Category Archives: United States

(BBG) Banned Chinese Security Cameras Are Almost Impossible to Remove

(BBG) An August deadline to remove them from federal agencies likely won’t be met as many departments don’t even know what cameras they’re using.

Thousands of Banned Chinese Surveillance Cameras Remain in U.S.

U.S. federal agencies have five weeks to rip out Chinese-made surveillance cameras in order to comply with a ban imposed by Congress last year in an effort to thwart the threat of spying from Beijing.But thousands of the devices are still in place and chances are most won’t be removed before the Aug. 13 deadline. A complex web of supply chain logistics and licensing agreements make it almost impossible to know whether a security camera is actually made in China or contains components that would violate U.S. rules. The National Defense Authorization Act, or NDAA, which outlines the budget and spending for the Defense Department each year, included an amendment for fiscal 2019 that would ensure federal agencies do not purchase Chinese-made surveillance cameras. The amendment singles out Zhejiang Dahua Technology Co. and Hangzhou Hikvision Digital Technology Co., both of which have raised security concerns with the U.S. government and surveillance industry.

Hikvision is 42% controlled by the Chinese government. Dahua, in 2017, was found by cybersecurity company ReFirm Labs to have cameras with covert back doors that allowed unauthorized people to tap into them and send information to China. Dahua said at the time that it fixed the issue and published a public notice about the vulnerability. The U.S. government is considering imposing further restrictions by banning both companies from purchasing American technology, people familiar with the matter said in May. “Video surveillance and security equipment sold by Chinese companies exposes the U.S. government to significant vulnerabilities,” said Representative Vicky Hartzler, a Republican from Missouri, who helped draft the amendment. Removing the cameras will “ensure that China cannot create a video surveillance network within federal agencies,” she said at the time.Dahua declined to comment on the ban. In a company statement, Hikvision said it complies with all applicable laws and regulations and has made efforts to ensure its products are secure. A company spokesman added that the Chinese government is not involved in the day-to-day operations of Hikvision. “The company is independent in business, management, assets, organization and finance from its controlling shareholders,” the spokesman said.Despite the looming deadline to satisfy the NDAA, at least 1,700 Hikvision and Dahua cameras are still operating in places where they’ve been banned, according to San Jose, California-based Forescout Technologies, which has been hired by some federal agencies to determine what systems are running on their networks. The actual number is likely much higher, said Katherine Gronberg, vice president of government affairs at Forescout, because only a small percentage of government offices actually know what cameras they’re operating. The agencies that use software to track devices connected to their networks should be able to comply with the law and remove the cameras in time, Gronberg said. “The real issue is for organizations that don’t have the tools in place to detect the banned devices,” she added. Several years ago the Department of Homeland Security tried to force all federal agencies to secure their networks by tracking every connected device. As of December, only 35% of required agencies had fully complied with this mandate, according to a 2018 report by the Government Accountability Office. As a result, most U.S. federal agencies still don’t know how many or what type of devices are connected to their networks and are now left trying to identify the cameras manually, one by one. 

(EUobserver) EU selling more goods to US despite Trump tariffs

(EUobserver)

The EU’s goods trade surplus with the US for the first five months of 2019 rose to €62.1bn from €55.4bn in the same period last year. The increase could stoke tensions after the US already imposed tariffs on some EU exports to get the numbers down. At the same time, Europe’s trade deficit with China grew to €76.7bn from €69.2bn, amid complaints China unfairly restricts market access for foreign firms.

(Reuters) UK police identify suspect behind leaked envoy memos: Sunday Times

(Reuters) LONDON (Reuters) – The suspect behind the leak of confidential memos from Britain’s Washington ambassador, which sparked a major diplomatic rift with the United States, has been identified, the Sunday Times newspaper reported.

Last week, Britain’s Mail on Sunday newspaper published memos from Kim Darroch in which he described Donald Trump’s administration as “inept” and “dysfunctional”, prompting an angry response from the U.S. president and causing the envoy to announce his resignation.

British officials have launched an inquiry to find the person responsible for the leak and counter-terrorism police said on Friday they had launched a criminal investigation.

According to the Sunday Times, which cited unnamed government sources, a suspect had been identified and suggestions that it could be the result of a computer hack by a foreign state had been ruled out.

“They think they know who did the leaking,” an unnamed government source told the paper. “It’s now a case of building a case that will stand up in court. It was someone with access to historical files. They went in and grabbed a range of material. It was quite crude.”

Both the Sunday Times and the Mail on Sunday reported that intelligence officials from the GCHQ eavesdropping spy agency were about to join the investigation to find the suspect by scouring email and phone records.

The Mail also published further memos from Darroch, defying a police warning that media which did so could be committing a criminal act.

The paper said Darroch had written to the British government in May 2018 that Trump had decided to unilaterally withdraw from Iran’s nuclear deal with major powers for “personality reasons” because it had been agreed by his predecessor Barack Obama.

