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Westlake Legal Group > Posts tagged "International Trade and World Market"

Trump’s Orders on WeChat and TikTok Are Uncertain. That May Be the Point.

Westlake Legal Group 07DC-ORDER-facebookJumbo Trump’s Orders on WeChat and TikTok Are Uncertain. That May Be the Point. WeChat (Mobile App) United States Politics and Government Trump, Donald J TikTok (ByteDance) Tencent Holdings Ltd Social Media Mobile Commerce and Payments Mobile Applications International Trade and World Market

WASHINGTON — President Trump’s sudden decision late Thursday to restrict two popular Chinese social media services from the United States has created confusion about how broad the bans on doing business with China could ultimately be.

That confusion may be part of the point.

Citing national security concerns, the Trump administration announced that it would bar people and property within U.S. jurisdictions from carrying out “transactions” with WeChat and TikTok, the two Chinese-owned apps, after 45 days. But the White House did not define what those transactions included, leaving companies bewildered about whether they may be forced to fundamentally change their business within a matter of weeks.

Stoking this kind of uncertainty is something that the Trump administration has not been apologetic about in the past. Some White House advisers see it as a feature rather than a bug of their policy process, arguing that the risk of further crackdowns will dissuade American companies from operating in China.

That, they said, is a good thing because Chinese policies like “civil-military fusion” have undermined the ability of both Chinese and American companies to operate independently in China.

“Mobile apps like TikTok and WeChat that collect your personal or business information and that can track, surveil or monitor your movements put you and your family in the cross hairs of an Orwellian regime.” Peter Navarro, the White House director of trade and manufacturing policy, said in an interview. He posed a question to the mothers of America, “It’s 10 p.m. Does the Chinese Communist Party know where your children are at?”

Mr. Navarro acknowledged that some multinationals might oppose the measures, but said that “the American public is tired of the corporate greed that, before the Age of Trump, sent our jobs overseas and now endangers our national security and privacy.”

Critics countered that the Trump administration’s unpredictable actions threaten to compromise the secure business environment that the United States is known for, in which rule of law prevails and the government rarely interferes in the market.

“The government inserting this much uncertainty into the business landscape and into the user landscape is deeply problematic,” said Matt Perault, a professor of Duke University’s Center for Science & Technology Policy.

On Friday, TikTok, which is owned by Chinese internet conglomerate ByteDance, said in a statement that it was “shocked by the recent executive order, which was issued without any due process.” It said it had sought to work with the U.S. government for nearly a year but instead found the White House “paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses.”

A spokesman for Tencent, the parent company of WeChat, which is widely used in China and around the world as a messaging and payments app, said it was “reviewing the executive order to get a full understanding.”

The Trump administration has steadily ramped up its actions in a broader economic and geopolitical fight with China, starting with a trade war that put tariffs on hundreds of billions of dollars of Chinese products in 2018 and 2019. It also introduced restrictions on other kinds of Chinese technology, including clamping down on exports to the Chinese telecom giant Huawei.

The sudden, vaguely worded order from the White House on Thursday night, which came without further explanation or a media briefing, followed a familiar model for some of the other policy announcements on China from the Trump administration. Many have left multinational companies in suspense for days or weeks about the specifics.

With policy moves like tariffs and export controls, the Trump administration wielded uncertainty as a source of leverage, using it to frighten companies into compliance and leaving themselves room to back down or escalate the situation.

The executive orders on WeChat and TikTok leave the determination of what constitutes a “transaction” up to the secretary of commerce, Wilbur Ross. According to the language of the orders, Mr. Ross will make that determination in 45 days, meaning it would not be clear to businesses what will be included in the ban until it actually goes into effect.

“It may be that it’s won’t be nearly as bad as people might fear,” said Jason M. Waite, a partner at the law firm Alston & Bird, adding that the administration might discover legal or practical concerns with putting the order in place in the interim. “It is a 45-day surprise.”

People familiar with the deliberations said administration officials clearly intended to target the presence of WeChat and TikTok on the Google and Apple app stores, cutting off downloads and updates for the Chinese apps. It is unclear if the restrictions could affect other parts of the Chinese companies’ sprawling portfolios and business dealings, particularly for Tencent.

The order appears to bar transactions with Tencent or its subsidiaries that are specifically related to WeChat. That suggests it would not affect Tencent’s sprawling investment relationships and business dealings with companies like Tesla; the Snapchat owner Snap; the National Basketball Association; Activision Blizzard, the maker of video game World of Warcraft; and Epic Games, the maker of Fortnite.

But many American companies, including Visa, Mastercard and Starbucks, have more direct partnerships with WeChat in China to use its payment platform and e-commerce functions. Whether those kinds of activities would be barred in China or around the world, or whether phone makers like Apple would be allowed to sell mobile phones installed with WeChat, remain up in the air.

“The Trump administration has left itself a lot of wiggle room in terms of what is covered, how quickly prohibitions will be carried out, and how the order will be enforced,” said Scott Kennedy, a China expert at the Center for Strategic and International Relations.

Other Chinese tech companies could find themselves as the next target of the Trump administration. U.S. officials viewed the executive orders on TikTok and WeChat as a template that could be applied to other Chinese companies, and some have discussed whether services like Alibaba’s Alipay pose a similar national security concern, according to people with knowledge of the matter.

“There’s definitely a chilling effect,” said Samm Sacks, a fellow in cybersecurity policy and China’s digital economy fellow at New America, a think tank. But she said that companies like Alibaba and Tencent had long understood the risks of operating in the United States.

“This latest move may have come as a surprise, but their real growth strategies have never focused in the U.S.” she said. “They’ve always known it was a hostile environment.”

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TikTok, Trump and an Impulse to Act as C.E.O. to Corporate America

WASHINGTON — President Trump campaigned on a promise to run the economy like his business empire. And for almost four years, he has unabashedly wielded the power of the presidency to insert himself into corporate affairs, helping some companies and punishing others in line with his instincts and inclinations.

The latest target of his attention is TikTok, the Chinese-owned social media app under scrutiny for potentially providing the Chinese government with access to American user data. After threatening on Friday to ban the app from the United States, Mr. Trump reversed course, saying he would allow TikTok to keep operating if it was sold to an American owner.

At the White House on Monday, Mr. Trump said that TikTok would be shut down in the United States on Sept. 15 unless Microsoft or another “very American” company purchased it, and that he had told Microsoft’s chief executive in a call over the weekend to “go ahead” with the acquisition.

He also argued that the United States should receive money in return for letting the deal happen, without explaining how that would work. “A very substantial portion of that price is going to have to come into the Treasury of the United States, because we’re making it possible for this deal to happen,” he said.

Given the national security concerns, Mr. Trump had the right to sign off on a plan to mitigate any risks TikTok posed. But the events followed a pattern that Mr. Trump set early on in his presidency, in which some of the world’s most powerful companies have found themselves at his whims.

Daniel Price, a former economics adviser to President George W. Bush, said Mr. Trump’s reversal on TikTok was “just another example of the president’s undisciplined and impulsive decision-making style, so bewildering to friend and foe alike.”

“China presents serious security and economic challenges,” Mr. Price said. “But Trump’s erratic oscillation from adoration to demonization has certainly harmed U.S. business interests, and actually diminished our ability to influence China or rally allies to assist in that effort.”

Unlike his predecessors, Mr. Trump has frequently waded in to berate or praise executives and try to influence their operations. He attacked Carrier and General Motors over plant-closing decisions, badgered Boeing to lower prices and used Chinese companies as bargaining chips in negotiations with Beijing.

While past Republican administrations disapproved of government intervention in the market, Mr. Trump has had no qualms about taking a heavier hand, favoring industrial policy and a more managed approach to trade.

And when a company’s fate is at stake because of government actions — as when the Clinton administration filed an antitrust case against Microsoft, saying it threatened innovation in the nascent internet — presidents have usually kept their involvement at arm’s length to avoid charges of political interference.

Mr. Trump has not. He has particularly taken aim at multinational companies that he says have made fools of past American policymakers.

