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Five questions for Joe Biden on the economy – BBC News

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.css-evoj7m-Imagedisplay:block;width:100%;height:auto;Joe Biden

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.css-14iz86j-BoldTextfont-weight:bold;Joe Biden will become America’s 46th president after defeating incumbent Donald Trump in a bitterly divisive election conducted with the country still reeling from the coronavirus pandemic.

His plans for the next four years are likely to confront the challenge of a divided government, however, as Republicans claimed key victories in Congress. It’s a situation that many analysts say leaves the most ambitious parts of his agenda dead on arrival.

Here are five questions facing him when it comes to the US economy.

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1. How will he save the US economy?

For months, economists have pleaded with Washington to fund more coronavirus relief. But talks have been at an impasse, as Republicans reject the size of the spending plans put forward by Democrats, despite some pressure from Mr Trump for his party to compromise.

Republicans have indicated they will strike a deal before Mr Biden enters office, claiming a final win for Mr Trump.

But if that deal falls short of Democratic hopes, as is likely, or the recovery starts to falter, how much more will Mr Biden, who is known for being relatively moderate, seek?

On the campaign, Mr Biden backed plans to forgive student loans, increase Social Security cheques for pensioners, and provide money for small businesses. He also offered more ambitious proposals, like investing $2tn in areas such as clean energy, infrastructure and public transit.

But Republicans are likely to be even more steadfast in their resistance to spending proposals from a Democratic White House, promising a tough fight.

2. How will he address inequality?

As income inequality in the US increases to its highest in more than 50 years, liberals have pressed for higher taxes on the rich, a proposal that polls suggest is widely supported among the public.

During the campaign, Mr Biden called for reversing parts of the 2017 tax cuts signed by Donald Trump, promising to raise the rate on corporations from 21% to 28%, among other changes.

Outside groups estimated his plan could raise more than $3tn over the next decade – money that could be welcome as the pandemic swells America’s national debt.

But while Mr Biden’s proposals were not as far-reaching as some of the other plans backed by members of his party, any effort to raise rates will face a fierce fight from Republicans and business groups, who say higher taxes will hurt the economy.

With the economy in a precarious state, will Mr Biden even bother pushing the issue?

3. Can he convince America to take action on climate change?

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CHINO HILLS, CA - OCTOBER 27: Herman Termeer (cq) watches the brushfire at Chino Hills State Park from the roof of his house on Tuesday, Oct. 27, 2020 in Chino Hills, CA. (Photo by Myung J. Chun/Los Angeles Times via Getty Images)

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Climate change activists were disappointed when Mr Biden unveiled his first plan to fight climate change.

But this spring he returned with a sweeping proposal, crafted with help from some of his former critics, that has been described as the most ambitious ever put forward by an American presidential candidate.

It included investing $400bn in renewable energy research, tightening car pollution regulations, cracking down on corporate polluters, building 500,000 electric vehicle charging stations and eliminating carbon pollution from power plants by 2035.

Republicans warn the plan will “bury” the US economy. But enacting even a limited version, or focusing on regulation he can enact as president, would mark a stark turn from the Trump years, when the White House opened public lands to oil drilling, slashed regulations and walked away from global efforts, like the Paris Climate Accord.

So which proposals will Mr Biden prioritise?

4. Will he end Donald Trump’s trade wars?

BEIJING, CHINA - DECEMBER 04: Chinese President Xi Jinping (R) shake hands with U.S Vice President Joe Biden (L) inside the Great Hall of the People on December 4, 2013 in Beijing, China. U.S Vice President Joe Biden will pay an official visit to China from December 4 to 5. (Photo by Lintao Zhang/Getty Images)

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Donald Trump’s aggressive trade posture – attacking allies, criticising international organisations, and applying new border taxes on imports from countries around the world – was perhaps his most distinctive economic policy.

There’s little doubt Mr Biden will seek a reset, re-asserting America’s role as an ally and leader on the world stage, but how much will the substance differ?

When it comes to China, he has pledged “aggressive” action and few expect him to remove the tariffs Trump imposed on Chinese goods during his trade war anytime soon. As my colleague Karishma Vaswani wrote before the election, .css-yidnqd-InlineLink:linkcolor:#3F3F42;.css-yidnqd-InlineLink:visitedcolor:#696969;.css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visitedfont-weight:bolder;border-bottom:1px solid #BABABA;-webkit-text-decoration:none;text-decoration:none;.css-yidnqd-InlineLink:link:hover,.css-yidnqd-InlineLink:visited:hover,.css-yidnqd-InlineLink:link:focus,.css-yidnqd-InlineLink:visited:focusborder-bottom-color:currentcolor;border-bottom-width:2px;color:#B80000;@supports (text-underline-offset:0.25em).css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visitedborder-bottom:none;-webkit-text-decoration:underline #BABABA;text-decoration:underline #BABABA;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-skip-ink:none;text-decoration-skip-ink:none;text-underline-offset:0.25em;.css-yidnqd-InlineLink:link:hover,.css-yidnqd-InlineLink:visited:hover,.css-yidnqd-InlineLink:link:focus,.css-yidnqd-InlineLink:visited:focus-webkit-text-decoration-color:currentcolor;text-decoration-color:currentcolor;-webkit-text-decoration-thickness:2px;text-decoration-thickness:2px;color:#B80000;China expects no favours, regardless of the winner.

The former vice president has also endorsed the idea of tariffs in other circumstances, outlining plans to charge a fee to countries that do not meet climate and environmental obligations. And like Trump, he’s promised to revive American manufacturing, with stronger “Buy American” requirements for government spending that could bring the US in conflict with international trade rules.