Darroch had said in the cable that the Trump administration was “set upon an act of diplomatic vandalism”, the paper said.

Britain’s most senior counter-terrorism police officer had warned the media not to print any more leaked documents, saying it could breach the Official Secrets Act.

However, he was widely criticized by editors and politicians including the foreign minister Jeremy Hunt and ex-London Mayor Boris Johnson, the two men battling to replace Theresa May as prime minister when she steps down in just over a week’s time.

“It cannot be conceivably right that newspapers or any other media organization publishing such material should face prosecution,” Johnson, the frontrunner, said.

(BBC) Facebook ‘to be fined $5bn over Cambridge Analytica scandal’

(BBC)

Media captionHow the Facebook-Cambridge Analytica data scandal unfolded

US regulators have approved a record $5bn (£4bn) fine on Facebook to settle an investigation into data privacy violations, reports in US media say.

The Federal Trade Commission (FTC) has been investigating allegations that political consultancy Cambridge Analytica improperly obtained the data of up to 87 million Facebook users.

The settlement was approved by the FTC in a 3-2 vote, sources told US media.

Facebook and the FTC told the BBC they had no comment on the reports.

How was the settlement reached?

The consumer protection agency the FTC began investigating Facebook in March 2018 following reports that Cambridge Analytica had accessed the data of tens of millions of its users.

The investigation focused on whether Facebook had violated a 2011 agreement under which it was required to clearly notify users and gain “express consent” to share their data.

The $5bn fine was approved by the FTC in a 3-2 vote which broke along party lines, with Republican commissioners in favour and Democrats opposed.

The New York Times reported that the Democrats wanted stricter limits on the firm, while other Democrats have criticised the fine as inadequate.

“With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act,” US Senator Mark Warner said.

The fine still needs to be finalised by the Justice Department’s civil division, and it is unclear how long this may take, the sources said.

If confirmed, it would be the largest fine ever levied by the FTC on a tech company.

However, the amount falls in line with estimates by Facebook, which earlier this year said it was expecting a fine of up to $5bn.

Investors responded positively to the news, pushing Facebook shares up 1.8%.

Presentational grey line

Facebook has been expecting this

Analysis by Dave Lee, BBC North America technology reporter in San Francisco

Facebook had been expecting this. It told investors back in April that it had put aside most of the money, which means the firm won’t feel much added financial strain from this penalty.

What we don’t yet know is what additional measures may be placed on the company, such as increased privacy oversight, or if there will be any personal repercussions for the company’s chief executive, Mark Zuckerberg.

The settlement, which amounts to around one quarter of the company’s yearly profit, will reignite criticism from those who say this amounts to little more than a slap on the wrist.

Presentational grey line

What was the Cambridge Analytica scandal?

Cambridge Analytica was a British political consulting firm that had access to the data of millions of users, some of which was allegedly used to psychologically profile US voters and target them with material to help Donald Trump’s 2016 presidential campaign.

The data was acquired via a quiz, which invited users to find out their personality type.

As was common with apps and games at that time, it was designed to harvest not only the user data of the person taking part in the quiz, but also the data of their friends.

Facebook has said it believes the data of up to 87 million users was improperly shared with the now defunct consultancy.

How was Facebook users' data misused?

The scandal sparked several investigations around the world.

In October, Facebook was fined £500,000 by the UK’s data protection watchdog, which said the company had let a “serious breach” of the law take place.

Canada’s data watchdog earlier this year said Facebook had committed “serious contraventions” of its privacy laws.

(JN) Trump exige regulação bancária para criptomoedas

(JN)

O presidente dos Estados Unidos critica moedas como a Bitcoin ou a Libra, do Facebook, e exige que as empresas que criam estas moedas obtenham uma licença bancária.

As criptomoedas foram o novo alvo de Donald Trump esta semana. O presidente dos Estados Unidos considera que as empresas que criam e gerem moedas como a Bitcoin ou a Libra, a nova moeda que o Facebook pretende lançar, deveriam estar sujeitas a regulação bancária, “tal como os outros bancos”.

As críticas foram feitas, como habitualmente, na sua conta oficial de Twitter. “Não sou fã da Bitcoin e de outras criptomoedas, que não são dinheiro e cujo valor é altamente volátil e baseado em [critérios arbitrários]”, começou por escrever Trump. E continuou: “As criptomoedas sem regulação podem facilitar comportamentos ilegais, incluindo tráfico de droga e outras atividades ilegais”.

Donald J. Trump@realDonaldTrump

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….43,5 mil01:15 – 12 de jul de 2019Informações e privacidade no Twitter Ads26,1 mil pessoas estão falando sobre issoAssim, defende, deve ser criada regulação. “Se o Facebook e outras empresas querem tornar-se num banco, devem procurar uma nova licença bancária e tornar-se sujeitos a todas as regulações bancárias, tal como os outros bancos, tanto nacionais como internacionais”.

