Biden Administration Hikes Tariffs On Chinese Imports | Business Matters (September 13)

welcome back for today's business matters we have Don ma here with us Don how you doing doing well how about you guys pretty good I'm doing good looking forward to your segment today all right also it's Friday yep definitely is happy about that what do you have for us all right so uh the head of the Fe Federal Aviation Administration is set to update Senators on investigations into Boeing in two weeks a senate subcommittee will hold a hearing titled f AA oversight of Boeing's broken safety culture FAA administrator Michael Whitaker told reporters on Wednesday that he thinks Boeing's road to recovery will be a long one uh after the door plug blowout in January Whitaker told Boeing that it had to submit a quality improvement plan he borrowed the play maker from producing more 737 Max aircraft and FAA audit found that Boeing and spirit arrow systems did not meet quality control standards and spirit supplies Fus and other parts for Boeing in June Whitaker told the senate committee that the FAA was too focused on paperwork Audits and not focused enough on inspections at Boeing meanwhile there's a good chance um that you know spending you're just spending too much on housing especially if you rent New Census Bureau data shows nearly half of all renters do that uh it's called being cost burdened and it's defined by spending more than 30% of your income to pay for your home the rising cost of real estate has been a topic of national concern for years now but rent is now Rising more than twice as fast as home prices last year it went up 3.8% as opposed to home values which went up 1.8% now the Biden Administration today implemented steep tariff hikes on Chinese Imports the measures include a 100% tax on electric vehicles the White House says the tariffs will strengthen protections for Strate IC domestic industries from Chinese production the office of the US trade representative said the taxes include a 100% Duty on Chinese EVS as well as 50% on solar cells 25% on steel aluminum EV batteries and key minerals so the agency saying that the tariffs will go into effect on September 27th and a 50% tax on Chinese semiconductors will start in 2025 so China argues that its EV industry success is due to Innovation and not government control Beijing has promised retaliation against the tariffs also the Biden Administration is moving close to a trade loophole being closed with China in mind Chinese e-commerce companies have been evading us tariffs by shipping directly to American consumers that's by taking advantage of a trade rule called de Minimus so under this packages shipped directly from foreign countries to the US to us consumers don't have to pay any Duty or very little so if the packages are valued less than $800 that is Chinese e-commerce such as Shen and timu have been utilizing this rule illegal shipment of fenel also slipped through the cracks uh over under this this rule so over a billion packages came to the US last year under this rule most of them from China that marks in over 600% increase from a decade ago so the administration will strip that exemption for certain products that would affect over 40% of us Imports and 70% of Chinese textile and apparel Imports Shen and timu said that di Minimus is not essential for their success timus parent company shares went down over 5% after the White House announcement Biden's move comes after over 100 house Democrats urged him to take action on the DI Minimus rule lawmakers from both sides have proposed bills to bring changes uh importers FedEx and UPS are against the changes proposed they say it would lead to tax increases on consumers the rule was put in place to allow Americans to bring back souvenirs bot overseas duty-free but retailers like Amazon and Walmart are also taking advantage of it in 2020 di Minimus Imports Rose to over $67 billion now moving on here during the presidential debate candidate kamla Harris claimed that Goldman s said Donald Trump's plan will make the economy worse and hers will strengthen it uh but the bank CEO has pushed back on that he said the report in question came from an independent analyst he also said that haris overstated the results of the report here he is with CNBC what the report did is it looked at a handful of policy issues that have been put out by both sides and it tried to model their impact on GDP growth and the reason I say a bigger deal has been made of It Is What It showed is the difference between the sets of policies that they put forward was about 2/10 of 1% during the interview the same one that is Solomon pointed out that the national debt was not mentioned at all during the debate uh but it is something that will need to be addressed uh by any upcoming administrations he says joining us now is VJ morolia he's the founder and CIO at RP Capital Solutions VJ always great to have you how are you doing today fantastic and thanks again for having me how are you I'm doing well so let me ask you this at what point could the debt pose a real threat to the economy right to investor sentiment or perhaps the Dollar's dominance as a reserve currency I think yesterday um basically I don't mean to be flippant Don but I think that it's already started and that's why it should be scarier than a lot of people are uh making it seem it needs to be a a high alert and the reason is we know that the most powerful force is exponential growth and our debt is exploding um we're bragging about the inflation rate coming down even though the cost of living continues to grow up go up and the money is going towards not production it's going towards waste and fraud and it's going towards uh let's call it unproductive uh programs so you say that impact has already uh been seen uh before you said yesterday to be precise but we're seeing investors still purchasing US Treasury so maybe at least the sentiment hasn't changed right so I guess what I'm talking about more of is that the rest of the world the other Global powers are starting to understand that wait a minute um the US dollar has kind of pigeon hold us to a certain extent and until and unless we figure out a way to not use as many US dollars and use other Global currencies or other digital assets or other hard assets or other programs um we're