By Luca Di Leo and Jared A. Favole
28 April 2010
Federal Reserve Chairman Ben Bernanke said the U.S. needed to come up with a plan to cut the budget deficit soon, telling a White House debt commission it should look at how the tax system could be changed.
Mr. Bernanke’s remarks Tuesday kicked off the first meeting of an 18-member panel charged with drafting ideas to reduce the country’s $1.4 trillion annual deficit. President Barack Obama created the panel, which includes congressional Republicans and Democrats.
Two former Congressional Budget Office directors said the biggest threats were ballooning health-care costs, interest on money borrowed from abroad, Social Security and taxes.
Mr. Bernanke has not spoken about taxes for a while. The Fed chief is being more cautious on the subject than his predecessor, Alan Greenspan, who made the controversial move of endorsing President George W. Bush’s tax cuts in 2001.
Mr. Bernanke said the U.S. would ultimately have to decide between raising taxes, cutting Social Security or Medicare, or spending less on everything from education to defense. Mr. Bernanke didn’t make specific recommendations.
Ahead of the meeting, groups on both sides voiced doubt that the panel could succeed, particularly in an election year. "When we say everything is on the table, does that include the new health-care bill?" asked Rep. Dave Camp (R., Mich.). The right worries the panel will recommend tax increases, while the left says it could seek entitlement cuts.
The debt panel is chaired by former GOP. Sen. Alan Simpson and Clinton White House Chief of Staff Erskine Bowles. It must report back by Dec. 1.
China to hit US chicken with new tariffs
By Geoff Dyer in Beijing
April 28 2010
China will impose new tariffs on US imports of chicken of as much as 31.4 per cent, raising the temperature in the ongoing trade tussles between the two countries.
China’s Commerce ministry on Wednesday announced that the new tariffs were a response to what it said were unfair subsidies given to poultry farmers in the US. The duties come on top of tariffs of up to 105.4 per cent that China placed on US poultry two months ago because of alleged dumping, and industry analysts said they would likely end US poultry exports to China.
The new tariffs come at a time when economic friction between the two countries appears to be relaxing. The US Treasury department has delayed its decision over whether it thinks China is manipulating its currency and Beijing has signalled that it will abandon its dollar peg.
However, Wednesday’s news underlined the thorny bilateral trade issues between the two countries. Earlier this year, China threatened to impose sanctions on a number of leading US companies for participating in a planned arms deal with Taiwan.
China has become the biggest export market for the US poultry industry with sales of $722m in 2008. Chinese consumers favour chicken wings and feet, parts of the bird that are usually shunned in the US, which means that they can fetch prices 20 times higher in the Chinese market.
Although there have been complaints from Chinese companies for several years about surging US chicken imports, the Beijing government announced it would investigate US poultry imports two weeks after the Obama administration said in September that it would impose tariffs on Chinese imports of tires.
This is the first time that China has imposed duties on imports of agricultural goods on the grounds of alleged subsidies, following similar duties placed on some US specialist steel products last year. The Commerce ministry did not say how it had calculated the level of subsidies received by US farmers, although it said it was a result of the subsidised corn and soybeans that they use in chicken feed.
Under the new ruling, US companies which submitted information to the Chinese government investigation would face duties of 3.8 per cent to 11.2 per cent, while companies which did not co-operate would face duties of 31.4 per cent.