Donald J. Trump@realDonaldTrump · 12h

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….

Donald J. Trump@realDonaldTrump

….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…32,9 mil01:15 – 12 de jul de 2019Informações e privacidade no Twitter Ads9.645 pessoas estão falando sobre issoO presidente norte-americano concluiu com elogios ao dólar. “Só temos uma moeda real nos Estados Unidos e está mais forte do que nunca, é tanto segura quanto fiável. É, de longe, a moeda mais dominante do mundo e assim será para sempre”.

Donald J. Trump@realDonaldTrump · 12hRespondendo a @realDonaldTrump

….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…

Donald J. Trump@realDonaldTrump

…and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!35,6 mil01:15 – 12 de jul de 2019Informações e privacidade no Twitter Ads12,6 mil pessoas estão falando sobre issoOs investidores ignoram, para já, as declarações de Donald Trump. A Bitcoin segue, por esta altura, a valorizar perto de 5%, negociado acima dos 11.660 dólares e mantendo-se nos níveis mais elevados desde fevereiro de 2018.

(CNBC) Dow rallies 200 points to close above 27,000 for the first time ever

(CNBC)

The Dow Jones Industrial Average rallied to a record high on Thursday, led by UnitedHealth shares, after testimony by Federal Reserve Chair Jerome Powell this week that signaled easier monetary policy could be implemented later this month.

The 30-stock average broke above 27,000 for the first time in its history, rising 227.88 points, or 0.9% to 27,088.08. The Dow first closed above 26,000 in January of 2018, so it’s been a little more than a year-and-half trek between 1,000 point moves. The gains were largely driven by expectations the Fed will cut rates, insulating the market from a slowing economy and a trade battle with China.

Microsoft has been the best-performing Dow stock since the index’s first close above 26,000, surging around 50% in that time. Visa, Cisco Systems and Nike are also up sharply since then.

“This week solidified the fact that the market doesn’t need, it doesn’t want, it’s demanding a rate cut from Powell,” said Jeff Kilburg, CEO of KKM Financial. “I do have a little bit of caution going into the earnings season because we have some forward-guidance uncertainty with the trade tensions, but the wind in the sails continues to be that dovish stance from Powell.”

The S&P 500 also posted a record close, rising 0.2% to 2,999.91. The S&P 500 made its own milestone on Wednesday when it traded above 3,000 for the first time ever. The  Nasdaq Composite slipped 0.1% to 8,196.04.

UnitedHealth shares surged more than 5% after the White House dropped a proposal to eliminate drug rebates. CVS Health and Cigna also jumped on the news, gaining 4.7% and 9.2%, respectively.

Delta Air Lines rose 1.1% on better-than-expected earnings.

In testimony to the House Financial Services Committee on Wednesday, Powell said business investments across the U.S. have slowed “notably” recently as uncertainties over the economic outlook linger. As a result, expectations of an upcoming rate cut grew.

RT: NYSE trader happy 151215

Traders work on the floor of the New York Stock Exchange.Brendan McDermid | Reuters

“Crosscurrents have reemerged,” Powell said. “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”

Powell reiterated that testimony on Thursday. Market expectations for a rate cut later this month are at 100%, according to the CME Group’s FedWatch tool.

Thursday’s milestone was only the latest in the longest bull market in history. The bull run started in March of 2009 after the financial crisis. Back then, the Dow was trading around 6,600 points while the S&P 500 hovered below 1,000 points.

“Sure, 27,000 is just a number and in the whole scope of things isn’t meaningful,” said Ryan Detrick, senior market strategist at LPL Financial. “What it is though, is a reminder for all investors that this bull market has ignored all the scary headlines for years and the dual benefit of fiscal and monetary policy could mean it has a lot longer to go than most expect.”

In economic news, the U.S. consumer price index — a widely followed measure of inflation — rose more than expected last month, with the core CPI posting its biggest gain in 1½ years. But that failed to dent investors’ expectations that the Fed will deliver a rate cut.

(ZH) China To Sanction American Companies Selling Weapons To Taiwan

(ZH)

When it comes to tail risks that could cause WWIII, simmering tensions around Taiwan and Beijing’s increasingly belligerent rhetoric probably rank as one of the most probable. Since at least the beginning of the year, President Xi has warned that ‘reunification’ between Taiwan and the mainland is inevitable, and hinted that Beijing wouldn’t hesitate to attack any foreign power that tries to stop China. In response, Taiwan’s President Tsai Ing-wen has insisted that the people of Taiwan would ‘never’ tolerate rule by the Communist Party, and insisted that the island’s military would fight.

In the middle of this, Washington has okayed the sale of $2.2 billion in weapons, including missiles and tanks, to Taiwan. The decision outraged Beijing, which accused Washington of interfering in its relations with its wayward province.