He signaled his approach even as a candidate. When United Technologies decided to close its Carrier subsidiary’s plant in Indianapolis in 2016 and move furnace production to Mexico, Mr. Trump seized on the incident, asserting that only he could get companies to stop moving jobs abroad. He threatened to hit Carrier furnaces from Mexico with 35 percent tariffs and promised to call the company’s executives. In the end, he predicted, they would capitulate.

As it turned out, saving jobs wasn’t as easy as he promised. In exchange for $7 million in tax breaks, Carrier kept the plant open and invested $16 million in new equipment. But barely half of the 1,350 blue-collar workers in Indianapolis kept their jobs.

Other corporate leaders have felt the heat. Just weeks after his election, Mr. Trump strong-armed Boeing into lowering the price of a new Air Force One, declaring that the plane’s costs were “out of control” and signaling that he would upend yearslong negotiations.

Cancel order!” he tweeted.

Since then, Mr. Trump has singled out several companies for confrontation, driven in some cases by personal pique.

He has repeatedly attacked what he calls the “Amazon Washington Post” and Jeff Bezos, the Amazon founder who also owns the newspaper. He has said his yearslong assault on the Postal Service is based on his belief that the government does not charge Amazon enough to ship its packages.

Mr. Trump’s antipathy toward many news organizations has led him to repeatedly threaten to interfere with media companies’ operations. He twice urged regulators to examine taking away the “license” from NBC, though it was unclear what license he was referring to. He declared as a candidate that he would not approve AT&T’s acquisition of Time Warner because the company owned CNN, a network he frequently accuses of treating him unfairly, and the Justice Department later sued unsuccessfully to block the deal.

He has also lashed out at companies and their executives for perceived failures in responding to his desires. After Kenneth C. Frazier, the chief executive of Merck Pharmaceuticals, resigned from a presidential advisory council over Mr. Trump’s handling of violent white nationalist protests in Charlottesville, Va., the president took after him on Twitter for “RIPOFF DRUG PRICES.”

Mr. Trump denounced General Motors for closing a car factory in Lordstown, Ohio, and three other plants in the United States, and attacked its chief executive, Mary T. Barra, by name. Later, with the onset of the coronavirus crisis, Mr. Trump criticized Ms. Barra for what he said was the company’s failure to make good on a promise to help make ventilators.

“Always a mess with Mary B,” he wrote on Twitter.

“He’s been doing this from the outset, using his power to try to influence corporate deals,” said Richard W. Painter, a professor at the University of Minnesota Law School. “Being president is not the art of the deal. He’s not in a boardroom. He’s in the White House.”

But Mr. Trump’s efforts to dictate corporate decisions have been inconsistent, making it harder for executives to anticipate White House demands or reactions.

As he found himself on the defensive this spring in his handling of the coronavirus pandemic, Mr. Trump resisted calls to use the Defense Production Act to pressure industries to make more masks and medical supplies, saying that such a move would be akin to “nationalizing our business” and that the government “was not a shipping clerk.”

And even with China, which many in Washington have accused of gaming America’s free-market system by stealing intellectual property and cheating on trade rules, Mr. Trump has not always intervened to take a tougher line.

ImageWestlake Legal Group merlin_151294254_bd86d497-a4ca-4bf6-95c3-03dacca5a733-articleLarge TikTok, Trump and an Impulse to Act as C.E.O. to Corporate America United States Politics and Government United States International Relations Trump, Donald J TikTok (ByteDance) Social Media Relocation of Business Regulation and Deregulation of Industry Microsoft Corp Mergers, Acquisitions and Divestitures International Trade and World Market China
Credit…Toni Albir/EPA, via Shutterstock

The president’s back-and-forth on TikTok offers a new illustration of how he has made national security decisions by impulse.

A national security panel, called the Committee on Foreign Investment in the United States, recommended to the president last week that TikTok sell its assets to an American company to curtail China’s potential influence in the United States, and Microsoft had stepped forward as a potential buyer.

But several China hawks in the Trump administration, including the White House trade adviser Peter Navarro, argued against the sale, seeing the moment as an opportunity to take more sweeping action against TikTok and other Chinese-run internet services.

Mr. Trump took Mr. Navarro’s side on Friday, saying that he did not favor a sale of TikTok and that he planned to ban the app. But after a series of calls, including ones from Senator Lindsey Graham, Republican of South Carolina, and Satya Nadella, the chief executive of Microsoft, Mr. Trump appeared to change his mind.

Several of Mr. Trump’s aides had warned that a ban could prompt an intense legal battle, as well as hurt the president’s popularity with younger Americans. TikTok has said it is used by 100 million Americans.

Mr. Trump appeared to object to TikTok’s sale in part because it would funnel money back to China. Speaking to reporters on Monday, the president argued that the United States should also receive money in return for permitting the deal to happen, because Microsoft would not have the right to make the acquisition “unless we give it to them.”

Explaining his views to reporters, Mr. Trump drew a parallel to his days in real estate development.

“It’s a little bit like the landlord-tenant,” the president said. “Without a lease, the tenant has nothing. So they pay what’s called key money.”

“The United States should be reimbursed, or should be paid a substantial amount of money,” Mr. Trump said, “because without the United States, they don’t have anything.”

Neal E. Boudette contributed reporting from Ann Arbor, Mich., Mike Isaac from San Francisco and Nelson D. Schwartz from New York.

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Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery

Westlake Legal Group despite-historic-plunge-europes-economy-flashes-signs-of-recovery Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery United States Economy United States International Trade and World Market Europe Economic Conditions and Trends Coronavirus (2019-nCoV)

LONDON — Before the pandemic, a traditional state of play prevailed in the enormous economies on the opposite sides of the Atlantic. Europe — full of older people, and rife with bickering over policy — appeared stagnant. The United States, ruled by innovation and risk-taking, seemed set to grow faster.

But that alignment has been reordered by contrasting approaches to a terrifying global crisis. Europe has generally gotten a handle on the spread of the coronavirus, enabling many economies to reopen while protecting workers whose livelihoods have been menaced. The United States has become a symbol of fecklessness and discord in the face of a grave emergency, yielding deepening worries about the fate of jobs and sustenance.

On Friday, Europe released economic numbers that on their face were terrible. The 19 nations that share the euro currency contracted by 12.1 percent from April to June from the previous quarter — the sharpest decline since 1995, when the data was first collected. Spain fell by a staggering 18.5 percent, and France, one of the eurozone’s largest economies, declined 13.8 percent. Italy shrunk by 12.4 percent.





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Westlake Legal Group eu-gdp-Artboard_1 Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery United States Economy United States International Trade and World Market Europe Economic Conditions and Trends Coronavirus (2019-nCoV)

Eurozone G.D.P.

Percentage change from previous quarter

Westlake Legal Group eu-gdp-Artboard_2 Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery United States Economy United States International Trade and World Market Europe Economic Conditions and Trends Coronavirus (2019-nCoV)

Eurozone G.D.P.

Percentage change from previous quarter


Note: Adjusted for inflation and seasonality.

Source: Eurostat

By The New York Times

Europe appeared even worse than the United States, which the day before recorded the single-worst three-month stretch in its history, tumbling by 9.5 percent in the second quarter.

But beneath the headline figures, Europe flashed promising signs of strength.

Germany saw a drop in the numbers of unemployed, surveys found evidence of growing confidence amid an expansion in factory production, while the euro continued to strengthen against the dollar as investment flowed into European markets — signs of improving sentiment.

These contrasting fortunes underscored a central truth of a pandemic that has killed more than 670,000 people worldwide: The most significant cause of the economic pain is the virus itself. Governments that have more adeptly controlled its spread have commanded greater confidence from their citizens and investors, putting their economies in better position to recuperate from the worst global downturn since the Great Depression.

“There is no economic recovery without a controlled health situation,” said Ángel Talavera, lead eurozone economist at Oxford Economics in London. “It’s not a choice between the two.”

ImageWestlake Legal Group merlin_175146681_a203d848-e364-4e08-a9e3-d22cc3a647d6-articleLarge Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery United States Economy United States International Trade and World Market Europe Economic Conditions and Trends Coronavirus (2019-nCoV)
Credit…Andrew Testa for The New York Times

European confidence has been bolstered by a groundbreaking agreement struck in July within the European Union to sell 750 million euro ($892 million) worth of bonds that are backed collectively by its members. Those funds will be deployed to the hardest hit countries like Italy and Spain.

