US ECONOMICS

5G

DoC. May 15, 2020. Trade enforcement. Commerce Addresses Huawei’s Efforts to Undermine Entity List, Restricts Products Designed and Produced with U.S. Technologies

The Bureau of Industry and Security (BIS) today announced plans to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad. This announcement cuts off Huawei’s efforts to undermine U.S. export controls. BIS is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.

Since 2019 when BIS added Huawei Technologies and 114 of its overseas-related affiliates to the Entity List, companies wishing to export U.S. items were required to obtain a license.[1]  However, Huawei has continued to use U.S. software and technology to design semiconductors, undermining the national security and foreign policy purposes of the Entity List by commissioning their production in overseas foundries using U.S. equipment.

“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenization effort.  However, that effort is still dependent on U.S. technologies,” said Secretary of Commerce Wilbur Ross.  “This is not how a responsible global corporate citizen behaves.  We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests.”

Specifically, this targeted rule change will make the following foreign-produced items subject to the Export Administration Regulations (EAR):

(i) Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
(ii) Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States.  Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.

To prevent immediate adverse economic impacts on foreign foundries utilizing U.S. semiconductor manufacturing equipment that have initiated any production step for items based on Huawei design specifications as of May 15, 2020, such foreign-produced items are not subject to these new licensing requirements so long as they are reexported, exported from abroad, or transferred (in-country) by 120 days from the effective date.

Note

[1] In May 2019, BIS added Huawei Technologies Co., Ltd. (Huawei) and certain non-U.S. affiliates to the Entity List (with additional affiliates added in August 2019) on the basis of information that provided a reasonable basis to conclude that Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interests.  This information included the activities alleged in the Department of Justice’s public Superseding Indictment of Huawei, including alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA by providing prohibited financial services to Iran, and obstruction of justice in connection with the investigation of those alleged violations of U.S. sanctions.

DOCUMENT: https://www.federalregister.gov/documents/2020/05/19/2020-10856/export-administration-regulations-amendments-to-general-prohibition-three-foreign-produced-direct

DoC. May 15, 2020. Trade enforcement. Department of Commerce Issues Expected Final 90-Day Extension of Temporary General License Authorizations

The U.S. Department of Commerce announced today it is extending the terms of the existing Temporary General License (TGL) authorizations for Huawei Technologies Co. Ltd. and its non-U.S. affiliates (Huawei) on the Entity List for 90 days.  The terms and duration of any future general licenses will be announced prior to the expiration of this 90-day time period.

This announcement follows public comments received from numerous companies, associations, and individuals about the TGL. The Department continues to assess the national security and foreign policy implications of companies and individuals that have not yet transitioned from Huawei equipment.

The 90-day extension provides an opportunity for users of Huawei devices and telecommunication providers—particularly those in rural U.S. communities—to continue to temporarily operate such devices and existing networks while hastening the transition to alternative suppliers.

In announcing this extension, the Department is also notifying the public that activities authorized in the TGL may be revised and possibly eliminated after August 13, 2020. Companies and persons relying on TGL authorizations should begin preparations to determine the specific, quantifiable impact of elimination if they have not done so already.  Those companies and persons should be prepared to submit license applications to the Department to determine which, if any, activities will be authorized in the event that their TGL authorization is eliminated.  The Department will provide prior notice via the Federal Register of a need to submit such applications.

The Bureau of Industry and Security (BIS) in the Department of Commerce is responsible for overseeing these export control activities. BIS’s mission is to advance U.S. national security and foreign policy objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. BIS is committed to restricting U.S.-origin commodities and technology from use in support of Weapons of Mass Destruction projects, terrorism, or destabilizing military modernization programs.

FULL DOCUMENT: www.bis.doc.gov

U.S. Department of State. 05/15/2020. Briefing with Under Secretary for Growth, Energy, and the Environment Keith Krach, Science and Technology Adviser to the Secretary Mung Chiang, and Assistant Secretary for International Security and Nonproliferation Christopher A. Ford On Taiwan Semiconductor Manufacturing Corporation’s Intent to Invest $12 Billion In the U.S. and on the CCP’s Ability to Undermine U.S. Export Controls. Via Teleconference

• Keith Krach, Under Secretary for Economic Growth, Energy, and the Environment
• Mung Chiang, Science and Technology Adviser to the SecretaryOffice of the Science and Technology Adviser
• Dr. Christopher Ashley Ford, Assistant SecretaryBureau of International Security and Nonproliferation

MS ORTAGUS: Thanks. Hello again, everyone. We’re three for three briefings today. I know it’s at the end of the day and we do a full Friday afternoon, so thank you so much for dialing in. Just a reminder that this call is on the record but is embargoed – the contents are embargoed – until the end of the call, please.

We wanted to highlight two separate but related developments for your attention today. We note with pleasure that on May 14th, Taiwan Semiconductor Manufacturing Corporation, or TSMC, announced that it intends to invest 12 billion in the state of Arizona starting in 2021 to develop the most state-of-the-art five-nanometer semiconductor fabrication foundry in the world. The TSMC deal is a game changer for the U.S. semiconductor industry that will bolster American national security and our economic prosperity.

Meanwhile, the U.S. Department of Commerce announced today its plan to restrict Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad. This action is intended to cut off Huawei’s, and by extension, the PRC’s, efforts to undermine U.S. export controls.

To help put these events in broader context, I’m joined for this on-the-record briefing with Keith Krach, our under secretary for economic growth, energy, and the environment; as well as Assistant Secretary Chris Ford, who heads our Bureau of International Security and Nonproliferation; and for Q&A we have Mung Chiang, the Science and Technology Adviser to the Secretary. They’ll all be available to answer your questions after their brief introductory statements.

As always, the contents of this on-the-record briefing are embargoed until the end of the call, and to get into the question queue, please dial 1 and then 0. We’ll start with Keith’s opening statements first. Keith, go ahead.

UNDER SECRETARY KRACH: All right, thanks so much, Morgan, and thanks to everyone for being here. A happy Friday to you. So this is a big day for America – for national security, our economic security, and our long-term prosperity. And I’d like to highlight the three separate yet highly interrelated achievements of the week, and the first, as Morgan said, is the $12 billion investment by TSMC; the second is the tightening of export controls to restrain Huawei; and third, the continued implementation of the 5G Clean Path. Any of these alone is – are newsworthy, but together they represent a 5G national security trifecta.

And first let me turn to TSMC to give you an overview. TSMC will invest $12 billion, a truly massive sum, in perhaps one of the most historic onshorings in decades, and from 2021 to 2029 to develop the world’s most advanced five-nanometer chip fabrication facility in Arizona. And this means that chips critical to our lives and national security will once again be made in America, where the semiconductor industry was first invented. The chips will power everything from smartphones in our pockets to 5G base stations to the F-35s that help defend our homeland.

The deal is a game changer for the U.S. semiconductor industry. TSMC is bringing its supply chain companies to the United States. This is a giant leap towards bringing high-tech manufacturing back home where it belongs and keeping that commitment that President Trump has made. The fab – and they call these manufacturing facilities “fabs” – the fab will promote the creation of thriving, high-skilled sub-industries known as clusters, and that will help ensure American leadership in technologies of the future. And I want to say something about so highly skilled that in talking with the chairman of TSMC, over 50 percent of the employees that are going to work in this fab are going to have master’s degrees or higher. And the clustering effect is perhaps unique to the semiconductor industry or at least really intensified, and that’s where all that ecosystem builds up around. I mean, that’s how Silicon Valley became Silicon Valley.

The investment will of course create thousands of jobs across the entire supply chain and create a broad ripple effect of technical training and know-how throughout the tech ecosystem. TSMC will train hundreds of American workers on its leading-edge technologies in Taiwan, and these workers will bring skills back home, where they will proliferate. The deal will also spur cutting-edge research and development by American universities and campuses, and in particularly in the equipment manufacturers themselves.

Not least of all, it strengthens our relationship with Taiwan, a vibrant democracy and a force for good in the world and a great friend to the United States. Yet again, President Trump is delivering on his pledge to make America stronger, safer, and more prosperous.

Let me move on to the second part of that trifecta, and that’s with the Foreign Direct Product Rule. All of this is also supported by the day’s other big news: expansion of the Foreign Direct Product Rule to prevent Huawei from dodging U.S. export controls. And Dr. Ford will talk about this in detail after I complete my remarks, and I simply want to make this point: Since its addition to the entity list one year ago today, Huawei has persisted in its efforts to circumvent U.S. export controls. Huawei benefited from a loophole that allowed it to make use of U.S. electronic design software and manufacturing equipment to continue to produce its own semiconductors.

That ends today. The United States is closing this loophole to prevent Huawei from exploiting U.S. technology and threatening our national security. Quite simply, Huawei cannot be trusted to respect the rule of law. It is required by the PRC to cooperate with Beijing’s security and intelligence services, and that really relates to the law that I’ve talked with you many times about in terms of the National Intelligence Act of the PRC. We urge our allies and our partners to join us in aligning their domestic export-control laws to address the very real security threat posed by Huawei and the PRC. Huawei is a PRC state-supported firm serving as a tool for the Chinese Communist Party. The United States will continue to restrict most exports to Huawei.

And the third part of that trifecta is the Clean Path. And let me call your attention to the State Department’s 5G Clean Path initiative, and that was announced by Secretary Pompeo on April 29th. It said that 5G data entering or exiting U.S. diplomatic facilities, domestically and overseas, like in our embassies, must transit only through trusted equipment. The 5G Clean Path is an end-to-end communication path that does not use any 5G transmission, control, computing, or storage equipment from an untrusted vendor, including Huawei and ZTE. 5G Clean Path implementation in the 2019 NDAA prohibits U.S. executive agencies from procuring, obtaining, extending, or renewing contracts for any equipment, system, or telecommunications services that make the use of Huawei, ZTE, and Xiaomi, and other untrusted PRC vendor equipment.

The 5G Clean Path embodies the highest standards of security against untrusted, high-risk vendors by blocking their ability to siphon sensitive information into the hands of the PRC. And we encourage all of our allies and partners to join us in requiring a 5G clean path for their diplomatic facilities overseas.

So just to sum it up, each of these initiatives form a three-legged stool of trust, security, and resilience for the United States. Each reinforces the others and greatly augments U.S. national and economic security, especially as we’re facing increasing competition from the PRC.

The last five months can leave no doubt in the minds of any freedom-loving nation that the PRC is untrustworthy, and only by maintaining solidarity with our trusted partners can we guarantee a secure future for the United States, our companies, and our friends.

So with that (inaudible) I’d like to turn it over to Dr. Ford for his comments.

ASSISTANT SECRETARY FORD: Thank you, Keith, and good afternoon, everybody. As Under Secretary Krach noted, while major suppliers of semiconductors are clearly flocking to the United States to take advantage of the opportunities available here in America, the other piece of good news is that we are also in the Trump administration taking decisive steps to protect U.S. technology and suppliers from being exploited by Huawei and its masters in the PRC.

We announced today the expansion of something called the Foreign Direct Product Rule, or FDPR, if you will, which is designed to help keep Huawei, as the Under Secretary indicated, from circumventing U.S. export controls. This expanded rule will impose a U.S. licensing requirement, an export-control licensing requirement whenever anyone anywhere in the world uses U.S. technology or software to design or produce semiconductors for Huawei. Companies wishing to sell certain items to Huawei produced with U.S. technology must now obtain a license from the United States.

Now, this is done because we need to understand how Huawei is taking advantage of cutting-edge U.S. technology in this field, and we need to make it harder for Huawei to use this technology against us, against our allies, and against our partners. These licensing requirements will help us do that.

The key issue today, and I’d like to add a bit of a gloss on what the Under Secretary had said, is why we are doing this and why the United States believes Huawei to be such a threat. And I would say that our concerns with Huawei are at least threefold. First of all, for starters, Huawei engages, clearly, in illegal activity, including intellectual property theft from U.S. companies and the evasion of U.S. sanctions, in support of the world’s biggest state sponsor of terror and a notorious proliferator. The U.S. Department of Justice has issued not one but two indictments against Huawei for a range of crimes, including intellectual property theft, violations of the Racketeer Influenced and Corrupt Organizations Act – that is to say, RICO – and for helping Iran evade sanctions. This is not the sort of entity with which reputable U.S. or other foreign companies should be doing business as usual, and our changes reflect that.

The second factor is that Huawei is an enabler for human rights abuses by the People’s Republic of China. It provides technological support for Chinese Communist Party ethnic cleansing in Xinjiang, for example, and for the party’s technologically facilitated surveillance-and-control authoritarianism throughout China. Huawei also helps make such technologies available for export to other repressive regimes. So that’s the second factor.

And the third one is that – is perhaps in some ways the most troubling over time, and that is that because of the PRC’s governance model and standing Chinese laws, Huawei is a company that is structurally subject to manipulation and to control by the Chinese Communist Party, essentially at any time. Whenever the party calls upon it, Huawei can function – and indeed has no choice but to serve – as a tool of strategic influence and political manipulation, including through providing support where it can to the PRC’s broader military-civil fusion strategy for acquiring Western technology and diverting that technology to military and security uses that further the CCP’s, the Chinese Communist Party’s, repressive agenda at home and its geopolitical revisionism abroad.

So in our view, U.S. national security simply requires that we put mechanisms in place to understand how U.S. exports and technology are being used by and for Huawei. These new licensing rules help to do that so that we can keep an eye on any malign activity that runs contrary to our foreign policy and national security interests, and indeed I would suggest those of all free and democratic countries.

So for these reasons, we needed to take action to prevent Huawei from flaunting our export-control laws, exploiting American technology, and threatening our national security. And we would be happy to answer such questions as you might have as best we can about how it is specifically that we are doing that.

But I should probably turn things back over to Morgan. Thanks.

MS ORTAGUS: Thanks, Chris. I know we’ve got a queue started already. We’re going to try our best to get through everybody in the queue. And again, just dial 1 and 0 if you’d like to be added.

First up is from Reuters, we have Humeyra.

QUESTION: Hello, can you hear me? Hi.

MS ORTAGUS: Yes, we (inaudible).

QUESTION: Thank you. Can I ask a couple of things? Can you comment on the timing of this? TSMC announced this investment, and the next day USG has moved to amend this export rule, which is something that could restrict its sales. Why now? And can you talk a little bit about whether this investment actually makes it easier for them to get the license?

And lastly, can you talk a bit about the incentives that were given to TSMC? Was it federal money, tax breaks, what is the breakdown? Thank you so much.

UNDER SECRETARY KRACH: First of all, with regard to the timing, the Direct Foreign Product Rule has been in the works for quite some time. So that was on a path to happen. And then also on a separate path were discussions with TSMC, and they actually announced on their earnings call – on their last earnings call that they were looking at this. So they lined up together. And then it also lined up as well with the Clean Path.