Now – at a time when Peter Navarro said that trade talks are going “great” – Beijing is moving ahead with an unexpected escalation: China’s Foreign Ministry Spokesman Geng Shuang said in a statement that Beijing intends to impose sanctions on American companies selling arms to Taiwan.

That list likely includes most of the major American defense contractors, particularly General Dynamics, the maker of the Abrams tank, and Raytheon, maker of the Stinger missile – two of the armaments being purchased by Taiwan.

  • CHINA SAYS TO SANCTION U.S. FIRMS INVOLVED IN TAIWAN ARMS SALES
  • U.S. GOVT IN `TOTAL DISREGARD’ OF CHINA, MINSTER WANG YI SAYS
  • WANG YI: U.S. SHOULDN’T HAVE OFFICIAL RELATIONS WITH TAIWAN

The announce comes as Chinese Foreign Minister Wang Yi warned during a trip to Hungary on Friday that Washington must end its dealings with Taiwan, saying that continuing would be like “playing with fire.”

Wang

Wang Yi

He added that no foreign power will be able to prevent China’s reunification with its runaway province. Though the US has vowed to protect Taiwan should the mainland try to invade. Wang added that the US government is in ‘total disregard’ of China.

And just like that, the prospects for moving from trade war to military confrontation with Beijing have climbed considerably.

)

(Reuters) New North Korea constitution calls Kim head of state, seen as step to U.S. peace treaty

(Reuters)

SEOUL (Reuters) – Kim Jong Un has been formally named head of state of North Korea and commander-in-chief of the military in a new constitution observers said was possibly aimed at preparing for a peace treaty with the United States.FILE PHOTO: North Korean leader Kim Jong Un speaks during the 4th Plenary Meeting of the 7th Central Committee of the Workers’ Party of Korea (WPK) in Pyongyang in this April 10, 2019 photo released on April 11, 2019 by North Korea’s Korean Central News Agency (KCNA). KCNA via REUTERS/File Photo

North Korea has also long called for a peace deal with the United States to normalize relations and end the technical state of war that has existed since the 1950-1953 Korean War concluded with an armistice rather than a peace treaty.

The new constitution, unveiled on the Naenara state portal site on Thursday, said that Kim as chairman of the State Affairs Commission (SAC), a top governing body created in 2016, was “the supreme representative of all the Korean people”, which means head of state, and “commander-in-chief”.

A previous constitution simply called Kim “supreme leader” who commands the country’s “overall military force”.

Previously, North Korea’s official head of state was the president of the titular parliament, known as the Presidium of the Supreme People’s Assembly.

“Kim had dreamed of becoming the president of North Korea and he effectively made it come true,” said Kim Dong-yup, a professor at Kyungnam University’s Far East Institute in Seoul.

“He has long sought to shake off the abnormal military-first policy the country has stuck to for a long time.”

Kim shifted his focus to the economy last year, launched nuclear talks with the United States and moved to revamp his image as a world leader via summits with South Korea, China and Russia.

Hong Min, a senior researcher of the Korea Institute for National Unification in Seoul, said the title change was also aimed at preparing for a potential peace treaty with the United States.

“The amendment may well be a chance to establish Kim’s status as the signer of a peace treaty when it comes, while projecting the image of the country as a normal state,” Hong said.

Washington had baulked at signing a comprehensive peace treaty before North Korea takes substantial steps toward denuclearisation, but U.S. officials have signaled they may be willing to conclude a more limited agreement to reduce tensions, open liaison offices, and move toward normalizing relations.

Denuclearisation talks between the United States and North Korea have stalled, although fresh talks with Pyongyang are supposed to take place this month.

North Korea has frozen nuclear bomb and long-range missile testing since 2017. But it tested new short-range missiles after a second summit with the United States in February broke down, and U.S. officials believe it has expanded its arsenal by continuing to produce bomb fuel and missiles.

The new constitution continued to describe North Korea as a nuclear weapons state.

In reality Kim, a third-generation hereditary leader, rules North Korea with an iron-fist and the title change will mean little to the way he wheels power.

(Reuters) U.S. probes Deutsche Bank’s dealings with Malaysia’s 1MDB: WSJ

(Reuters)

(Reuters) – The U.S. Justice Department is investigating whether Deutsche Bank AG (DBKGn.DE) violated foreign corruption or anti-money-laundering laws in its work for state fund 1Malaysia Development Berhad (1MDB), the Wall Street Journal said on Wednesday.The logo of Deutsche Bank is pictured on a company’s office in London, Britain July 8, 2019. REUTERS/Simon Dawson

The news comes after the bank announced plans to scrap its global equities unit, cut some fixed-income operations and slash 18,000 jobs globally in a 7.4-billion-euro ($8.34 billion) restructuring program.

