8 MAY

Taxing Times

A "decade in the red" is how The New York Times describes newly obtained tax information about President Trump's businesses over a ten-year period. The printouts from Trump’s official Internal Revenue Service (IRS) tax transcripts — with figures from his federal tax forms for the years 1985 to 1994 — represents the fullest and most detailed look to date at the president’s taxes, information he has kept from public view.

The numbers show that in 1985, Trump reported losses of US$46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totalling US$1.17 billion in losses for the decade.

The report claims Trump lost more money than nearly any other individual American taxpayer when it compared his results with detailed information the IRS compiles on an annual sampling of high-income earners. The losses meant Trump was able to avoid paying income taxes for eight of the 10 years. The information does not, however, cover the more recent tax years at the centre of an escalating battle between the Trump administration and Congress.

NEWS WRAP

The Buttigieg bust

• Democratic presidential hopeful Pete Buttigieg found himself the subject of an elaborate hoax last week, attempting to tie him to false sexual assault allegations. Senior Lecturer in American Politics David Smith joined the 2020Vision podcast to unpack the conspiracy and explain why "Mayor Pete" has had such a meteoric rise among the 2020 Democratic field. LISTEN HERE.
   

• A Chinese delegation is still expected to come to the United States this week for trade talks despite President Trump upending negotiations by threatening new tariffs. Trump said Sunday that he would increase tariffs on $200 billion in Chinese products to 25 per cent from 10 per cent. He added that he would “shortly” put duties on the $325 billion in Chinese goods currently not subject to tariffs. US stock markets initially plunged Monday following Trump’s threat. READ MORE HERE.
   
• The Trump administration has had its hands full with international affairs this week, from Latin America, North Korea and the US trade relationship with China. Associate Professor in American Politics Brendon O'Connor, who has co-written a new book titled Ideologies of American Foreign Policy, spoke to 2020Vision this week to compare the current and previous administrations' approaches to foreign policy and discuss what might change if Democrats take back the White House in 2020. LISTEN HERE.
   
• Does President Trump want to be impeached? Non-Resident Senior Fellow Bruce Wolpe argues in his latest column that just might be the case. "He knows impeachment is not popular. He knows it would look too political and he knows what happened to Republicans when President Clinton was impeached: Clinton’s popularity soared and the Republicans lost seats in Congress," Wolpe writes. READ MORE HERE.
   
• Golfer Tiger Woods has been awarded the highest civilian honour in the United States, the Presidential Medal of Freedom, by President Trump. Trump tweeted he was awarding Woods the medal because of his "incredible Success & Comeback in Sports (Golf) and, more importantly, LIFE". READ MORE HERE.

Each of us believes that the conduct of President Trump described in Special Counsel Robert Mueller’s report would, in the case of any other person not covered by the Office of Legal Counsel policy against indicting a sitting president, result in multiple felony charges for obstruction of justice.

Part of a letter signed by more than 500 former US Justice Department officials and federal prosecutors. 
(6 May 2019)

ANALYSIS

Digital rules, strategic considerations

Hilary McGeachy
Alliance 21 Fellow

The geo-economic implications of US-China competition in standards setting for countries such as Australia become apparent when set alongside another key development in international rule-making on digital technology: the change of focus in US trade policy.

Trade agreements are the leading fora for setting international rules on digital issues. The United States is credited with identifying and articulating the need for new concepts to enable digital trade, the best known of which relate to the movement of data across borders and prohibiting sweeping requirements to store data locally. These rules attempt to balance the need for governments to maintain public policy-based regulation about the handling of data — such as privacy — with the increasingly central role of data in global economic activity. It has proved to be a complex exercise, particularly as countries introduce or update their data protection laws in response to the prevalence of digital technology or perceive opportunities to mandate the establishment of a local data processing industry. Trade agreements do not incorporate standards on data, but they may cross-reference the use of international standards or include statements that reiterate their value in facilitating international trade. In other words, there is a complementarity between trade agreements and international standards.

With that complementarity in mind, Washington’s withdrawal from what is now the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) saw the United States step away from what had been a key objective: the establishment of a regional framework on digital trade. The withdrawal of the United States from the CPTPP has not taken digital trade rules off the US trade agenda — the strong outcomes on digital trade in the United States-Mexico-Canada Agreement (USMCA) are testament to their ongoing importance. But its departure from the CPTPP, alongside overarching concerns about the functioning of the World Trade Organization (WTO), and Washington’s focus on bilateral trade policy agendas — has taken the United States out of the driver’s seat on regional and global digital trade rules (notwithstanding its participation in e-commerce discussions occurring among a subset of WTO members).

The net effect of a narrower US focus in securing digital trade outcomes and China’s enthusiastic pursuit of international standards has created a sense of contest and uncertainty across international rule-setting on new technologies. For some, this is an extension of the ‘Balkanisation’ of the internet that has taken place in recent years as major economies have adopted different, and sometimes incompatible, regulatory settings on the treatment of data. There is no obvious replacement for the United States’ forward-leaning stance on global digital trade. It is not China, which does not share the United States’ desire to set wide-reaching commitments on data. And while Japan and the European Union — as well Australia and number of others — are active voices, there are differences in their approaches that make binding commitments challenging to secure.

In the absence of global leadership, policy developments in major emerging markets will take on increased importance in shaping international digital activity. India, which is projected to be the world’s most populous country and the third largest economy by 2035, is chief among these. India provides large volumes of ICT services to the United States, and serves the EU data processing market. It is currently grappling with precedent, protectionism and economic potential as it develops key digital policy settings, including a draft data protection bill that incorporates aspects of both the EU General Data Protection Framework (GDPR) and China’s Cyber Security law. India is also moving ahead with an ambitious 5G roll-out plan. It is making decisions that balance the need for technology that is priced to the Indian market with a desire to foster domestic manufacturing growth, while keeping an eye on security considerations. The factors influencing India’s domestic policy settings mirror some of the contested dialogue at the international level, but India’s rapidly expanding and data-rich economy is also large enough to project influence — including on the future global market in emerging technologies. This should not be overlooked in the focus on the United States and China.

Read Hilary McGeachy's full report, 'US-China technology competition: Impacting a rules-based order' here.

DIARY

The week ahead

• Wednesday, 8 May: President Trump is scheduled to attend a campaign rally in Panama City, Florida.
   

• Wednesday, 8 May: US Senate Appropriations Committee hearing to examine proposed budget estimates and justification for fiscal year 2020 for the Department of Defense.
   

• Wednesday, 8 May: Prime Minister Scott Morrison and Opposition Leader Bill Shorten will participate in a third leaders' debate at the National Press Club in Canberra.
   

• Thursday, 9 May: President Trump is scheduled to host the 2018 World Series Champions, the Boston Red Sox, at the White House.

EVENT

Film screening | The Manchurian Candidate (1962)

VIDEO

Senator Kamala Harris' full questioning of Attorney-General William Barr

THE WEEK IN TWEETS

#Trade

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