U.S./China tensions, actions continue to increase... Will Phase 1 accord be impacted?
In Today’s Updates
* What traders will focus on in today's USDA WASDE report
* Hottest commodity in the U.S. these days is wood
* China’s currency hits highest level since March as stocks surge
* IEA warns oil demand recovery at risk from virus resurgence
* A look at U.S. ethanol exports
* Global banks at risk of breaching China's new security law by complying with U.S.
* Will escalating U.S./China tensions impact Phase 1 trade accord?
* Covid containment policy key test for U.S. economy
* Mnuchin defends Trump’s use of tariff threats in negotiations with China, USMCA
* FY 2021 appropriations updates
* Democratic lawmakers introduce cattle market pricing bill
* House bill introduced to slow meatpacking line speeds
* 1.28 million acres accepted in signup for CRP Grasslands
* Mnuchin: 'We support another round of stimulus payments to individuals'
* Pelosi signals GOP's $1 trillion target is a 'starting point'
* Additional commodities eligible for CFAP
* U.S. food supply update
* Robots may be coming to U.S. meatpacking plants
* Michigan is taking action to protect its meat-industry workers
* Update on reopening America... and around the world
* Fauci says hard-hit states should be 'pausing' the reopening process
* EPA pauses plans toward reopening its Washington, D.C., headquarters
* Coronavirus update
* Coronavirus-related hospitalizations & new cases climb in several states
* Starbucks will require masks in its U.S. stores
* Biden rolls out economic plan
* Supreme Court paves way for prosecutor to view Trump taxes
* Supreme Court backs tribe on treaties
* Supreme Court will wade into gov't takeover of Fannie Mae and Freddie Mac
* Explosion rocked western Tehran early today
* House Dems offer maritime help measure
* U.S. to announce actions today against France over its digital services tax
* Number of migrants arrested at southern border jumped by 40% in June
* Cotton AWP rises for latest week
Equities today: Global stock markets were mostly lower in overnight trading, including in China, where an eight-session winning streak in the Shanghai composite index was halted Friday. The Shanghai Composite Index closed 1.9% lower after eight straight days of gains through Thursday. The U.S. stock indexes are pointed toward lower openings.
U.S. equities yesterday: The Dow dropped 361.19 points, 1.4%, to 25,706.09. Thursday’s decline put the Dow 0.5% lower week to date. The S&P 500 slid 0.6% to 3,152.05. The Nasdaq Composite posted a record, rising 0.5% to 10,547.75.
Chinese state media urged investors to think long-term, and authorities highlighted hundreds of operations making illegal loans against shares, showing that Beijing is eager to avoid stocks overshooting.
On tap today:
• USDA WASDE report, noon ET
• U.S. Producer Price Index for June is expected to increase 0.4% from a month earlier. (8:30 a.m. ET)
• Baker Hughes rig count is out at 1 p.m. ET.
• CFTC Commitments of Traders report at 3:30 p.m. ET
What traders will focus on in today's USDA WASDE report:
• How will USDA adjust the 2019-20 wheat balance sheet to reflect the higher carryover signaled by the June Grain Stocks level.
• Will USDA adjust the corn-for-ethanol component in the 2019-20 corn balance sheet or 2020-21?
• Will USDA adjust wheat production levels for Russia, the European Union and/or Argentina given recent weather events that are viewed as reducing production?
• USDA's livestock/meat balance sheets will be adjusted to reflect the Hogs & Pigs data and the increased slaughter weights that have been seen as hogs and cattle have been backed up in marketing channels and poultry producers have adjusted output.
• How many traders will think USDA should have adjusted their weather-adjusted trend yield for corn or soybeans — which they won't.
Covid containment policy key test for U.S. economy. A strong economic recovery depends on effective and sustained containment of Covid-19, economists said in a new Wall Street Journal survey. More than 90% of business and academic economists agreed “somewhat” or “strongly” that economic recovery depends on containing the virus. “A virus resurgence will push consumer spending back into hibernation,” said Scott Anderson, chief economist at Bank of the West. Federal Reserve officials, including Chairman Jerome Powell, have voiced similar views in recent days.