Deutsche Bank’s work for 1MDB included helping to raise $1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate, the newspaper said, citing unidentified people familiar with the matter.

Prosecutors are mainly looking into the role of Tan Boon-Kee, a colleague of a former Goldman Sachs Group Inc executive, Tim Leissner, who worked with him on 1MDB-related business, the paper said.

She left Goldman to become Asia-Pacific head of banking for financial institutions clients at Deutsche Bank, where she was involved with further 1MDB dealings, it added.

In an emailed statement, Deutsche Bank said it had fully cooperated with all regulatory and law enforcement agencies that made inquiries about the fund.

“As stated in asset forfeiture complaints filed by the U.S. Department of Justice, 1MDB made ‘material misrepresentations and omissions to Deutsche Bank officials’ in connection with 1MDB’s transactions with the bank,” the bank told Reuters.

“This is consistent with the bank’s own findings in this matter,” it added.

A U.S. DoJ civil asset-forfeiture complaint repeatedly describes Deutsche Bank as being misled by 1MDB officers, the WSJ said.

Tan left Deutsche Bank last year, after it discovered communications between her and Jho Low, the Malaysian financier the Justice Department has described as the central player in the 1MDB scandal, it added.

A representative of insurance company FWD Group, Tan’s current employer, said the company and Tan declined to comment.

The DoJ did not immediately respond to a request for comment from Reuters.

(CNA) The unexpected effectiveness of US President Donald Trump – Janan Ganesh

(CNA) LONDON: It was said of John Updike that he could review a book at great length without mentioning whether he liked it or not. In his diplomatic correspondence — that other literary genre — Kim Darroch does the same with Donald Trump.

At no point do his leaked memos say if the president is a good or bad thing in moral or philosophic terms. Advertisement

Leaving such judgments to columnists and other windbags, Britain’s outgoing ambassador to Washington majors on what is useful to his masters: Mr Trump’s methods, his foibles, his prospects. The analysis is technical, not normative.

HOW EFFECTIVE IS TRUMP?

Those hamming up their rage at Sir Kim are only entitled to challenge him, then, on one point. Is he right? Judged on its own terms, is this administration “inept” and “uniquely dysfunctional”?

To answer in the affirmative seems natural enough. Mr Trump had a Republican Congress for two years and could not build his wall against Mexico.

He falls foul of the judiciary so often that no one blinks when the Supreme Court rebukes his tinkering with the census. Abroad, his flattery of the leader of North Korea seems to intensify the less it is rewarded.

As the examples mount, Sir Kim’s view seems the plainest common sense — faultable only for stating the obvious. Just one thing gives me pause. If Mr Trump were wholly inept, he would incur only derision, not fear. In fact, he attracts plenty of both.

It suggests he has been, if not effective in absolute terms, then more effective than some of us had hoped.

MANY, MANY WINS

In December 2017, Mr Trump passed a tax cut that did not seem probable just a week or two earlier. It was budgetary folly and awful politics.

Republicans made no great mention of it in last year’s midterm elections. But if we are judging him on the enactment of his own aims, it must rate as a win.

He also secured his first-choice nominee to the Supreme Court on two occasions. Even Ronald Reagan tasted defeat on that score, and in an era of near-unanimous confirmations. George W Bush had to sheepishly withdraw a name.

Then there is the attritional war against what Steve Bannon, who once advised Mr Trump, calls the “administrative state”.

Through deregulation, the wilful understaffing or mis-staffing of the executive and the appointment of judges who construe the government’s powers narrowly, the president has worked to enfeeble Leviathan.

It is dry stuff, this, but it matters. Mr Trump has been a trooper for the anti-government right. It is a particular effort to keep up with the environmental rules he has either scrapped or loosened.

MANY, MANY WINS ABROAD

Even if he had pulled off none of these domestic ruptures, his foreign policy would be enough to mark him out as a consequential leader. To harden the US line on China is no feat by itself.

A president has more latitude on foreign affairs than in any other field. More remarkable is the extent to which Mr Trump has popularised this animus throughout the governing classes.

Political, diplomatic and corporate elites now countenance a lasting struggle with China. This was not just unforeseeable in 2016. It was unforeseeable at the start of 2018.

And its implications include nothing less than the gumming up of the globalisation that Mr Trump defines himself against.

A GRIM KIND OF EFFECTIVENESS

To say this is not to credit the president with a bureaucratic guile that is somehow lost on other observers. What he does have is an obsession with a few priorities — which is strategic behaviour of a kind — and a personal force that is difficult to thwart.

It is customary to bemoan the Republicans’ servility towards him as though they were under no duress. But it is precisely his aggression, his ability to turn his multitudinous flock of voters on enemies, that causes lawmakers to fold.

It is a grim kind of political effectiveness. But it is a kind of political effectiveness.

Better President Trump than President Mike Pence, Democrats used to say, reasoning that the vice-president would chase rightwing aims more successfully.