And I think – now, nothing really happens by total coincidence, but this went – on these particular days it actually did. But I think you’ll also see future announcements in terms of different clean strategies coming down the road that will be rolled out, and we’ll be having some other announcements in the June timeframe. We haven’t set a date for it, but there’s some more coming down the path.

And I think a big thing in terms of the deal itself, the Trump administration is committed to advancing the reshoring of manufacturing, particularly for critical components such as semiconductors, and this is a strategic imperative for our national security. And the administration policies will help make TSMC successful in their investment in the United States, and it will provide the same benefits to other investors and companies in the semiconductor industry. Our objective is that U.S. chip manufacturers build all their future fabs in the U.S., and also that other foreign chip manufacturers build their next state-of-the-art fabs in the United States to really create that ecosystem.

And the semiconductor was invented in the United States. We have tremendous capabilities here. Sixty percent of TSMC’s customers are based in the United States. So that’s kind of the rationale. So did I answer your question?

ASSISTANT SECRETARY FORD: Okay. If I might, Keith, just to add some —

UNDER SECRETARY KRACH: Yeah, sure.

ASSISTANT SECRETARY FORD: — gloss on that, just to underline what the Under Secretary said, that both of these things moved entirely on their own steam and on their trajectories and timelines. It was actually quite surprising to me that they lined up to be so close in sequence, but they are conceptually different and moved for different reasons.

I would say that the common element that they share in some respects is the fact that they are both in different ways reflections of the commanding comparative advantage that U.S. high technology skills and prowess and innovation in the realm of soft – of semiconductor design and fabrication. We have an extraordinary position in the global technology ecosystem by virtue of the skills and efforts of U.S. companies in this respect. And they – it’s not surprising in light of that both that we will need – both that our – that the United States would be an attractive location for companies to come to and take advantage of all that we have in this country to offer, and at the same time that we would need to be careful about making sure that others did not exploit and try to gain inappropriate access to our technology moving forward.

So these are both two sides of the same coin, but they are, in terms of timing, entirely coincidental.

MS ORTAGUS: Thanks. Okay. Let’s go over to Nick Wadhams from Bloomberg.

QUESTION: Hi, thanks very much. I just wanted to try to put a finer point on Humeyra’s question because I didn’t hear an answer there, just two issues. Is there any understanding with TSMC as part of this deal that it will get a license given that it gets about 10 percent of its revenue from Huawei, that that business will not be affected? And is the federal government offering any incentives or subsidies to TSMC as part of this agreement? Thanks.

UNDER SECRETARY KRACH: So the TSMC will not be granted a license or not granted a license based upon their commitment, their intent to build a five-nanometer fab here in the United States. So that’s not part of it at all.

If you look at this decision for their press announcement in the first place, it’s really a result of – they looked at the investment climate here in the U.S., and some of the statements they shared with us is President Trump’s tax cuts, regulatory reform, workforce development, and an emphasis on the high-tech innovation is a big reason why they decided to make that $12 billion commitment, along with the – as I mentioned, many of their main customers like Apple, (inaudible) Intel, AMD, Qualcomm, Nvidia are all customers, great customers for TSMC.

And so – and they – and I think they were really successful and galvanizing their ecosystem as well. So – and they looked at the workforce here as well. So – and there’s already a ecosystem here in the U.S. So I think it was a natural choice by them, but certainly one that reflects the great emphasis that President Trump has put on bringing jobs and – back to the United States, and a particular interest of what our focus is at the State Department, and that’s national security.

MS ORTAGUS: Thanks.

ASSISTANT SECRETARY FORD: And if I might, from my perspective, just to say that although we do not have someone from the Department of Commerce on the call, if we were to have someone from the Department of Commerce on this call, I have every confidence that they would be very, very clear and state unequivocally that all licenses are reviewed on their own merits and always will be.

MS ORTAGUS: Thanks, guys. Hey, Ruben, my email is acting up. Can you tell me who’s in the queue next, please? I’m sorry.

MR HARUTUNIAN: Sure. We’ve got Asa Fitch from The Wall Street Journal next.

QUESTION: Hi, guys. Thanks for doing this call. Where is this TSMC plant going to be exactly? We know Arizona; we don’t know anything more specific than that. Does that depend on the incentives you can offer, the biggest ones? And then just to echo what some others have asked, what are the incentives that have been discussed?

UNDER SECRETARY KRACH: With regard to the location in Arizona, the – I don’t think that’s been 100 percent nailed down. I believe it might be somewhere around the Phoenix area, but it’s not been 100 percent nailed down.

In terms of the incentives, I know there is a number of things that the United States Congress is looking at. I think they – they understood there’s some really good possibilities coming down the road as well as the climate for this. And there’s a lot we’re doing in terms of R&D, and I think that was a big point to it. But – and they did the math and it worked out for them.

MS ORTAGUS: Great. Thanks. We now have Ana Swanson from The New York Times.

QUESTION: Hi. Thank you so much for doing the call. I appreciate that. So setting the issue of the facility aside, do you think that TSMC will receive a license, or has the company received any assurances about the license? This – right, it seems like this regulation on Huawei announced today could be quite a blow to the company, and there are some rumors and reports that TSMC had received some kind of assurance. And if they had not, would TSMC be reacting negatively to this measure that you announced today that could clamp down on their revenue? Thank you.

UNDER SECRETARY KRACH: Well, I could say for a fact that there’s no assurance whatsoever on that. And about – I think roughly around 10 to 12 percent of TSMC’s business is China, and I think that is in essence almost primarily Huawei, so they will be restricted unless they’re granted a license. And there’s no assurances on that, and we don’t anticipate that.

MS ORTAGUS: Thanks. Let’s go over to Nick Schifrin, PBS.

QUESTION: Hey, guys, thanks for – thank you for doing this. Just wanted to switch over to 5G a little bit and have you zoom in on that. So the Secretary’s talked about what you spoke about earlier in terms of trying to protect U.S. institutions around the world, U.S. facilities around the world from 5G. What does that look like? Does that look like, I don’t know, some local businessman who wants to walk into the embassy can’t have a Huawei phone or something much more specific about U.S. infrastructure? And can you talk about the larger effort to try and convince countries around the world to get, for example, Nokia or Erickson 5G when Huawei’s been out front packaging 5G for over a year now? Thanks.

UNDER SECRETARY KRACH: So just to put the Clean Path in the most simplistic terms, what that means is that for traffic coming in, let’s say to a U.S. embassy or a U.S. military base, it cannot have touched a Huawei base station. Or if you have a Huawei – to the TELCO providers, they have a Huawei tower and a Huawei antenna, they’re going to need to put it in Ericsson or a Nokia one right alongside of it. So those technical details would be up to the TELCO operator. It definitely increases their cost if 5G Huawei is one of their vendors. And this is a 5G program, so most TELCO operators have not rolled out their pure 5G yet, but – so it will be a significant cost. And I forgot what your second question was.

MS ORTAGUS: Can – AT&T, can unmute Nick Schifrin’s line and let him re-ask?

UNDER SECRETARY KRACH: And Mung, you may want to – you may want to add —

MS ORTAGUS: Nick?

QUESTION: Yes. Can you hear me now?

MS ORTAGUS: Yes.

UNDER SECRETARY KRACH: — in terms of the Clean Path.

QUESTION: If you can hear me, what I was asking about, the second question is the larger context of the 5G battle. As you guys know, Huawei’s been packaging these 5G offers around the world for over a year. Obviously, you’ve been working with Nokia and Ericsson, so can you talk about the larger effort to try and convince countries not to buy these Huawei packages and instead consider the more expensive European ones?

UNDER SECRETARY KRACH: Sure. And we’ve had a lot of discussions with countries as well as TELCO operators, and it boils down to one word and one word only. It’s who do you trust. Because a lot of times people will say: Well, Nokia or Ericsson, they can’t do the job, or we’ve – we’re only going to put them on the edge, or they’ve given us a written agreement that there will be no back doors. Well, the fact of the matter is that AT&T, Verizon – T-Mobile, which is majority owned by Deutsche Telekom – NTT Docomo – they’re all rolling out with Nokia, Ericsson, or Samsung, so they can do the job.

In terms of hey, there’s no back door. Well, anybody from Silicon Valley knows – or anybody’s who’s been in the software business know there’s no such thing as a back door. There’s a front door every day because that software’s being updated almost every day, so they could slip in there anything that they – anything they want. And in terms of just putting it on the edge, well, a way to look at a 5G system, it’s like a necklace with chains. You’re only as strong as your weakest link. So once you’re in, you’re in.

So the fact of the matter is that the IT vendors have the keys to the kingdom, and so it depends who do you trust. And when you look at Huawei and ZTE, coming from a country where they have a national intelligence act that requires any state-owned company or otherwise or any Chinese citizen to turn over any information, proprietary technology, intellectual property, or data upon request to the Chinese Communist Party or to the Chinese Government or the PLA. And if they don’t, they have to suffer the consequences. Then – I think countries and TELCO operators really understand that, and I think now citizens of the world do as well. And we’re seeing that around the world.

And the other thing, too, is sometimes we say well, it’s so much less expensive, and I’ll say to them, “Well, you’re paying something, you’re getting ripped off,” because in a lot of cases, they’re giving it away for free. And my question is: Why do you think they’re giving it away for free? They want to be able to control it. They want to have access to the data.

MS ORTAGUS: Great, thanks. Let’s see. I think now we have Jeanne Whalen from Washington Post.

QUESTION: Oh, hello. Won’t the new commerce rule just incentivize fabs to buy their chip-making equipment from non-U.S. manufacturers? Like how hard would it be for GSMT or other fabs to just buy chip-making equipment from the Netherlands or other suppliers?

UNDER SECRETARY KRACH: Well, I would say in response to that that it depends what one wants to make. And one of the virtues of this approach is – that we’ve taken with the direct product rule – is precisely that it does put foundries all around the world on a level playing field and makes it very difficult simply to substitute in foreign supply. With respect to the cutting edge of chip technology, the Chinese technology companies of course would very much like to and are working very hard to try to indigenize all aspects of the supply chain. But at least for the moment and for at least some time to come, U.S. companies have still a very significant comparative advantage when it comes to the largely software-facilitated design tools that are involved in producing the very best chips.

One might be able to find non-U.S. providers for design tools for making somewhat less sophisticated chips, but if you really want to play on the cutting edge of this technology area right now, you still for the most part have to use U.S. technology. And so frankly, it’s taking advantage of that relative position that enables the direct product rule change that we have just rolled out to be effective, because it applies to anyone who wishes to use the very best tools in support of Huawei. And it doesn’t matter whether that user of those tools is in the United States or someplace else. So we regard this as a very elegant solution that in fact structurally does in fact address the concerns that you raise.

MS ORTAGUS: Thanks. Thanks so much. And our last question is going to go to Nike Ching, Voice of America.

QUESTION: Thank you. Good afternoon – for this phone call. How much will this deal pave the way for U.S.-Taiwan free trade agreement? And is a free trade agreement with Taiwan still on the table? Thank you.

UNDER SECRETARY KRACH: It – by the way, it won’t affect it at all. One thing that I can say, though, is we think it does nothing but strengthen the relationship between the United States and Taiwan. So nothing’s changed in terms of those discussions, and Taiwan’s been a great friend to the United States.

QUESTION: And can I —

MS ORTAGUS: Great, thanks – sure, go ahead, Nike. You can follow up.

QUESTION: Yes, thank you. So a more technical question: For people who do not know much about the semiconductor like me, could you please help us understand the five-nanometer semiconductor technology? And what can they do? What is so – such a game change deal, and why it’s so, like, state of the art? Thank you.

UNDER SECRETARY KRACH: By the way, Dr. Mung, if you’re – we haven’t heard from you, and this probably would be a good one.

DR CHIANG: Sure.

UNDER SECRETARY KRACH: And Dr. Mung comes to us from Purdue University where he was dean of engineering. Before that he was dean of electrical engineering at Princeton, three-time entrepreneur, did his PhD in 5G. So Dr. Mung, I turn over to you.

DR CHIANG: Thank you, Under Secretary Krach. Good afternoon, everyone. Thank you for sticking around. And I’m going to focus on this particular technology aspect of the first story, that is the very important TSMC investment in United States. And Under Secretary Krach summarized very well why this is a game-changer for the U.S. semiconductor industry that will bolster the American national security. And to answer the question just raised, indeed semiconductor is the backbone to the entire digital industry, going from artificial intelligence to autonomous vehicles to next-generation wireless networks. And indeed one can say that with this investment, now United States has a very vibrant 5G chip future. And this is the cutting-edge technology.

Different generations of semiconductor technology is often labeled by the number, and smaller the number the better, because you will be able to do more with the same given resource. And this five-nanometer technology will be the cutting-edge one, not just in the U.S. but around the world, and coming from one of the pioneering companies in the entire industry, coming from Taiwan, as mentioned, friend to the United States. And we have seen bipartisan support of such research and development leadership here in the United States, and with this latest cutting-edge semiconductor investment, we can anticipate a full blossom just like the old Bell Lab days, if you will. We can now anticipate a full blossom of American innovations in the coming years. Thank you.

MS ORTAGUS: Thanks, Mung. We appreciate that. Well listen, everybody, thank you so much for dialing in on a Friday. While we were on the call, we did issue, I believe – Ruben, correct me if I’m wrong, but we went ahead and issued the Secretary’s statement on the commerce action, is that right?

MR HARUTUNIAN: That’s right.

MS ORTAGUS: Okay, great, so you all should have that in your queues as well. So thank you so much, Keith, Chris, Mung. We really appreciate it. And hope everyone has a great weekend.

UNDER SECRETARY KRACH: Thank you.

DR CHIANG: Thank you, everyone. Cheers.

ASSISTANT SECRETARY FORD: Yes, thanks, Morgan. Have a great weekend.

U.S. Department of State. 05/15/2020. The United States Protects National Security and Integrity of 5G Networks. Michael R. Pompeo, Secretary of State

The U.S. government today took another step to protect U.S. national security and the integrity of 5G networks by expanding the Commerce Department’s foreign direct product rule to restrict Huawei from circumventing U.S. law. We will not tolerate efforts by the Chinese Communist Party to undermine the privacy of our citizens or the integrity of next-generation networks worldwide.

Huawei is an untrustworthy vendor and a tool of the Chinese Communist Party, beholden to its orders. The Department of Justice has indicted Huawei for stealing U.S. technology and helping Iran evade sanctions, and the Department of Commerce placed Huawei on the Entity List in 2019. The Department of State has engaged for more than a year to share what we know about Huawei and other untrustworthy vendors with allies and partners around the world.

Today’s expanded rule helps prevent Huawei from undermining U.S. export controls, closing a loophole that has allowed the company to exploit U.S. technology and threaten our national security. It also imposes U.S. export control restrictions on countries that use U.S. technology or software to design and produce semiconductors for Huawei. Companies wishing to sell certain items to Huawei produced with U.S. technology must now obtain a license from the United States.

The United States will continue to restrict most U.S. exports to Huawei and its affiliates on the Entity List for activities that threaten U.S. national security and international stability.

