News of the Day

U.S. officials listed $300 billion more of Chinese goods for possible tariff hikes while Beijing vowed Tuesday to “fight to the finish” in an escalating trade battle that is fueling fears about damage to global economic growth.

The U.S. Trade Representative’s Office issued its target list after Beijing announced tariff hikes Monday on $60 billion of American goods in their spiraling dispute over Chinese technology ambitions and other irritants. Chinese authorities were reacting to President Donald Trump’s surprise decision last week to impose punitive duties on $200 billion of imports from China.

The latest U.S. list of 3,805 product categories is a step toward carrying out Trump’s May 5 threat to extend punitive 25% duties to all Chinese imports, the USTR said. It said a June 17 hearing would be held before Washington decides how to proceed.

Trump started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes businesses Beijing is trying to build into global leaders in robotics and other fields.

A stumbling block has been U.S. insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.

Odds of a settlement “remain high,” said Mark Zandi of Moody’s Analytics in a report. “But suddenly a number of other scenarios seem possible, even one in which the U.S., China and the global economy suffer a recession.”

Supporters say the proposed Dairy Innovation Hub under consideration by the Wisconsin Legislature, one of 49 recommendations approved by Dairy Task Force 2.0, could match or go beyond the significance of the signature recommendation made by the first dairy task force in the late 1980s.

That task force told cheese producers to focus more on making specialty cheeses. At that time, the dairy industry was in the throes of an economic downturn as challenging as the current one.

As it turned out, the combined efforts of the Center for Dairy Research and the state’s cheese producers beginning in the early 1990s helped make specialty cheese a staple of the state dairy industry and strengthened its economic position, here and around the world.

While California overtook Wisconsin as the nation’s top milk producer that decade, America’s Dairyland stayed firmly on its perch as the country’s top cheese producer.

The funding concept for the research hub follows a similar plan the state of New York uses to help fund Cornell University’s Pro-Dairy program that links farmers and businesses in that state to research and key resources.

“The funds there don’t just go into what the state might look at as the big, black hole of the university,” said Mark Stephenson, chairman of Dairy Task Force 2.0. “It goes for a very specific program.”

That excites Shelly Mayer, a dairy farmer in Washington County and the executive director of the Professional Dairy Producers of Wisconsin.

As an example, she cited research by UW-Madison dairy science professor Laura Hernandez that includes a new diet to lower instances of dangerous milk fever — caused by low blood calcium levels — in cows after they give birth. That has led researchers studying postpartum depression in women to look at Hernandez’s work.

“There’s a lot of linkages and synergies between animal health and human health that we haven’t even scratched the surface on,” Mayer said.

The White House on Wednesday filed formal notice of President Trump’s increase to tariffs on Chinese imports amid a breakdown in trade negotiations.

The Office of the U.S. Trade Representative (USTR) submitted an order raising tariffs on $200 billion in Chinese imports after Trump announced the increase Sunday morning.

Trump said in a pair of tweets Sunday that he would raise tariffs on a wide variety of Chinese imports from 10 percent to 25 percent. USTR’s notice to formalize those increases will be published in the Federal Register on Thursday and take effect Friday morning at 12:01 a.m.

The filing comes after Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer confirmed the pending tariff increase Monday, blaming China for backing away from previous agreements with the administration.

China’s Commerce Ministry reportedly said Wednesday that it will respond “in kind” if Trump follows through on the tariff hikes.

Republicans at the Wisconsin Capitol are promising to gut Gov. Tony Evers’ spending budget proposal. But Republicans are leaving the governor’s proposed gas tax increase largely as is.

“I would be open to an increase in the gas tax with a sunset,” state Rep. Mike Rohrkaste, R-Neenah told News Talk 1130 WISN Friday morning. “Meaning that that gas tax could come off in two, three, four, fives years.”

Rohrkaste said a gas tax increase could be a temporary solution to the state’s transportation needs. The emphasis is on “temporary.”