You hear less of that now. It is not clear that a more seasoned politician would have achieved a great deal more.

ALL TOO FUNCTIONAL

Remember how much of the cultural weather is against the Republican Party. Americans are ever more liberal on social issues. They are ever more “European” on healthcare and inequality.

The party has won the presidential popular vote once since the end of the cold war. In inhospitable times, conservatives are grateful for small mercies. Mr Trump gives them quite a few.

“Dysfunctional”? Judged by normal standards, Sir Kim was right. 

Judged by the expectations of 2016, the administration is all too functional.

(BBC) France passes tax on tech giants despite US threats

(BBC)

A visitor walks in front of a Google logo during a show at Parc des Expositions in May 2018

France has approved a digital services tax despite threats of retaliation by the US, which argues that it unfairly targets American tech giants.

The 3% tax will be levied on sales generated in France by multinational firms like Google and Facebook.

The French government has argued that such firms headquartered outside the country pay little or no tax.

The US administration has ordered an inquiry into the move – which could result in retaliatory tariffs.

The new tax was approved by the French senate on Thursday, a week after it was passed by the lower house, the National Assembly.

Any digital company with revenue of more than €750m ($850m; £670m) – of which at least €25m is generated in France – would be subject to the levy.

It will be retroactively applied from early 2019, and is expected to raise about €400m this year.

Why target tech giants?

At present, they are able to pay little or no corporate tax in countries where they do not have a large physical presence. They declare most of their profits where they are headquartered.

The European Commission estimates that on average traditional businesses face a 23% tax rate on their profits within the EU, while internet companies typically pay 8% or 9%.

France has long argued that taxes should be based on digital, not just physical presence. It announced its own tax on big technology firms last year after EU-wide efforts stalled.

An EU levy would require consensus among members, but Ireland, the Czech Republic, Sweden and Finland raised objections.

France’s new 3% tax will be based on sales made in the country, rather than on profits.

About 30 – mostly American companies – will pay it. Chinese, German, Spanish and British firms will also be affected.

The French government says the tax will end if a similar measure is agreed internationally.

The big tech companies have argued they are complying with national and international tax laws.

What has the US said?

The Trump administration denounced the move a day before the vote.

On Wednesday trade representative Robert Lighthizer said an investigation would “determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce”.

US Trade Representative Robert Lighthizer
Image captionUS Trade Representative Robert Lighthizer said President Trump ordered the investigation

The US inquiry could pave the way for punitive tariffs, which Mr Trump has imposed on several occasions since taking office.

Previous investigations launched by Washington have covered European Union and Chinese trade practices.

Defending the new tax on Thursday, French Finance Minister Bruno Le Maire said France was “sovereign and decided its own tax rules”.

“I want to tell our American friends that this should be an incentive for them to accelerate even more our work to find an agreement on the international taxation of digital services,” he added.

Grey line

France isolated

Analysis by Dave Lee, BBC North America technology reporter

This “Section 301” investigation, as it is known, has been used before as a way of eventually implementing new tariffs on countries the Trump administration feels is taking the US for a ride.

If France is going to take hundreds of millions of euros from the pockets of American tech giants, the US argument might be, then why shouldn’t the US earn more money from what the French do in the US? It took the same view with China and has buried itself in a trade war that has destabilised relations and has the potential to escalate even further.

The digital tax is a risk for France, for it is now isolated. There had been talk of a Europe-wide tech tax, but talks fell down thanks in part to opposition from countries such as Ireland, which has benefitted from being able to attract tech firms to set up their European base in the country. Other countries – such as the UK, Spain and Austria – are considering similar moves, but France is furthest along.

One thing all sides agree on, however, is that in our modern, digital economy, the overhaul of how companies are taxed is long overdue.

France will be hoping for one of two outcomes. Either countries follow their lead and implement their own, independent laws, limiting France’s exposure. Or the move gives added energy to calls for a multilateral agreement on how digital firms should be taxed globally, putting an end to the squirreling-away of vast sums of money made by internet giants.

(EUobserver) New US-Israel-EU parliament group launched

(EUobserver)

The Brussels-based American Jewish Committee (AJC) Transatlantic Institute announced on Tuesday in the European Parliament an inter-parliamentary Transatlantic Friends of Israel (TFI) group. The goal is to “strengthen the trilateral partnership between the US, Israel and Europe”. The chairman of the group, Austrian MEP Lukas Mandl, said he considered “the transatlantic alliance with Israel one of the most important issues of our time”.

(GUA) Kim Darroch resigns as UK ambassador to US after leaked Trump comment

(GUA) Resignation letter says ‘situation is making it impossible for me to carry out my role as I would like’

Sir Kim Darroch
 Sir Kim Darroch Photograph: Niall Carson/PA

Sir Kim Darroch, the UK ambassador to Washington who has been at the centre of a diplomatic row over leaked cables criticising Donald Trump, has resigned his post, the Foreign Office has said.

