The next chapter in the long-running legal drama involving a $19 billion damage award against Chevron (later reduced to a mere $9.5 billion) granted by an Ecuadorian court began today in New York. The mastermind of the case, plaintiff attorney Steven Donziger, is appealing a civil Racketeer and Corrupt Organizations Act (RICO) decision from the federal district court that prevents him from collecting the $9 billion because he used fraudulent and corrupt means to attain the award. RICO is the statute well known for bringing down mobsters and the use of the statute in civil cases such as these is rare, making this case even more notable than its Hollywood-worthy story line had already made it. If you missed any of the lead-up to this phase of the proceedings, this brief overview will fill you in on the backstory. (continue reading…)
The legal battle in the Gulf over the Deepwater Horizon accident has now shifted to the so-called penalty phase — five years after the disaster began. The legal action so far concerning the business settlement agreement has left us alarmed and dismayed to see the system allow people to reap payouts when they were not even remotely impacted by the accident. This terrible tragedy has impacted many lives — and certainly those at fault should be accountable for their actions. But the purpose of these legal proceedings should not be to vilify and bankrupt the companies. Manufacturers continue to watch this case closely as the results are important to all companies. (continue reading…)
The National Association for Business Economics (NABE) reported decelerated growth in its latest Business Conditions Survey. The net percentage of respondents saying that their profit margins had increased over the past three months dropped from 24 percent in January to 10 percent in April, reflecting both weaker demand and higher costs. On the positive side, sales continue to expand, just at a slightly eased pace. This is especially true in the goods-producing sectors, which had half of those taking the survey say that their sales were higher in the quarter. Yet, 56 percent of respondents noted that slower growth in China had negatively impacted their businesses, with two –thirds saying that a stronger U.S. dollar had made a negative “material impact” on them. (continue reading…)
Here is the summary for this week’s Monday Economic Report:
Manufacturing production increased 0.1 percent in March. This followed three months of weaker data, including declines in both January and February. There have been some significant headwinds hitting the manufacturing sector over the past few months, including a strong U.S. dollar, weakened economic markets abroad, lower crude oil prices, the West Coast ports slowdown and weather. These challenges have slowed activity in the sector since November. The latest Beige Book discussed these headwinds. The year-over-year pace of manufacturing production in March was 2.4 percent, down from 4.5 percent in November. Meanwhile, total industrial production, which includes mining and utilities, fell 0.6 percent in March, declining for the third time in the past four months. As such, the data suggest manufacturers have started the new year on a very soft note despite optimism for better demand and output moving forward. (continue reading…)
Today, the Department of the Interior took one big step towards a change in royalty fees paid by companies who want to explore the abundant energy resources located on federal land. The Bureau of Land Management (BLM) issued a notice seeking public comment on the need for new regulations and whether the government should be allowed to raise these fees.
Currently, fees assessed by the Department of the Interior are 12.5% of the gross value of production minus allowable deductions. For some leases, this can be tens of thousands to hundreds of thousands of dollars in fees. (continue reading…)
The Bureau of Labor Statistics said that the consumer price index increased for the second straight month in March, up 0.2 percent. This was largely due to higher gasoline prices, which increased 2.4 percent and 3.9 percent in February and March, respectively. To be fair, the price of regular gasoline remains 29.2 percent lower today than it was 12 months ago. Indeed, the average price of regular gasoline rose from $1.982 a gallon on January 26 to $2.348 per gallon on March 30, according to the Energy Information Administration. It has edged marginally lower since then, down to $2.317 per gallon on April 13, or earlier this week. (continue reading…)
Negotiations on the Trans-Pacific Partnership (TPP) between the United States and eleven Asia-Pacific nations have been ongoing for several years, but we are finally nearing a make-or-break point in the effort to promote stronger commercial engagement between our nations and set in place new rules on transparency and protections for American innovation and investment that will help raise standards much closer to what we in America have long taken for granted. (continue reading…)
The introduction of bipartisan legislation by Sens. Rob Portman (R-OH), Claire McCaskill (D-MO), Pat Toomey (R-PA) and Richard Burr (R-NC) to establish a new process for Congressional consideration of a Miscellaneous Tariff Bill (MTB) is a long overdue step that would pave the way for the elimination of taxes that harm manufacturers here in the United States.
During the past 30 years, Congress has supported manufacturing in America by suspending or reducing import taxes on necessary manufacturing inputs that are not available in the United States and must be imported from overseas. The MTB has historically been noncontroversial and has received strong bipartisan and bicameral support: In 2010, the U.S. Manufacturing Enhancement Act passed the House by a 378-43 vote and the Senate by unanimous consent. (continue reading…)