not going to be able to escape that control and so if you look at India Russia China uh the Middle East um they're already trying to and already uh in the process of uh getting away from the dollar so you're not seeing it right right now because the dollar is still the world's Global Currency it's the safest asset it's liquid you could spend it anywhere but 5 10 years from now it might not be the only one that can say that all right as an investor which sectors do you think will be most impacted by the debt and interest payments I think ultimately the debt is going to just cause more inflation and that's what kind of concerns me Don because inflation is the thing that's kind of erasing the middle class and it's creating a society of the halves and the have knots the halves have assets the inflation will push up the value of those assets the Have Nots just have bills and sadly because they don't own assets their bills are just going to rise faster than their wages and that's what we have to fix the only two ways to fix that is through early financial literacy so education and then we got to stop printing all this money and we got to stop spending it so we don't need to print as much so here's the reality if the US debt is left unchecked the interest on it could become the largest expense for the US one day uh so my question to you is have we already gotten ourselves trapped in a dead spiral where we're just borrowing to service the existing debt Don once again you hit the nail on the head that is my concern that is why why we own precious metals why we own Bitcoin why we own ether why we own businesses that are basically software platforms that are gonna they're they're not limited by the laws of physics they're not limited by scale they're not bricks and mortar now here's the thing I'm not anti- bricks and mortar you know my father made his livelihood by building bricks and mortar we still develop we still invest in bricks and mortar but as a business soft Ware is eating the world and so to deny that is to approach death okay just about 30 seconds do you see any likel scenarios for us death management man I really wish I had something better to end on no I don't and that's the sad thing but here's what I do see let me end on a positive thing I really hope that the new that the election that's coming up is going to force people to do a little bit of math I know that math is not fun for everybody like it is for me but you got to do it how about this the US government spent in August enough to pay every voter about $88,000 in that month what would you do with that 8,000 do you think the government did a good job with it that's the question you got to ask yourself all right VJ thanks for the discussion today thank you man all right moving on from that the heaviest punish M yet for international accounting firms operating in China so Chinese authorities slapped a more than $62 million fine on accounting firm PWC and this is over its auditing of evergrand which is China's most indebted developer now PWC would be banned from signing off on any Financial results in China for half a year already it's losing clients China's finance ministry said PWC issued false audit reports of every Grand and that the audit procedure had serious defects so in a statement pwcc said the work performed by its audit team with everr was completely unacceptable and that its Chinese branch has cooperated fully with Regulators PWC came under Beijing scrutiny after every Grand collapsed in January authorities said that ever Grand inflated its Mainland Chinese Revenue by almost $80 billion PWC had audited ever Grant's accounts for 14 years until 2023 and gave it a clean bill of health now shares of Tech Giant super micro are up 3.5% today but they're also down almost 20% since the middle of August the company was hit with another lawsuit this week again it's accused of accounting manipulation super micro rejected similar accusations included in in a short seller report last month here are the details shares of IT company super micro are down almost 20% since August 17th when short seller Hindenberg research accused The Firm of accounting malpractice super micro called the allegations misleading but it did pause the scheduled filing of a financial report it said it wanted to First assess the effectiveness of its Financial controls NTD has reached out to Super Micro multiple times but hasn't received a response former super micro executive Bob long is suing the company he says that after he discovered misleading accounting practices super micro fired him he became a victim of super micro when he tried to raise complaints the message that's being sent like you raise red flags and you're going to be sent home Long's attorney Tanya gomerman says super micro didn't investigate the complaints long alleges super micro tried to raiseed its Revenue numbers in dishonest ways he says it recorded incomplete sales as Revenue shipped faulty products and shifted Revenue numbers between business units he says this was to make it look like super micro was selling more than it actually was long says he wants to take super micro to federal court in federal court he can make his evidence public but according to court documents super micro is attempting to push this case into arbitration out of the public eye nothing is filed publicly and nobody is going to be able to find everything out if that happens it's likely less information will be made public a district court hearing on September 26th May determine how the case will proceed now Factory workers of the aviation company Boeing have gone on strike for the first time since 2008 after rejecting a new labor contract offer our Washington correspondent Luis Martinez has more on this story 94% of over 30,000 members of the International Association of meist and Aerospace workers of the Boeing Company its largest unionized group of workers voted Thursday night to reject the new lab contract and go on [Applause] strike stri our members voted across puges sound Portland Moses Lake Victorville Edwards Air Force Base and other remote locations this is about respect this is about addressing the past and this is about fighting for our future we've been working like dogs long hours busting our ass at boing and B let me tell you what Bo's a good company right