It Is Time to #InvestigateATT

Trade War Update: More Tariffs Go Up

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

These days there’s enough happening on the Trump administration’s trade agenda that it warrants a weekly update. It’s Tuesday! And we’re gonna talk about trade!

It’s Trade Tuesday!

Last week President Trump, on the advice of his trade negotiator, further raised tariffs on Chinese imports after Chinese negotiators made sweeping revisions to agreements the U.S. side believed were settled.

Those Chinese negotiators still arrived in Washington for talks a few days later, apparently just to keep the talks going. The U.S. tariffs went up while they were still in town, and China has since retaliated with more tariffs against American imports of its own – and its state-run media outlets, which have until now been relatively quiet on the topic of the American trade dispute, are now getting involved. This editorial was featured in the Xinhua News Agency and the People’s Daily:

“The most important thing is that in the Sino-U.S. trade war, the American side fights because of greed and arrogance. If it does not brag and make up stories, the country’s morale will break. China is fighting back to protect its legitimate rights and interests.”

“… The trade war in the United States is the creation of one person and his administration who have swept along the entire population of the country. Whereas, the entire country and all the people of China are being threatened. For us, this is a real ‘people's war.’”

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Planting New Roots in the U.S.

Future of workers uncertain as third-biggest US coal company declares bankruptcy

E.A. Crunden

E.A. Crunden Reporter, ThinkProgress

The third-largest coal company in the United States has declared bankruptcy, leaving the future of its more than 1,000 workers uncertain. The announcement is also the latest indicator that the faltering coal industry is spinning further into decline despite the efforts of President Donald Trump to save it.

Wyoming-based Cloud Peak Energy filed for Chapter 11 reorganization on Friday, a move that has been expected since at least the spring. The company has pointed to a weak market as a leading reason for its struggles, in addition to sluggish success in expanding exports. Officials said the company’s mines will continue to operate throughout the bankruptcy process; Cloud Peak operates two mines in Wyoming and one in Montana.

“While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers,” Cloud Peak President and CEO Colin Marshall said in a statement.

The company’s workers lack union protections. But even coal miners backed by unions are at risk — a ruling earlier this year allowed a coal company to abandon union contracts. And broader threats to federal funding for miner benefits are jeopardizing pensions for tens of thousands of workers.

Cloud Peak’s financial troubles reflect the broader realities of coal, which is being displaced by cheaper energy sources, including natural gas and renewables. Since 2015, major coal companies Alpha Natural Resources, Peabody Energy, Arch Coal, Mission Coal, and Westmoreland Coal have all declared bankruptcy amid falling profits and increasing concerns over long-term viability.

While that trend has continued through several presidential administrations, more coal plants closed during Trump’s first two years in office than during the entire first term of the Obama administration.

In total, at least 50 U.S. coal plants have shuttered under Trump as of this month, according to a Sierra Club report released last week. The uptick reflects market realities but it also comes despite the White House’s best efforts to revive coal.

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Surprise! Kavanaugh joins liberal justices in 5-4 decision

Ian Millhiser

Ian Millhiser Senior Constitutional Policy Analyst, Think Progress

The Supreme Court held on Monday that antitrust plaintiffs may sue Apple for allegedly using its monopoly over iPhone app sales to jack up prices. The decision itself is a minor one, as it largely turns on who is allowed to sue the tech giant for its alleged antitrust violations, not whether Apple broke the law.

Nevertheless, Apple Inc. v. Pepper is significant for an unexpected reason. It is the first case where Trump judge Brett Kavanaugh crossed over to vote with his four liberal colleagues in a 5-4 decision.

The iPhone’s app store, as Kavanaugh notes in his opinion, “is the only place where iPhone owners may lawfully buy apps” for their phone. Apple permits developers to set the prices of these apps, but it also takes a 30% commission on all app sales, regardless of what price the developer sets.

The theory of the plaintiffs’ case is that, were iPhone apps sold in a competitive market with multiple sellers, Apple would have to lower its 30% commission in order to compete with those other sellers. Thus, Apple effectively uses its monopoly on app sales to drive up prices and jack up its own profits.

So it’s a fairly straightforward antitrust case, but there is one hitch. More than four decades ago, in Illinois Brick Co. v. Illinois, the Supreme Court held that only “direct purchasers” may bring antitrust suits against an alleged monopolist.

Illinois Brick involved an alleged price-fixing scheme by a brick company that sold those bricks to masonry contractors, who in turn sold pre-assembled structures to general contractors, who in turn sold construction services to the state of Illinois. Illinois sued the brick company, alleging that it paid higher construction costs because of the price fixing scheme. The Supreme Court held that Illinois could not sue the brick company because, in Kavanaugh’s words, “the State had not purchased concrete blocks directly from Illinois Brick.”

But, as Kavanaugh explains in his Apple opinion, this more recent case is not Illinois Brick. That is, Apple is not a case where a company sold a product to a contractor, who sold it to another contractor, who sold it to an antitrust plaintiff. Apple is a case where a tech company sold a product directly to consumers. Thus, under Illinois Brick, Apple may be sued by those consumers.

Indeed, Apple is such a straightforward case that the most surprising aspect of Monday’s decision is that it produced a dissent — much less a four person dissent. Had Apple prevailed, that decision could have had negative consequences for consumers. As Kavanaugh explains, “Apple’s theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement.”

Nevertheless, the most important question arising from Apple is what we should make of Kavanaugh’s apostasy. As I wrote last January, Kavanaugh is not Neil Gorsuch — the nihilist conservative that President Donald Trump placed on the Supreme Court after Senate Republicans held a seat on that court open for more than a year. While Gorsuch embraces “a will-to-power approach to judging” which demands that he seize as much power as he can, and as fast as he can, Kavanaugh and Chief Justice John Roberts “appear to prefer a slower, more incremental approach.”

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