INTERNATIONAL TRADE

DoC. May 14, 2020. U.S. Secretary of Commerce Wilbur Ross Praises Plans by Taiwan Semiconductor Manufacturing Company (TSMC) to Build Semiconductor Facility in Arizona
Export and investment promotion Investing in communities and workers

U.S. Secretary of Commerce Wilbur Ross praised today’s announcement by Taiwan Semiconductor Manufacturing Company (TSMC) of plans to invest approximately $12 billion to construct a new 5-nanometer semiconductor production facility in Arizona. This manufacturing facility will be one of only two of its kind globally capable of producing the world’s most advanced semiconductors. TSMC’s planned investment will create an estimated 1,600 high-tech jobs, in addition to thousands of additional jobs in the broader semiconductor ecosystem.

“TSMC’s plan to build a $12 billion semiconductor facility in Arizona is yet another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing and made the United States the most attractive place in the world to invest,” said Secretary Ross. “This plan is the result of years of close collaboration among TSMC, the Governor of Arizona and his staff, and the Administration, particularly our Assistant Secretary of Commerce Ian Steff.”

The semiconductor industry is critical to U.S. economic growth, underpinning many of the advanced technologies that consumers depend on including smart phones, transportation safety applications, advanced medical devices, and telecommunications. TSMC’s investment will reinforce American leadership in cutting-edge semiconductor design and manufacturing and will further accelerate Arizona’s rise as a global hub for the technology industry.

President Trump’s bold and unprecedented achievements on tax cuts, deregulation, workforce development, and high-tech innovation have laid the foundation for these types of capital-intensive investments in semiconductor design, R&D, and manufacturing. This Administration is committed to ensuring the United States has a secure, vibrant, and internationally competitive high-tech ecosystem, buttressed by domestic chip production.

“We are grateful to TSMC for working with our SelectUSA program, charged with coordinating federal efforts to attract and retain global investment,” said Ian Steff, Assistant Secretary of Commerce for Global Markets and Director General of the U.S. and Foreign Commercial Service. “This announcement is the product of strong cooperation between federal, state, and local governments, leveraging the unprecedented investment climate for manufacturers created by President Trump. Our global team of Commerce professionals stand ready to work with additional semiconductor companies looking to expand their operations and investments in the United States.”

The United States is home to more foreign direct investment (FDI) than any other country in the world, with a total of $4.34 trillion at the end of 2018. FDI supports directly and indirectly more than 7.35 million U.S. jobs and is responsible for $382.7 billion in U.S. goods exports.

###

SelectUSA

The U.S. Department of Commerce-led SelectUSA program, housed at the International Trade Administration, promotes and facilitates business investment into the United States by serving as a single point of contact for investors. SelectUSA assists U.S. economic development organizations in competing globally for investment by providing information about and access to potential business investors, a platform for international marketing, and high-level advocacy. SelectUSA also helps business investors find the information they need to make decisions by connecting them to the right people at the local level, supporting the navigation of the Federal regulatory system, and finding solutions to issues related to the Federal government.

FULL DOCUMENT:  www.selectusa.gov

FINANCIAL STABILITY

FED. May 15, 2020. Financial Stability Report

This report summarizes the Federal Reserve Board’s framework for assessing the resilience of the U.S. financial system and presents the Board’s current assessment. By publishing this report, the Board intends to promote public understanding and increase transparency and accountability for the Federal Reserve’s views on this topic.

FULL DOCUMENT: https://www.federalreserve.gov/publications/files/financial-stability-report-20200515.pdf

INDUSTRY

FED. May 15, 2020. Industrial Production and Capacity Utilization. Revision of Industrial Production and Capacity Utilization Notice Below

Total industrial production fell 11.2 percent in April for its largest monthly drop in the 101-year history of the index, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to slow or suspend operations throughout the month. Manufacturing output dropped 13.7 percent, its largest decline on record, as all major industries posted decreases. The output of motor vehicles and parts fell more than 70 percent; production elsewhere in manufacturing dropped 10.3 percent. The indexes for utilities and mining decreased 0.9 percent and 6.1 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.0 percent lower in April than it was a year earlier. Capacity utilization for the industrial sector decreased 8.3 percentage points to 64.9 percent in April, a rate that is 14.9 percentage points below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.

In addition to the regular revisions that reflect incoming data, the industrial production indexes for March were revised to incorporate data on initial claims for unemployment insurance by employees who had worked in the industrial sector.

Industrial Production and Capacity Utilization: Summary

Seasonally adjustedMake Full Screen

Industrial production	2012=100						Percent change
	2019		2020				2019		2020				Apr. '19 to Apr. '20
	Nov.[r]	Dec.[r]	Jan.[r]	Feb.[r]	Mar.[r]	Apr.[p]	Nov.[r]	Dec.[r]	Jan.[r]	Feb.[r]	Mar.[r]	Apr.[p]
Total index	110.0	109.6	109.1	109.3	104.3	92.6	.9	-.4	-.5	.1	-4.5	-11.2	-15.0
Previous estimates	110.1	109.6	109.1	109.6	103.7		.9	-.4	-.5	.5	-5.4
Major market groups
Final Products	104.2	103.3	101.8	102.6	96.5	84.0	1.8	-.9	-1.4	.8	-6.0	-13.0	-18.1
Consumer goods	106.7	105.5	104.5	105.7	99.6	87.9	2.0	-1.1	-.9	1.1	-5.7	-11.7	-15.8
Business equipment	101.8	101.3	98.4	98.0	90.2	74.6	2.0	-.5	-2.9	-.4	-8.0	-17.3	-25.9
Nonindustrial supplies	108.5	108.6	109.2	109.4	104.3	92.8	.2	.2	.5	.2	-4.7	-11.0	-13.8
Construction	116.3	117.5	119.6	119.4	114.1	99.8	-.1	1.0	1.7	-.2	-4.4	-12.6	-13.4
Materials	115.3	115.2	115.3	114.7	111.1	100.1	.4	-.1	.1	-.5	-3.2	-9.9	-12.8
Major industry groups
Manufacturing (see note below)	104.9	105.1	104.9	104.9	99.1	85.5	.9	.2	-.1	.0	-5.5	-13.7	-18.0
Previous estimates	104.9	105.1	104.9	104.9	98.3		.9	.2	-.1	-.1	-6.3
Mining	132.6	133.8	134.9	133.0	131.5	123.4	-.6	.9	.8	-1.4	-1.1	-6.1	-7.5
Utilities	109.7	103.4	98.6	102.2	100.2	99.3	3.0	-5.7	-4.7	3.6	-1.9	-.9	-3.8

Make Full Screen

Capacity utilization	Percent of capacity												Capacity growth
	Average 1972- 2019	1988- 89 high	1990- 91 low	1994- 95 high	2009 low	2019 Apr.
							2019		2020				Apr. '19 to Apr. '20
							Nov.[r]	Dec.[r]	Jan.[r]	Feb.[r]	Mar.[r]	Apr.[p]
Total industry	79.8	85.1	78.8	85.0	66.7	77.8	77.6	77.2	76.7	76.7	73.2	64.9	1.8
Previous estimates							77.6	77.1	76.7	77.0	72.7
Manufacturing (see note below)	78.2	85.5	77.3	84.6	63.7	75.4	75.2	75.2	75.1	75.0	70.8	61.1	1.2
Previous estimates							75.2	75.2	75.1	75.0	70.3
Mining	87.2	86.3	84.3	88.6	78.3	91.9	88.8	89.3	89.9	88.4	87.2	81.7	4.1
Utilities	85.2	93.2	84.7	93.2	78.2	75.9	79.5	74.8	71.1	73.5	71.9	71.1	2.8
Stage-of-process groups
Crude	86.2	87.8	84.7	90.0	76.4	89.6	87.7	87.9	88.3	87.1	85.8	80.4	3.2
Primary and semifinished	80.3	86.4	78.1	87.8	63.9	75.7	75.8	74.8	74.5	74.8	71.2	62.9	1.5
Finished	76.7	83.3	77.3	80.6	66.5	74.5	74.7	74.6	73.7	73.9	69.4	60.0	1.5

[r] Revised. [p] Preliminary.

Market Groups

All major market groups recorded decreases in production in April. The index for consumer goods fell 11.7 percent, with a drop of 36.0 percent for consumer durables, a decline of 3.3 percent for consumer energy products, and a decrease of 6.2 percent for consumer non-energy nondurables. The weakness in consumer durables was led by a drop of 61.9 percent in automotive products, while the decline in consumer energy products reflected a decrease in fuels that was partly offset by an increase in sales by utilities to residences. The production of business equipment decreased 17.3 percent, held down by a drop of 60.3 percent in transit equipment that resulted from essentially month-long closures of most factories producing motor vehicles and civilian aircraft. The indexes for construction supplies and business supplies declined 12.6 percent and 9.9 percent, respectively. The output of materials fell 9.9 percent, with a drop of 17.2 percent for durables and decreases of 7.2 percent and 5.1 percent for nondurables and energy, respectively.

Industry Groups

Manufacturing output dropped 13.7 percent in April. At 85.5 percent of its 2012 average, manufacturing production was at its lowest level since August 1997. The index for durable manufacturing fell 19.3 percent; among its components, the largest decline was posted by motor vehicles and parts. The shutdowns of most motor vehicle assembly plants led to light vehicle production at an annual rate of only 70,000 units, far below the assembly rate of 11.0 million units in February 2020. Among other durable goods industries, decreases of around 20 percent were recorded by primary metal products, by aerospace and miscellaneous transportation equipment, and by furniture and related products. The index for nondurables fell 8.2 percent, with declines of around 20 percent for textile and product mills, for apparel and leather, for printing and support, and for petroleum and coal products. The output of other manufacturing (publishing and logging) fell 10.4 percent.

The output of utilities weakened 0.9 percent in April, as a decrease for electric utilities was mostly offset by a gain for natural gas utilities that reflected strong demand for heating due to cold temperatures. Mining output fell 6.1 percent, with the largest decreases in crude oil extraction, in oil and gas well drilling, in coal mining, and in non-energy mining. The index for oil and gas well drilling fell 28 percent, its largest drop on record (since 1972).

Capacity utilization for manufacturing in April was 61.1 percent, 9.7 percentage points lower than in March and 2.6 percentage points below its recession trough of June 2009, the previous historical (since 1948) low for the measure. The operating rate for durable manufacturing also dropped below its 2009 low to 55.3 percent and was held down by decreases in every major industry group. Likewise, capacity utilization for nondurables set a new low, falling 6.1 percentage points to 68.0 percent.

Revision of Industrial Production and Capacity Utilization

The Federal Reserve Board plans to issue its annual revision to the indexes of industrial production (IP) and the related measures of capacity utilization in the second half of 2020. New annual benchmark data for manufacturing for 2017 and 2018 will be incorporated, as well as other annual data, including information on the mining of metallic and nonmetallic minerals (except fuels). The weights for market-group splits of the industry-level indexes will be updated with information from the 2012 benchmark input-output accounts from the U.S. Bureau of Economic Analysis. The updated IP indexes will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications to the methods for estimating the output of an industry will affect the index from 1972 to the present.

Capacity and capacity utilization will be revised to incorporate data for manufacturing through the fourth quarter of 2019 from the U.S. Census Bureau's Quarterly Survey of Plant Capacity Utilization, along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organizations.

FULL DOCUMENT: https://www.federalreserve.gov/releases/g17/current/g17.pdf

CORONAVIRUS

U.S. Department of State. 05/18/2020. Taiwan’s Exclusion from the World Health Assembly. Michael R. Pompeo, Secretary of State

The United States condemns Taiwan’s exclusion from the World Health Assembly. At a time when the world continues to struggle with the COVID-19 pandemic, we need multilateral institutions to deliver on their stated missions and to serve the interests of all member states, not to play politics while lives are at stake.

No one disputes that Taiwan has mounted one of the world’s most successful efforts to contain the pandemic to date, despite its close proximity to the original outbreak in Wuhan, China. This should not be a surprise. Transparent, vibrant, and innovative democracies like Taiwan always respond faster and more effectively to pandemics than do authoritarian regimes.

WHO’s Director-General Tedros had every legal power and precedent to include Taiwan in WHA’s proceedings. Yet, he instead chose not to invite Taiwan under pressure from the People’s Republic of China (PRC). The Director-General’s lack of independence deprives the Assembly of Taiwan’s renowned scientific expertise on pandemic disease, and further damages the WHO’s credibility and effectiveness at a time when the world needs it the most.

The PRC’s spiteful action to silence Taiwan exposes the emptiness of its claims to want transparency and international cooperation to fight the pandemic, and makes the difference between China and Taiwan ever more stark. Taiwan is a model world citizen, while the PRC continues to withhold vital information about the virus and its origins, deny access to their scientists and relevant facilities, censor discussion of the pandemic within China and on Chinese social media properties, and casts blame widely and recklessly.

U.S. Department of State. 05/18/2020. Secretary Pompeo’s Call with German Foreign Minister Maas

The below is attributable to Spokesperson Morgan Ortagus:

Secretary of State Michael R. Pompeo spoke today with German Foreign Minister Heiko Maas. Secretary Pompeo and Foreign Minister Maas discussed ongoing efforts to combat COVID-19. The Secretary and Foreign Minister also discussed U.S.-German coordination on a range of global challenges to counter Russia’s continued aggression against Ukraine, and to resist Iran’s destabilizing actions in the Middle East.

U.S. Department of State. 05/18/2020. Secretary Pompeo’s Call with Croatian Prime Minister Plenkovic

The below is attributable to Spokesperson Morgan Ortagus:

Secretary Michael R. Pompeo spoke today with Croatian Prime Minister Andrej Plenkovic. Secretary Pompeo and Prime Minister Plenkovic discussed the importance of Transatlantic cooperation in combatting COVID-19 and ways to strengthen our close bilateral defense cooperation. The Secretary congratulated Croatia on its effective Presidency of the Council of the EU, including its welcomed focus on Western Balkan EU integration.

U.S. Department of State. 05/18/2020. Secretary Pompeo’s Call with Turkish Foreign Minister Mevlut Cavusoglu

The below is attributable to Spokesperson Morgan Ortagus:‎

Secretary of State Michael R. Pompeo spoke today with Turkish Foreign Minister Mevlut Cavusoglu.  Secretary Pompeo and Foreign Minister Cavusoglu discussed cooperation to address the COVID-19 pandemic, including the repatriation of both Turkish and U.S. citizens to their home countries, supply chain cooperation, and the NATO Alliance efforts to respond to the pandemic.  Secretary Pompeo thanked Turkey for its generous donation of personal protective equipment.  The Secretary and the Foreign Minister also discussed bilateral relations, including economic and security issues.

FED. May 19, 2020. Testimony. Coronavirus and CARES Act. Chair Jerome H. Powell. Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.