• China’s currency hits highest level since March as stocks surge. The renminbi rose past the important 7 to the dollar mark against backdrop of soaring shares. State media promoted a “healthy” bull market on Monday, but its tone turned more cautious later in the week as stocks rallied further.
Source of chart: Financial Times
• U.S. dollar fell against most currencies on Thursday as a rally in riskier assets such as global equities and commodities put a dent in safe-haven demand for the U.S. currency.
• America is on a lumber binge. Prices for forest products like lumber and plywood have soared because of booming demand from home builders making up for lost time, a DIY explosion and a race among restaurants and bars to install outdoor seating, the Wall Street Journal reports (link). Prices for forest products like lumber and plywood have soared in recent weeks because of booming demand from home builders making up for lost time during lockdown, an unexpected shift in the market that has saw mills scrambling to restore production. According to the WSJ item, PotlatchDeltic Corp. says demand from home-improvement retailers like Home Depot Inc. has been as strong as the U.S. mill has seen. That’s a big turnaround from expectations that homebound consumers would pinch pennies and put off home-improvement projects. Instead, suppliers say people are building decks, fences and anything else to stay busy. Lumber shipments in U.S. distribution channels have been lagging this year behind year-ago levels. But carloads of lumber and wood products carried by U.S. and Canadian railroads rose 6.7% from May to June, according to the Association of American Railroads.
• Crude oil futures have moderated losses seen earlier in overnight action, but remain lower. U.S. crude is trading around $39.15 per barrel with Brent crude around $41.90 per barrel, both down 0.45% to 0.5%.
• IEA warns oil demand recovery at risk from virus resurgence. The International Energy Agency (IEA) bolstered its outlook for global oil demand, but warned that the recovery could be derailed by the resurgence of coronavirus. A collapse in fuel consumption during the second quarter was slightly less severe than previously estimated, and demand should rebound sharply over the next three months as economic activity resumes, the agency said in a monthly report. Bloated inventories will diminish as OPEC and its allies persevere with vast production cuts, it predicted. Yet a flare-up of the virus, which is raging across several U.S. states and re-emerging in Asia, is “casting a shadow over the outlook,” the IEA cautioned.
• Ethanol exports. As U.S ethanol production has increased since the early 2000s, the demand for shipping ethanol has kept pace. Plus, after 2010, U.S. ethanol exports rose in response to key changes in Brazil’s ethanol markets, according to USDA’s Economic Research Service (link). In 2010, Brazil’s ethanol exports decreased sharply because of strong domestic ethanol demand. Brazil’s ethanol exports also decreased in response to a saturated U.S. ethanol market, high global sugar price, and strong Indian demand for sugar imports. Meeting India’s demand diverted much of Brazil’s sugarcane away from ethanol production. In the vacuum created by Brazil’s lower ethanol exports, the United States quickly became a large exporter of ethanol. In the last five years, increased U.S. corn production has pushed annual ethanol production to an average of almost 16 billion gallons. Total U.S. ethanol exports to all countries have averaged over 1.3 billion gallons during the last 5 years (fig. 2). In 2019, the Houston-Galveston, TX, port was the top export port, accounting for 41% of all ethanol exports. New Orleans, LA, and Port Arthur, TX, were also key ports. (Source: USDA Grain Transportation Report)
— Mnuchin defends Trump’s use of tariff threats in negotiations with China, and for USMCA. CNBC’s Squawk On The Street asked Treasury Secretary Steven Mnuchin about threatened new tariffs affecting China, Europe, and Canada. He said, “The President has used tariffs as a way of getting free and fair and reciprocal trade. The tariffs on China were all about it was not a level playing field. So the idea here was we wanted China to open up that was the intent of phase one. They are following phase one we expect them to adhere to this. The President’s use of tariffs in all these things, whether it was with Mexico and Canada, that was to get free and fair trade we couldn’t have been happier. The President of Mexico was at the White House. We had terrific meetings all afternoon. A working dinner of both US and Mexican business people with him and President Trump. And we couldn’t be more pleased with the USMCA agreement. It’s the largest trade deal in history. And that’s going to have a very positive impact at the U.S. economy and Mexico and Canada. Particularly in a time when we all need it as a result of Covid.” He added, “As a matter of policy, I don’t comment on future presidential actions.”
