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President Trump’s trade policy is ‘difficult to follow’: EU official

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China seems to be the biggest target, after the U.S. concluded that Beijing’s trade actions have meant a loss of billions of dollars to the U.S. economy, due to the presence of counterfeit goods and pirated software. U.S. tariffs worth $60 billion have therefore been put forward and an additional $100 billion are being studied.

“If it goes too far, then it’s the end of multilateralism,” Katainen told CNBC about the ongoing trade disputes.

“I don’t see this to happen yet,” he added.

In fact, according to Katainen the trade tensions between both the U.S. and Europe have calmed down in the last few weeks.

U.S. President Donald Trump threatened in March to impose tariffs on European steel and aluminium products. The 28-country-bloc responded with its own list of tariffs on U.S. products as a retaliation measure. However, the U.S. decided in the end to temporarily exclude Europe from its metal tariffs, thus avoiding a deterioration in their current trade ties.

“We are negotiating or discussing with the United States…at the moment and things are calming down, at least a little bit,” Katainen noted.

“We don’t know what is the final outcome of these discussions, but the situation is more calm now than it was two weeks ago,” Katainen said.

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Bitcoin and ether slide as China intensifies crackdown on cryptocurrencies

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Bitcoin and ether tumbled Friday, with traders rattled by tough talk out of China.

The price of bitcoin fell nearly 6% to $42,124.73, according to Coin Metrics data. Ether, the second-largest digital currency, dropped 8% to $2,894.36.

It comes after the People’s Bank of China said in a Q&A that all crypto-related activities are illegal. Services offering trading, order matching or derivatives for virtual currencies are strictly prohibited, the PBOC said, while overseas exchanges are also illegal.

Beijing has cracked down sharply on crypto this year. The Chinese government moved to stamp out digital currency mining, the energy-intensive operation that validates transactions and produces new coins. That led to sharp slump in bitcoin’s processing power as miners took their equipment offline.

The PBOC banned banks and non-bank payment institutions like Alibaba affiliate Ant Group from providing services related to virtual currency. In July, authorities told a Beijing-based software company to shut down over its involvement with crypto trading.

Constantine Tsavliris, head of research at crypto data site CryptoCompare, said the harsh rhetoric was likely to result in a “short-term sell-off as negative news presses investors to take a conservative approach.”

“The recent news by China serves as an extension of previous announcements in May regarding a crackdown on cryptocurrency mining and bans on financial and payment institutions from crypto-related services,” Tsavliris told CNBC.

“As a result of the bans, we previously saw a short-term sell-off and a shift in mining away from China, followed by a swift recovery throughout July and August,” added.

Vijay Ayyar, head of Asia Pacific at digital currency exchange Luno, said that while China’s position on crypto was not new, it was enough to pressure the market. Investors had already been unnerved by the U.S. Securities and Exchange Commission taking a tougher line on cryptocurrencies lately, he added.

Coinbase, America’s largest crypto exchange, recently got into a public spat with the SEC. Regulators threatened to sue the company over a product called Lend that would have allowed users to earn interest on their holdings. Coinbase recently decided to drop Lend.

“The Chinese regulators have always been extreme in their views and these comments are not new,” Ayyar told CNBC. “They have said these things many times in the past. But the reaction is interesting purely because we are anyway in a slightly nervous environment for crypto with the recent SEC comments and overall macro environment with the Evergrande news. So any comments of this nature will cause a sell off in risky assets.”

Global markets have been roiled lately by fears of a potential collapse for embattled Chinese property developer Evergrande.

“Overall, we’ve seen this play out many times in the past, with such dips being inorganic and bought up quite quickly especially in environments where crypto is in a bull market cycle,” Ayyar said, referring to China’s crackdown. “Price action wise, as long as we don’t drop below $38,000 on a high time frame basis, we are still in bullish territory.”

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Costco, Nike and FedEx are warning there’s more inflation set to hit consumers as holidays approach

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A worker wearing a protective mask removes rotisserie chicken from skewers inside a Costco store in San Francisco, California, on Wednesday, March 3, 2021.