Chairman Crapo, Ranking Member Brown, and other members of the Committee, thank you for the opportunity to discuss the extraordinary steps the Federal Reserve has taken to address the challenges we are facing.

I would like to begin by acknowledging the tragic loss and tremendous hardship that people are experiencing both here in the United States and around the world. The coronavirus outbreak is, first and foremost, a public health crisis, with the most important responses coming from those on the front lines in hospitals, emergency services, and care facilities. On behalf of the Federal Reserve, let me express our sincere gratitude to those individuals who put themselves at risk day after day in service to others and to our nation.

The forceful measures that we, as a country, are taking to control the spread of the virus have substantially limited many kinds of economic activity. Many businesses remain closed, people have been advised to stay home, and basic social interactions have been greatly curtailed. People have put their lives and livelihoods on hold at significant economic and personal cost. All of us are affected, but the burdens are falling most heavily on those least able to carry them.

It is worth remembering that the measures taken to contain the virus represent an investment in our individual and collective health. As a society, we should do everything we can to provide relief to those who are suffering for the public good.

Available economic data for the current quarter show a sharp drop in output and an equally sharp rise in unemployment. By these measures and many others, the scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II. Since the pandemic arrived in force just two months ago, more than 20 million people have lost their jobs, reversing nearly 10 years of job gains. This precipitous drop in economic activity has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future. In addition to the economic disruptions, the virus has created tremendous strains in some essential financial markets and impaired the flow of credit in the economy.

The Federal Reserve's response to this extraordinary period has been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote stability of the financial system. We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response. Congress's passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was critical in enabling the Federal Reserve and the Treasury Department to establish many of the lending programs that I discuss below.

In discussing the actions we have taken, I will begin with monetary policy. In March, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals.

In addition to monetary policy, we took forceful measures in four areas: open market operations to restore market functioning; actions to improve liquidity conditions in short-term funding markets; programs in coordination with the Treasury Department to facilitate more directly the flow of credit to households, businesses, and state and local governments; and measures to allow and encourage banks to use their substantial capital and liquidity levels built up over the past decade to support the economy during this difficult time.

Let me now turn to our open market operations and the circumstances that necessitated them. As tensions and uncertainty rose in mid-March, investors moved rapidly toward cash and shorter-term government securities, and the markets for Treasury securities and agency mortgage-backed securities, or MBS, started to experience strains. These markets are critical to the overall functioning of the financial system and to the transmission of monetary policy to the broader economy. In response, the Federal Open Market Committee undertook purchases of Treasury securities and agency MBS in the amounts needed to support smooth market functioning. With these purchases, market conditions improved substantially, and thus we have slowed our pace of purchases. While the primary purpose of these open market operations is to preserve smooth market functioning and effective policy transmission, the purchases will also foster more accommodative financial conditions.

As a more adverse outlook for the economy associated with COVID-19 took hold, investors exhibited greater risk aversion and pulled away from longer-term and riskier assets as well as from some money market mutual funds. To help stabilize short-term funding markets, we lengthened the term and lowered the rate on discount window loans to depository institutions. The Board also established, with the approval of the Treasury Department, the Primary Dealer Credit Facility (PDCF) under our emergency lending authority in section 13(3) of the Federal Reserve Act. Under the PDCF, the Federal Reserve provides loans against good collateral to primary dealers that are critical intermediaries in short-term funding markets. Similar to the large-scale purchases of Treasury securities and agency MBS I mentioned earlier, this facility helps restore normal market functioning.

In addition, under section 13(3) and together with the Treasury Department, we set up the Commercial Paper Funding Facility, or CPFF, and the Money Market Mutual Fund Liquidity Facility, or MMLF. Both of these facilities have equity provided by the Treasury Department to protect the Federal Reserve from losses. Indicators of market functioning in commercial paper and other short-term funding markets improved substantially and rapid outflows from prime and tax-exempt money market funds stopped after the announcement and implementation of these facilities.

In mid-March, offshore U.S. dollar funding markets also came under stress. In response, the Federal Reserve and several other central banks announced the expansion and enhancement of dollar liquidity swap lines. In addition, the Federal Reserve introduced a new temporary repurchase agreement facility for foreign monetary authorities. These actions helped stabilize global U.S. dollar funding markets, and they continue to support the smooth functioning of U.S. Treasury and other financial markets as well as U.S. economic conditions.

As it became clear the pandemic would significantly disrupt economies across the world, markets for longer-term debt also faced strains. The cost of borrowing rose sharply for those issuing corporate bonds, municipal debt, and asset-backed securities (ABS) backed by consumer and small business loans. Effectively, creditworthy households, businesses, and state and local governments were unable to borrow at reasonable prices, which would have further reduced economic activity. In addition, small and medium-sized businesses that traditionally rely on bank lending faced large increases in their funding needs as they struggled with possible closure or substantially curtailed revenues.

To support the longer-term, market-based financing that is critical to economic activity, the Federal Reserve took a number of bold steps. These steps were designed to ensure that credit would flow to borrowers and thus support economic activity. With credit protection provided by the Treasury Department, on March 23 the Board announced that it would support consumer and small business lending by establishing the Term Asset-Backed Securities Loan Facility (TALF). The TALF will lend against ABS backed by newly issued auto loans, credit card loans, and other consumer and small business loans. In turn, these loans will support consumers seeking to obtain these important types of credit.

The Federal Reserve also took action with the Treasury Department under section 13(3) to support the credit needs of large employers through the Primary Market Corporate Credit Facility and the Secondary Market Corporate Credit Facility. These facilities primarily purchase bonds issued by U.S. companies that were investment grade on March 22, 2020. By purchasing these bonds, the Federal Reserve is able to lower the borrowing costs for investment-grade companies and thus facilitate economic activity.

The Federal Reserve is also preparing to launch the Main Street Lending Program, which is designed to provide loans to small and medium-sized businesses that were in good financial standing before the pandemic. Importantly, with these and other facilities that the Federal Reserve has not employed before, public input has been crucial in their development. For example, in response to comments received, we lowered the minimum loan size and raised the maximum loan size across the three lending facilities within the program; in addition, we expanded the size of firms allowed to borrow under the program to companies with up to 15,000 employees. These changes should help the program meet the needs of a wider range of employers that may need bridge financing to support their operations and the economic recovery. We will continue to adjust facilities as we learn more.

To bolster the effectiveness of the Small Business Administration's Paycheck Protection Program (PPP), the Federal Reserve is supplying liquidity to lenders backed by their PPP loans to small businesses. And to help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities, the Federal Reserve, together with the Treasury Department, established the Municipal Liquidity Facility under section 13(3) authority to purchase short-term debt directly from U.S. states, counties, cities, and certain multistate entities. The two corporate credit facilities, the Main Street Lending Program, and the Municipal Liquidity Facility all have equity provided by the Treasury Department to protect the Federal Reserve from losses. The passage of the CARES Act by Congress was critical in enabling the Federal Reserve and the Treasury Department to establish these real economy emergency lending programs that have the capacity to make more than $2.6 trillion in loans.

The tools that the Federal Reserve is using under its 13(3) authority are for times of emergency, such as the ones we have been living through. When economic and financial conditions improve, we will put these tools back in the toolbox.

The final area where we took steps was in bank regulation. The Board made several adjustments, many temporary, to encourage banks to use their positions of strength to support households and businesses. Unlike the 2008 financial crisis, banks entered this period with substantial capital and liquidity buffers and improved risk-management and operational resiliency. As a result, they have been well positioned to cushion the financial shocks we are seeing. In contrast to the 2008 crisis when banks pulled back from lending and amplified the economic shock, in this instance they have greatly expanded loans to customers. Federal Reserve Board Vice Chair for Supervision Randal Quarles spoke to you about these topics last week.

The Federal Reserve has been entrusted with an important mission, and we have taken unprecedented steps in very rapid fashion over the past few months. In doing so, we embrace our responsibility to the American people to be as transparent as possible. We are deeply committed to transparency, and recognize that the need for transparency is heightened when we are called upon to use our emergency powers. This is particularly the case when Congress appropriates taxpayer funds to back lending programs that the Fed administers. In connection with the CARES Act facilities—including the two corporate credit facilities, the Main Street Lending Program, the Municipal Liquidity Facility, and the TALF—we will be disclosing, on a monthly basis, names and details of participants in each facility; amounts borrowed and interest rate charged; and overall costs, revenues, and fees for each facility.

Thank you, I'd be happy to take your questions.

U.S. Department of State. 05/17/2020. Secretary Michael R. Pompeo With Matthew Boyle of Breitbart News Network and SiriusXM Patriot. Michael R. Pompeo, Secretary of State. Via Teleconference

QUESTION:  Again folks, this is Breitbart News Saturday here on SiriusXM 125, the Patriot channel.  I’m Matt Boyle, our Washington political editor.  We have a very special guest on the line here, Secretary of State Mike Pompeo.  Thank you, Secretary Pompeo, for coming on the show.  I wanted to have you on to talk in depth about China, and we’ll get to that in a couple minutes, but you were just in Israel this week with Prime Minister Netanyahu, so let’s start there.  Can you tell us about your trip to Israel, your meeting with Netanyahu, and about the broader Vision for Peace plan that you and President Trump have been championing?

SECRETARY POMPEO:  Well, Matt, thank you.  I appreciate the chance to be on.  I did have a great visit.  It was short.  I was only on the ground there for a half a dozen hours or so, but we had a series of important things to talk about.  We have developed a deep, important partnership with the state of Israel.  They’re good partners of ours; they’re important.  This is, to so many people in the world, an important place religiously, but they’re also an important security partner, and we went to talk about those things.  It was on the eve of them forming their new government after multiple elections, and we talked about the threat from the Islamic Republic of Iran and how much progress we’ve made since we recovered from the horrible decisions the previous administration had made in entering the JCPOA.

We went there also to talk about the work that we can do to promote our efforts to tamp down on anti-Semitism, so we talked about that.  And then we also had the chance to talk about China’s efforts there in Israel, to make clear to our Israeli partners and friends that the risk of the Chinese Communist Party getting their hands on their technology, their high-end systems.  It’s a very capable, high-end, high-tech country.  We wanted to make sure they understood the risks associated with that as well.

QUESTION:  So you said while you were there in Israel that Iran is attempting to use the coronavirus pandemic to, quote, “foment terror.”  Can you elaborate on that?  What are they doing?  What is fomenting terror?

SECRETARY POMPEO:  So you continue to have, in spite of the Iranian leadership demanding that more money be given to them, they are using the resources that they have to continue funding Hizballah in Lebanon and threatening the state of Israel, funding Iraqi terrorist Shia groups, all the things that they have done historically – continuing to build out their capabilities even while the people inside of their own country are suffering.  And so they’ve said that it’s been our sanctions that have harmed them.  Frankly, the Iranian regime is the group responsible for all the hardship that exists inside of Iran, and in fact it is the Iranian people who are demanding a change in the nature of that regime.

QUESTION:  And so this kind of brings me to the main topic of what I really wanted to talk to you about today, which is China and the coronavirus pandemic.  Mr. Secretary, you’ve been relentless in criticizing the Chinese Communist Government for their handling of this virus outbreak, in particular the likelihood – the increasing likelihood that this virus came from the laboratory there in Wuhan, the Wuhan Institute of Virology.  Can – the Chinese deny this, of course.  Can you tell us where we are in this whole investigative effort of the origins of the coronavirus?

SECRETARY POMPEO:  Well, sadly, Matt, we’re not much further than we were weeks and weeks ago.  The Chinese Communist Party has relentlessly deceived and denied information to the West.  We have repeatedly asked to have teams go in to assist them in identifying where the virus originated.  We know it began in Wuhan, but we don’t know from where or from whom, and those are important things.  Your listeners need to know we still need to know that so that we can crack the code on this thing.  One of the key facts for scientists and epidemiologists to build out vaccines and therapeutics and to identify how this was ultimately delivered to the world – you have to know where patient zero began and how patient zero became infected.  And yet the Chinese Communist Party, at every turn, has attempted to manage the World Health Organization, to manage the information flow, to punish doctors who wanted to talk about this publicly, to undermine the central understandings of transparency that every country has a responsibility to deliver.

And as a result of that, we still have so many unanswered questions.  We – the United States – the world has so many unanswered questions that are incredibly important so that we can address this issue going forward to keep American people safe.  This isn’t political.  This isn’t aimed at achieving a political victory.  It is aimed squarely at getting the right health outcomes and saving lives all across the world.

QUESTION:  Yeah.  So on that note, independent studies have shown us that if the Chinese had been honest with us from the beginning about this, and honest with the world about this, that as  high as 95 percent of the deaths and destruction could have been avoided.  What are your thoughts on that?  Are you thinking that if they had been honest we could have avoided the significant economic and obviously health damage that we’ve seen from this virus here in the United States and elsewhere around the world?

SECRETARY POMPEO:  Matt, we know this much.  We know that in December at least, maybe earlier, the Chinese Communist Party came to understand the threat that was presented.  And then we watched their actions – I’ve talked about some of them – denying information to the world.  We then saw that when the United States made the decision, when President Trump made the decision to close off travel between the United States and China, we saw China squawk at that, saying you shouldn’t be doing that.  Even though they had locked down Wuhan, they had not locked down travel all across the world.

Those are the kinds of decisions that, as you stare at them, it is unambiguous that they created increased risk, that people were still traveling around the world – why?  While the Chinese Communist Party knew of the risk of transmission it was still allowing people to travel outside of China while they had locked down a major city inside of their own country.  We know those all to be facts, and we know had they made a different set of decisions at the front end there would have been more time for the entire world – not just for the United States but for the entire world – to prepare and react to the pandemic that has now spread all across the globe.

QUESTION:  So what should be the penalty for the Chinese here?  I mean, the American people are demanding that there be – I mean, if you look at the polls, they’re saying 70 percent, maybe even higher, people want to see China held accountable.  How do we do that?  What – how do we hold China accountable?  How do we enforce that?  What does that look like?  Can you tell us that?

SECRETARY POMPEO:  I don’t want to get out in front of what President Trump will ultimately decide, but I think we all know in this administration that we have to make sure that something like this can never happen again.  That means deterrence.  That means setting up processes.  The President’s already stopped funding to the WHO so that we can evaluate that and figure out which pieces of the WHO might actually work and which pieces don’t, so that we can deliver good outcomes and keep Americans safe and make sure this doesn’t happen again.

And then there’ll come a time, there will come a day, when we will evaluate what it is needs to be done to convince the Chinese Communist Party that there are real costs – real costs – connected to this kind of misbehavior.  You know this, Matt.  We see this all the time inside the United States but around the world too.  We have to hold nations accountable.  And I’ve talked to many of my counterparts around the world.  We have to hold nations accountable for the things and actions that they undertake which create risk and, in this case, created enormous loss of life here in the United States.  President Trump is committed to doing that.  The precise mechanisms that we will choose, I want to make sure that he gets the chance to get fully briefed and make those decisions.

