Trump’s Backdown on Punishing Mexico: Trade War Peak?

Maybe we can give peace a chance: It could be that we have seen the peak of the trade war, meaning it won’t get worse.

Republican lawmakers’ successful resistance to President Donald Trump’s plan to sock Mexico with harsh new tariffs has limited his ability and desire for more trade warfare, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.

What’s more, Shepherdson wrote in a research note, there’s little chance the Trump administration will enlarge the tariffs against China, which would smash them with levies on $300 billion more in goods.

Senate Majority Leader Mitch McConnell laid down the law to Trump on June 4, saying, “There is not much support for tariffs in my conference.” Shepherdson translated that to mean: “Please don’t do this; it’s crazy, and you could be humiliated by a two-thirds majority in the Senate to stop you doing it.”

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Result: Trump ditched the levies, intended to coerce Mexico into stepping up its efforts to stem migration of Central American refugees into the US. The president contended that the Mexican government had knuckled under to his harsher enforcement demand, although it apparently already had agreed to take such steps before the tariff threat.

Shepherdson wrote that “this episode demonstrated to everyone—domestic politicians on both sides, the business lobby, and trade partners—that the president’s freedom of movement on trade is constrained.”

By Shepherdson’s reckoning, Republican lawmakers’ leeriness over the impact of broader Chinese trade sanctions will keep Trump from imposing them. They fear, he wrote, that “pushing up the price of everything at Wal-Mart, would strike existential fear into the heart of congressional Republicans, and they would push back hard, along with the retail lobby and advocates for low-income families, who would suffer most.”

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Tags: China, Donald Trump, Mexico, Tariffs, Trade War

A massive institutional investor consortium is pushing more than 700 companies to reveal more on their environmental impact, including ExxonMobil, Amazon, and Volvo.

The Group of 88, an organization with almost $10 trillion in assets, wants to see more detailed disclosures from the businesses.

Of the 707 companies being targeted, 546 of them are being told to reveal their climate change impact, 166 are to report on water security, and the remaining 115 must disclose their deforestation activities. The demands are overlapping on some companies.

Members of the 88-institution union include the Washington State Investment Board ($104 billion), the New York State Common Retirement Fund ($210 billion), and Australia’s First State Superannuation Scheme ($61 billion). Among the other members are HSBC Asset Management, Aviv Investors, and insurer Legal & General. The firms they’re after have a combined $15.3 trillion market cap spanning 46 countries.

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The engagement is part of the Carbon Disclosure Project’s 2019 non-disclosure campaign, which pushes for more corporate transparency around climate change, deforestation, and water security using shareholder influence from the big-time investors to make the difference. It is the first time in the four-year history of the ESG organization’s campaign it is publicly reporting its results.

“While some companies may say they already disclose in their own sustainability reports – that is not enough on its own,” said Emily Kreps, global director of investor initiatives at the Carbon Disclosure Project. “Investors and the wider market need transparency in the form of consistent, comparable, and relevant metrics that are easy to access, compare, and benchmark.”

Group 88’s highest priority sectors on climate change transparency this year are the services industry, manufacturing, and fossil fuels. Manufacturing tops the water security initiative, beating retail and fossil fuels. Retail, food, beverage and agriculture, and manufacturing top the deforestation brigade’s demands.

Some companies, however, have argued that investors don’t really care about environmental reporting. In response, Kreps said the campaign’s mission proves the opposite. “Investors are asking for this information and using it—for corporate engagement, selecting stocks and building investment products,” she said, noting that 7,000 firms are already disclosing their procedures through the project and providing the market with appropriate information.

She said it’s time investors put an end to the “vow of silence” from transparency-averse companies.

According to the project, companies targeted in last year’s campaign were more than twice as likely to disclose than non-selected businesses.

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Tags: Carbon Disclosure Project, Climate Change, ESG, Group of 88, Pension