First Things First

Temperature Rises in Trade War

As the trade war intensifies, financial markets have gotten skittish over the possibility of slowed economic growth.

Today, China announced it would impose an additional $75 billion in tariffs on U.S. goods. This is in retaliation to the additional tariffs the United States is set to place on Chinese goods on September 1 and December 15.

This only exacerbates the problem and puts the U.S.-China trade relationship at serious risk.

“The 40-year old trade relationship between our two countries has been for the most part productive, constructive, and mutually beneficial.  U.S. companies have been ambassadors for positive changes to the Chinese economy that continue to benefit both our people,” said Myron Brilliant, Executive Vice President and Head of International Affairs for the U.S. Chamber, in a statement widely picked up by the media.

In the past year, farmers have borne the brunt from the trade dispute, Reuters reports:

For North Dakota, losing China - the buyer of about 70% of the state’s soybeans - has destroyed a staple source of income. Agriculture is North Dakota’s largest industry, surpassing energy and representing about 25% of its economy.

“North Dakota has probably taken a bigger hit than anybody else from the trade situation with China,” said Jim Sutter, CEO of the U.S. Soybean Export Council.

In its second-quarter agricultural credit conditions survey this month, the Federal Reserve Bank of Minneapolis said 74% of respondents in North Dakota reported lower net farm income.

…

Vanessa Kummer’s farm in Colfax, North Dakota, has yet to sell a single soybean from the fall harvest because of the low prices. Normally, the farm would have forward-sold 50% to 75% of the upcoming harvest.

She fears the U.S.-China soy trade is now “permanently damaged” as China shifts its purchases to Brazil, uses less soy in animal feed and consumes less pork as African swine fever kills of millions of the nation’s pigs.

Overall, U.S. export growth is down, “costing the U.S. the equivalent of about $40 billion a year in lost exports,” Bloomberg reports.

Resolving the trade situation would ease anxiety.

“Time is of the essence,” Brilliant said. “We do not want to see a further deterioration of US-China relations. We urge the administration and the government of China to return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies."

Diving In

The Internet depends on undersea cables. CNN looks at how they’re laid:

The process begins by looking at naval charts to plot the best route. Cables are safest in deep water where they can rest on a relatively flat seabed, and won't rub against rocks or be at risk of other disturbances.

"The deeper the better," Clatterbuck said. "When you can lay the cable down in deep water you rarely have any problems. It goes down on the bottom of the seabed and just stays there."

Things become more difficult the closer you get to shore. A cable that is only a few centimeters thick on the bottom of the ocean must be armored from its environment as reaches the landing station that links it with the country's internet backbone.

"Imagine a long garden hose, inside of which are very small tubes that house a very, very thin fiber pair," Clatterbuck said. That hose is wrapped in copper, which conducts the direct current that powers the cable and its repeaters, sometimes up to 10,000 volts.

"The fibers are wrapped in urethane and wrapped in copper and wrapped again in urethane," he said. "If we're going to have to put that cable on a shoreline that is very shallow and has a lot of rocks, you're now going to have to armor coat that cable so no one can hack through it."

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Caught My Eye

The nation’s cybersecurity risk remained nearly unchanged in the second quarter, according to the Assessment of Business Cyber Risk (ABC) report released by the U.S. Chamber of Commerce and FICO.

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Looking Ahead

September 12, 2019: The BusinessH2O: Water Innovation Summit will showcase innovative water technologies and best practices that support economic growth in the driest places in the world.

September 27, 2019: Civics education, civic engagement, and civil discourse in America will be the focus of the U.S. Chamber of Commerce Foundation’s Civics Forward summit.

October 24, 2019: The U.S. Chamber of Commerce Foundation's national workforce conference, Talent Forward 2019, will convene education and workforce experts to discuss the future of talent and the future of work.

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