In a letter to Simon McDonald, the most senior official at the Foreign Office, Darroch said the row, in which Trump has called the ambassador “a pompous fool” and “very stupid”, meant he could not continue.

“Since the leak of official documents from this embassy there has been a great deal of speculation surrounding my position and the duration of my remaining term as ambassador,” he wrote.

“I want to put an end to that speculation. The current situation is making it impossible for me to carry out my role as I would like.”

In response to Darroch’s letter, McDonald said that he accepted the resignation with “deep personal regret” and praised him for behaving throughout the controversy “as you have always behaved over a long and distinguished career, with dignity, professionalism and class”.

McDonald added: “The prime minister, foreign secretary and whole of the public service have stood with you: you were the target of a malicious leak; you were simply doing your job. I understand your wish to relieve the pressure on your family and your colleagues at the embassy; I admire the fact that you think more of others than yourself.”

Speaking in the House of Commons shortly after the news emerged, Theresa May praised Darroch for “a lifetime of service to the United Kingdom”. She added: “We owe him an enormous debt of gratitude. I hope the house will reflect on the importance of defending our values and principles particularly when they are under pressure.”

Jeremy Corbyn called the treatment of Darroch “beyond unfair and wrong” and said that he had given “honourable and good service”.

“The whole house should join together in deeply regretting the feeling he’s got that he must resign at this moment,” he said.

(IrishTimes) UK minister to apologise to Ivanka Trump for diplomat’s memos

(IrishTimes) Trump says US will ‘no longer deal’ with UK ambassador after leaks on his ‘inept’ administration

Ivanka Trump and UK international trade secretary Liam Fox arrive for the state banquet for US president Donald Trump  at Buckingham Palace on June 3rd. Photograph: Victoria Jones/Reuters

Ivanka Trump and UK international trade secretary Liam Fox arrive for the state banquet for US president Donald Trump at Buckingham Palace on June 3rd. Photograph: Victoria Jones/Reuters

US president Donald Trump will “no longer deal” with the UK’s ambassador to the US Sir Kim Darroch and criticised prime minister Theresa May for making a “mess” of Brexit, he said on Twitter.

“I have been very critical about the way the UK and Prime Minister Theresa May handled Brexit. What a mess she and her representatives have created,” he tweeted.

“I told her how it should be done, but she decided to go another way. I do not know the Ambassador, but he is not liked or well thought of within the US. We will no longer deal with him.

“The good news for the wonderful United Kingdom is that they will soon have a new Prime Minister. While I thoroughly enjoyed the magnificent State Visit last month, it was the Queen who I was most impressed with!”

Earlier on Monday, Britain’s trade minister said he would apologise to Mr Trump’s daughter Ivanka for a leak of confidential memos in which the UK ambassador describes the US administration as “dysfunctional” and “inept”.

The memos from Sir Kim, the ambassador to Washington, were leaked to a Sunday newspaper, annoying Mr Trump and triggering demands on the British side to find out who had disclosed them.

International trade secretary Liam Fox, who is on a visit to Washington, told BBC radio he would apologise to the president’s daughter Ivanka, whom he is due to meet during his trip.

“I will be apologising for the fact that either our civil service or elements of our political class have not lived up to the expectations that either we have or the United States has about their behaviour, which in this particular case has lapsed in a most extraordinary and unacceptable way,” he said.

“Malicious leaks of this nature … can actually lead to a damage to that relationship, which can therefore affect our wider security interest.”

The revelations come at a time when Britain is hoping to strike a major trade deal with its closest ally after it leaves the European Union, an exit scheduled for October 31st.

Mr Trump told reporters, of Sir Kim: “We are not big fans of that man and he has not served the UK well, so I can understand and I can say things about him but I won’t bother.”

In memos to his government dating from 2017 to the present, Sir Kim said reports of in-fighting in the White House were “mostly true” and last month described confusion within the administration over Mr Trump’s decision to call off a military strike on Iran.

“We don’t really believe this Administration is going to become substantially more normal; less dysfunctional; less unpredictable; less faction riven; less diplomatically clumsy and inept,” Sir Kim wrote in one memo.

‘Serious consequences’

Ministers said Britain did view the Trump administration as effective.

“I have made it clear that I don’t share the ambassador’s assessment of either the US administration or relations with the US administration, but I do defend his right to make that frank assessment,” foreign secretary Jeremy Hunt told reporters.

“What we will not allow to happen is any interruption in the superb relationship that we have the United States, which is our closest ally around the world,” he added, promising “serious consequences” for whoever who had leaked the memos.

Nigel Farage, leader of the Brexit Party and long a thorn in the side of British governments, said figures such as Sir Kim, would be “not be around” if former foreign secretary Boris Johnson, one of two candidates seeking to replace Theresa May as prime minister, was chosen by Conservative Party members.