The deal transcended years of opposition from parsimonious northern European countries like Germany and the Netherlands against issuing common debt. They have balked at putting their taxpayers on the line to bail out southern neighbors like Greece while indulging in crude stereotypes of Mediterranean profligacy. The animosity perpetuated the sense that Europe was a union in name only — a critique that has been muted.

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The United States has spent more than Europe on programs to limit the economic damage of the pandemic. But much of the spending has benefited investors, spurring a substantial recovery in the stock market. Emergency unemployment benefits have proved crucial, enabling tens of millions of jobless Americans to pay rent and buy groceries. But they were set to expire on Friday and there were few signs that Congress would extend them.

Europe’s experience has underscored the virtues of its more generous social welfare programs, including national health care systems.

Americans feel compelled to go to work, even at dangerous places like meatpacking plants, and even when they are ill, because many lack paid sick leave. Yet they also feel pressure to avoid shops, restaurants and other crowded places of business because millions lack health insurance, making hospitalization a financial catastrophe.

Credit…Joseph Rushmore for The New York Times

“Europe has really benefited from having this system that is more heavily dominated by welfare systems than the U.S.,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Oslo. “It keeps people less fearful.”

The more promising situation in Europe is neither certain nor comprehensive. Spain remains a grave concern, with the virus spreading, threatening lives and livelihoods. Italy has emerged from the grim calculus of mass death to the chronic condition of persistent economic troubles. Britain’s tragic mishandling of the pandemic has shaken faith in the government.

If short-term factors look more beneficial to European economies, longer-term forces may favor the United States, with its younger population and greater productivity.

A sense of European-American rivalry has been provoked by the bombast of a nationalist American president, making the pandemic a morbid opportunity to keep score.

“There is a certain amount of triumphalism,” said Peter Dixon, a global financial economist at Commerzbank in London. “People are saying, ‘Our economy has survived, we are doing OK.’ There’s a certain amount of European schadenfreude, if I can use that word, given everything that Trump has said about the U.S.”

Credit…Samuel Aranda for The New York Times

But for now, Europe’s moment of confidence is palpable, most prominently in Germany, the continent’s largest economy.

Though the German economy shrank by 10.1 percent from March to June — its worst drop in at least half a century — the number of officially jobless people fell in July, in part because of government programs that have subsidized furloughed workers.

Surveys show that German managers — not a group inclined toward sunny optimism — have seen expectations for future sales return to nearly pre-virus levels. That buoyancy translates directly into growth, emboldening companies to rehire furloughed workers.

Ziehl-Abegg, a maker of ventilation systems for hospitals, factories and large buildings, recently broke ground on a 16 million euro ($19 million) expansion at a factory in southern Germany.

“If we wait to invest until the market recovers, that’s too late,” said Peter Fenkl, the company’s chief executive. “There are billions of dollars in the market ready to be invested and just waiting for the signal to kick off.”

The euro has gained more than 5 percent against the dollar so far this year, according to FactSet. European markets have been lifted by international money flowing into so-called exchange-traded funds that purchase European stocks. The Stoxx 600, an index made up of companies in 17 European countries, appears set for a second straight month of gains outpacing the S&P 500.

Credit…Lena Mucha for The New York Times

The French oil giant Total saw demand for its products in Europe drop by nearly one third in the second quarter of the year, but a powerful recovery has been gaining momentum, said the company’s chairman and chief executive, Patrick Pouyanné.

“Since June, we have seen a rebound here in Europe,” he said during a call with analysts. “Activity in our marketing networks is back to, I would say, 90 percent of the pre-Covid levels.”

France, Europe’s second largest economy, has been buttressed by aggressive government spending. President Emmanuel Macron has mobilized more than 400 billion euros ($476 million) in emergency aid and loan guarantees since the start of the crisis, and is preparing an autumn package worth another 100 billion euros.

Those funds paid businesses not to lay off workers, allowing more than 14 million employees to go on paid furlough, stay in their homes, accumulate modest savings and continue spending. Delayed deadlines for business taxes and loan payments spared companies from collapse.

In the second quarter, when France was still partially locked down, the country’s economy contracted by nearly 14 percent. Tourism, retail and manufacturing, the main pillars of the economy, ground to a halt.

But services, industrial activity and consumer spending have all shown signs of improvement. The Banque de France, which originally expected the economy to shrink more than 10 percent this year, recently forecast less damage.

Credit…Christophe Archambault/Agence France-Presse — Getty Images

In Spain, a sense of recovery remains distant. Its economy shrunk by nearly 19 percent from April to June. The nation’s unemployment rate exceeds 15 percent, and could surge higher if a wage subsidy program for furloughed workers is allowed to expire in September.

Spain officially ended its coronavirus state of emergency on June 21, but has since suffered an increase in infections. The economic impacts have been compounded by Britain’s decision to force travelers returning from Spain to quarantine for two weeks. Tourism accounts for 12 percent of Spain’s economy.

Italy is also highly exposed to tourism. Its industry is concentrated in the north of the country, which saw the worst of coronavirus. The central bank expects the Italian economy to contract by nearly 10 percent this year.

But exports surged more than one-third in May compared with the previous month. That left them below pre-pandemic levels, yet on par with German and American competitors, according to Confindustria, an Italian trade association.

Credit…Alberto Pizzoli/Agence France-Presse — Getty Images

“We are starting to slowly recover after the most violent downfall in the last 70 years,” said Francesco Daveri, an economist at Bocconi University in Milan.

Europe’s fortunes appear on the mend because its people are more likely to trust their governments.

Denmark acted early, imposing a strict lockdown while paying wage subsidies that limited unemployment. Denmark suffered far fewer deaths per capita than the United States and Britain.

With the virus largely controlled, Denmark lifted restrictions earlier, while Danes heeded the call to resume commercial life. The Danish economy is expected to contract by 5.25 percent this year, according to the European Commission, with a substantial improvement in the second half of the year.

In the United States, people have wearied of bewildering and conflicting advice from on high against a backdrop of more than 150,000 deaths.

Credit…Ritzau Scanpix/via Reuters

The result has been record surges of new cases along with a syndrome likely to persist — an aversion to being near other people. That spells leaner prospects for retail, hotels, restaurants and other job-rich areas of the American economy.

Liz Alderman reported from Paris. Emma Bubola contributed reporting from Milan, Raphael Minder from Madrid and Stanley Reed and Eshe Nelson from London.

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Once a Source of U.S.-China Tension, Trade Emerges as an Area of Calm

WASHINGTON — For the better part of three years, President Trump’s trade war with China strained relations between the world’s largest economies. Now, the trade pact the two countries signed in January appears to be the most durable part of the U.S.-China relationship.

Tensions between the United States and China are flaring over the coronavirus, which the Trump administration accuses China of failing to control, as well as accusations of espionage, intellectual property theft and human rights violations. American officials on Tuesday ordered the closure of China’s consulate in Houston, saying that diplomats there had aided in economic espionage, prompting China to order the closure of the American consulate in Chengdu.

Earlier in the week, the Trump administration added another 11 Chinese companies to a government list barring them from buying American technology and other products, citing human rights abuses against predominantly Muslim ethnic minorities in the Xinjiang region in China’s far west. The two countries are also clashing over China’s security crackdown in Hong Kong, its global 5G ambitions and its territorial claims in the South China Sea.

But unlike previous moments of heightened tensions between the United States and China, Mr. Trump has not threatened to impose additional tariffs on Chinese goods or take other steps to punish companies that export their products to America. And neither side is threatening to rip up the initial trade deal they signed in January, which took years of painful negotiations to complete.

Trade, long the most contentious part of the U.S.-China relationship, has suddenly become an area of surprising stability.

The reasons have more to do with politics than diplomacy. Both the Trump administration and Chinese leaders invested time and political capital in reaching their initial trade deal, which removed barriers for foreign firms doing business in China and strengthened the country’s intellectual property protections. The deal also required China to purchase an additional $200 billion of American goods by the end of next year, including some agricultural goods like soybeans, pork and corn from farm states that are crucial to Mr. Trump’s re-election chances.