QUESTION:  So Mr. Secretary, also in recent days we’ve seen Chinese state media threaten U.S. lawmakers like Senator Tom Cotton, like Congressman Jim Banks, who’ve been very outspoken on China.  They’ve threatened states like Missouri, which is trying to sue the Chinese.  They’ve threatened media outlets, including us at Breitbart, The Wall Street Journal, other places.  What are your thoughts about these threats that are coming from Chinese state media against Americans, whether they be U.S. states, whether they be members of Congress, whether they be media outlets like us, Breitbart or The Wall Street Journal, other places as well?  What are your thoughts about that?

SECRETARY POMPEO:  They have come at me too – all kinds of names.  I think this shows that the Chinese Communist Party understands the risk that they have put on top of their own nation.  I think those attacks demonstrate weakness, not resolve, by the Chinese Communist Party.

Matt, you and I are both old enough to remember.  We know how communist regimes, how autocracies behave.  When they know that they have done things that are wrong, they strike out; they try to blame others.  I think that’s what you’re seeing.

They also try to maneuver around the world through disinformation, and we have been clear – President Trump, myself, the State Department have been clear – about making sure that everybody understands the facts surrounding the Chinese Communist Party.  We were at this long before the coronavirus, where we called out the fact that they had kicked out American journalists.

We had been talking about the fact that they haven’t followed their own promises, their commitment not to arm the South China Sea, to put weapons there.  They promised they wouldn’t do it.  They have done it.  They have promised a commitment to the people of Hong Kong with “one country, two systems.”  They continue to diminish freedom in Hong Kong.

This goes – when it comes to what the Chinese Communist Party is doing, it goes so far beyond just what’s happened in the time of this coronavirus.  I think the American people and I hope people all across the world understand the risk to the globe, to freedom-loving countries and democracies around the world, that are presented by the actions of the Chinese Communist Party.

QUESTION:  Yeah, so on that note, this – well, the pandemic has definitely thrust this into the forefront of everybody’s minds, into the spotlight, this whole threat of a rising Beijing.  But I know this is an issue you’ve been working on for a long time, combating the Belt and Road Initiative.  If you – can you kind of explain that?  Because I know – I believe we had one of our reporters with you on a trip to Northern Europe, where again they were trying to build inroads into the Arctic.  And they’ve been doing this all around the globe, where they’ve been trying to build their international influence.  And this is something that I know you’ve taken a lot of steps to counter around the world.

Can you tell us about this?  Because I think their efforts to try to, whether it be control the Eurasian land mass, whether it be building control of shipping lanes, and so on and so forth all around the world, their geopolitical quest for control and dominance is serious, and I know it’s something that you’re fighting on a regular basis.  So can you tell us more broadly about that?

SECRETARY POMPEO:  Matt, you’ve captured it very, very well.  The Chinese Communist Party working inside of their own country is one thing.  Their efforts to create control and influence around the world are quite another and we have a responsibility to fix that.  President Trump got this right in his campaign.  He talks about it an awful lot.  This is something that presidents of both political parties ignored for far too long.  President Trump has taken it on squarely.  You – we’ve seen it, it’s very public what he’s done in trade to try and make sure that that is fair and reciprocal.

But your point, your point about China’s efforts to use their wealth, state-owned enterprises, and their authoritarian regime in Africa, in the Arctic, in the straits, the sea lanes all around the world, present real risk to the United States of America and to free nations.  And we are working to push back against that.

We want good things, Matt, for the Chinese people.  We hold no brook against them.  But the regime, the Chinese Communist Party itself, is acting in ways that are much to the detriment of the United States of America.  And President Trump has made clear we’re going to make sure and protect, keep Americans safe, and do everything we can to make sure that Americans can operate freely around the world in a way that is fair, and reciprocal, and equitable.

QUESTION:  Yeah, Mr. Secretary, I know you’re tight on time, so this’ll be my last question for you.  And I want to definitely go deeper with you down the road, so – on this, because I know this is an important issue.

But my last question for you here today is:  This influence operation that they’re building around the world – very similar, by the way, to what the Soviet Union was doing, another communist regime, in the past – but they’ve got – we’ve seen American professors at universities getting convicted of being on the take from Chinese Communist Party officials.  We’ve seen their efforts to use state-backed companies like Huawei to try to infiltrate the Western world’s technology infrastructure.  What are some of the things that you’re doing to combat the broader influence operations that the Chinese Communist Party has employed, whether it be here in the United States or elsewhere around the world?

SECRETARY POMPEO:  Matt, this is connected to what you talked about with the Belt and Road Initiative, but it is also true here inside the United States.  I spoke to the National Governors Association a few months back, where I shared that they are working to influence governors, mayors, school board members, people all – private business owners, to influence them to put the bright face of China on when it is in fact the Chinese Communist Party that’s seeking to exert their influence here inside of the United States.

This is primarily the responsibility of the FBI to police, but your listeners should know the State Department is doing its part too.  We put restrictions on their diplomats who are moving around America, the same ones that they put on our diplomats as they’re traveling in China.  This effort to influence what’s going on here in the United States is a very serious matter.  You talked about our universities and our research lab.  This is not about good Chinese people working on commercial projects.  We find that acceptable.  This is about the Chinese Communist Party exerting its influence here in the United States for missions that are deeply connected to the regime in China trying to exert influence in places where it ought not to be, and we’re going to do everything we can to push back against that.

QUESTION:  All right.  Well, Secretary Pompeo, I really want to thank you for coming on the program here.  And where can people go to learn more about what you guys are doing at the State Department?

SECRETARY POMPEO:  If you go to state.gov, you’ll see a series of sets of remarks, and you’ll see the actions that our team has taken as well.  It’s a good place to go find consolidated the efforts we have to make sure and defend America, and keep us all safe and prosperous here at home even in these challenging times, Matt.

QUESTION:  All right.  Well, Secretary Pompeo, thank you for coming on the program.  Thank you for everything you’re doing for America.  I really want to thank you again.

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ORGANISMS

CORONAVIRUS

IMF. 05/18/2020. MAKING ECONOMIES MORE RESILIENT TO DOWNTURNS

• John Bluedorn, Deputy Division Chief on the World Economic Outlook in the IMF’s Research Department. 
• Wenjie Chen, economist in the IMF’s African Department, where she contributes to the Regional Economic Outlook.

The world is in the grip of the COVID-19 pandemic, and the ensuing Great Lockdown, has pushed many countries into deep recessions—worse than during the 2008–09 global financial crisis. In response, governments and central banks all over the world have introduced strong discretionary (one-off and specific) fiscal and monetary measures to counteract the economic fallout caused by the spread of the coronavirus. Existing automatic stabilizers (such as income-based taxes and unemployment and household benefits), which differ across countries, have generally operated freely, providing some further cushion.

But with interest rates at record lows and public debts at historical highs in many countries, how can advanced economies best prepare for and respond to future downturns? Analysis in our recent World Economic Outlook completed before the pandemic looks at how advanced economies could build their resilience to negative shocks in such an environment. It finds that rules-based fiscal stimulus—where the stimulus is automatically triggered by deteriorating macroeconomic indicators—can be highly effective in countering a downturn under such conditions.

A larger role for fiscal policy

With interest rates at or near zero in advanced economies, the scope for further conventional rate cuts is limited. But central banks may still use unconventional monetary policy tools more intensively—like large-scale asset purchases—to deliver additional support, as they have recently in response to the pandemic. However, relying on monetary policy alone to respond to shocks might not be enough and also raises questions about side effects on future financial stability and threats to central bank independence.

While keeping an eye on debt sustainability concerns over the long term, fiscal policy needs to play a larger role. Putting in place more automatic fiscal responses in advanced economies could help build their resilience to future adverse shocks. If rules for fiscal stimulus are well communicated and established before shocks occur, they can help shape expectations and reduce uncertainty, thereby dampening the drop in activity once a negative shock materializes.

A case for more automatic fiscal stimulus

Our study shows that rules-based fiscal stimulus measures—such as temporary targeted cash transfers to liquidity-constrained, low-income households that kick in when the unemployment rate rises above a certain threshold—could be highly effective in countering a downturn caused by a typical demand shortfall. Although these stimulus measures would be automatic, they are very different from traditional automatic stabilizers, which instead respond to an individual’s circumstances (for example, being laid-off in the case of unemployment insurance or lower incomes in the case of progressive income taxes). Rules-based fiscal stimulus is particularly effective when interest rates are at their effective lower bound (when rates cannot be cut further) and discretionary fiscal policy lags are long. Moreover, fiscal stimulus after demand shocks tend to be especially powerful when the economy has unemployed resources and monetary policy is accommodative.

When demand falls suddenly, the fall in output and rise in debt ratios are smaller when a rules-based fiscal stimulus is in place to support the economy. In fact, our findings suggest that when rules-based fiscal stimulus measures are adopted, economic downturns can be countered nearly as effectively as when monetary policy is able to operate at full strength.

The current economic shock from the pandemic is unusual as it has affected both supply and demand. Even though the political will for action has rapidly coalesced in response to the current shock, its unrivaled speed and depth have complicated the design and timely delivery of discretionary fiscal support. When workers and firms are unable to operate while the epidemic is active, the effectiveness of fiscal stimulus to boost output (the multiplier) is low. Nonetheless, even in these circumstances, a rules-based fiscal stimulus implemented ahead of time could have been helpful, especially in the form of targeted transfers. These measures could provide further income insurance and strengthen the social safety net for the vulnerable.

Our findings suggest that policymakers should consider enhancing fiscal policy’s automatic response to negative shocks, helping to improve the economy’s resilience. In parallel, even if interest rates cannot be cut further, monetary policy can support fiscal stimulus in a recession by maintaining an accommodative stance, including by easing financial market conditions.

Designing and adopting new fiscal tools—like rules-based fiscal stimulus measures—and improving existing automatic stabilizers will take time and require political agreement. But with automatic policies for fiscal stimulus in place, the risks that political hurdles delay responses when economic conditions deteriorate are lower. Moreover, when monetary policy is constrained, having in place rules-based fiscal stimulus measures can markedly reduce the likelihood of demand-driven recessions.

This does not mean that discretionary fiscal policy becomes redundant. In fact, discretionary fiscal measures, appropriately tailored to the specific circumstances and the nature of the negative shock—like the pandemic shock—are essential to provide powerful countercyclical support. But they must be adopted and deployed in a timely manner.

A more agile response to future recessions

Given historical delays in the implementation of discretionary fiscal stimulus and the helpful effects of setting expectations by adopting rules for action in advance, there is a strong case for a more automatic fiscal response to economic downturns. Our analysis shows that adopting rules-based fiscal stimulus measures can be highly effective and more timely, particularly when central bank interest rates are close to or at their effective lower bound and monetary policy is constrained.

Based on Chapter 2 of the World Economic Outlook, “Countering Future Recessions in Advanced Economies: Cyclical Policies in an Era of Low Rates and High Debt,” by Michal Andrle, Philip Barrett, John Bluedorn (co-lead), Francesca Caselli, and Wenjie Chen (co-lead).

FULL DOCUMENT: https://blogs.imf.org/2020/05/18/making-economies-more-resilient-to-downturns/?utm_medium=email&utm_source=govdelivery

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INDICADORES/INDICATORS

• US ECONOMIC INDICATORS
• US INTERNATIONAL TRADE IN GOODS AND SERVICES
• BALANÇA COMERCIAL BRASILEIRA
• BACEN. BOLETIM FOCUS: RELATÓRIO SEMANAL DE MERCADO (Projeções atualizadas semanalmente pelas 100 principais instituições financeiras que operam no Brasil, para os principais indicadores da economia brasileira)
• BACEN. Indicadores Econômicos Consolidados
• BACEN. Indicadores Econômicos Selecionados
• BACEN. IBC-Br
• BACEN. Câmbio
• BOVESPA
• INDICADORES DO BANCO MUNDIAL

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BACEN. BOLETIM FOCUS: RELATÓRIO SEMANAL DE MERCADO

(Projeções atualizadas semanalmente pelas 100 principais instituições financeiras que operam no Brasil, para os principais indicadores da economia brasileira)

ANÁLISE

BACEN. PORTAL G1. 18/05/2020. Analistas do mercado financeiro passam a estimar tombo de 5,12% para o PIB em 2020. Economistas das instituições financeiras, ouvidos pelo Banco Central na semana passada, também reduziram de 1,76% para 1,59% previsão de inflação para este ano.
Por Alexandro Martello, G1 — Brasília

Economistas de instituições financeiras ouvidas pelo Banco Central baixaram a estimativa de queda do Produtor Interno Bruto (PIB) de 4,11% para 5,12% em 2020. Essa foi a décima quarta semana seguida de revisão para baixo. A previsão de inflação para o ano também foi reduzida.

As projeções fazem parte do boletim de mercado, conhecido como relatório "Focus", divulgado nesta segunda-feira (18) pelo BC. Os dados foram levantados na semana passada em pesquisa com mais de 100 instituições financeiras.

O PIB é a soma de todos os bens e serviços produzidos no país e serve para medir a evolução da economia.

PREVISÕES DO MERCADO PARA O PIB DE 2020

(EM %)

20/03/2020
● : 1,48

Fonte: BANCO CENTRAL

Na semana passada, o governo brasileiro estimou uma queda de 4,7% para o PIB de 2020, tendo como base a premissa de que as medidas de distanciamento social terminarão no fim de maio.

O Banco Mundial prevê uma queda de 5% no PIB brasileiro e o Fundo Monetário Internacional (FMI) estima um tombo de 5,3%.

A nova redução da expectativa para o nível de atividade foi feita em meio à pandemia do novo coronavírus, que tem derrubado a economia mundial e colocado o mundo no caminho de uma recessão.

Em 2019, segundo dados do Instituto Brasileiro de Geografia e Estatística (IBGE), o PIB cresceu 1,1%. Foi o desempenho mais fraco em três anos.

Para o próximo ano, a previsão do mercado financeiro para o crescimento do Produto Interno Bruto (PIB) continuou em 3,20%.

Inflação abaixo de 2%

Segundo o relatório divulgado pelo BC, os analistas do mercado financeiro reduziram,de 1,76% para 1,59%, a estimativa de inflação para 2020. Foi a décima redução seguida do indicador.

A expectativa de inflação do mercado para este ano segue abaixo da meta central, de 4%, e também do piso do sistema de metas, que é de 2,5% neste ano.

Pela regra vigente, o IPCA pode oscilar de 2,5% a 5,5% sem que a meta seja formalmente descumprida. Quando a meta não é cumprida, o BC tem de escrever uma carta pública explicando as razões.

A meta de inflação é fixada pelo Conselho Monetário Nacional (CMN). Para alcançá-la, o Banco Central eleva ou reduz a taxa básica de juros da economia (Selic).

Para 2021, o mercado financeiro reduziu de 3,25% para 3,20% sua previsão de inflação. No ano que vem, a meta central de inflação é de 3,75% e será oficialmente cumprida se o índice oscilar de 2,25% a 5,25%.