Despite being close to Mr Trump, Mr Farage ruled himself out of becoming Britain’s next ambassador in Washington. “I don’t think I’m the right man for that job,” he told BBC radio.

An inquiry is now being held to determine who was behind the second serious disclosure of confidential material this year.

Two months ago, Mrs May fired defence minister Gavin Williamson after secret discussions in the National Security Council about Chinese telecoms firm Huawei were leaked to the media, and an inquiry concluded that he was responsible.

Mr Williamson denied any involvement and police said there was no reason for a criminal investigation. – Reuters

(CNBC) Nintendo says it will shift part of its Switch gaming console production out of China

(CNBC)

  • Nintendo, which currently outsources almost all of the console production to contract manufacturers in China, plans to make the partial shift to Vietnam this summer.
  • Its spokeswoman said the shift was intended to diversify risks and not to escape potential tariff hikes by the United States on products imported from China.
GP: Sony Nintendo 170614

Sony PlayStation and Nintendo Switch game console signage is displayed during the E3 Electronic Entertainment Expo in Los Angeles, California, U.S., on Wednesday, June 14, 2017.Patrick T. Fallon | Bloomberg | Getty Images

Japan’s Nintendo plans to shift a part of the production of its Switch gaming consoles to Vietnam from China in an effort to diversify manufacturing sites, a spokeswoman said on Tuesday.

Nintendo, which currently outsources almost all of the console production to contract manufacturers in China, plans to make the partial shift to Vietnam this summer.

The spokeswoman said the shift was intended to diversify risks and not to escape potential tariff hikes by the United States on products imported from China.

The United States has held off from launching the fourth tranche of tariffs on $300 billion worth of goods that would cover nearly everything imported from China to the United States.

(ZH) Trump Says US Should Join “Great Currency Manipulation Game” By Devaluing Dollar

(ZH)

President Trump has never been a fan of the strong dollar. And after beating around the bush for months by demanding a 50 bp rate cut and more QE from the Fed, it seems the president is now explicitly calling on the US to artificially weaken the greenback by any means necessary.

In a tweet, Trump blasted China and Europe for playing a ‘big currency manipulation game’ and recommended that the US “MATCH” or risk being “the dummies who sit back and politely watch as other countries continue to play their games.”

Donald J. Trump@realDonaldTrump

China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!61.3K3:21 PM – Jul 3, 2019Twitter Ads info and privacy23.2K people are talking about this

Notably, the tweet calling for even more easing followed Trump’s latest tweet celebrating new market highs.

Donald J. Trump@realDonaldTrump

S&P 500 hits new record high. Up 19% for the year. Congratulations!67.2K3:12 PM – Jul 3, 2019Twitter Ads info and privacy18.8K people are talking about this

Trump’s warning also comes less than two weeks after Bank of America warned that direct intervention to weaken the dollar would be possible by a few avenues, some directly involving Trump (jawboning), some involving the Treasury and the Fed (direct intervention by the NY Fed’s New York markets desk).

Whatever the administration decides, it’s becoming increasingly clear that the dollar is unsustainably overvalued compared with its long-term real effective exchange rate value. BofA’s analyst calculated that the dollar is 13% above its long-term average.

Currency

According to tradition, the dollar and its value have long been the exclusive purview of the Treasury Department. But Trump has never been one to unquestioningly adhere to precedent. And back in May, the Treasury Department declined to name any country to its list of currency manipulators, though it added some to a ‘watch list’.

Although the Fed and most central banks insist that they don’t explicitly target the exchange rate, most observers know this isn’t exactly true.

John Kemp@JKempEnergy

CURRENCY MANIPULATION is what Bertrand Russell called an “emotive conjugation” and Bernard Woolley called an “irregular verb”:
* I am cutting interest rates
* You are trying to achieve a competitive devaluation
* He/she/it is manipulating their currency to obtain unfair advantage133:43 PM – Jul 3, 2019Twitter Ads info and privacySee John Kemp’s other Tweets

John Kemp@JKempEnergyReplying to @JKempEnergy

Major central banks (Fed, ECB, BOE, BOJ) usually pretend the exchange rate is not part of their strategy. But exchange rates enter their thinking in two ways:
* Competitiveness of exporting and import-competing firms
* Import prices and pass through to inflation53:48 PM – Jul 3, 2019Twitter Ads info and privacySee John Kemp’s other Tweets

And for everybody who bought the dip in gold the other day…well done.

Kevin C. Smith, CFA@crescatkevin

Insanely bullish for gold.$XAU $GLD $GC $GDX https://twitter.com/realDonaldTrump/status/1146423819906748416 …Donald J. Trump@realDonaldTrumpChina and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!1163:52 PM – Jul 3, 2019Twitter Ads info and privacy38 people are talking about this