As tensions between the two countries rise again, both sides appear to think they have more to lose from rupturing the agreement than they would gain.

“Ironically, trade has become an area of cooperation or stability,” said Michael Pillsbury, a China expert at the Hudson Institute who advises the Trump administration.

ImageWestlake Legal Group merlin_174556137_60e70096-cfc8-4e5f-97a7-a415ff0bc9e4-articleLarge Once a Source of U.S.-China Tension, Trade Emerges as an Area of Calm United States International Relations United States Trump, Donald J Politics and Government International Trade and World Market International Relations China
Credit…Leon Neal/Getty Images

As painful as the trade war was for companies on both sides of the Pacific, it provided a strange source of stability for the U.S.-China relationship by focusing the conflict between the countries on purely economic matters. With trade no longer the source of friction, tensions are spilling over into diplomacy, security and technology, issues that are more contentious and trickier to solve.

The technological divide between the United States and China, which censors its internet with the help of its so-called Great Firewall, is growing larger. China is considering whether to extend new internet controls to Hong Kong, while the Trump administration is weighing potential action against Chinese-owned social media services, like TikTok and Tencent’s WeChat.

The United States has been pressuring other countries to ban equipment from Huawei, which it views as a surveillance and national security threat, from wireless networks around the globe, including in Britain, which recently barred the Chinese telecom giant. On Thursday, cybersecurity researchers revealed that a popular Chinese-made drone was collecting large amounts of personal information that could be exploited by Beijing.

Geopolitical tensions are rising, too. Clashes between Chinese and Indian troops over their disputed border in the Himalayas have resulted in fatalities. American officials have increased their criticisms of China’s actions in the South China Sea, calling Beijing’s claims to the disputed waters “completely unlawful.” In April, the United States sent two warships into disputed waters near Malaysia as a show of force after a Chinese government vessel tailed a Malaysian state oil company ship for days.

American officials say that China’s behavior has become increasingly provocative in recent months, prompting tougher action not just from the United States but also Australia, Britain, India and other nations. Some public figures in China have blamed increasing tensions on Democrats and Republicans in the United States competing to appear tougher on China ahead of the general election in November.

Jia Qingguo, a professor of Peking University’s the School of International Studies, said in an online panel hosted by the National Press Foundation on Thursday that the United States and China were not yet in a new Cold War, but they were heading in that direction with “accelerating speed, thanks to the Trump administration.”

“If the current momentum continues, I think the two countries are likely to end up in a Cold War and maybe even in a hot one,” Mr. Jia said.

The Chinese government is trying to keep trade matters separate from other frictions in the bilateral relationship, though that has proved more difficult as the two countries begin closing each other’s consulates.

“Comparatively speaking, trade I think is more stable and more quiet,” said He Weiwen, a former Chinese commerce ministry official and now a senior fellow at the Center for China and Globalization, a nonprofit research group in Beijing. But he said there are reasons to be worried going forward.

“I’m quite concerned about the trade relationship ahead, because we need a calm, stable political environment,” said Mr. He, who is also an executive council member of the China Association of International Trade.

Chinese officials and experts argue that recent difficulties in bilateral relations between Washington and Beijing are caused by the Trump administration and not by the Chinese government, which has tried to address different challenges in the relationship individually, rather than linking them together for leverage.

“China has made all efforts to smooth the relationship with the U.S.,” said Tu Xinquan, the dean of the China Institute for World Trade Organization Studies at the University of International Business and Economics in Beijing.

“Though it is admitted that there are problems between the two countries, China has never planned an all-out whole-government strategy against the U.S.,” he said.

While the trade truce is holding for now, that could prove fleeting if Mr. Trump decides Beijing is not living up to its side of the deal. The agreement left tariffs in place on more than $360 billion of Chinese goods and ushered in a détente that forestalled further tariff increases by either side.

But the president views tariffs as one of his most effective and reliable tools, a powerful cudgel to wield against foreign countries that doesn’t require the approval of Congress. And China appears to be lagging far behind on the purchases of America products it pledged to make as part of the trade deal, partly as a result of the pandemic.

Analysts have long viewed those targets as unrealistic. But Mr. Trump sees those purchases as crucial to narrowing the U.S. trade deficit and boosting the fortunes of farmers and businesses, and thus his re-election prospects.

“The president has repeatedly said if they don’t make the purchases, I will terminate the deal,” Mr. Pillsbury said.

As China shakes off the coronavirus, its purchases of American products appear to be ticking up. Data from China’s General Administration of Customs shows that the country’s imports from the United States were up 15.1 percent in June from the same month last year, when calculated in China’s currency, the renminbi, compared to a 5.2 percent increase in China’s exports to the United States.

Agricultural imports from the United States have been especially strong this summer, with two of the three largest Chinese purchases ever of American grain occurring this month.

On Thursday, Mr. Trump pointed to record-setting purchases of corn made by China. But, he added that “the trade deal means less to me now than it did when I made it.”

“Can you understand that? It just means much less to me,” the president said.

For now, Mr. Trump and his trade advisers are mostly defending China’s efforts to live up to the trade deal, saying China has been taking crucial steps to open its agricultural markets and financial system.

“I don’t think it’s going away,” Jamieson L. Greer, a former chief of staff to the United States Trade Representative, who is now a partner at the law firm King & Spalding, said of the initial trade deal. “The Chinese really needed it, and the administration has every incentive to keep it, too.”

Ana Swanson reported from Washington, and Keith Bradsher from Beijing. Paul Mozur contributed reporting.

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Nord Stream 2 Pipeline Raises U.S.-Europe Tensions

A hulking Russian pipe-laying vessel called the Akademik Cherskiy can be seen off Germany’s Baltic coast these days, marine tracking sites say, apparently waiting for the chance to complete the final stretches of a massive undersea pipeline that will carry natural gas directly to Germany from Russia.

The Trump administration, though, is trying to keep the pipeline, known as Nord Stream 2, on ice. Last week, the State Department moved to potentially impose economic penalties on investors and other business participants in the project, an expansion of existing sanctions.

The new measures were “a clear warning to companies” that “aiding and abetting Russia’s malign influence projects will not be tolerated,” Secretary of State Mike Pompeo told reporters. “Get out now, or risk the consequences.”

The threat from Washington has brought quick condemnation from European leaders, who called it interference in their sovereign right to set energy policy, but it may also put pressure on some European energy companies, including Royal Dutch Shell, that are backing the pipeline.

The project is described as 94 percent complete, and while backers are confident it will be finished, the sanctions threat has made it unclear when that will happen.

The pipeline, being built by a company owned by Gazprom, the Russian gas giant, has become the particular focus of concerns in Washington that Russia’s dominance of energy supplies to Europe could translate into political leverage for Moscow. Such worries are not new, as natural gas from the Soviet Union and, after its demise, Russia has been crucial to powering the European economy for decades.

Recently, though, President Vladimir V. Putin’s aggressive approach to Russia’s foreign policy has heightened worries about his ambitions. And now that the United States has ample supplies of gas from shale drilling and fracking, there is widespread suspicion that Washington may be using geopolitical concerns to bolster American exports of liquefied natural gas.

“We want them to buy from us, not the Russians,” said Robert McNally, president of Rapidan Energy Group, a market research firm, describing Washington’s policy.

Senator Ted Cruz, Republican of Texas, which is a key exporter of fuels, is helping sponsor even tougher sanctions legislation and has called the pipeline “a critical threat to America’s national security.”

Some analysts say the United States could now use sanctions to target five European companies that are providing financial backing for up to half the cost of the 9.5 billion euro ($11 billion) Nord Stream 2. Besides Shell, Europe’s largest oil company, they are Uniper, a German utility; OMV, the Austrian energy company; Engie, a French energy firm; and Wintershall Dea, a German oil company. On the other hand, with the project largely complete and major financial commitments already made, some say these companies may not have much to worry about.

ImageWestlake Legal Group 00nordstream-3-articleLarge Nord Stream 2 Pipeline Raises U.S.-Europe Tensions United States International Relations Russia Pipelines Nord Stream AG natural gas International Trade and World Market Germany Gazprom Europe Embargoes and Sanctions
Credit…Stine Jacobsen/Reuters

Still, European officials and business leaders are bristling at what they say is Washington’s interference in European matters.