David Paul Morris | Bloomberg | Getty Images

Shipping bottlenecks that have led to rising freight costs are cooking up a holiday headache for U.S. retailers.

Costco this week joined the long list of retailers sounding the alarm about escalating shipping prices and the accompanying supply chain issues. The warehouse retailer, which had a similar cautionary tone in May, was joined by athletic wear giant Nike and economic bellwethers Federal Express and General Mills in warning of similar concerns.

The cost to ship containers overseas has soared in recent months. Getting a 40-foot container from Shanghai to New York cost about $2,000 a year and a half ago, just prior to the Covid pandemic. Now, it runs some $16,000, according to Bank of America.

In a conference call with analysts, Costco Chief Financial Officer Richard Galanti called freight costs “permanent inflationary items” and said those increases are combining with items that are “somewhat permanent” to drive up pressure. They include not only freight but also higher labor costs, rising demand for transportation and products, plus shortages in computer chips, oils and chemicals and higher commodity prices.

“We can’t hold on to all those,” Galanti said. “Some of that has to be passed on, and it is being passed on. We’re pragmatic about it.”

Quantifying the situation, he said inflation is likely to run between 3.5% to 4.5% broadly for Costco. He noted that paper products have seen cost increases of 4% to 8% and he cited shortages of plastic and pet products that are driving up prices from 5% to 11%.

“We can hold the line on some of those things and do a little better job — hopefully do a better job than some of our competitors have and be even that more extreme than the value,” Galanti said. “So I think all those things so far, at least despite the challenges, have worked in our favor a little bit.”

Getting ready for the holidays

The timing, though, is not good.

Persistent inflationary pressures come at a time when retailers are preparing for the holiday shopping season – Halloween, Thanksgiving and Christmas, then into the new year. The pandemic has brought with it a relentless slew of factors that has made inflation an economic buzzword after a generation of mostly moderate price pressures.

Companies are pressed to deal with the situation ahead of a critical period.

“Getting closer to the holidays, we have been working with retailers and what we see is, No. 1, they’ve got to be flexible with their supply chain,” said Keith Jelinek, managing director of the global retail practice at consulting firm Berkeley Research Group. “We’ve seen cost-of-good increases especially in apparel, also costs of inbound shipping with the costs of containers, increases with transportation, trucking to get into distribution centers,”

“All these costs are going to hit the operating profits,” he added. “Retailers right now are really challenged with how much can I pass onto the consumer vs. can I get other efficiencies out of my operations in order to hit my total margin.”

Many companies have indicated that consumers at least for now are willing to take on higher prices. Trillions in government stimulus during the pandemic has helped swell personal wealth, with household net worth up 4.3% in the second quarter.

No one knows how long consumers will be willing to pay higher prices. Jelinek said he expects the current situation to persist into at least through the holiday season and into the early part of next year

“There’s only so much you can pass on to the consumer,” he said. “What most retailers are doing is looking across their [profit and loss statements] and they’re looking to improve performance and to optimize efficiency. That means really focusing on their supply chain.”

It also means raising prices.

Company warnings

FedEx this week announced that it will hike shipping rates 5.9% for domestic services and 7.9% for other offerings. The company said it is being hit by labor shortages and “costs associated with the challenging operating environment.”

The head of the company’s chief competitor acknowledged the hurdles the business faces.

“The labor market is tight, and in certain parts of the country we’ve had to make some market-rate adjustments to react to the demand of the market,” UPS CEO Carol Tome´ said Thursday on CNBC’s “Closing Bell.”

She added that the company also has been hit by supply chain issues.

“I’m afraid this is going to last for a while. These issues have been a long time coming and it’s going to take all of us working together to clear those blockages,” she said.

Federal Reserve officials this week conceded that inflation will be higher in 2021 than they had anticipated. However, they still see prices settling to a more normal range just above 2% in the coming years.