— FY 2021 Appropriations Updates:
- EPA Administrator Andrew Wheeler said he would urge President Donald Trump to veto the House FY 2021 Interior-Environment spending bill, partly because it includes language to prohibit Trump administration efforts to roll back two Obama-era rules — methane standards for the oil and gas sector and the Waters of the U.S. (WOTUS) water pollution rule. The House Appropriations Committee today will mark up the $36.76 billion spending bill that also would bar the White House from finalizing a rule to limit the power states have to veto infrastructure projects that negatively affect water quality.
- Ag spending bill: The House Appropriations Committee on Thursday approved by voice vote the FY 2021 appropriations bill covering USDA, FDA, the CFTC and the Farm Credit Administration. A manager's amendment orders the National Academies of Sciences, Engineering and Medicine to complete within one year an analysis of the latest version of the Dietary Guidelines for Americans with a focus on the methodology used, and comparing it to recommendations the National Academies recommended in 2017. Link to bill summary.
- Appropriators set top-line levels. The House Appropriations Committee yesterday set top-line spending levels for all 12 of its fiscal 2021 government funding bills. The panel advanced the allocations, which provide for $1.3 trillion in discretionary spending, on a partisan 29-21 vote. House appropriators aim to finish all 12 markups before next Wednesday, Chairwoman Nita Lowey (D-N.Y.) said.
— Democratic lawmakers introduce cattle market pricing bill. Iowa Democratic Reps. Cindy Axne, Abby Finkenauer and Dave Loebsack on Thursday introduced the cattle market pricing bill. A companion bill was introduced in the Senate by Sens. Chuck Grassley (R-Iowa) and Jon Tester (D-Mont.). The bill would require processors to have a minimum of 50% of their weekly slaughter purchased from cash market sales.
— House bill introduced to slow meatpacking line speeds. Democratic Reps. Marcia Fudge of Ohio, Rosa DeLauro of Connecticut, and Bennie Thompson of Mississippi on Thursday introduced the Safe Line Speeds in Covid-19 Act, a bill to stop USDA from allowing increases in line speeds in poultry and meat packing plants. USDA issued a final rule, implemented in December, establishing the New Swine Slaughter Inspection System, which removes federal limits on the speed of production lines.
For the duration of the Covid-19 public health emergency declaration, the House measure would:
▪ Suspend all active waivers issued by USDA related to line speeds at meat and poultry establishments and suspend USDA’s authority to issue new waivers in this area;
▪ Suspend implementation of, and conversion to, the New Swine Slaughter Inspection System established under USDA’s final rule published on Oct. 1, 2019 titled, Modernization of Swine Slaughter Inspection;
▪ Prohibit USDA from using federal funds to develop, proposed, finalize, issue, amend, or implement any policy, regulation, directive, constituent update, or any other agency program that would increase line speeds at meat and poultry establishments.
▪ Ensure the provisions of the bill are in addition to, not in lieu of, any state laws or regulations designed to further protect worker safety or animal welfare beyond what this bill provides;
▪ Require Government Accountability Office to review the effectiveness of various actions taken by USDA, the Department of Labor (DOL), the Department of Health and Human Services (HHS), and meat and poultry establishments in response to the Covid-19 pandemic to protect animal, food, and worker safety; and
▪ Require USDA, DOL, and HHS to issue a report to Congress by December 31, 2020, including their respective actions taken in response to the Covid-19 pandemic to protect animal, food, and worker safety.
Sen. Cory Booker (D-N.J.) intends to introduce companion legislation in the Senate.
— Some 1.28 million acres accepted in recent signup for USDA's Conservation Reserve Program Grasslands during the signup period that began March 16 and ended May 15. The number of acres offered during this signup period was 1.9 million acres, over three times the number offered during the last signup period in 2016.
Background. Through CRP Grasslands, farmers and ranchers can protect grasslands, rangelands and pastures while retaining the right to conduct common grazing practices, such as haying, mowing or harvesting seed from the enrolled land. Timing of some activities may be restricted by the primary nesting season of birds.
Three states had 100,000 acres or more accepted — South Dakota (377,774 acres), Nebraska (298,890 acres) and Montana (174,314 acres). Contracts under the CRP Grassland enrollment start Oct, 1, 2020.