Taxa básica de juros

O mercado passou a prever corte maior da taxa básica de juros da economia brasileira neste ano. Atualmente, a taxa Selic está em 3% ao ano.

A previsão dos analistas para a taxa Selic, no fim de 2020, passou de 2,50% para 2,25% ao ano.

Para o fim de 2021, a expectativa do mercado permaneceu em 3,50% ao ano. Isso quer dizer que os analistas seguem estimando alta dos juros no ano que vem.

Outras estimativas

• Dólar: a projeção para a taxa de câmbio no fim de 2020 avançou de R$ 5 para R$ 5,28. Para o fechamento de 2021, subiu de R$ 4,83 por dólar para R$ 5 por dólar.
• Balança comercial: para o saldo da balança comercial (resultado do total de exportações menos as importações), a projeção em 2020 subiu de US$ 42,50 bilhões para US$ 43,35 bilhões de resultado positivo. Para o ano que vem, a estimativa dos especialistas do mercado foi elevada de US$ 42 bilhões para US$ 42,80 bilhões.
• Investimento estrangeiro: a previsão do relatório para a entrada de investimentos estrangeiros diretos no Brasil, em 2020, caiu de US$ 70,75 bilhões para US$ 65 bilhões. Para 2021, a estimativa dos analistas recuou de US$ 79 bilhões para US$ 76 bilhões.

BACEN. REUTERS. 18 DE MAIO DE 2020. Previsão de contração da economia em 2020 supera 5%; dólar é calculado a R$5,28

SÃO PAULO (Reuters) - A perspectiva de contração da economia brasileira neste ano ultrapassou 5% na pesquisa Focus realizada pelo Banco Central, com alta no cenário para o dólar e taxa básica de juros ainda mais baixa.

O levantamento semanal apontou que a expectativa agora é de que o Produto Interno Bruto (PIB) encolha 5,12% em 2020, de uma queda de 4,11% estimada antes. Para 2021, segue o cenário de um crescimento de 3,20%

Pela terceira semana seguida, os economistas consultados reduziram a perspectiva para a taxa de juros Selic, chegando agora a 2,25%, de 2,50%. Para o ano que vem, eles ainda veem os juros a 3,50%.

O Top-5, grupo dos que mais acertam as previsões, também passou a ver os juros básicos em 2,25% neste ano, de 2,50% na semana anterior. Para 2021, a conta caiu a 3,50%, de 3,88% antes na mediana das projeções.

Na semana passada, o BC destacou que vê queda forte do PIB na primeira metade deste ano, seguida de uma recuperação gradual a partir do terceiro trimestre, repetindo a mensagem em que indicou um novo ajuste de, no máximo, 0,75 ponto percentual à frente após baixar a Selic a 3%.

Com o dólar batendo recordes sucessivos ante o real, a pesquisa com uma centena de economistas mostrou ainda que a expectativa é de que a moeda norte-americana alcance 5,28 reais no fim de 2020 e 5 reais em 2021, de 5 e 4,83 reais previstos anteriormente.

Por Camila Moreira

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ECONOMIA BRASILEIRA / BRAZIL ECONOMICS

CORONAVÍRUS

FGV. 15/05/2020. Impactos do COVID-19. Os Direitos Humanos no cenário da pandemia

Os Direitos Humanos permeiam diversas discussões e debates em tempos de pandemia. Dentre eles está o direito de circulação e locomoção dos indivíduos e até o lockdown, em caso de grandes riscos de contaminação entre a população. Para o professor Michael Mohallem, da FGV Direito Rio, o Estado tem obrigação de proteger e tomar medidas que contenham a disseminação da pandemia. Segundo ele, nos próximos meses, poderá haver ações contra o Brasil, contra o Estado brasileiro, em tribunais como a Corte Interamericana de Direitos Humanos, buscando a responsabilização do Brasil pelas milhares de vidas perdidas. Os casos devem alegar que o Brasil pode não ter adotado medidas mais severas contra a pandemia de uma forma mais adequada, assegurando os direitos das pessoas.

VÍDEO: https://www.youtube.com/watch?v=PyjwJp09fn8

FGV. 18/05/2020. Impactos do COVID-19. Os desafios do ensino no ambiente virtual

Qual o papel da sala de aula virtual durante a pandemia? Além de continuar o projeto educacional, é garantir a saúde mental dos alunos. É necessário cuidar de suas angústias, medos e o enfrentamento desse período de isolamento em todas as suas dimensões. Mas, ao mesmo tempo em que se cuida da parte mental dos alunos, tem se trabalhado também uma das habilidades do futuro: a adaptabilidade e a resiliência frente às novas situações. Quem explica melhor o assunto é a professora Marina Feferbaum, da FGV Direito SP.

VÍDEO: https://www.youtube.com/watch?v=S1ic1GOpV6I&feature=youtu.be

REUTERS. 18 DE MAIO DE 2020. Esperança sobre vacina contra Covid-19 empurra dólar à maior queda do mês
Por José de Castro

SÃO PAULO (Reuters) - O dólar caiu 2,00% ante o real nesta segunda-feira, maior queda desde o fim de abril, em dia de maior apetite por risco nos mercados globais por esperanças sobre uma vacina contra o Covid-19 e após notícias de maior consenso entre autoridades das duas maiores economias da União Europeia (UE) para combater a crise do coronavírus.

O dólar à vista fechou a 5,7224 reais na venda, mínima em quase duas semanas. A desvalorização de 2,00% é a mais forte desde 29 de abril (-2,94%).

No piso da sessão, atingido às 14h25, a moeda cedeu a 5,6952 reais na venda, baixa de 2,15%.

Na B3, o dólar futuro recuava 2,17%, a 5,7340 reais, às 17h29.

As operações domésticas espelharam o movimento externo, onde o dólar teve queda ante divisas fortes e emergentes, enquanto as bolsas de valores no mundo inteiro saltaram, o índice Dow Jones da Bolsa de Nova York fechou em disparada de quase 4% e o petróleo teve um rali.

“Os mercados de risco tiveram um rali com notícias relacionadas a fundamentos de longo prazo —especificamente a Moderna relatando dados favoráveis sobre vacinas”, disse o conselheiro econômico principal da Allianz, Mohamed A. El-Erian.

A farmacêutica Moderna Inc informou que sua vacina experimental contra Covid-19 mostrou resultados promissores em um pequeno estudo de estágio inicial. A informação fortaleceu expectativas de reabertura mais ampla das economias, ainda afetadas por medidas de isolamento social determinadas meses atrás para conter a disseminação do vírus. Ajudando ainda mais na queda do dólar, no começo da tarde França e Alemanha concordaram em propor a criação de um fundo de recuperação de 500 bilhões de euros que ofereceria subsídios a países membros e regiões da UE mais afetados pela crise do coronavírus, o que o presidente francês, Emmanuel Macron, considerou um “grande passo adiante”.

Com a depreciação desta segunda, o dólar está 4,19% abaixo do recorde nominal intradia de 5,9725 reais alcançado na última quinta-feira e a 4,63% da marca psicológica de 6 reais que muitos no mercado ainda acreditam que a cotação tocará.

O Goldman Sachs faz parte desse grupo. O banco revisou na noite da sexta-feira passada suas projeções para o dólar e passou a ver a moeda em 6 reais dentro dos próximos três meses, ante estimativa anterior de 5,25 reais, citando uma atualização aos movimentos do mercado.

A instituição alterou ainda os prognósticos para seis e 12 meses —de 4,90 reais para 5,75 reais e de 4,70 reais para 5,25 reais, respectivamente.

“O real provavelmente vai operar mais fraco que seu valor justo por um período considerável de tempo”, disseram analistas do Golman no relatório.

SP. REUTERS. 18 DE MAIO DE 2020. SP encerra nas máximas em 10 semanas sob esperança de vacina e promessa de estímulo
Por Chuck Mikolajczak

NOVA YORK (Reuters) - As ações dos Estados Unidos avançaram nesta segunda-feira, e o S&P 500 encerrou na máxima em 10 semanas, com base em dados iniciais animadores acerca de uma potencial vacina contra o coronavírus e com a promessa de mais estímulos para incentivar uma economia impactada pela pandemia.

A farmacêutica Moderna subiu depois que a empresa disse que sua vacina experimental para o Covid-19 mostrou resultados promissores em um pequeno estudo em estágio inicial

Em dados não oficiais, o Dow Jones subiu 3,85%, para 24.597,37 pontos, o S&P 500 valorizou 3,15%, para 2.953,91 pontos, e o Nasdaq cresceu 2,44%, para 9.234,83 pontos.

PIB

FGV. IBRE. 18/05/20. Monitor do PIB aponta retração de 1,0% na atividade econômica no 1º trimestre

O Monitor do PIB-FGV aponta, na análise da série dessazonalizada, retração de 1,0%, na atividade econômica no 1º trimestre, na comparação com o 4º trimestre de 2019. Na análise mensal, a retração da atividade em março foi de -5,3%, em comparação a fevereiro. Na comparação interanual a economia cresceu 0,3% no 1º trimestre e caiu 0,9% em março.

“A retração da economia de 1,0% no 1º trimestre do ano expõe os enormes desafios que serão enfrentados no âmbito econômico no decorrer de 2020. As medidas de isolamento social só vigoraram por cerca de 1/6 desse trimestre (quinze dias de março) e já foram suficientes para que a economia apresentasse essa significativa queda. A queda de 5,3% registrada em março, em comparação a fevereiro é a maior observada na série histórica do Monitor do PIB iniciada em 2000 e, ao que tudo indica, esse recorde de queda, muito provavelmente atingirá patamares mais negativos nos próximos meses. É inegável que o ano de 2020 será marcado pela forte desaceleração econômica em decorrência da pandemia de COVID-19; passamos do lento ritmo de crescimento observado nos três últimos anos, à acelerada retração, que está apenas no início” afirma Claudio Considera, coordenador do Monitor do PIB-FGV.

Os Gráficos 1 e 2, no press release abaixo, mostram que a retração de 1,0% da atividade econômica no 1º trimestre deste ano interrompe o ritmo de crescimento observado no período desde o 1º trimestre de 2017 ao 4º trimestre de 2019 com taxa de crescimento média de 0,4% ao trimestre. Essa mudança na trajetória econômica é principalmente explicada pelo desempenho da economia em março deste ano, em que a atividade caiu 5,3%, sendo a maior queda registrada nesta comparação desde o início da série histórica iniciada em 2000. É digno de nota que os resultados de janeiro (+0,6%) e fevereiro (+0,2%) já eram bem decepcionantes. Na comparação interanual, os resultados também mostram forte desaceleração econômica, embora a taxa trimestral ainda tenha apresentado crescimento de 0,3% com crescimento das três grandes atividades (agropecuária, indústria e serviços), embora apenas a agropecuária tenha apresentado aceleração do ritmo de crescimento; na comparação dessazonalizada a agropecuária foi a única das três grandes atividades a crescer.

ANÁLISE DESAGREGADA DOS COMPONENTES DA DEMANDA

A análise gráfica desagregada dos componentes da demanda foi feita na série trimestral interanual por apresentar menor volatilidade do que as taxas mensais e aquelas ajustadas sazonalmente permitindo melhor compreensão da trajetória de seus componentes. No entanto, como as medidas de isolamento social em decorrência da pandemia de COVID-19 iniciaram-se em meados do mês de março, tendo significativos impactos na economia, nesta edição, após a usual apresentação da composição da taxa trimestral móvel interanual dos componentes da demanda, é apresentada, também, a desagregação da taxa mensal interanual das principais categorias destes componentes.

Consumo das famílias

O consumo das famílias cresceu 0,2% no 1º trimestre, em comparação ao mesmo trimestre do ano anterior. O consumo de produtos não duráveis (2,4%) e o de serviços (0,4%) foram ao únicos a crescerem, sendo no caso do consumo de não duráveis explicado, principalmente, pelos produtos alimentícios e os artigos farmacêuticos. A retração no consumo de semiduráveis (-8,5%) foi influenciada pela queda no consumo de vestuários e calçados em geral enquanto a queda no consumo de duráveis (-3,8%) foi devido, em grande parte, ao desempenho do consumo de equipamentos de informática e de veículos em geral.

A forte desaceleração da taxa do 1º trimestre do ano é explicada pela paralisação de diversas atividades econômicas em decorrência das medidas de isolamento social adotadas devido a pandemia de COVID-19. Com isso, o consumo retraiu 1,9% em março, na comparação interanual; a menor taxa desde outubro de 2016 (-3,9%). De acordo com o Gráfico 4 no press release, os componentes mais afetados do consumo foram os produtos semiduráveis e os não duráveis com quedas de -27,7% e -13,9%, respectivamente. Na análise da série ajustada sazonalmente, em comparação a fevereiro, esses componentes também foram os com as retrações mais elevadas: -30,2% e -22,4%, respectivamente, em março.

Formação bruta de capital fixo (FBCF)

A FBCF retraiu 0,2% no 1º trimestre do ano, em comparação ao 1º trimestre de 2019. A construção foi o único componente da FBCF a crescer neste trimestre. A retração de máquinas e equipamentos (-1,3%) foi influenciada, principalmente, pelas retrações dos segmentos de automóveis em geral e de equipamentos eletrônicos.

Mesmo que o componente da FBCF de construção tenha crescido no 1º trimestre do ano, na comparação interanual, apresentou retração em março, assim como os demais componentes da FBCF como reflexo dos efeitos do isolamento social. Na comparação da série ajustada sazonalmente, o componente que mais retraiu, em comparação a fevereiro foi máquinas e equipamentos com queda de 5,6%, em março.

Exportação

A exportação de bens e serviços apresentou queda de 3,8% no 1º trimestre, em comparação com o 1º trimestre de 2019 com expressiva retração da exportação de bens de capital (-42,7%). Apesar do desempenho negativo, a série apresenta tendência ascendente, após a retração de 8,9% registrada no trimestre móvel findo em janeiro deste ano.

O expressivo crescimento de 9,4% da exportação em março, na comparação interanual é reflexo do desempenho positivo na maioria de seus componentes, com destaque para o crescimento de 27,7% da exportação de produtos agropecuários. Em contrapartida, a maior retração dentre os componentes da exportação deveu-se, novamente, aos bens de capital com variação de -18,0% no mês.

Importação

A importação cresceu 5,3% no 1º trimestre do ano, comparativamente ao 1º trimestre de 2019. A importação dos bens intermediários e a dos bens de capital foram as principais responsáveis pelo desempenho positivo da importação, conforme apresentado no Gráfico 9.

O aumento da importação de produtos intermediários e de bens de capital, na comparação interanual, foro a principal influência para o crescimento positivo de 8,3% do total das importações em março. Em contrapartida, a importação de serviços (-13,2%) e de produtos da extrativa mineral (-11,8%) foram as únicas quedas registradas nos componentes da importação.