International organisations and long-time allies alienated by Trump, like Canada and Europe, can probably expect fewer attacks. But some tensions are likely to linger. And in the case of the UK specifically, agreeing a trade deal may become more difficult – not less – as Mr Biden has made clear such a pact is not a high priority and may depend on what Brexit means for the Irish border.

5. Will he break up Big Tech?

The practices of America’s tech giants are under major scrutiny around the world – and at home, where politicians on the left and right have called for tougher rules in areas such as competition and consumer privacy.

Mr Biden has backed the break-up of companies as a “last resort” and criticised Facebook and others for not doing enough to police disinformation and other malign content on their platforms. He has said he supports revoking the US law that protects tech firms from liability for content posted on their platforms.

But he and his vice president Kamala Harris, who have received widespread support in Silicon Valley, have been unusually quiet on this subject. They did not, for example, showcase such positions on the campaign website.

Some of the changes under discussion require Congress to act. But the White House wields significant power on its own to conduct competition probes, enforce privacy and other regulations and can decide whether to fight international actions, like efforts in the UK and elsewhere to collect more tax from tech companies.

So, with his powers in other areas limited by the Republican presence in Congress but pressure remaining to deliver to Democrats’ liberal base, will Mr Biden champion tech regulation or will the issue take a back seat?

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Economy

U.S., Mexico, Canada to hold ‘robust’ talks on trade deal

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The United States, Mexico and Canada will next week hold their first formal talks on their continental trade deal, with particular focus on labor and environmental obligations, the U.S. government said on Friday.

Trade ministers from the three nations are set to meet virtually on Monday and Tuesday to discuss the U.S.-Mexico-Canada (USMCA) deal, which took effect in July 2020.

“The ministers will receive updates about work already underway to advance cooperation … and will hold robust discussions about USMCA’s landmark labor and environmental obligations,” the office of U.S. Trade Representative Katherine Tai said in a statement.

The United States is also reviewing tariffs which may be leading to inflation in the country, economic adviser Cecilia Rouse told reporters at the White House on Friday, a move that could affect hundreds of billions of dollars in trade.

The United States, testing provisions in the new deal aimed at strengthening Mexican unions, this week asked Mexico to investigate alleged abuses at a General Motors Co factory.

(Reporting by David Ljunggren; Editing by Hugh Lawson and Jonathan Oatis)

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Economy

The Toronto Stock Exchange rises 0.15% to 19,135.81

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Toronto Stock Exchange

* The Toronto Stock Exchange’s TSX rises 0.15 percent to 19,135.81

* Leading the index were Canadian Tire Corporation Ltd <CTCa.TO​>, up 10.6%, WSP Global Inc​, up 9.2%, and Sunopta Inc​, higher by 7.5%.

* Lagging shares were Turquoise Hill Resources Ltd​​, down 18.5%, AcuityAds Holdings Inc​, down 17.0%, and Pan American Silver Corp​, lower by 10.3%.

* On the TSX 125 issues rose and 97 fell as a 1.3-to-1 ratio favored advancers. There were 12 new highs and 2 new lows, with total volume of 239.1 million shares.

* The most heavily traded shares by volume were Enbridge Inc, Manulife Financial Corp and Suncor Energy Inc.

* The TSX’s energy group fell 2.80 points, or 2.2%, while the financials sector climbed 4.42 points, or 1.3%.

* West Texas Intermediate crude futures fell 3.47%, or $2.29, to $63.79 a barrel. Brent crude  fell 3.32%, or $2.3, to $67.02 [O/R]

* The TSX is up 9.8% for the year.

This summary was machine generated May 13 at 21:03 GMT.

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Economy

Rising Canadian Dollar could hit export outlook, affect monetary policy

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If the buoyant Canadian dollar continues to rise it could create headwinds for exports and business investment as well as affecting monetary policy, Bank of Canada Governor Tiff Macklem said on Thursday.

The currency has jumped about 4% since the central bank updated its projections in April, driven by surging commodity prices. Canada is a major exporter of energy, lumber, minerals and agricultural products. It hit a six-year high on Wednesday.

“We’ve highlighted that a stronger dollar does create some risk,” Macklem told reporters after a speech to university students in his most detailed comments yet about the potential drawbacks of a more muscular currency.

“If it moves a lot further, that could have a material impact on our outlook and it is something we have to take into account in our setting of monetary policy.”

Further gains could drag down export projections. “If we’re less competitive, our export profile is weaker, that also probably means that our investment profile will be weaker,” he said.

The Canadian dollar was trading 0.4% lower at 1.2180 to the greenback, or 82.10 U.S. cents, pressured by a sharp decline in oil prices.

Macklem earlier said that some of the monetary policy tools the bank is using to address the COVID-19 pandemic, such as quantitative easing (QE), could widen wealth inequality and that it was looking closely at the issue.

While the QE program has stimulated demand and helped create jobs, it was is boosting wealth by inflating the value of assets that “aren’t distributed evenly across society”, he said.

The bank had been buying C$4 billion ($3.3 billion) of government bonds a week but last month cut that to C$3 billion, becoming the first major central bank to trim a pandemic-era money-printing stimulus program.

It also signaled it could start lifting interest rates in late 2022, as it hiked the outlook for the Canadian economy.

Macklem reiterated Thursday that the benchmark rate would stay at its current record low 0.25% until inflation was sustainably at the 2% target. The bank, he added, would continue to use monetary policy tools to support a “complete recovery.”

(Additional reporting by Fergal Smith in Toronto; Editing by Steve Orlofsky and John Stonestreet)

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