“In the long run, the gas tax is not sustainable with increasing fuel efficiency, hybrid, and electric [cars],” Rohrkaste  said. “Over time, our transportation funding source will decline at a faster pace than the needs of our weather and our economy.”

Direct tourism spending in 2018 increased 4.86% to $13.3 billion with an overall economic impact of $21.5 billion, an increase of 4.68%, according to a report released Monday by the state Department of Tourism.

The state’s tourism industry accounted for 199,073 jobs, an increase of 1.67%, that paid out $5.5 billion in wages, an increase of 2.43%, while tourism also contributed $1.5 billion in state and local taxes, an increase of 2.6 percent over 2017.

But for data-driven Sara Meaney, the state’s Tourism Secretary designee, one of the growth categories she is trumpeting this week as she tours the state to tout the tourism numbers is the 4.9% increase in spending per visitor to $118. The number of visitors in 2018 grew by 2 million people over 2017 to 112.1 million.

Statewide, lodging and food and beverage purchases accounted for about $7 billion or about 53% of tourism spending. Shopping contributed $2.6 billion, and $1.8 billion was spent on transportation. Recreational spending on activities like boating, fishing, biking and camping experienced the largest growth by sector with an increase of 8% to $1.9 billion.

U.S. job growth surged in April and the unemployment rate dropped to a more than 49-year low of 3.6 percent, pointing to solid economic growth.

Nonfarm payrolls increased by 263,000 jobs last month, amid gains in hiring nearly across all sectors. Data for February and March was revised up to show 16,000 more jobs created than previously reported. Economists polled by Reuters had forecast nonfarm payrolls rising by 185,000 jobs last month.

The two-tenths of a percentage point decline in the unemployment rate from 3.8 percent in March was because 490,000 people left the labour force in April. The jobless rate is now below the 3.7 percent that Fed officials project it will be by the end of the year.

The labour force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell to 62.8 percent in April from 63.0 percent in March. The participation rate hit a more than five-year high of 63.2 percent in January. The low participation rate suggests some slack still remains in the labour market.

Republican legislative leaders say their first action next week on Gov. Tony Evers’ budget plan will be to scrap several of its key pillars, including its expansion of Medicaid, overhaul of marijuana laws and tax hikes on big manufacturers and high earners.

Roughly 350,000 Wisconsin workers would be at risk of losing their jobs as a result of increasing the minimum wage to $15 an hour, according to a new policy brief published by the Badger Institute.

“The High Cost of Increasing the Minimum Wage in Wisconsin to $15,” authored by economists and Badger Institute Visiting Fellows Ike Brannon and Andrew Hanson, examines the economic impact in Wisconsin if lawmakers were to mandate a 107% increase in the minimum wage as Gov. Tony Evers and others have recommended.

The 350,000 workers who would lose their jobs represent nearly one-third of all workers currently earning a wage below the proposed new minimum. Half of the job loss would come from the bottom 10% of the income distribution, and 90% would come from the bottom quartile of the income distribution.

“Using a blunt instrument like the minimum wage to reduce poverty is both penny foolish and pound foolish,” said Brannon. “Greatly increasing the minimum wage could end up costing a couple hundred thousand workers their jobs, most of whom would be young and have relatively little experience in the workforce. If we want to help the working poor without reducing their employment, improving the Earned Income Tax Credit makes much more sense.”

“We estimate that up to half of all workers in food preparation and service currently earning below $15 an hour could potentially lose their jobs,” Hanson said. “But there are a wide variety of other occupations in the state that the data tell us would see a dramatic decline in employment, including maintenance, personal care and service, building and grounds maintenance, office and administrative support, sales, production, and transportation and material-moving industries.”

The authors conclude that a minimum wage increase to $15 an hour would also lead to cutbacks in hours, reduced benefits and more difficulty in securing employment for workers who are younger, possess lower skills or have blemishes on their records.