Participants will receive an annual rental payment and may receive up to 50% cost-share for establishing approved conservation practices. Duration of the CRP contract is 10 or 15 years. FSA ranked offers using a number of factors, including existence of expiring CRP land, threat of conversion or development, existing grassland and predominance of native species cover and cost.
The 2018 Farm Bill set aside not fewer than 2 million acres for CRP Grassland enrollment. On Oct. 1, 2020, grassland enrollment is expected to be 2.1 million acres.
Perspective: There are currently 21.9 million acres enrolled in CRP with contracts on 5.36 million acres set to expire Sept. 30. Earlier this year, USDA accepted offers on 3.4 million acres of ground via a General CRP signup, with contracts starting Oct.1, 2020. Enrollment under the continuous signup in Fiscal Year (FY) 2020 opened Dec. 9 and runs through Aug. 21. Data through February indicated that 2,267 acres had been enrolled; continuous enrollment in FY 2018 totaled 292,490 acres while another 244,764 acres were enrolled in FY 2019 — the record continuous signup level was 1.35 million acres in FY 2017. For FY 2021, the maximum level of acreage that can be allowed in the program is 25 million. It is not clear how many acres offered during the general CRP signup or the CRP Grasslands effort may have been covered by contracts that will expire Sept. 30, but past CRP signups have seen a high percentage of acres offered be ones that were covered by a CRP contract that was scheduled to expire Sept, 30 of the year of enrollment. But even with the CRP Grasslands and general CRP enrollments, it would appear the program will not come close to the acreage cap for FY 2021.
— Update on China:
- U.S. sanctions Chinese Communist Party officials for Uighur human rights abuses. The Trump administration announced sanctions on Thursday aimed at Chinese Communist Party officials whom the U.S. believes have been involved in carrying out human rights abuses against Uighurs and other minorities in China. The Treasury Department’s Office of Foreign Assets Control revealed the sanctions against a Chinese Communist Party entity and four Chinese Communist Party officials “in connection with serious rights abuses against ethnic minorities” in the Xinjiang Uyghur Autonomous Region in western China.
How will China react? China watcher Bill Bishop of Sinocism says, “I would be surprised if they blow up the Phase 1 trade deal in response, but it is worth noting that in spite of the trade deal, President Trump finally authorized these sanctions. PRC officials will not be happy but they should not be surprised. Any countermeasures may be tempered by what looks to be a renewed push from leading PRC diplomats to stabilize the U.S./China relationship.”
- CNBC: A ‘financial war’ with China could be brewing on top of the trade war. You’ve heard about the trade war with China. There may be a separate, potential “financial war” brewing. The Securities and Exchange Commission wants you to know more about what is happening with Chinese companies that list in the United States. The regulators also want you to know that they are having a really hard time finding out exactly what is going on. Link to CNBC article.
- American, United Airlines cancel Hong Kong Flights over mandatory crew testing. The airlines temporarily halted flights after the city ended testing exemption for crews amid rise in local coronavirus transmissions. A United Airlines Holdings Inc.’s spokesman said due to the recent changes in testing protocols, flights to Hong Kong had been suspended through July 10 as have their corresponding return flights. He added the company was currently assessing how this would affect future operations. American Airlines Group Inc. was scheduled to resume flights to Hong Kong Jul. 9 but said in a statement it now wouldn’t restart the flights until Aug. 5. In many countries, including the U.S. and the U.K., pilots and crew are exempted from testing, quarantine or self-isolation rules that other arrivals are required to undertake. On Thursday, a day after testing of airline crew started, Hong Kong government officials said three pilots and a flight attendant had tested positive for Covid-19.
- China refutes Pompeo's accusations on COVID-19 pandemic: Xinhua. Zhao Lijian, a Chinese politician and the current deputy director of the Chinese Ministry of Foreign Affairs Information Department, said: "Speaking of facts, I want to ask if the U.S. government could tell the truth and explain to the U.S. people and the international community issues including the Fort Detrick bio-lab, and the EVALI and its biological laboratories worldwide.”
Zhong Sheng of People's Daily attacked the U.S. politicians as “immoral” and “despicable” for pulling out from the World Health Organization at a moment the world needs global cooperation the most.
- U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link.