“The U.S. administration is disrespecting Europe’s right and sovereignty to decide itself where and how we source our energy,” said Heiko Maas, Germany’s foreign minister.

The European Union’s foreign policy chief, Josep Borrell, said he was “deeply concerned at the growing use of sanctions, or the threat of sanctions, by the United States against European companies and interests.”

German business representatives also say the dispute threatens to further sour trans-Atlantic economic ties that have already been strained during the Trump administration.

“It will be a very dangerous precedent that a third country can impose its rules on European sovereignty and rule of law,” said Michael Harms, managing director of the German Eastern Business Association, an industry group that promotes trade with Russia.

Mr. Harms warned that German businesses were talking of retaliating by seeking a ban on imported gas derived from fracking — a procedure responsible for most of the gas exported from the United States but banned in Germany.

While countries like Germany and France tend to shrug off fears of being too dependent on Russian energy, other countries, like Poland and Lithuania, have built their own liquefied natural gas facilities to ensure energy independence from Russia. Germany, Europe’s largest economy, is also studying building such facilities, although analysts say neighboring countries have plenty of capacity that Germany can use.

Construction of Nord Stream 2, which will roughly double the amount of gas that Russia can supply directly to Germany by pipeline, was moving along rapidly until December when the threat of U.S. sanctions against contractors led Allseas, a Swiss-Dutch company, to withdraw its advanced pipe-laying ships, leaving the 760-mile line about 50 miles short. Germany is already receiving Russian gas through an existing pipeline that was completed in 2012.

“We are forced to look for new solutions to lay the remaining 6 percent of our pipeline,” a Nord Stream spokesman wrote in an email Thursday. “We are looking for options and will inform about our plans in due time.”

Credit…Axel Schmidt/Reuters

Gazprom, analysts say, has been working on a plan to complete the remaining work, which is mostly in Danish waters, with its own vessels. The project seemed to have clear sailing when a Danish agency said on July 6 that it would allow the company to proceed with other vessels.

Mr. Pompeo continued to press the case this week on a trip to Europe that included a stopover in Denmark, but he apparently did not find a receptive audience. During a news conference with Mr. Pompeo in Copenhagen on Wednesday, the Danish foreign minister, Jeppe Kofod, appeared to rule out blocking the pipeline.

“The pipeline runs through Denmark’s economic zone, and here international rules apply and we abide by those,” Mr. Kofod said, according to Bloomberg News.

Washington could still cause more delays and raise the costs for Gazprom, but most analysts expect the pipeline to be completed because it is so close to the finish line and because Gazprom needs it to bring gas from new fields it is developing to market. The pipeline would also, theoretically, allow Gazprom’s gas to largely avoid going through Ukraine, a longstanding aim, although the Russian company agreed at the end of last year to continue shipping substantial amounts of the fuel through Ukraine for five more years.

“They are not going to abandon the project, because they have put so much into it,” said Jane Rangel, an analyst at Energy Aspects, a research firm.

At the moment, the European gas market that the United States and Russia are competing for is not all that enticing. Prices have fallen about 75 percent over the last two years, as a surge of new supplies from the United States and elsewhere swamped the market. More recently, demand has fallen as lockdowns designed to tackle the pandemic have cut energy needs. Growing pressures to reduce carbon emissions are also raising questions about future demand for gas.

Thane Gustafson, the author of a new book on European gas links to Russia, “The Bridge: Natural Gas in a Redivided Europe,” said that while Washington worried about Gazprom in Europe, the Russian company was actually beginning to turn its attention to faster-growing Asian markets.

“The Russians understand that the European market — within another decade or so — is going to start to stagnate and decline,” he said. “They are starting to shift their strategy to respond to that.”

Melissa Eddy contributed reporting.

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U.K. Bans Huawei From 5G Network, Raising Tensions With China

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LONDON — Britain announced on Tuesday that it would ban equipment from the Chinese technology giant Huawei from the country’s high-speed wireless network, a victory for the Trump administration and a reversal of an earlier decision that underscores how technology has taken center stage in the deepening divide between Western powers and China.

In January Britain said that Huawei equipment could be used in its new 5G network on a limited basis. But since then Prime Minister Boris Johnson has faced growing political pressure domestically to take a harder line against Beijing, and in May the United States imposed new restrictions to disrupt Huawei’s access to important components.

Britain’s about-face signals a new willingness among Western countries to confront China, a determination that has grown firmer since Beijing last month adopted a sweeping new law to tighten its grip on Hong Kong, the semiautonomous city that was a British colony until 1997. On Tuesday, Robert O’Brien, President Trump’s national security adviser, was in Paris for meetings about China with counterparts from Britain, France, Germany and Italy.

Huawei’s critics say its close ties to the Chinese government mean Beijing could use the equipment for espionage or to disrupt telecommunications — a point the company strongly disputes.

Arguing that Huawei created too much risk for such a critical, multibillion-dollar project, the government said Tuesday that it would bar the purchase of new Huawei equipment for 5G networks after December, and that existing gear already installed would need to be removed from the networks by 2027.

“As facts have changed, so has our approach,” Oliver Dowden, the government minister in charge of telecommunications, told the House of Commons on Tuesday afternoon. “This has not been an easy decision, but it is the right one for the U.K.’s telecoms networks, for our national security and our economy, both now and indeed in the long run.”

The dispute over Huawei, the world’s largest maker of telecommunications equipment, represents an early front in a new tech Cold War, with ramifications for internet freedom and surveillance, as well as emerging technologies like artificial intelligence and robotics.

“The democratic West has woken up late to its over-dependence on a country whose values are diametrically opposed to it,” said Robert Hannigan, the former head of the British digital surveillance agency GCHQ, who is now an executive at the cybersecurity firm BlueVoyant. “Huawei and other Chinese companies present a real cybersecurity risk, but the primary threat comes from the intent of the Chinese Communist Party, as we see in Hong Kong.”

Huawei described Tuesday’s announcement as a disappointment and “bad news for anyone in the U.K. with a mobile phone.”

“It threatens to move Britain into the digital slow lane,,” said Ed Brewster, a spokesman for Huawei U.K. “Regrettably our future in the U.K. has become politicized; this is about U.S. trade policy and not security. ”

Until the latest turn of events, Britain had been welcoming. In 2005, it was the first country to offer Huawei a foothold in Europe, now the company’s largest market outside of China. Huawei financed university research and a charity started by Prince Charles. And just last month, Huawei announced plans to spend 1 billion pounds (about $1.25 billion) on a new research center in Cambridge.

The British experience shows the challenges nations face navigating the United States-China rift. In moving forward with the ban, Britain risks retaliation from China, one of its largest and fastest-growing trading partners, at a time when it is trying to craft a more open trade policy outside the European Union. China’s ambassador in London, Liu Xiaoming, recently warned that Britain would “bear the consequences” of treating China with hostility.

“The Huawei issue is the first of many complicated decisions we’re going to have about striking the right balance between our commercial and economic engagement with China, and our security concerns about how China uses its power,” said John Sawers, the former chief of the British intelligence service MI6.

Huawei is the leading provider for towers, masts and other critical equipment needed to build new wireless networks based on fifth-generation wireless technology, known as 5G.

New 5G networks are seen as essential infrastructure in an increasingly digital global economy. The networks will provide faster download speeds for average phone users, but offer even more important potential for commercial applications in industries such as manufacturing, health care and transportation.

ImageWestlake Legal Group merlin_168094122_c9b26ed6-454f-4f12-b04a-21b9d790133e-articleLarge U.K. Bans Huawei From 5G Network, Raising Tensions With China United States International Relations United States Politics and Government International Trade and World Market Huawei Technologies Co Ltd Great Britain Embargoes and Sanctions Cyberwarfare and Defense China 5G (Wireless Communications)
Credit…Pool photo by Wpa

Huawei’s technological dominance in this field is increasingly viewed as a failure of industrial policy in the West. The American authorities have spent more than a year pressuring allies to keep Huawei out of communications networks, warning the company is a proxy for Beijing and a threat to national security. The Trump administration encouraged the use of other telecom equipment makers, including Sweden’s Ericsson and Finland’s Nokia.