MONITOR DO PIB-FGV EM VALORES

Em termos monetários, o PIB em valores correntes foi de aproximadamente 1 trilhão, 858 bilhões, 205 milhões de Reais no 1º trimestre de 2020.

TAXA DE INVESTIMENTO

O Gráfico 11, no press release abaixo, destaca em duas linhas as médias das taxas de investimento: a de cima mostra a média das taxas de investimento trimestrais desde o 1º trimestre (18,0%); a de baixo, a média das taxas de investimento trimestrais desde o 1º trimestre de 2015 (15,6%). Observa-se que a taxa de investimento no 1º trimestre de 2020 foi de 14,2%, na série a valores correntes. Esta taxa está abaixo da taxa de investimento trimestral média tanto na série iniciada em 2000 quanto na iniciada em 2015. Essa é a menor taxa de investimento trimestral desde 2000, início da série histórica.

HIATO DO PRODUTO

O hiato do produto é a diferença entre o produto efetivo (PIB) e o produto potencial. O PIB considerado, foi o estimado pelo Monitor do PIB-FGV, enquanto a estimação do produto potencial da economia foi realizada por uma função de produção.1 Com isto, o hiato do produto, no 1º trimestre foi estimado em -4,7%, superior, portanto, ao do 4º trimestre de 2019, que havia sido de -4,2%.

ANÁLISE ESPECIAL DAS ATIVIDADES DE SAÚDE PÚBLICA E PRIVADA

A chegada da pandemia de COVID-19 no Brasil, com a adoção das recomendações de isolamento social, tem impactos diretos e indiretos na economia, afetando, praticamente, todas as atividades econômicas. Nesta seção especial que estará disponível no Monitor do PIB-FGV durante todo o ano de 2020, busca-se compreender como duas das principais atividades econômicas diretamente afetadas pela COVID-19 (saúde pública e privada) serão impactadas pelo avanço da pandemia no país. Em conjunto essas duas atividades representavam, de acordo com o IBGE, 4,3% do PIB em 2017, sendo a saúde pública responsável por 2,0% e a saúde privada pelos outros 2,3%.

A saúde pública compõe, com participação de 13% (em 2017, de acordo com as TRUs2), a atividade de Administração Pública na desagregação do PIB em 12 atividades, nas Contas Nacionais Trimestrais do IBGE. Em março, a atividade de saúde pública caiu 2,7%, na comparação interanual, tendo contribuído negativamente (-0,4 p.p.) para o crescimento de 0,7% registrado na atividade de Administração pública. Os Gráficos 13 e 14 mostram a evolução recente da atividade e a contribuição da saúde pública para a atividade de Administração Pública.

Dado a baixa representatividade em termos de ponderação, a atividade não tem impacto tão expressivo no total da Administração Pública. Contudo, em momentos de elevado crescimento, como aconteceu em maio de 2017 ou elevada queda, como foi o caso de maio de 2018, a atividade de saúde pública foi fundamental para o desempenho da Administração Pública.

A saúde privada compõe, na desagregação do PIB em 12 atividades, nas Contas Nacionais Trimestrais do IBGE, a atividade de Outros Serviços, com 15,1% (em 2017, de acordo com as TRUs) de representatividade nesta atividade. Em março, a atividade de saúde privada retraiu 0,6%, na comparação interanual, tendo contribuído negativamente (-0,04 p.p.) para a retração da atividade de Outros Serviços, embora tenha sido pouco, em comparação a queda de 4,0% do total de Outros Serviços. Os Gráficos 15 e 16, no press release abaixo, mostram a evolução recente da atividade e a contribuição para a atividade de Outros Serviços.

Essas quedas de produção da atividade de saúde, tanto pública como privada, estão, provavelmente, associadas ao adiamento de consultas e exames devido ao isolamento social dos 15 últimos dias do mês de março.

Apesar de ter maior peso na atividade de Outros Serviços do que a saúde pública na atividade de Administração Pública, a saúde privada tem influenciado menos o comportamento de Outros Serviços do que a saúde pública no comportamento da Administração Pública.

É importante destacar que as estimativas realizadas para a saúde pública e privada no Monitor do PIB-FGV não abrangem toda a composição da Conta Satélite de Saúde do Brasil, divulgada pelo IBGE. Além das atividades de saúde pública e privada, a Conta Satélite abrange outras atividades, tais como fabricação de produtos farmacêuticos, comércio de produtos farmacêuticos entre outras atividades relacionadas a saúde.

Outro ponto importante de destacar é que essas estimativas são calculadas com base nos dados disponibilizados no DataSUS, e essas informações, por serem constantemente atualizadas, podem sofrer grandes alterações entre as divulgações.

APÊNDICE – NOTA EXPLICATIVA

O Monitor do PIB-FGV estima mensalmente o PIB brasileiro em volume e em valor. O objetivo de sua criação foi prover a sociedade de um indicador mensal do PIB, tendo como base a mesma metodologia das Contas Nacionais do IBGE. Sua série inicia-se em 2000 e incorpora todas as informações disponíveis das Contas Nacionais (Tabelas de Recursos e Usos, até 2017, último ano de divulgação) bem como as informações das Contas Nacionais Trimestrais, até o último trimestre divulgado (quarto trimestre de 2019).

O indicador é ajustado as Contas Nacionais Trimestrais sempre que há mudanças metodológicas e a cada trimestre divulgado. Ou seja, nos trimestres calendários, as médias trimestrais dos índices de volume do Monitor do PIB-FGV serão iguais aos indicadores trimestrais, sem ajuste sazonal, das Contas Nacionais Trimestrais. Nos trimestres calendário, são utilizados os mesmos modelos do IBGE para calcular todas as séries desagregadas com ajuste sazonal, tanto pela ótica da oferta, como da demanda. Para o ajuste sazonal mensal é utilizado o modelo mensal do IBC-Br, do Banco Central; para os trimestres móveis utiliza-se uma média desses ajustes mensais.

Assim, as estimativas do Monitor do PIB-FGV antecedem os resultados das Contas Nacionais Trimestrais nos meses em que este é divulgado. E, nos meses em que não há divulgação, o Monitor representa uma excelente antecipação para as tendências do PIB e seus componentes.

O Monitor do PIB-FGV compõe-se de um relatório descrevendo os principais resultados com ilustrações gráficas e de uma tabela Excel com informações de volume, em valores correntes, e a preços de 1995 das 12 atividades econômicas que agrupadas formam os 3 setores de atividade (agropecuária, indústria e serviços). Apresenta, ainda, o Valor Adicionado a preços básicos, os impostos sobre os produtos e o PIB e também os componentes do PIB pela ótica da demanda. Outro ponto a ser destacado é que o Monitor torna disponíveis desagregações que não são divulgadas pelo IBGE, mas que são relevantes para um melhor entendimento da absorção doméstica e da demanda externa. As desagregações disponibilizadas pelo Monitor são:

• Consumo das Famílias: bens de consumo duráveis, semiduráveis, não duráveis e serviços. Adicionalmente eles são classificados em nacionais e importados;
• Formação Bruta de Capital Fixo: em máquinas e equipamentos, construção e outros. Para máquinas e equipamentos e outros, há a desagregação entre nacionais e importados;
• Exportações e Importações: em produtos agropecuários, produtos da extrativa mineral, produtos industrializados de consumo (duráveis, semiduráveis e não duráveis), produtos industrializados de uso intermediário, bens de capitais e serviços.

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/monitor-do-pib-aponta-retracao-de-1-0-na-atividade-economica-no-1-trimestre.htm

INFLAÇÃO

FGV. IBRE. 18/05/20. Índices Gerais de Preços. IGP-10. IGP-10 varia 0,07% em maio

O Índice Geral de Preços – 10 (IGP-10) variou 0,07% em maio. No mês anterior, a taxa havia sido de 1,13%. Com este resultado, o índice acumula alta de 2,96% no ano e de 6,07% em 12 meses. Em maio de 2019, o índice havia registrado elevação de 0,70% no mês e alta de 8,02% em 12 meses.

“As taxas de bens finais e bens intermediários no IPA registraram aprofundamento da deflação antecipando a continuidade do cenário benigno para o IPC, índice que registrou queda de 0,51% nesta apuração. As próximas edições do IGP repercutirão os aumentos do preço da gasolina que já totalizam alta de 22% nas refinarias em maio, contribuindo para a aceleração da inflação ao produtor e ao consumidor ”, afirma André Braz, Coordenador dos Índices de Preços.

O Índice de Preços ao Produtor Amplo (IPA) variou 0,25% em maio. No mês anterior, o índice havia registrado alta de 1,52%. Na análise por estágios de processamento, os preços dos Bens Finais variaram de -0,09% em abril para -0,20% em maio. A principal contribuição para este resultado partiu do subgrupo alimentos in natura, cuja taxa passou de 8,33% para 2,11%. O índice relativo a Bens Finais (ex), que exclui os subgrupos alimentos in natura e combustíveis para o consumo, subiu 0,78% em maio. No mês anterior, a taxa foi de 0,64%.

A taxa do grupo Bens Intermediários variou de -0,08% em abril para -1,14% em maio. A principal contribuição para este movimento partiu do subgrupo materiais e componentes para a manufatura, cuja taxa passou de 2,87% para 0,45%. O índice de Bens Intermediários (ex), obtido após a exclusão do subgrupo combustíveis e lubrificantes para a produção, subiu 0,80% em maio, ante 2,76% no mês anterior.

O índice do grupo Matérias-Primas Brutas passou de 4,94% em abril para 2,11% em maio. As principais contribuições para este recuo partiram dos seguintes itens: milho (em grão) (4,39% para -6,14%), minério de ferro (13,19% para 7,97%) e soja (em grão) (8,58% para 5,67%). Em sentido ascendente, os movimentos mais relevantes ocorreram nos itens bovinos (-2,61% para -0,21%), cana-de-açúcar (0,91% para 1,90%) e trigo (em grão) (6,83% para 10,78%).

O Índice de Preços ao Consumidor (IPC) caiu 0,51% em maio. Em abril, o índice havia registrado alta de 0,33%. Todas as classes de despesa componentes do índice registraram decréscimo em suas taxas de variação, com destaque para o grupo Transportes (-0,68% para -2,66%). Nesta classe de despesa, vale citar o comportamento do item gasolina, cuja taxa passou de -2,74% para -8,49%.

Também apresentaram decréscimo em suas taxas de variação os grupos Educação, Leitura e Recreação (0,32% para -1,82%), Alimentação (1,44% para 0,78%), Habitação (0,38% para -0,07%), Vestuário (-0,07% para -0,44%), Saúde e Cuidados Pessoais (0,47% para 0,32%), Despesas Diversas (0,24% para 0,21%) e Comunicação (0,06% para 0,03%). As contribuições para estes movimentos partiram dos seguintes itens: passagem aérea (5,74% para -14,37%), hortaliças e legumes (11,94% para 4,23%), tarifa de eletricidade residencial (0,55% para -0,43%), roupas (-0,12% para -0,42%), artigos de higiene e cuidado pessoal (0,86% para 0,47%), alimentos para animais domésticos (0,87% para 0,62%) e tarifa de telefone residencial (0,62% para 0,07%).

O Índice Nacional de Custo da Construção (INCC) variou 0,19% em maio, ante 0,29% em abril. Os três grupos componentes do INCC registraram as seguintes variações na passagem de abril para maio: Materiais e Equipamentos (0,56% para 0,52%), Serviços (0,10% para -0,01%) e Mão de Obra (0,14% para 0,00%).

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/igp-10-varia-0-07-em-maio.htm

FGV. IBRE. 18/05/20. Índices Gerais de Preços. IPC-S. Inflação pelo IPC-S recua na segunda semana de maio

O IPC-S de 15 de maio de 2020 caiu 0,53%, ficando 0,19 ponto percentual (p.p) abaixo da taxa registrada na última divulgação.

Nesta apuração, seis das oito classes de despesa componentes do índice registraram decréscimo em suas taxas de variação. A maior contribuição partiu do grupo Educação, Leitura e Recreação (-1,47% para -2,13%). Nesta classe de despesa, cabe mencionar o comportamento do item passagem aérea, cuja taxa passou de -11,88% para -17,62%.

Também registraram decréscimo em suas taxas de variação os grupos: Transportes (-2,26% para -2,58%), Alimentação (0,94% para 0,71%), Habitação (0,01% para -0,12%), Saúde e Cuidados Pessoais (0,30% para 0,28%) e Despesas Diversas (0,27% para 0,20%). Nestas classes de despesa, vale destacar o comportamento dos itens: gasolina (-7,89% para -8,76%), laticínios (2,27% para 1,33%), tarifa de eletricidade residencial (-0,23% para -0,62%), artigos de higiene e cuidado pessoal (0,41% para 0,31%) e tarifa postal (0,46% para 0,09%).

Em contrapartida, os grupos Vestuário (-0,27% para -0,18%) e Comunicação (0,04% para 0,06%) apresentaram avanço em suas taxas de variação. Nestas classes de despesa, vale citar os itens: roupas (-0,17% para -0,02%) e mensalidade para internet (0,25% para 0,48%).

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/inflacao-pelo-ipc-s-recua-na-segunda-semana-de-maio-1.htm

COMÉRCIO EXTERIOR BRASILEIRO

MEconomia. 18/05/2020. COMÉRCIO EXTERIOR. Segunda semana de maio registra balança comercial com superávit de US$ 1,29 bilhão. No período de cinco dias úteis, corrente de comércio chega a US$ 6,346 bilhões

A balança comercial brasileira registrou superávit de US$ 1,29 bilhão e corrente de comércio de US$ 6,346 bilhões, na segunda semana de maio de 2020 - com cinco dias úteis -, como resultado de exportações no valor de US$ 3,818 bilhões e importações de US$ 2,528 bilhões. Os dados foram divulgados nesta segunda-feira (18/5) pela Secretaria de Comércio Exterior (Secex) do Ministério da Economia.

No ano, as exportações totalizam US$ 77,035 bilhões e as importações, US$ 61,559 bilhões, com saldo positivo de US$ 15,477 bilhões e corrente de comércio de US$ 138,594 bilhões.

Análise do mês

Nas exportações, comparadas a média diária até a segunda semana de maio de 2020 (US$ 967,41 milhões) com a de maio de 2019 (US$ 936,02 milhões), houve crescimento de 3,4%, em razão do aumento nas vendas na Agropecuária (69,9%).  Por outro lado, houve queda de vendas na Indústria Extrativa (-32,1%) e de produtos da Indústria de Transformação (-7,6%).

O aumento nas exportações foi puxado, principalmente, pela elevação nas vendas dos seguintes produtos agropecuários: Soja (+ 86,7%); Café não torrado (+ 46,1%); Arroz com casca, paddy ou em bruto (+ 595,2%); Especiarias (+ 122,9%) e Madeira em bruto (+ 155,7%).