- FBI probes Chinese exile, including work with former Trump aide Steve Bannon. The FBI is examining exiled Chinese businessman Guo Wengui and the money used to fund his media efforts in the U.S., including his work with Steve Bannon, a former senior adviser to President Trump, according to people familiar with the matter cited by the Wall Street Journal. Link.
- China’s statistics agency admits mistakenly publishing year-old monthly inflation, producer price data for June. China’s national statistics agency caused mild confusion on Thursday after mistakenly releasing year-old inflation and producer price data for June. Link to South China Morning Post article.
- China’s slower meat imports seen worsening protein shortage. China’s dwindling pace of meat imports, thanks to its tough measures against coronavirus contamination, will provide further support for prices already buoyed by a severe shortage of pork, analysts said. Link to Reuters article.
- Not so easy to decouple from China. Keith Bradsher has an article in the NYT (link) on why decoupling and building new supply chains to manufacture goods like masks and PPE won't be easy. China has built its monopolies not just with cheap labor, he says, but free land, subsidies and complex networks of supplies and low interest loans.
— Update on next aid package:
- Mnuchin: 'We support another round of stimulus payments to individuals;' Treasury secretary says administration is aiming for next stimulus package by the end of July. Treasury Secretary Steven Mnuchin said Thursday the Trump administration is working with the Senate to pass a new bill for coronavirus-related economic aid by the end of July, as enhanced unemployment benefits are set to expire. Mnuchin said the administration supports a second round of economic impact payments to households, an extension of enhanced unemployment benefits for furloughed workers, and a “much, much more targeted” version of the Paycheck Protection Program (PPP) of forgivable loans for small businesses.
“I had a very productive call with [Senate Majority Leader Mitch McConnell,” Mnuchin said in an interview with CNBC. “As soon as the Senate gets back, we’re going to sit down on a bipartisan basis with the Republicans and the Democrats, and it will be our priority to make sure between the 20th and the end of the month that we pass the next legislation.”
- Pelosi signals GOP's $1 trillion target is a 'starting point.' House Speaker Nancy Pelosi (D-Calif.) suggested that she didn’t make much of the $1 trillion goal from Republicans relative to the next aid package, indicating it was a starting point.
— Update on implementation of CARES 1, including CFAP:
- Additional commodities eligible for Coronavirus Food Assistance Program (CFAP); applications for new commodities accepted beginning July 13. USDA announced an initial list of additional commodities that have been added to the CFAP, and that USDA made other adjustments to the program based on comments received from agricultural producers and organizations and review of market data. Producers will be able to submit applications that include these commodities on Monday, July 13, 2020. USDA’s Farm Service Agency (FSA) is accepting through Aug. 28, 2020, applications for CFAP, which helps offset price declines and additional marketing costs because of the coronavirus pandemic. USDA expects additional eligible commodities to be announced in the coming weeks. USDA collected comments and supporting data for consideration of additional commodities through June 22, 2020.
No change in CFAP costs. USDA said "The correction and addition in the payment rates and the resulting changes in the eligibility for specific types of payments per commodity will not change CFAP costs.”
Changes to CFAP include:
• Adding the following commodities: alfalfa sprouts, anise, arugula, basil, bean sprouts, beets, blackberries, Brussels sprouts, celeriac (celery root), chives, cilantro, coconuts, collard greens, dandelion greens, greens (others not listed separately), guava, kale greens, lettuce – including Boston, green leaf, Lolla Rossa, oak leaf green, oak leaf red and red leaf – marjoram, mint, mustard, okra, oregano, parsnips, passion fruit, peas (green), pineapple, pistachios, radicchio, rosemary, sage, savory, sorrel, fresh sugarcane, Swiss chard, thyme and turnip top greens.
• Expanding for seven currently eligible commodities — apples, blueberries, garlic, potatoes, raspberries, tangerines and taro — CARES Act funding for sales losses because USDA found these commodities had a 5% or greater price decline between mid-January and mid-April as a result of the Covid-19 pandemic. Originally, these commodities were only eligible for marketing adjustments.
• Determining that peaches and rhubarb no longer qualify for payment under the CARES Act sales loss category.
