Journal comparing white, black, and Hispanic fertility rates in the U.S.:
Hispanic women have the highest fertility rate of all with an average of 2,006.5 children per 1,000 women nationwide, and passing the 2,100 rate needed to sustain the population in 29 states.
Nationwide, black women averaged 1,824.5 children per 1,000 women in 2017. Black women also passed the 2,100 threshold to sustain the population in twelve states.
White women came in at the lowest fertility rate with an average of 1,666.5 per 1,000 women. In no state did white women pass the 2,100 rate needed to sustain the current population in 2017.
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The News Memo is edited by Madeline Krumel
Sources for this week’s Memo:
The New York Times
US-China Trade Talks Wrap Up, With Outcome Unclear
Trump, Along the Border in Texas, Reiterates Demand for Wall
The Wall Street Journal
U.S.-China Negotiators Narrow Differences on Trade
At 30-Year Low, U.S. Birth Rate Shows Striking Differences Between States
White House Aides Explore Alternative Ways to Pay for Border Wall
Pentagon Pushes Forward on Syria Pullout
A quick guide to the US-China trade war
Trump wall: President addresses nation on border ‘crisis.’