At first, countries were resistant, unconvinced that Huawei posed a grave risk. Britain argued that it had a security system in place to ensure all Huawei equipment was reviewed before being put inside its communications networks. The announcement in January stipulated Huawei would be limited to “noncore” parts of the network.

A turning point came in May, when the Trump administration announced a rule that would bar Huawei and its suppliers from using American technology and software. The decision, slated to take effect in September, could throw Huawei’s supply chain into chaos.

In Britain, the American announcement added to pressure Mr. Johnson faced from members of his own Conservative Party to take a harder line against China, especially after the events in Hong Kong. The government announced a review of its January decision after the American punishments were announced.

“American sanctions left the U.K. with little choice,” said Priya Guha, a former British diplomat who represented the country’s interests in Silicon Valley. “There was a bit of checkmate by the U.S.”

Huawei spent the past several weeks lobbying against a ban, emphasizing its investments in Britain. Members of Huawei’s U.K. advisory board, made up of British business leaders including former BP chief executive John Browne, urged Mr. Johnson’s aides to take a more moderate approach. (A few hours before the government’s announcement on Tuesday, Huawei said Mr. Browne was leaving the board.)

British officials warned that its decision would add significant costs, and delay the rollout of 5G by around two years. The new 5G wireless systems must be built atop existing networks that Huawei had a major role in constructing. In setting a 2027 deadline, the British government said moving any faster to remove Huawei gear would produce a greater risk to the security and resilience of the network.

The ban does not apply to smartphones and other consumer products made by Huawei, or equipment used in 2G, 3G and 4G networks.

Many see the Huawei dispute as foreshadowing future conflicts, with other high-profile companies becoming entangled. Secretary of State Mike Pompeo said the United States was considering actions against Chinese apps, including the hugely popular social media service TikTok, which is owned by a Chinese internet company.

Last week, the American tech giants Facebook, Twitter and Google, all already blocked from the censored internet of mainland China, suspended the processing of Hong Kong government requests for user data because of a new national security law that mandates police censorship and digital surveillance. The new law could result in fines, equipment seizures or even arrests of company employees if the requests are denied.

Britain’s decision to ban Huawei will put pressure on other European countries. In Germany, Chancellor Angela Merkel is being urged to keep the company out of a new 5G network, but is weighing the economic fallout for German automakers, for whom China is a critical market. Australia has issued a ban, and Canada is considering one as well.

“If Huawei is stopped in its tracks, that does represent a very important inflection point for China’s ability to achieve its objectives,” said Nigel Inkster, a senior adviser at the International Institute for Strategic Studies in London who has written a book on the technology battle between the United States and China. “That would be very consequential.”

Mr. Inkster, a former member of the British intelligence service, warned that the West risks provoking China if it feels more economically isolated. “There is a serious need to think hard and deeply about whether it is realistic to disengage from China totally in these areas,” he said.

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OPEC and Russia May Ease Oil Production Cuts

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Saudi Arabia, the world’s largest oil exporter, and other major oil producing countries are likely to increase their output in August, as coronavirus lockdowns ease and demand begins to rise again.

The Organization of the Petroleum Exporting Countries, Russia and other producers are expected to modestly ease the record production cuts that they agreed to in April and later extended through July. A committee of key officials from the Organization of the Petroleum Exporting Countries and Russia will meet on Wednesday by video conference to discuss their approach to the market.

The oil producing countries want to make sure that they maintain or increase their share of the recovering market.

But analysts say that the actions by OPEC and its allies could be outweighed by the impact of the pandemic on demand. The International Energy Agency said oil demand fell by more than 16 million barrels a day in the second quarter compared with the same period in 2019. The Paris-based group is forecasting a strong recovery but said the spread of the virus in countries like the United States and Brazil and elsewhere “is casting a shadow” over the outlook by raising the prospect of further lockdowns that could discourage driving and other activity.

Total demand for gasoline in the United States rose in early July, a big month for driving, the agency said, citing data from the research firm Kayrros, but it fell in Texas, Arizona and Florida, which have seen recent surges in reported cases of infection.

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“We could be in for a second dose of falling demand,” said Bill Farren-Price, a director at RS Energy Group, a market research firm.

Oil prices have been on a wild ride in the last few months. They plummeted in April into negative territory, despite the deal days earlier by OPEC and the other oil producing nations for deep cuts in their May and June production, as demand collapsed and the world ran out of places to put all the oil the industry was pumping out. But a month later, as the global economy started to show signs of life and the production cuts by OPEC and producers in the United States began to take effect, oil prices climbed back above $30 a barrel.

In early June, with road traffic, air travel and other activity still depressed, the group, known as OPEC Plus, decided to extend the 9.7 million barrel-a-day cuts through July. The Saudis also reduced production “voluntarily” by another 1 million barrels a day in June to the lowest levels in three decades.

Unless there is a change in thinking, the production cuts will ease to 7.7 million barrels a day — still a large amount — in August, as agreed in April.

On Friday, Brent crude traded at $43.24 a barrel, still about 35 percent below the level at the beginning of year, and West Texas Intermediate, the American benchmark, was trading at $40.55 a barrel.


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  • Frequently Asked Questions

    Updated July 7, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


The energy agency said it did see some encouraging signs for the oil market. For instance, it said, the amount of oil stored on ships fell in June by about 35 million barrels from record levels of over 200 million barrels in May — a sign that increasing consumption may be beginning to work off the glut that has built up.

An OPEC delegate said that demand was improving globally, especially in China and India, which are major importers and customers for the OPEC countries.

In an interview in April, Prince Abdulaziz bin Salman, the Saudi oil minister, said that Saudi Arabia would go to great lengths to protect the Asian market, the destination of around 50 percent of Saudi oil.

“Nobody is going to fiddle with our backyard, “ he said.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

U.S. Will Impose Tariffs on French Goods in Response to Tech Tax

Westlake Legal Group 10dc-digitaltax-facebookJumbo U.S. Will Impose Tariffs on French Goods in Response to Tech Tax Politics and Government International Trade and World Market Federal Taxes (US) E-Commerce Computers and the Internet

WASHINGTON — The Trump administration on Friday said it would impose new tariffs on $1.3 billion worth of French goods, including cosmetics, soap and handbags, in retaliation for a French tax that largely hits American technology companies, escalating a trade dispute that threatens to further damage the global economy.

Notably absent from the tariff list, published by the United States Trade Representative, are French cheese, sparkling wine and cookware, which the administration had threatened to tax in December. Wine retailers and other U.S. importers of French goods had voiced opposition to those potential tariffs, saying they would hurt American companies and their workers.

The 25 percent tariffs will be delayed 180 days and take effect in January 2021, a hiatus meant to give both countries time to resolve their differences over a digital tax that will hit American tech companies.

France has adopted a 3 percent tax on the revenues some companies earn from providing goods and services to French users over the internet, even if they do not have large physical presences in France, a measure that will target Facebook, Google, Amazon and others whose businesses focus on digital advertising and e-commerce.

The Trump administration launched a trade investigation into the tax a year ago. The report found in December that the French tax “discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy and is unusually burdensome for affected U.S. companies.” The report recommended tariffs as high as 100 percent on certain French imports valued at $2.4 billion, including cheese, wine and handbags. The final recommendation was significantly less punitive, with tariffs at 25 percent, and wine and cheese were dropped from the list entirely.

American and French officials called a temporary truce on the issue in January, with the French pledging to suspend collection of the tax and Americans pledging to hold off on tariffs, while international negotiators sought a multilateral agreement on where and how to tax internet commerce that crosses borders.

But that détente has collapsed in recent months, with Treasury Secretary Steven Mnuchin suspending international tax negotiations and warning of retaliation against any country that imposes new taxes on American technology companies like Amazon, Facebook and Google.

While the United States initially agreed to work with global counterparts to come up with a unified tax system, other countries have balked at the Trump administration’s push for a provision that would effectively allow some American companies to choose whether to be governed by any new system created by a global agreement.