• Correcting payment rates for apples, artichokes, asparagus, blueberries, cantaloupes, cucumbers, garlic, kiwifruit, mushrooms, papaya, peaches, potatoes, raspberries, rhubarb, tangerines and taro.
Additional details can be found in the Federal Register in the Notice of Funding Availability (NOFA) and Final Rule Correction and at www.farmers.gov/cfap.
Perspective: USDA did not indicate eggs would be added as an eligible commodity nor that classes of wheat other than hard red spring wheat and durum would be eligible. “USDA is still evaluating comments and will issue another document with additional determinations and payment rates,” USDA said in a Federal Register notice, adding in a release that additional eligible commodities would be announced “in the coming weeks.” Despite the changes announced this week, USDA said that it “will not change CFAP costs” even as some have speculated the actions will mean the program could run out of money even earlier. Under CFAP, producers will receive an initial payment equal to 80% of the total payment. As of July 6, more than $5.3 billion has been paid out thus far.
Reaction: NPC lauds move on potatoes, urges further boost in payment rates. National Potato Council (NPC) President Britt Raybould said the group is pleased at “the rapid work of USDA in considering these changes and making potatoes eligible for all three categories of payments” under CFAP, now to include sales losses. USDA set sales loss payment rates for fresh russet potatoes at $0.04 per pound (lb), processing potatoes at $0.02/lb and other potatoes at $0.01/lb. NPC hopes to continue working with USDA to see the sales loss payment rates for all three categories set to at least $0.04/lb “to ensure all injured potato growers have an equal opportunity to apply and seek relief,” Raybould added.
Other groups will be disappointed their commodities still did not make the cut for coverage under CFAP. The National Association of Wheat Growers (NAWG) had sought coverage for soft red winter, hard red winter and white wheat, while other interests and lawmakers had urged the inclusion of eggs under the program. None of those commodities were added to the covered list with USDA’s latest move.
— Food and beverage supply/industry update:
- Robots may be coming to U.S. meatpacking plants.The industry is looking at bringing automation into operations that have been notoriously manual, the Wall Street Journal reports (link), in an effort to boost safety and certainty in supply chains that have been highly strained during the coronavirus pandemic. Meatpacking plants have been hotbeds of outbreaks, with more than 17,300 meat and poultry processing workers in 29 states infected in April and May, including 91 who died. Factory closures slashed production and some supermarkets had to limit how much meat shoppers could buy. Tyson Foods Inc. is pulling together a team that includes former auto industry designers develop an automated deboning system destined to handle the millions of chickens that move each week through Tyson plants. Companies face major challenges making robotics work, however, in plants where highly detailed work is done in tight spaces, the article stresses. Tyson Foods, the biggest U.S. meat company by sales, currently relies on about 122,000 workers to churn out about 20% of chicken, beef and pork produced in the U.S. That's changing after the coronavirus pandemic showed supply chain vulnerabilities. The company is now pushing further into robotics, developing an automated deboning system destined to handle some of the roughly 39 million chickens it processes each week. At Pilgrim's Pride, the second largest U.S. chicken processor, deboning machines now trail humans by only 1% to 1.5% in terms of meat yield per chicken.
- Michigan is taking action to protect its meat-industry workers, ordering social-distancing requirements on an unprecedented scale. Under an executive order Governor Gretchen Whitmer signed Thursday, the state is compelling meat and poultry processing plants to “configure communal work environments so that employees are spaced at least 6 feet apart in all directions.”
Numbers from the U.S. Centers for Disease Control this week underscore the human toll of the virus on the industry: More than 16,200 American meat plant workers had tested positive for Covid-19 by the end of May, and 86 had died. The agency has cited difficulty maintaining social distancing among the factors that increased risks for workers.
— Update on reopening America... and around the world:
- Fauci says hard-hit states should be 'pausing' the reopening process. Dr. Anthony Fauci, the nation's top infectious disease expert, said Thursday that hard-hit states should not be moving forward with reopening, but stopped short of calling for full shutdowns. "I would think we need to get the states pausing in their opening process, looking at what did not work well and try to mitigate that," Fauci told The Hill's Steve Clemons. "I don't think we need to go back to an extreme of shutting down."
