Donald Trump congratulated himself for obtaining $ 250 billion in commercial contracts during his visit to China. In reality, Beijing does not commit to anything new or nearly so.
Trade was at the heart of these meetings. The $ 250 billion deal is “a miracle”, says Chinese Trade Minister Gao Hucheng. To this, must be added the 20 contracts already signed Wednesday for a total of 9 billion dollars.
These contracts include the oil sector, internet, automotive, and aeronautics. Other beneficiaries of these agreements include Caterpillar, General Electric and Qualcomm, one of Apple’s suppliers.
Doing business with China was Donald Trump’s priority. He has come to China with a delegation of nearly 40 contractors. The American president wants to believe that these economic agreements will really change the situation. His entourage assures that this will create 12,000 jobs in the United States and reduce its trade deficit by $ 10 billion each year.
But this impressive figure of $ 253 billion is to be put into perspective. First, because these contracts had been under discussion for months, they were just waiting to be unveiled. Then, because some of them are not binding, which means that they may never be realized.
Moreover, on the bottom of the problem, the opening of the Chinese market to foreign companies, Xi Jinping did not announce anything concrete.
Valentin Dechambre IEJ 3E
The French president succeeded in founding a compromise with the EU member states on the reform of posted workers. The lenghty negociations took place on Monday 23rd October at the European Council.
A “posted worker” is an employee who’s been sent by his employer to work in another EU Member State on a temporary basis. While they’re working abroad, they’re still affiliated to the social system in force in their country of origin. But, the French victory goes with some concessions, as the date of entry into force of the text, as well as in the transport sector.
“Reforming the Posting of Workers Directive is essential to enable the European Union to return to the path of economic and social convergence from above, for the benefit of all Europeans,” said Nathalie Loiseau, the minister in charge of EU affairs.
In France, one of the main host countries for posted workers, this revision of the European rules has become a formula of Europe’s capacity to protect citizens. Whereas it was one of the promises made by E. Macron during his campaign, some people aren’t in agreement with this compromise.
“Social Europe is not a map of sectors! I do not accept the concession made on transport”, said Green MEP Karima Delli.
Marine PLANTEC, IEJ 1D
The Commission had announced the opening of a case (11th June), at the same time, another case judged tax regime of Apple in Ireland and Fiat Financial and Trade in Luxembourg. Since those cases, the Commission has opened a fourth enquiry about Amazon in Luxembourg.
Concerning Starbucks, the company which is concerned, is a subsidiary based in the Netherlands (Starbucks Manufacturing BV).
The Commission is asking about the way in which the calculation has been done about “transfer price”, that means the transactions’s prices be done between companies in the same group.
Those prices have the effect to increase or to reduce the income of a company. Multinational companies use it to create fiscal optimization, sharing benefits and costs between subsidiaries located in severals countries, according to the rate of taxation.
According to OCDE, transfers of prices have to be fixed as if different entities were not tied. Throughout forty pages published on Friday, The Commission formulates a lot of doubts about the respect of this measure by Starbucks and the Dutch tax authority.
According to Brussels, it’s an advantage for Starbucks (through this, the American company can reduce the base of calculation concerning the company’s taxes in the Netherlands), compared to other companies.
Last spring the American company had announced, their intention to move their European headquarters (based in Amsterdam) to London, U.K.
In U.K, methods concerning optimization of taxes are stronger than in the Netherlands.
Julien Coussy & Clément Briole, IEJ1B