And a growing list of governments have looked to digital taxes of their own as tax revenues plunge during the pandemic recession. Several European countries, led by France, have been rolling out digital services taxes, which would fall heavily on American internet companies. Italy, Spain, Austria and Britain have all announced plans to levy digital services taxes, which impose duties on the online activity that takes place in those countries, regardless of whether the company has a physical presence.

In June, the administration launched trade investigations, similar to the one against France’s tax, against tax proposals in nine countries and the European Union.

The decision to go ahead with the tariffs on France could revive a trade war between the United States and Europe. President Trump has already imposed tariffs on foreign steel and aluminum, prompting the European Union to retaliate with its own taxes on American goods. The two governments are also at odds over domestic aircraft subsidies, with the Trump administration taxing as much as $7.5 billion of European exports annually as punishment for unfair subsidies given to Airbus.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Sweden Has Become the World’s Cautionary Tale

LONDON — Ever since the coronavirus emerged in Europe, Sweden has captured international attention by conducting an unorthodox, open-air experiment. It has allowed the world to examine what happens in a pandemic when a government allows life to carry on largely unhindered.

This is what has happened: Not only have thousands more people died than in neighboring countries that imposed lockdowns, but Sweden’s economy has fared little better.

“They literally gained nothing,” said Jacob F. Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. “It’s a self-inflicted wound, and they have no economic gains.”

The results of Sweden’s experience are relevant well beyond Scandinavian shores. In the United States, where the virus is spreading with alarming speed, many states have — at President Trump’s urging — avoided lockdowns or lifted them prematurely on the assumption that this would foster economic revival, allowing people to return to workplaces, shops and restaurants.

In Britain, Prime Minister Boris Johnson — previously hospitalized with Covid-19 — reopened pubs and restaurants last weekend in a bid to restore normal economic life.

Implicit in these approaches is the assumption that governments must balance saving lives against the imperative to spare jobs, with the extra health risks of rolling back social distancing potentially justified by a resulting boost to prosperity. But Sweden’s grim result — more death, and nearly equal economic damage — suggests that the supposed choice between lives and paychecks is a false one: A failure to impose social distancing can cost lives and jobs at the same time.

Sweden put stock in the sensibility of its people as it largely avoided imposing government prohibitions. The government allowed restaurants, gyms, shops, playgrounds and most schools to remain open. By contrast, Denmark and Norway opted for strict quarantines, banning large groups and locking down shops and restaurants.

More than three months later, the coronavirus is blamed for 5,420 deaths in Sweden, according to the World Health Organization. That might not sound especially horrendous compared with the more than 129,000 Americans who have died. But Sweden is a country of only 10 million people. Per million people, Sweden has suffered 40 percent more deaths than the United States, 12 times more than Norway, seven times more than Finland and six times more than Denmark.

ImageWestlake Legal Group merlin_171728283_4312516e-eec8-4ff7-bbce-5e06f49445dc-articleLarge Sweden Has Become the World’s Cautionary Tale United States Economy Unemployment Sweden Labor and Jobs International Trade and World Market Economic Conditions and Trends Deaths (Fatalities) Coronavirus Reopenings Coronavirus (2019-nCoV)
Credit…Jonathan Nackstrand/Agence France-Presse — Getty Images

The elevated death toll resulting from Sweden’s approach has been clear for many weeks. What is only now emerging is how Sweden, despite letting its economy run unimpeded, has still suffered business-destroying, prosperity-diminishing damage, and at nearly the same magnitude of its neighbors.

Sweden’s central bank expects its economy to contract by 4.5 percent this year, a revision from a previously expected gain of 1.3 percent. The unemployment rate jumped to 9 percent in May from 7.1 percent in March. “The overall damage to the economy means the recovery will be protracted, with unemployment remaining elevated,” Oxford Economics concluded in a recent research note.

This is more or less how damage caused by the pandemic has played out in Denmark, where the central bank expects that the economy will shrink 4.1 percent this year, and where joblessness has edged up to 5.6 percent in May from 4.1 percent in March.

In short, Sweden suffered a vastly higher death rate while failing to collect on the expected economic gains.

The coronavirus does not stop at national borders. Despite the government’s decision to allow the domestic economy to roll on, Swedish businesses are stuck with the same conditions that produced recession everywhere else. And Swedish people responded to the fear of the virus by limiting their shopping — not enough to prevent elevated deaths, but enough to produce a decline in business activity.

Here is one takeaway with potentially universal import: It is simplistic to portray government actions such as quarantines as the cause of economic damage. The real culprit is the virus itself. From Asia to Europe to the Americas, the risks of the pandemic have disrupted businesses while prompting people to avoid shopping malls and restaurants, regardless of official policy.

Credit…Jonathan Nackstrand/Agence France-Presse — Getty Images

Sweden is exposed to the vagaries of global trade. Once the pandemic was unleashed, it was certain to suffer the economic consequences, said Mr. Kirkegaard, the economist.


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  • Frequently Asked Questions

    Updated July 7, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


“The Swedish manufacturing sector shut down when everyone else shut down because of the supply chain situation,” he said. “This was entirely predictable.”

What remained in the government’s sphere of influence was how many people would die.

“There is just no questioning and no willingness from the Swedish government to really change tack, until it’s too late,” Mr. Kirkegaard said. “Which is astonishing, given that it’s been clear for quite some time that the economic gains that they claim to have gotten from this are just nonexistent.”

Norway, on the other hand, was not only quick to impose an aggressive lockdown, but early to relax it as the virus slowed, and as the government ramped up testing. It is now expected to see a more rapid economic turnaround. Norway’s central bank predicts that its mainland economy — excluding the turbulent oil and gas sector — will contract by 3.9 percent this year. That amounts to a marked improvement over the 5.5 percent decline expected in the midst of the lockdown.

Sweden’s laissez faire approach does appear to have minimized the economic damage compared with its neighbors in the first three months of the year, according to an assessment by the International Monetary Fund. But that effect has worn off as the force of the pandemic has swept through the global economy, and as Swedish consumers have voluntarily curbed their shopping anyway.

Researchers at the University of Copenhagen gained access to credit data from Danske Bank, one of the largest in Scandinavia. They studied spending patterns from mid-March, when Denmark put the clamps on the economy, to early April. The pandemic prompted Danes to reduce their spending 29 percent in that period, the study concluded. During the same weeks, consumers in Sweden — where freedom reigned — reduced their spending 25 percent.

Strikingly, older people — those over 70 — reduced their spending more in Sweden than in Denmark, perhaps concerned that the business-as-usual circumstances made going out especially risky.

Collectively, Scandinavian consumers are expected to continue spending far more robustly than in the United States, said Thomas Harr, global head of research at Danske Bank, emphasizing those nations’ generous social safety nets, including national health care systems. Americans, by contrast, tend to rely on their jobs for health care, making them more cautious about their health and their spending during the pandemic, knowing that hospitalization can be a gateway to financial calamity.

“It’s very much about the welfare state,” Mr. Harr said of Scandinavian countries. “You’re not as concerned about catching the virus, because you know that, if you do, the state is paying for health care.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

China Dominates P.P.E. Manufacturing

BEIJING — Alarmed at China’s stranglehold over supplies of masks, gowns, test kits and other front-line weapons for batting the coronavirus, countries around the world have set up their own factories to cope with this pandemic and outbreaks of the future.

When the outbreak subsides, those factories may struggle to survive. China has laid the groundwork to dominate the market for protective and medical supplies for years to come.

Factory owners get cheap land, courtesy of the Chinese government. Loans and subsidies are plentiful. Chinese hospitals are often told to buy locally, giving China’s suppliers a vast and captive market.

Once vaccines emerge, demand will plummet. Factories will close. But Chinese companies are likely to have the lowest costs by far and be best positioned for the next global outbreak.

“The Chinese have been successful weaving global personal protection equipment dominance with supply-chain command and control,” said Omar Allam, a former Canadian trade official trying to establish production of in-demand N95 medical respirators in his country.

China’s grip on the market is a testament to its drive to dominate important cogs in the global industrial machine.