Fauci in another appearance said that states facing Covid-19 surges should consider “shutting down” again. In a podcast with the Wall Street Journal, Fauci said, “What we are seeing is exponential growth. It went from an average of about 20,000 to 40,000 and 50,000. That’s doubling. If you continue doubling, two times 50 is 100. Any state that is having a serious problem, that state should seriously look at shutting down. It’s not for me to say because each state is different.”
- EPA has paused its plans toward reopening its Washington, D.C., headquarters, according to an internal email sent Thursday afternoon. The the guild representing many Environmental Protection Agency employees has resisted the agency’s efforts to bring them back to the office. During a review of 14-day trend data for the national capital region, EPA experts “determined that the gating criteria to enter Phase 2 were not met,” wrote Donna Vizian, the EPA’s principal deputy assistant administrator for the Office of Mission Support, referring to President Donald Trump’s three-phased coronavirus reopening plan. Washington, D.C., has seen nearly 11,000 coronavirus infections since the pandemic began. In recent days infections have been trending upward in the area.
— Coronavirus update:
- Summary: Global cases of Covid-19 are at 12,279,131 with 555,166 deaths, according to data from the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU). U.S. cases of the virus are at 3,118,143 with 133,291 deaths.
Florida reported a record in coronavirus-related hospitalizations. The state also reported a record spike in Covid deaths. California’s average daily case increase hit an all-time high as well.
Link to Covid Case Tracker
- The number of Americans dying from the coronavirus has started rising again. More than 800 have died in each of the last three days — a three-day total that’s 56% higher than during the same three days last week.
The NYT notes that “The chart above doesn’t yet include yesterday’s number, which would add a third large gray bar on the right side.
- Vaccine update. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Moderna’s coronavirus vaccine candidate will likely enter Phase 3 trials by the end of July.
- Starbucks will require masks in its U.S. stores. Customers at the coffee giant’s 9,000 American locations will have to abide by the rule starting July 15. In locations where local rules don’t require mask-wearing, customers without face coverings can use drive-throughs or curbside pickup.
POLITICS & ELECTIONS
— 2020 Presidential Election Interactive Map
— The Green Papers
- Biden offers $700 billion economic plan. Joe Biden, the presumptive Democratic presidential nominee, proposed spending on American products and research, offering his own brand of economic nationalism to compete with President Trump’s and setting the stage for an election-year debate over the economy. “When we spend taxpayers’ money, when the federal government spends taxpayers’ money, we should use it to buy American products and support American jobs,” said Biden in a speech in Dunmore, Pa.
The Biden campaign plan for manufacturing and innovation says it will bring back jobs lost this year and create at least 5 million more with sweeping investments in domestic technology; reduce dependence on foreign countries to supply critical goods; and implement trade and tax policies that empower U.S. workers.
Biden is proposing tightening current “Buy American” laws that are intended to benefit U.S. firms but can be easily circumvented by government agencies.
Biden's new platform focuses heavily on using the power of the federal government to promote a U.S. domestic manufacturing base. The plan includes a $400 billion procurement initiative over four years to spur demand for American products and services, as well as a $300 billion investment in U.S. research and breakthrough technologies. Half of the $300 billion is in clean-energy initiatives that were previously announced, the campaign said.
The plan also calls for the government to launch a 100-day “supply chain review” that could require federal agencies to buy only medical supplies and other goods manufactured in the United States.
To finance the ongoing costs of his economic agenda, Biden’s campaign says he will reverse some of Trump’s tax cuts for corporations and impose “common-sense tax reforms that finally make sure the wealthiest Americans pay their fair share.” The campaign did not provide a more detailed accounting of how it would pay for the $700 billion in spending laid out Thursday.
“They are essentially trying to steal the Trump program of 2016 and steal that playbook,” Steve Bannon, the former Trump adviser, said, as the Washington Post reported. “For some reason, the White House and the campaign have been caught flat-footed.”
The proposal calls for using tax dollars to “stand up to the Chinese government’s abuses, insist on fair trade, and extend opportunity to all Americans.”
Biden wants a resurgence in U.S. markets before engaging in new trade deals abroad. That includes joining the Trans-Pacific Partnership (now the CPTPP) that Biden advocated when he served as President Barack Obama’s vice president. Trump opposed TPP as a 2016 candidate. Biden wants to push through some changes to the TPP/CPTPP.