they're a good company but it has to work both ways it can't just be one way that's right the Boeing Company issued a statement saying that they remain committed to resetting their relationship with their employees and the union and are ready to get back to the table to reach a new agreement the Boeing Company offered workers a 25% wage increase in a new labor contract but the unionized workers are demanding 40% so far what I've seen here is a lot of strong power with our Union a lot of the members are pretty upset about our first offer um we're hoping that the second offer uh is what we're looking for if not we're just going to keep going against them we're going to keep striking and standing for ourselves the strike comes as the FAA director is set to testify before the Senate on the safety culture of the Boeing Company and this week Boeing's Starliner capsule made its uncrewed return to Earth from the International Space Station after a malfunction grounded its crew back in June industry analysts estimate that a 30-day strike would cost the Boeing Company $1.5 billion in losses the last time that Boeing workers went on a strike was in 2008 and it lasted for 2 months reporting from Washington DC Luis Eduardo Martinez NTD news meanwhile a strike could be next in the Auto industry leaders of the United Auto Works Union have threatened to strike against Atlantis the owners of Jeep and Dodge in their latest contracts delanta pledged to reopen a facility in badier Illinois those plans have now been delayed over what the company calls unfavorable market conditions as reported poor sales and earnings this year the union and its workers are concerned that if stellantis would break this agreement it would break another St stenta said that it stands by its commitment to open beler but but it needs time so it can stay competitive and and preserve us jobs now connecting at a cruising altitude United Airlines has teamed up with Elon Musk starlink company to provide infl Wi-Fi in a press release United says consumers will be able to enjoy the same high-speed internet service in the air that they do on the ground the service is is expected to be more reliable over the ocean in in more remote areas the airlin said that it plans to outfit its entire fleet with starlinks internet service testing is said to start as early as next year with the service offer offered on the first passenger flight later that year and United said the service will be free now alarm Bells over retail theft appeared to have gone silent shoplifting was such a big problem a year ago that locations were closing merchandise was being locked up and companies were declaring big losses data shows mentions of retail shrink or inventory loss not from a sale have shrunk in the first part of the Year shrink uh may be improving for a number of reasons improved merchandise accounting preventative measures like removing self checkout stations and more support from many local state governments but some retail analysts suggest that companies overestimated the issue to hide other problems now leftover money in 529 college funds can now be moved into retirement accounts uh this is this is New Territory the law took effect last year it allows unused 529 funds to be transferred into Roth IRA tax-free with certain limits some restrictions include that the 529 account must be at least 15 years old uh and no rollover can come from contributions in The Last 5 Years the rollover amount cannot exceed $35,000 per beneficiary so if someone has several 529 accounts say for example for each child they could have a $35,000 limit for each one so rollover re also face other requirements that generally apply to Roth IRAs so no R IRS guidance yet on Switching account beneficiary and what that does for a 15-year time limit and today in entertainment news a Star Wars icon returns take a look the greatest hero of all time Luke Skywalker let me see if I have this right in your Galaxy my dad is mostly evil until he turns good for like 5 minutes and then dies my own nephew betrays me and kills most of my best friends Mark Hamill returns as Luke Skywalker in Lego Star Wars rebuild the Galaxy a cosmic accident scrambles the galaxy in the animated Adventure the four episode Special Event launches Friday on Disney plus and it's Friday the 13th and Crispy Cream is giving donut lovers they're giving them some glazed Lucky Charms so to celebrate the the day known for being unlucky the chain is offering a dozen donuts for just 13 cents customers who buy any dozen donuts or 16c count minis at regular price can buy a dozen or original glazed donuts for just 13 cents the offer is being made for in store or online orders if you go online use the promo code 13 all right quickly uh Market Strong finish for the week for us stocks in fact S&P and NASDAQ just enjoyed their best week of the year S&P of half a percent Dow Jones up 7% and the NASDAQ is up around 6% Wonder of Brothers up another 10% today it signed a new distribution deal with Charter yesterday all right with that all the stories for today's business matters uh back to you guys Chris you want to you know Don that Lego Star Wars miniseries might be pretty interesting I saw one of these Lego movies I think it was like a Lego Batman movie and I thought it would just be you know a cute kids movie with made of Legos but it's actually very clever and kind of hilarious yeah Lego movies are known for that uh personally I have seen a many of the Star Wars movies and TV series so for me uh I would give it a a look when it comes out the miniseries yeah yeah for anybody who's into Star Wars it's interesting because it comes after the nine film Star Wars saga and it sort of explores what could come after that but in a sort of hilarious way I guess um you know Luke Skywalker is in this alternative universe and jarar Banks is the Sith Lord he turns evil somehow yeah for for Star Wars fans uh we all know what Chris is talking about but for others yeah I have I have to admit I am not a big fan of either Star Wars or Lego really so can't add much to this conversation are you a fan of crispy K cream I am a fan of crispy K cream I would indeed like to try this deal yeah right yeah take advantage of that deal all right I'm kind of sad we didn't get any today maybe after work all right Don thank you thanks