Video

Westlake Legal Group 00virus-china-masks-2-videoSixteenByNineJumbo1600 China Dominates P.P.E. Manufacturing Sinopec Corp Protective Clothing and Gear Medical Devices Masks International Trade and World Market Factories and Manufacturing Coronavirus (2019-nCoV) China
N95 masks being made at the QYK Brands factory in Anaheim, Calif., on equipment imported from China.CreditCredit…Photographs and Video by Bryan Denton

For years, China’s leaders have worried that the country depended too much on foreign sources for everything from medical supplies to microchips to airliners. It has used subsidies, economic targets and other government inducements to emerge as a powerhouse in those important industries.

When Chinese leaders grew concerned about pollution and dependence on foreign oil, for example, they helped local makers of solar panels, wind turbines and high-speed rail equipment clobber the competition. They have taken similar steps to dominate industries of the future, like the next generation of wireless data transmission, known as 5G.

The state’s heavy involvement in its economy has led to waste and graft that could slow China’s growth. But the policies have often proved effective in building industries that can withstand losses and tough foreign competition. Medical supplies may be similar.

“There will be massive consolidation after the epidemic,” said Howard Yu, a professor of management and innovation at the Institute for Management Development, a business school in Switzerland. “It will be exactly the same dynamics as in green energy, 5G and high-speed rail.”

ImageWestlake Legal Group merlin_172713912_f1da7e06-af56-4db7-ab41-1aa72fb2ad57-articleLarge China Dominates P.P.E. Manufacturing Sinopec Corp Protective Clothing and Gear Medical Devices Masks International Trade and World Market Factories and Manufacturing Coronavirus (2019-nCoV) China
Credit…Bryan Denton for The New York Times

Before the pandemic, China already exported more respirators, surgical masks, medical goggles and protective garments than the rest of the world combined, the Peterson Institute for International Economics estimated.

Beijing’s coronavirus response has only added to that dominance. It increased mask production nearly 12-fold in February alone. It can now make 150 tons per day of the specialized fabric used for masks, said Bob McIlvaine, who runs a namesake research and consulting firm in Northfield, Ill. That is five times what China could make before the outbreak, and 15 times the output of U.S. companies even after they ramped up production this spring.

American companies have been reluctant to make big investments in fabric manufacturing because they worry that mask demand will be temporary. But Texas required on Thursday that most residents wear masks in public places, part of a broader embrace of face masks in recent days.

“It is a huge mistake to assume that the market will disappear,” Mr. McIlvaine said.

Ma Zhaoxu, vice minister of foreign affairs, said that from March through May, China exported 70.6 billion masks. The entire world produced about 20 billion all of last year, with China accounting for half.

Other countries now want self-reliance. Earlier in the pandemic, China sometimes decided which countries received crucial supplies and demanded profuse and public thanks in exchange.

Credit…Bryan Denton for The New York Times

President Emmanuel Macron of France pledged in March to produce homegrown masks and respirators by the end of this year. Peter Navarro, President Trump’s industrial policy adviser, has begun a push for the federal government to buy American-made pharmaceuticals and medical supplies.

China, however, has a head start.

In 2005, after the outbreak of SARS, which killed 350 people in China, the Ministry of Science and Technology announced that it had developed respirators that better fit Chinese faces. In 2010, the government’s five-year economic plan ordered a “focus on developing basic equipment and medical materials that have high demand, wide application and are mainly imported.”

China also foresaw the importance of nucleic acid test kits, which can detect coronavirus infections. In 2017, the Ministry of Science and Technology identified the kits as a “targeted development” industry.

The ministry’s decision was part of the country’s $300 billion “Made in China 2025” industrial policy to replace imports in many key industries, including medical devices. The ministry called for raising China’s share of the local market by 30 to 40 percentage points in each category of medical supplies.

Chinese makers of medical gear enjoyed generous government subsidies. Shenzhen Mindray, a maker of ventilators and other intensive care equipment, received up to $16.6 million a year over the past three years, according to company documents. Winner Medical, a mask manufacturer, received $3 million to $4 million a year. Guangzhou Improve, a producer of masks and test kits, received $2.5 million to $5 million a year.

Credit…Bryan Denton for The New York Times

Shenzhen Mindray and Winner Medical declined to comment, while Guangzhou Improve did not respond to numerous requests.

Hospitals began to buy locally. Three years ago, the central government required purchasers to buy from domestic producers that could meet requirements. Local governments followed. Sichuan Province, for example, cut in half the number of categories for which medical equipment and supplies could be imported. Only the top hospitals could import anything, the provincial government said, while lower-ranked hospitals had to buy everything in China.

At least three other large, populous provinces — Liaoning, Hubei and Shandong — made similar announcements.

Credit…Bryan Denton for The New York Times

Such efforts helped put China firmly at the front of the industry, as Rakesh Tammabattula discovered. An entrepreneur in the Los Angeles suburbs, he shifted his business making nutrition supplements and moisturizer to the production of medical masks and hand sanitizer in response to the epidemic. To do that, he needed a machine that could compress and cut fabric to make masks.


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  • Frequently Asked Questions and Advice

    Updated June 30, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


He discovered that the machines were made only in China. He had to charter a jet to fly the huge device — 36 feet long, six feet high and five feet wide — from southern China to Los Angeles.

“It’s not that we can’t make this,” said Mr. Tammabattula, the chief executive of QYK Brands. “It’s just that we haven’t focused on it.”

The Chinese government played a major role in this year’s medical-equipment build-out.

Sinopec, a state-owned Chinese oil company, said it had worked closely with the Chinese Communist Party as it set out to build a factory to make the particle-trapping fabric needed for surgical masks and respirators.

Video

Westlake Legal Group 00virus-china-masks-8-videoSixteenByNineJumbo1600 China Dominates P.P.E. Manufacturing Sinopec Corp Protective Clothing and Gear Medical Devices Masks International Trade and World Market Factories and Manufacturing Coronavirus (2019-nCoV) China
QYK Brands flew this fabric-compressing machine in from China, the only country that makes it.CreditCredit…Photographs and Video by Bryan Denton

At one site, 600 engineers and workers labored in shifts day and night for 35 consecutive days to build a factory that would normally take a year to construct. A “party member assault team” worked 20 hours straight on Feb. 26 to prepare a warehouse for the project, according to the company.

Officials also accelerated efforts to make land available for new factories. The city of Hangzhou in Zhejiang Province transferred 1.6 acres to the Jiande Chaomei Daily Chemical Company on Feb. 15 for an emergency expansion of respirator production. Lanxi, a county in Zhejiang, transferred land to the Baihao New Materials Company by the end of February for respirator production. Officials in Guangdong Province and the city of Jinan in Shandong Province approved more lenient land policies for medical supply businesses as well.

Government support for the medical supply industry is continuing. Guangzhou Aoyuan Biotech Company decided this year to expand from its usual business of making disinfectant into the manufacture of N95 masks. A top local official immediately visited the company, arranged land for it in an industrial park and approved all of the necessary forms.

Credit…Bryan Denton for The New York Times

A few economic policy experts in China contend that their country may be going too far. According to Tianyancha, a Chinese data service, more than 67,000 companies have registered in China this year to make or trade masks. Many start-ups with poor quality control have already run into trouble. The Chinese government has imposed increasingly stringent customs inspections on exports.

“Many mask-manufacturing enterprises — especially the small and medium enterprises that came into the picture much later and do not possess strong foundations — would have to face closure when they have a surplus of masks and profits begin to plunge,” wrote Cai Enze, a retired deputy mayor and economic planner in central China, in an essay in April. “That marks the start of a crisis.”

Still, the broader industry in China appears to be better prepared for the future.

In Los Angeles, Mr. Tammabattula has found that even producing hand sanitizer is hard. He has been unable to find any company in the United States that still makes plastic bottles with pump handles. He imports them, on expensive chartered aircraft, from China.

Mr. Tammabattula has applied for a federal loan for small businesses trying to produce medical supplies, but the paperwork has proved extensive, daunting and slow, he said.

“If we were to compare to the Chinese government,” Mr. Tammabattula said, “there’s just no support for domestic manufacturing.”

Credit…Bryan Denton for The New York Times

Coral Yang contributed research from Shanghai.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com