Nas importações, a média diária até a segunda semana de maio de 2020 (US$ 599,8 milhões) ficou -11,8% abaixo da média de maio do ano passado (US$ 680,37 milhões). Nesse comparativo, caíram os gastos com Agropecuária ( -4,0%); Indústria Extrativista (-53,5%) e produtos da Indústria de Transformação ( -8,5%).

A queda das importações foi puxada, principalmente, pela diminuição dos gastos com os seguintes produtos agropecuários: Milho não moído, exceto milho doce ( -93,1%); Pescado inteiro vivo, morto ou refrigerado ( -42,3%); Frutas e nozes não oleaginosas, frescas ou secas ( -31,7%); Látex, borracha natural, balata, guta-percha, guaiúle, chicle e gomas naturais ( -15,5%) e Tabaco em bruto ( -37,3%).

Já na Indústria Extrativista, a queda das importações ocorreu devido à diminuição dos gastos com a compra de Óleos brutos de petróleo ou de minerais betuminosos, crus ( -86,9%); Carvão, mesmo em pó, mas não aglomerado ( -27,4%); Minérios de cobre e seus concentrados ( -65,9%); Gás natural, liquefeito ou não ( -14,0%) e Fertilizantes brutos, exceto adubos, ( -37,6%).

Finalmente, na Indústria de Transformação, a queda das importações foi puxada pela diminuição do volume de compras com Óleos combustíveis de petróleo ou de minerais betuminosos, exceto óleos brutos, ( -63,2%); Veículos automóveis de passageiros ( -71,0%); Partes e acessórios dos veículos automotivos ( -46,9%); Veículos automóveis para transporte de mercadorias e usos especiais ( -79,5%) e Geradores elétricos giratórios e suas partes ( -43,4%).

RESULTADOS PRELIMINARES

Na 2ª semana de Maio de 2020, a balança comercial registrou superávit de US$ 1,29 bilhões e corrente de comércio de US$ 6,346 bilhões, resultado de exportações no valor de US$ 3,818 bilhões e importações de US$ 2,528 bilhões. No mês, as exportações somam US$ 9,674 bilhões e as importações, US$ 5,998 bilhões, com saldo positivo de US$ 3,676 bilhões e corrente de comércio de US$ 15,672 bilhões. No ano, as exportações totalizam US$ 77,035 bilhões e as importações, US$ 61,559 bilhões, com saldo positivo de US$ 15,477 bilhões e corrente de comércio de US$ 138,594 bilhões.

DOCUMENTO: http://www.mdic.gov.br/index.php/comercio-exterior/estatisticas-de-comercio-exterior/balanca-comercial-brasileira-semanal

MEconomia. REUTERS. 18 DE MAIO DE 2020. Exportação de açúcar do Brasil no mês já supera o total embarcado em maio de 2019

SÃO PAULO (Reuters) - A exportação de açúcares do Brasil somou 1,57 milhão de toneladas até a segunda semana deste mês (dez dias úteis), volume que já supera o total embarcado em maio de 2019, de acordo com dados publicados nesta segunda-feira pela Secretaria de Comércio Exterior (Secex).

O aumento nas exportações de açúcar ocorre em momento em que o câmbio tem impulsionado os negócios e a fabricação do adoçante no Brasil, o maior produtor global da commodity. Na temporada passada, o setor privilegiou o etanol em detrimento do açúcar.

O Brasil aumentará a produção de açúcar em 18,5% na safra 2020/21, para 35,3 milhões de toneladas, com uma maior destinação de cana para a produção do adoçante, segundo a Companhia Nacional de Abastecimento.

Além da questão cambial, produtores fixaram boa parte das exportações em meses anteriores, quando as cotações do açúcar estavam em maiores patamares.

Já as exportações de soja nas duas primeiras semanas de maio somaram 8,8 milhões de toneladas, aproximando-se das 10 milhões de toneladas vistas em maio de 2019 —o país tem embarcado volumes históricos da oleaginosa recentemente enquanto escoa uma safra recorde contando com forte demanda da China.

Os embarques de farelo de soja seguem a mesma perspectiva positiva do grão e alcançaram 1,14 milhão de toneladas nos dez primeiros dias úteis deste mês, ante 1,66 milhão de toneladas registradas no total de maio do ano passado.

A exportação de café verde do Brasil somou 1,97 milhão de sacas de 60 quilos até a segunda semana de maio. Segundo a Secex, a média diária de embarques aumentou 32% na variação anual. O avanço do dólar e a perspectiva de colheita de uma safra cheia no país impulsionam a comercialização do grão.

Na área de carnes, as vendas externas da proteína bovina alcançaram 78,7 mil toneladas no acumulado deste mês, puxadas pela ampla demanda chinesa. Em maio do ano passado, o total exportado foi de 124,3 mil toneladas.

MINÉRIO

As exportações de minério de ferro totalizaram 10 milhões de toneladas no acumulado de maio, de acordo com a Secex. A média diária dos embarques recuou 26% em relação ao mesmo mês de 2019.

Já os embarques de petróleo alcançaram 3,13 milhões de toneladas no período avaliado e a média diária de embarques aumentou 42% na variação anual, sinalizando que as exportações brasileiras continuam firmes, após um recorde registrado pela Petrobras em abril.

Por Roberto Samora e Nayara Figueiredo

CNI. 18/05/2020. CNI lança sistema que facilita acesso a benefícios tarifários a exportadores brasileiros. Em meio à crise causada pela covid-19, nova plataforma permite emissão do Certificado de Origem Digital (COD) de forma mais intuitiva e prática. Documento garante benefícios alfandegários para 23 países. O sistema permite que o empresário emita de forma simplificada o documento que garante ao produto brasileiro benefícios tarifários em 23 países

Em meio à crise desencadeada pela pandemia de Covid-19, a Confederação Nacional da Indústria (CNI) lança, nesta segunda-feira (18), uma nova plataforma para a emissão do Certificado de Origem Digital (COD) para exportadores brasileiros. Com identidade visual mais moderna, numa plataforma mais ágil e intuitiva, o sistema permite que o empresário emita de forma simplificada o documento que garante ao produto brasileiro benefícios tarifários em 23 países.

No primeiro quadrimestre deste ano, a emissão de COD pela CNI mais que dobrou na comparação com o mesmo período de 2019. O salto registrado foi de 116%. Para a confederação, facilitar esse processo é fundamental neste momento de crise, uma vez que o comércio exterior costuma ser o primeiro a instrumento a ajudar um país a sair da recessão.

“Fazer uso dos benefícios alfandegários garantidos nos acordos do Brasil com diversos países é fundamental para aumentar a competitividade dos produtos nacionais no mercado global. Daí a importância de o empresário ter a sua disposição um sistema moderno e ágil para emitir os Certificados de Origem Digital”, comentou o diretor de Desenvolvimento Industrial da CNI, Carlos Eduardo Abijaodi.

Além do benefício econômico, no contexto da pandemia de Sars-CoV-2, o COD reduz a circulação de papeis e pessoas que podem se tornar vetores da doença.

A emissão do COD é feita pela Rede Brasileira de Centros Internacionais de Negócios (Rede CIN), coordenada pela CNI. Presente nas federações de indústrias dos estados e do Distrito Federal, ela promove a internacionalização das empresas brasileiras por meio da oferta de um conjunto de serviços customizados a suas necessidades. Em casos específicos, a depender do acordo comercial entre os países, o COD pode garantir a isenção completa das tarifas alfandegárias.

DOCUMENTO: https://noticias.portaldaindustria.com.br/noticias/internacional/CNI-redeCIN-plataforma-emissao-certificado-origem-digital/

MEconomia. 18/05/2020. COVID-19. Governo Federal totaliza 509 produtos com Imposto de Importação zerado. Nova lista de redução tarifária inclui mais de 80 medicamentos considerados essenciais pelos municípios brasileiros no enfrentamento da pandemia

Mais 118 produtos utilizados no combate à pandemia da Covid-19 no Brasil tiveram o Imposto de Importação reduzido a zero por decisão da Câmara de Comércio Exterior (Camex), órgão interministerial presidido pelo Ministério da Economia. A medida, aprovada em reunião virtual do Comitê Executivo de Gestão da Camex (Gecex), inclui mais de 80 medicamentos utilizados no tratamento de pacientes hospitalizados e no combate direto ao coronavírus, atendendo a demanda do Conselho Nacional das Secretarias Municipais de Saúde e parâmetros da Organização Mundial da Saúde (OMS).

A Resolução Nº 44/2020 do Gecex, que foi publicada nesta segunda-feira (18/5), no Diário Oficial da União, abrange produtos classificados em 55 códigos da Nomenclatura Comum do Mercosul (NCM). Com a nova lista, chega a 509 o número de produtos que tiveram tarifa de importação reduzida a zero para o combate à pandemia, em um total de sete resoluções do colegiado (Nos. 17, 22, 28, 31, 32, 33, e 44) com esse objetivo.

A relação de itens com tarifa zerada contempla substâncias com um vasto campo de aplicação terapêutica, como a prednisona, indicada para o tratamento de doenças endócrinas, osteomusculares, alérgicas e oftálmicas.

Ações coordenadas

Nos últimos meses, o Governo Federal tem adotado uma série de medidas na área de comércio exterior para garantir o abastecimento de itens essenciais ao enfrentamento da Covid-19 e à redução dos efeitos negativos da pandemia.

Além de abaixar o Imposto de Importação, o Governo Federal tem reduzido a zero o IPI de centenas de produtos essenciais no combate à doença. Atua também na simplificação do despacho aduaneiro de importação, o que garante a manutenção de um fluxo rápido de abastecimento de itens essenciais e evita gargalos nos recintos aduaneiros, ao agilizar a entrega das cargas.

Outras medidas na área de comércio exterior incluem suspensão temporária de direitos antidumping sobre tubos de coleta de sangue e seringas descartáveis, eliminação de licenciamentos na importação de itens imprescindíveis no enfrentamento da pandemia e permissão para a importação de equipamentos usados, desde que indispensáveis em unidades de terapia intensiva, dispensando-os de exigências como a comprovação de inexistência de produção nacional.

ATP. REUTERS. 18 DE MAIO DE 2020. Superávit comercial marítimo do Brasil aumenta com forte exportação agrícola, diz ATP
Por Ana Mano

SÃO PAULO (Reuters) - O Brasil registrou um superávit comercial marítimo de 19,7 bilhões de dólares em meio a uma queda no valor das importações e fortes exportações agrícolas nos primeiros quatro meses do ano, disse um grupo de operadores portuários nesta segunda-feira.

O superávit é 14,56% maior que o verificado em igual período de 2019, apesar da crise causada pelo novo coronavírus, que afetou sistemas de transporte em todo o mundo, afirmou a Associação dos Terminais Portuários Privados (ATP), que representa empresas como Vale e Bunge.

O resultado reflete o fato de que os portos brasileiros têm operado regularmente durante a pandemia, disse a ATP em comunicado. O superávit ocorre em meio a uma queda de 30% nos preços dos fretes marítimos após a derrocada mundial no preço do petróleo, acrescentou o presidente da ATP, Murillo Barbosa, em uma nota separada.

O crescente superávit comercial marítimo do Brasil indica a força do setor agrícola do país, que exportou grandes volumes de produtos como a soja em março e abril, guiado pela demanda aquecida da China.

O Brasil embarcou cerca de 36 milhões de toneladas da oleaginosa até abril, de acordo com dados da agência marítima Cargonave. Isso corresponde a metade do volume de soja exportado pelo país em todo o ano de 2019, segundo os números da Cargonave.

A ATP disse que o cálculo da balança comercial marítima envolve apenas cargas movimentas pelo mar, principalmente commodities agrícolas e minerais.

Em termos de valor, as importações marítimas do Brasil recuaram quase 7% entre janeiro e abril em comparação com igual período do ano anterior, enquanto as exportações permaneceram virtualmente estáveis, em 56,75 bilhões de dólares, disse a ATP, com base em dados do governo.

As exportações marítimas do Brasil também seguiram relativamente estáveis no período em termos de volume, alcançando 195,6 milhões de toneladas, enquanto as importações avançaram 1,09% em volume, acrescentou a ATP, também utilizando dados oficiais.

O aumento nos volumes importados reflete mais compras de fertilizantes pelo Brasil. Por outro lado, houve uma queda nos preços do insumo, segundo análise da ATP.

ENERGIA

OPEP. REUTERS. 18 DE MAIO DE 2020. Preços do petróleo saltam com alívio de lockdown e resultado positivo para vacina
Por Scott DiSavino

NOVA YORK (Reuters) - Os preços do petróleo saltaram para o maior nível em dois meses nesta segunda-feira, diante de resultados positivos em testes iniciais para uma vacina contra o coronavírus, do otimismo quanto à retomada da atividade econômica e de sinais de que produtores estão cumprindo os cortes de produção prometidos.

Os contratos futuros do petróleo Brent para entrega em julho fecharam em alta de 2,31 dólares, ou 7,1%, a 34,81 dólares por barril, enquanto o petróleo nos Estados Unidos (WTI) avançou 2,39 dólares, ou 8,1%, para 31,82 dólares/barril.

Esses são os maiores níveis de fechamento tanto do Brent quanto do WTI desde 11 de março, poucos dias depois de os preços começarem a entrar em colapso após o fracasso de um acordo entre a Organização de Países Exportadores de Petróleo (Opep) e a Rússia para cortes de produção.

“O WTI levou mais de dois meses para basicamente limpar os destroços da reunião de março (da Opep+)”, disse Bob Yawger, diretor de futuros de energia da Mizuho em Nova York.

A Opep+ reduziu de forma acentuada suas exportações de petróleo na primeira quinzena de maio, de acordo com empresas que monitoram os embarques, sugerindo um forte início para o cumprimento de um novo acordo para cortes de oferta.

O rali do contrato junho do WTI, que expira na terça-feira, sugere que a queda histórica registrada no mês passado, quando a cotação se aproximou da marca de -40 dólares, não deve se repetir.

Nos EUA, a fase de reabertura econômica ganhou tração, com mais norte-americanos deixando os lockdowns e os mercados de ações avançando diante de resultados preliminares positivos nos testes da Moderna para uma vacina contra a Covid-19.

Reportagem adicional de Bozorgmehr Sharafedin em Londres e Florence Tan em Cingapura

OPEP. REUTERS. 18 DE MAIO DE 2020. Exportação de petróleo da Arábia Saudita cresce para 7,39 mi bpd em março

DUBAI (Reuters) - As exportações de petróleo da Arábia Saudita em março cresceram para 7,391 milhões de barris por dia (bpd), ante 7,278 milhões de bpd em fevereiro, mostraram dados oficiais nesta segunda-feira.

Os dados mensais sobre exportações são entregues pelo governo saudita e por outros membros da Organização dos Países Exportadores de Petróleo (Opep) à chamada Iniciativa Conjunta de Dados (Jodi, na sigla em inglês), que então publica os números em seu site.

Por Rania El Gamal

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LGCJ.: