China Did Not Fulfill Trade Promises, Report Says

A farmer preparing to harvest his corn crop in Iowa. President Donald J. Trump sold the trade deal with China as a boon for American farmers and manufacturers.
Credit…Kia Johnson/Reuters

China has fallen far short of its promise to buy hundreds of billions of dollars in American products as part of an initial trade deal it reached with the United States last January, according to data released on Thursday, creating another Trump-era challenge for the Biden administration to confront.

A key part of the deal, which resulted in a tariff cease-fire between both countries, included a commitment from China that it would buy an additional $200 billion worth of American goods and services in 2020 and 2021. But an analysis of Chinese import data conducted by the Peterson Institute for International Economics found that, nearly a year after the agreement went into effect, China has bought just 58 percent of the goods that it had committed to purchase.

The shortfall poses a challenge for President Biden as he seeks to reorient the United States’ relationship with China. The new administration faces a big question of whether to keep the tariffs that President Donald J. Trump imposed on $360 billion worth of Chinese goods in an attempt to force Beijing to commit to certain economic changes. Mr. Biden must now decide whether to maintain those tariffs — which have raised prices for American companies — or find new ways to curb China’s practices of subsidizing its exports and stealing intellectual property.

At her confirmation hearing this week, Janet L. Yellen, Mr. Biden’s nominee to be Treasury secretary, sounded a tough tone toward China and said the administration would look to address any economic misbehavior by China. Ms. Yellen suggested that the United States would engage its allies to help in that effort, which would be a marked departure from the Trump administration’s aggressive and unilateral approach.

In written responses to the Senate Finance Committee, which were reviewed by The New York Times on Thursday, Ms. Yellen said Mr. Biden would not make any immediate moves with regard to the tariffs but suggested that the United States needed to take a different approach from the one the Trump administration had pursued.

“President Biden has said that he is not going to make any immediate moves on the current China tariffs,” she wrote. “As part of his review, he is going to consult with allies to galvanize collective pressure.”

Mr. Trump sold the trade deal as a boon for American farmers and manufacturers, saying the Chinese government would buy agricultural and energy products, along with other goods and services.

But China bought only 64 percent of the agricultural products that it had committed to purchase, 60 percent of the manufactured products and 39 percent of energy products, according to the Peterson Institute’s analysis.

Trump administration officials have blamed the pandemic and the slowing global economy for China’s failure to buy as many goods as expected. Before they left office, Mr. Trump and his top economic officials said they expected Beijing to eventually make good on its promises. The administration never used the enforcement provisions that were part of the deal, despite extensive negotiations about how such a mechanism would work. It is now up to the Biden administration to decide whether to initiate those penalties.

A federal judge declined on Thursday to force Amazon to resume hosting the social networking app Parler on its cloud computing platform, saying that doing so would not be in the public interest.

Amazon kicked Parler, which had become a gathering place for far-right conservatives, off its platform in the days after the Jan. 6 riot at the Capitol. Parler then sued Amazon, accusing the tech giant of not giving proper warning before ending its services, and asked the court to force Amazon to host the social network. Parler also argued in its complaint, filed in the United States District Court for the Western District of Washington, that Amazon colluded with Twitter in violation of antitrust laws.

Amazon responded that Parler failed to sufficiently moderate the violent and incendiary content on its site, leaving it no choice but to act swiftly. It also denied having contact with Twitter on the matter.

Judge Barbara J. Rothstein ruled that Parler “proffered only faint and factually inaccurate speculation” of the alleged collusion between Amazon and Twitter. She also found that “there is no debate” that forcing Amazon to reinstate Parler now, before the social network could put in place an effective system of moderating content, “would result in the continued posting of the kind of abusive, violent content” that caused Amazon to kick Parler off in the first place. The court, she wrote, “explicitly rejects” forcing Amazon to host that kind of violent speech.

Judge Rothstein wrote that the Capitol riots were “a tragic reminder that inflammatory rhetoric can — more swiftly and easily than many of us would have hoped — turn a lawful protest into a violent insurrection.”

While the judge did not dismiss the case entirely, she wrote that Parler “failed to demonstrate that it is likely to prevail on the merits” of its claims.

Jeffrey Wernick, Parler’s chief operating officer, said in a statement that the litigation was still in its early stages. “We remain confident that we will ultimately prevail in the main case,” he said.

Rock-bottom interest rates have prompted a surge in home buying and refinancing.
Credit…John Raoux/Associated Press

Even as the labor market struggles, there are signs that other economic measures are turning more positive. Bond yields are rising, an indication that traders expect faster growth and higher prices once mass inoculations take hold and the coronavirus recedes.

Yields on the benchmark 10-year Treasury note have jumped by 20 basis points to 1.10 percent over the last two months, breaking the 1 percent threshold on Jan. 6. Rates remain extremely low by historical standards, but a continuation in the surge could threaten one of the leading bright spots in the economy — the housing market.

Rock-bottom interest rates have prompted a surge in home buying and refinancing, as borrowers take advantage of the Federal Reserve’s move to lower rates after the coronavirus struck last March.

Low rates have also buoyed the stock market, as yield-hungry investors turned to equities in search of faster growth. An upturn in interest rates — reflecting lower bond prices as other investments become more attractive — would almost certainly undermine the momentum that has propelled major market indexes to record highs.

So far, economists play down the likelihood of a surge in rates. But all eyes are nevertheless on yields, said Carl Tannenbaum, chief economist at Northern Trust in Chicago.

“It’s the No. 1 question I get from clients,” Mr. Tannenbaum said. “I know there are folks out there that think the 10-year yield is poised to become unmoored and shoot up to 1.5 or 2 percent. But I find that highly unlikely.”

Even if Mr. Tannenbaum is right about the solidity of the real estate market, rising yields could put a brake on the Biden administration’s stimulus efforts.

So-called bond vigilantes drove rates higher in the 1990s during the Clinton administration, helping to force officials to make deficit reduction a higher priority than new spending.

“We just bumped up our rate forecast for 2021,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “If Biden gets his way with more stimulus, there will definitely be more concern about the pace of Treasury bond issuance. This could all make the bond market nervous.”

For now, though, a surge in rates is unlikely, said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh. What’s more, the Federal Reserve can push back on yields, whether by increasing asset purchases or buying more longer-term debt.

“The Fed has some options,” Mr. Faucher said. “And the Biden administration has made it clear the economy needs more stimulus. I don’t expect them to balk on their stimulus plans even if rates move higher.”

To help the White House with its goal of vaccinating 100 million people in its first 100 days, Amazon offered to vaccinate a large share of its workers.
Credit…Johannes Eisele/Agence France-Presse — Getty Images

On President Biden’s first day in office, the head of Amazon’s consumer business, Dave Clark, sent a letter to the White House with an offer to help achieve the goal of vaccinating 100 million people in the administration’s first 100 days. By way of assistance, the retailer offered to vaccinate a large share of its workers.

The e-commerce giant has made similar offers to state governments, including Tennessee and Washington, although Amazon was not among the companies Gov. Jay Inslee of Washington announced as partners in its vaccination plan this week.

Those earlier letters to governors were signed by Brian Huseman, who runs Amazon’s U.S. lobbying team, which has been seeking permission from the Centers for Disease Control and Prevention to vaccinate “essential” workers at the company’s warehouses, data centers and Whole Foods “at the earliest appropriate time.”

The company has hired a health care provider to help administer the vaccine to employees, it said in the letters.

This suggests that public-private partnerships to distribute vaccines may come with perks for the companies taking part, the DealBook newsletter notes, potentially giving companies leverage to push employees up the line in priorities set by states. Several states are struggling to roll out vaccines as fast as they’d like because of issues with funding, staffing and logistics. In his letter to Mr. Biden, Mr. Clark said that Amazon could help with “operations, information technology and communications capabilities,” though he didn’t specify what that would entail.

The New Yorker Union decided on a walkout on Thursday after a recent round of negotiations with management failed.
Credit…Jeenah Moon for The New York Times

The New Yorker’s union employees did not go to work on Thursday.

The more than 100 employees represented by The New Yorker Union, which includes fact checkers, web producers and some other editorial employees, decided on the daylong walkout after recent rounds of negotiations with management failed, said Natalie Meade, the union chair.

The issue is pay. Ms. Meade, who is a fact checker at the magazine, said the union wanted to raise the salary minimum to $65,000. In the recent negotiations, managers at The New Yorker did not hit that number, she said, instead offering wage increases that she called “insulting.”

“They already know they’re underpaying us,” Ms. Meade said.

The union, which does not represent The New Yorker’s staff writers, has been working toward a collective bargaining agreement since 2018. The walkout started at 6 a.m. on Thursday and was scheduled to last 24 hours.

Before negotiations, the union conducted a pay study based on data from Condé Nast, the magazine’s parent company. The survey found that union workers at The New Yorker had a median salary of $64,000 and that the company’s editorial assistants were paid a median of $42,000.

In a statement on Thursday, a New Yorker spokesperson said that proposals made during the recent bargaining sessions on salary were “initial offers.”

“It is our hope that, as opposed to resorting to actions like this one, the union will bargain in good faith and return a counter proposal, as is standard in negotiations,” the statement said. “That way, we can work together productively to reach a final contract as quickly as possible.”

The New Yorker spokesperson also faulted the union’s pay study, adding: “We are devoted to fair pay all around. We dispute certain conclusions of this study, and we are determined to get to an equitable agreement.”

In September, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Alexandria Ocasio-Cortez, Democrat of New York, pulled out of keynote speaker slots at The New Yorker Festival in solidarity with union workers, who were planning a digital picket line to pressure management into including a “just cause” proposal in their agreement.

“Just cause” is a provision often included in union contracts that sets a standard employers have to meet to discipline or fire workers. New Yorker management eventually agreed to include it.

The New Yorker Union is part of the NewsGuild of New York, which represents employees at The New York Times, Reuters, The Daily Beast and other news outlets.

Volkswagen’s new electric vehicle, the ID.3. The car suffered from software problems that delayed its arrival in showrooms last year.  
Credit…Ints Kalnins/Reuters

Volkswagen, the largest carmaker in Europe, faces penalties of more than 100 million euros, or $120 million, after it failed last year to cut the carbon dioxide emissions of its vehicles enough to meet European standards.

The company blamed the shortfall on disruption to auto sales caused by the pandemic, which slowed the rollout of the ID.3, Volkswagen’s new electric vehicle.

Still, the failure to meet environmental standards was a setback for Volkswagen as it tries to position itself as the company that will make electric cars affordable for the masses. The German company is still recovering from an emissions cheating scandal in 2015 that badly damaged its reputation.

European Union rules that took effect last year compel carmakers to sharply reduce their output of carbon dioxide, a cause of climate change. Volkswagen said that it cut average CO2 emissions of its vehicles by 20 percent compared with 2019, but that was not enough to avoid penalties.

The ID.3, with a starting price of less than €30,000, or $36,000, has suffered from software problems that delayed its introduction. Nonetheless, the company said it delivered 57,000 ID.3s in 2020 and that demand was strong.

The ID.3 is not being sold in the United States, but Volkswagen plans to begin delivering the ID.4, an electric SUV, to American dealers in March. The car will have a starting price of $40,000.

Volkswagen did not say exactly how high the European emissions fine would be, only that it would exceed €100 million. Matthias Schmidt, an independent analyst in Berlin who tracks electric car sales, estimated the fine would come to €140 million. Volkswagen said it had already set aside enough money to avoid an impact on fourth-quarter earnings.

The European Central Bank’s headquarters in Frankfurt. The bank’s policymakers have commited spending 1.9 trillion euros in bond markets to keep interest rates low.
Credit…Kai Pfaffenbach/Reuters

The European Central Bank promised on Thursday to keep easy money flowing after its president, Christine Lagarde, said that the eurozone economy shrank in the last three months of 2020 and that the outlook for 2021 was uncertain.

The bank left its stimulus measures intact, as expected, after ramping up its de facto money printing in December to limit economic damage from the pandemic.

Following a meeting of its governing council, the bank reiterated its intent to pump as much as 1.9 trillion newly created euros, or $2.3 trillion, into bond markets as part of a “pandemic emergency” program intended to keep market interest rates low.

The bond purchases will continue at least until March 2022 and longer if necessary, the bank said. The central bank also said that it would maintain a program that effectively pays banks to lend money to businesses and consumers.

Ms. Lagarde stressed that the bank could adjust the amount of stimulus up or down depending on how quickly the pandemic was brought under control. “All instruments can be adjusted and nothing is off the table,” she told reporters during an online news conference.

The ultimate goal, Ms. Lagarde repeated numerous times, was to ensure that borrowing costs for businesses, eurozone citizens and governments remained favorable.

Her statement that stimulus could also be reduced raised expectations that the central bank might be expecting a quicker economic recovery. But Ms. Lagarde, citing extended lockdowns and the slow rollout of vaccinations, indicated she remained wary, though she stopped short of predicting a recession in the first quarter of 2021.

“I wish I was cautiously optimistic,” Ms. Lagarde said. “I’m now getting old enough to be realistic and to observe the development of the situation, which is really hard to predict.”

  • Stocks on Wall Street were mostly unchanged on Thursday, but the S&P 500 index set a record nonetheless.

  • The S&P 500 rose 0.03 percent. The FTSE 100 in Britain fell slightly and the Stoxx Europe 600 was flat. Most Asian markets ended higher.

  • United Airlines fell more than 5 percent, after it said it lost $1.9 billion in the fourth quarter, bringing its total losses for 2020 to just over $7 billion, its worst year since merging with Continental Airlines a decade ago.

  • In Europe, some renewable energy stocks extended their gains on Thursday. President Biden has recommitted the United States to the Paris climate agreement and pledged to spend heavily on the development of alternative energy.

The skyline of London’s financial district last week. After years of shunning British stocks, investors are having a change of heart. 
Credit…Toby Melville/Reuters

The start of 2021 has been rocky for Britain. Its exit from the European Union unleashed a colossal amount of red tape that has left some industries desperate for help, and the country is under yet another lockdown because of a fast-spreading strain of the coronavirus.

But there has been a glimmer of hope. More than four million people in Britain have been partially vaccinated against the coronavirus, a promising pace of inoculation.

Investors looking to ride a wave of optimism about a vaccine rollout have turned to Britain’s stock market, which has posted a strong start to the year, jumping more than 6 percent in the first week.

Overall, in the first two and a half weeks of January, the FTSE 100, Britain’s benchmark stock index of large companies, gained 4.3 percent — outstripping the S&P 500 index, which rose 2.6 percent, and the Stoxx Europe 600 index, which was up 3 percent. Even when the gains are converted to U.S. dollars, the FTSE 100 still has a clear lead.

Beyond the vaccine rollout helping to ensure an economic rebound, another factor is drawing investors: the relative cheapness of British stocks.

Britain’s FTSE 100 index is benefiting from an investment strategy in which traders buy so-called value stocks. These are companies that are perceived to be trading below their true value because their business has been disrupted by a recession, especially in the financial and energy sectors, and the FTSE 100 has a large share of these stocks.

Analysts at Citigroup have ordained Britain’s stock market their “favorite” value trade.

“I would emphasize the very much unloved and horrible dreadful U.K. market might be worth a look this year,” Robert Buckland, a Citigroup equity strategist, said in a presentation last week. “We all know it’s been a place to avoid for many, many years.”

The British stock market has been a laggard for years.

Once converted into dollars, the annual returns of the FTSE 100 have been the worst of the three indexes for the past nine years.

Why are investors betting on a turnaround now? For one, many of them are ready for a bargain. The equity bull market has been dominated by shares of American tech companies that are expensive, which makes some investors nervous about how much they can keep rising. Cheap stocks in industries that tend to do well during economic boom times are offering an alternative.

And then there is Britain’s free-trade deal with the European Union. Some investors have put aside whether it’s a good or bad deal in its detail, in favor of relief that an agreement was reached in late December.

The deal “reduced that overhang people had of uncertainty,” said Caroline Simmons, the U.K. chief investment officer at UBS Global Wealth Management.