But Cleveland Fed President Loretta Mester said in a speech Friday that she sees “upside risks” to the central bank’s inflation forecasts.

“Many businesses report that cost pressures are intensifying and consumers seem to be willing to pay higher prices,” she said. “The combination of strong demand and supply-chain challenges could last longer than I anticipate and could lead people and businesses to raise their expectations for future inflation more than we have seen so far.”

Fed officials said they are ready to start pulling back on the monetary stimulus they’ve provided during the pandemic but probably won’t be raising rates soon. However, Mester said that should prices and expectations hold higher, Fed policy “would need to be adjusted” to control inflation.

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Biden condemns Border Patrol treatment of Haitian migrants in Del Rio

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U.S. President Joe Biden speaks in the State Dining Room of the White House in Washington, D.C., U.S., on Friday, Sept. 24, 2021.

Al Drago | Bloomberg | Getty Images

President Joe Biden on Friday condemned Border Patrol’s treatment of Haitian migrants in Del Rio, Texas, calling their actions “outrageous” and vowing the agents responsible will be punished. 

“It’s horrible what you saw. To see people like they did, with horses, running them over, people being strapped, it’s outrageous,” Biden said at the White House, referencing a series of photos and video showing mounted Border Patrol agents grabbing Haitian migrants trying to cross into the U.S. 

“I promise you, those people will pay. There is an investigation underway right now and there will be consequences,” he said. 

It was the president’s first substantive comment on the situation in Del Rio, Texas, where more than 10,000 Haitian migrants have tried to enter the U.S. from Mexico since mid-September. 

Vice President Kamala Harris, in an interview on ABC’s “The View” Friday, also said Border Patrol agents responsible for the “deeply troubling” treatment of migrants need to be held accountable.

“As we all know it evoked images of some of the worst moments of our history where that kind of behavior has been used against the indigenous people of our country, has been used against African Americans during times of slavery,” Harris said.

“There needs to be consequences and accountability. Human beings should not be treated that way,” the vice president said, noting that she fully supports the investigation being conducted by the Department of Homeland Security.

The Biden administration’s handling of the influx of migrants has drawn sharp criticism from immigration advocates and Democratic lawmakers after the photos and video depicting Border Patrol agents’ harsh treatment surfaced this week. 

Amid public outcry, the administration announced Thursday that it was halting agents’ use of horses in Del Rio, Texas.

Department of Homeland Security Secretary Alejandro Mayorkas and Border Patrol Chief Raul Ortiz on Monday rejected allegations that whips were used by agents in images and videos that fueled outrage on social media. They said the agents were wielding reins to control their horses.

United States Border Patrol agents on horseback try to stop Haitian migrants from entering an encampment on the banks of the Rio Grande near the Acuna Del Rio International Bridge in Del Rio, Texas on September 19, 2021.

Paul Ratje | AFP | Getty Images

Biden said he took responsibility for the crisis unfolding at the border and the actions of Border Patrol depicted in the photos and video.

“Of course I take responsibility,” Biden said. “I’m President.”

 “It’s dangerous. It’s wrong. It sends the wrong message around the world and sends the wrong message at home,” he continued. “It’s simply not who we are.”

The administration’s deportation of Haitian migrants led the U.S. special envoy for Haiti, Daniel Foote, to resign Thursday over what he called inhumane treatment. 

“Our policy approach to Haiti remains deeply flawed, and my recommendations have been ignored and dismissed,” Foote said in a resignation letter Wednesday obtained by NBC News.

More than 3,000 Haitian nationals have been moved to Customs and Border Protection custody to either be placed in removal proceedings or expelled through Title 42, a Trump-era health law that denies certain migrants the opportunity to apply for asylum, White House press secretary Jen Psaki said Thursday. 

And a total of 1,401 Haitians have been flown back to Haiti on repatriation flights that began Sunday, leaving fewer than 5,000 Haitian migrants under a bridge in Del Rio.

— CNBC’s Christina Wilkie contributed to this report

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