OTHER ITEMS OF NOTE
- Supreme Court on Thursday ordered that Donald Trump's financial records be turned over to prosecutors in New York. The 7-2 ruling gave the green light for the Manhattan district attorney’s office to obtain financial records held by Trump's accountant, Mazars USA. But in a second case, the high court in another 7-2 decision temporarily blocked similar subpoenas issued by Congress, saying they should be reviewed again by the courts. Trump’s appointees to the court, Neil Gorsuch and Brett Kavanaugh, were in the majority in both cases.
- Supreme Court ruled Thursday that the eastern half of Oklahoma can be considered Native American territory, a decision the state warned could create "civil, criminal and regulatory turmoil." The 5-4 decision was written by Associate Justice Neil Gorsuch and joined by the court's four liberal justices. The case concerned an appeal from Jimcy McGirt, a Native American, who claimed his state rape conviction from 1997 should be overturned because Oklahoma lacked jurisdiction. Congress, his lawyer Ian Gershengorn said, never properly terminated the reservation. One consequence is that the federal government (not the state) will have jurisdiction in the area, which could require the retrial of hundreds of criminal convictions.
- Supreme Court will wade into a yearslong dispute involving the government’s takeover of Fannie Mae and Freddie Mac, which guarantee half the country’s $11 trillion mortgage market and neared collapse during the 2008 financial crisis.
- An explosion rocked western Tehran early today, state media reported, the third major recent nighttime explosion in Iran. The location this time wasn’t clear; the first two occurred at key military and nuclear bases.
- House Democrats offer maritime help measure. Maritime emergency relief authority would be established under a bill offered by key Democrats on the House Transportation and Infrastructure Committee that would allow the Maritime Administration (MARAD) to provide financial help for the U.S. Maritime Transportation System (MTS) during a natural emergency or disaster. The plan would “help eligible state entities and other eligible maritime supply chain entities engaged in vessel construction, transportation by water, or other maritime support activities (e.g., harbor pilots, assist tugs, stevedores, etc.),” according to a release on the measure offered by panel Chairman Pete Defazio (D-Ore.) and Subcommittee on Coast Guard and Maritime Transportation Chairman Sean Patrick Malongy (D-N.Y.). It would allow MARAD to offer grant help to pay for repairing and/or replacement equipment, facilities, and shore infrastructure that have incurred serious damage from natural disasters. The legislation would also allow MARAD to reimburse or provide help to cover operating and overhead costs involved with emergency response operations, but would not cover lost revenue.
“Covid-19 relief is critical for the port and maritime industry in response to challenges faced as a result of the pandemic,” said American Association of Port Authorities (AAPA) president and CEO Christopher Connor. “Relief grant funds will help U.S. ports to manage the impact that this pandemic is having on their ability to function efficiently and for maintaining a ‘state of readiness.’”
Even if the measure is authorized, there would still need to be funds appropriated. However, this could be something eyed for inclusion in the next Covid-19 aid plan that is hoped to be completed prior to the August congressional recess.
- The U.S. is expected to announce actions today against France over its digital services tax, but will suspend them while France defers the collections from U.S. technology firms. The steps are tied to a U.S. Section 301 probe into the foreign tax, which Washington says discriminates against U.S. tech giants like Google, Apple and Facebook. The Trump administration also plans to finalize regulations this week that will bar the U.S. government from buying goods or services from any company that uses products from five Chinese firms, including Huawei, Hikvision, Dahua, Hytera and ZTE Corp.
- Mexican Border: The number of migrants arrested at the southern border jumped by 40% in June to 30,300, according to U.S. Customs and Border Protection, including about 27,000 people who were turned back under a new policy put in place for the duration of the pandemic.
- Cotton AWP rises for latest week. The Adjusted World Price (AWP) for cotton increased to 41.48 cents per pound, effective today (July 10), up from 50.13 cents per pound the prior week. This still leaves an opportunity for an LDP of 52 cents per pound. USDA also announced that Special Import Quota #12 for upland cotton will be established July 16 for the importation of 17,878 bales of upland cotton, applying to supplies that are purchased not later than Oct. 13 and entered into the U.S. not later than Jan. 11.