The Washington Post - USA (2022-05-24)

TUESDAY, MAY 24 , 2022. THE WASHINGTON POST EZ RE A

ment rights merely by labeling it a

common carrier,” the court wrote.

The judges ruled that one pro-

vision of the Florida law, which

would have required tech compa-

nies to explain thoroughly why

they make content moderation

decisions, violates the First

Amendment. However the court

ruled that other disclosure re-

quirements, like alerting people

to changes to content moderation

rules, were constitutional.

The Computer and Communi-

cations Industry Association and

Netchoice, groups representing

Facebook, Google and other ma-

jor tech companies, celebrated

the ruling.

“This ruling means platforms

cannot be forced by the govern-

ment to disseminate vile, abusive

and extremist content under pen-

alty of law,” said CCIA President

Matt Schruers. “This is good news

for Internet users, the First

Amendment and free speech in a

democracy.”

Florida Attorney General Ash-

ley Moody (R) said on Twitter that

Florida was “pleased” the court

upheld portions of the Florida

law.

“We will continue to vigorously

defend Florida’s authority to de-

mand accountability from Big

Tech,” she tweeted.

policymakers have weighed pro-

posals to address perceived abus-

es by social media companies that

could collide with free speech

protections.

Out of power in Washington,

Republicans have turned to state

legislatures to pass bills to ad-

dress their accusations of social

media “censorship,” which were

inflamed by major companies’ de-

cisions to suspend former presi-

dent Donald Trump last year.

Florida and 11 other states last

week filed a brief supporting Tex-

as in the Supreme Court case,

arguing that states have a “strong

interest” in ensuring tech plat-

forms do not abuse their power.

Some lawmakers pushing for

laws governing online content

moderation and Supreme Court

Justice Clarence Thomas have ar-

gued that tech companies should

be regulated as “common carri-

ers,” businesses like phone com-

panies that are subject to govern-

ment regulation because of the

essential services they provide.

The 11th Circuit panel wrote a

blistering rejection of those argu-

ments, arguing states can’t force

such restrictions on tech plat-

forms.

“Neither law nor logic recog-

nizes government authority to

strip an entity of its First Amend-

Economy & Business

SUPPLIES

Managers quitting

supply chain jobs

Supply chain managers quit
their jobs last year at the highest
rate since at least 2016 due to a
mix of burnout and a desire for
fatter paychecks.
The high rate of turnover
aligns with the escalation of
supply chain woes in 2021. The
pandemic led to shuttered
manufacturing plants, backed-
up ports and rapidly increasing
transportation costs. Those
headaches have largely fallen to
supply chain managers to sort
out, making their jobs far
tougher — but also more
lucrative.
LinkedIn, a division of
Microsoft, calculates turnover by
analyzing member profiles to
determine the number of people
who left their jobs each month,

called the separation rate. The

figure is compared with the

average for 2016. For supply

chain managers, the average

separation rate increased by 28

percent from 2020 to 2021,

according to Bloomberg data.

— Bloomberg News

LAWSUITS

Activision threatened

staff, labor board says

U.S. labor board prosecutors

determined that Activision

Blizzard illegally threatened staff

and enforced a social media

policy that conflicts with

workers’ rights, a government

spokesperson said. The finding is

a setback as Activision tries to

fend off a unionization effort and

finalize a $68.7 billion sale to

Microsoft.

Unless Activision settles, the

Los Angeles-based regional

director of the National Labor

Relations Board will issue a

complaint, press secretary Kayla

Blado said Monday. Activision

did not immediately respond to a

request for comment.

The labor board is slated to

count ballots on Monday from an

election held among about 21

employees at Activision’s Raven

studio in Wisconsin.

The allegations in the labor

board case were brought to the

agency in September by the

Communications Workers of

America, the union organizing at

Raven.

— Bloomberg News

FOOD PRODUCTION

Avian flu triggers

higher egg prices

Production of eggs in the

United States p lummeted in

April as millions of hens were

killed during one of the worst-

ever outbreaks of avian

influenza, signaling that retail

egg prices will stay high after a

surge of about 40 percent this

year.

Table egg production declined

3.9 percent to 7.55 billion, while

the number of egg-laying birds

fell 5.3 percent from a year ago, a

U.S. Department of Agriculture

report showed Friday. Both are

the lowest levels since 2015, the

last time the poultry industry

was hit with a bird flu outbreak.

There are signs the outbreak is

easing, with the top egg state of

Iowa this week l ifting quarantine

restrictions on some farms.

— Bloomberg News

ALSO IN BUSINESS

JPMorgan Chase plans to hire

about 1,300 advisers over the

next three years as part of a

strategy to boost assets in its

wealth-management operation

to $1 trillion. The additions

would bring the total to 6,

from about 4,700, Jennifer

Piepszak, co-chief executive of

JPMorgan’s consumer and

community banking operation,

said Monday. The bank has

already added 1,100 advisers

since 2017, she said.

The U.S. Securities and

Exchange Commission on

Monday said BNY Mellon

Investment Adviser had paid

$1.5 million to resolve charges

that it misstated environmental,

social and governance

investment policies for some

mutual funds it managed. The

SEC said that from July 2018 to

September 2021, BNY Mellon

Investment Adviser represented

or implied in statements that all

investments in the funds had

undergone an ESG quality

review, even though that was not

always the case.

Americans are growing more

pessimistic about the likelihood

of changes to government

assistance in a wide range of

areas, including affordable

housing, subsidized preschool

education and student debt

forgiveness, according to a

survey by the Federal Reserve

Bank of New York. The April

public policy survey marks a

strong reversal from earlier in

the pandemic, when there was a

steady rise in respondents

anticipating an increase in

federal assistance and social

insurance programs, the New

York Fed said in the report

released Monday.

— From news services

COMING TODAY

10 a.m.: Census Bureau releases

new-home sales for April.

DIGEST

BY DAVID J. LYNCH

With the stroke of a White
House pen, President Biden could
lower the cost of thousands of
consumer and industrial products
and strike a blow in the anti-infla-
tion fight that he calls “his top
domestic priority.”
All he has to do is lift the tariffs
on imported Chinese products
that President Donald Trump im-
posed starting in 2018.
But with his advisers split, the
potential economic gains limited
and the danger of Republican at-
tacks for being “soft on China”
looming, Biden is unconvinced.
The imperative to do some-
thing about inflation is clear. Con-
sumer prices in April were 8.3 per-
cent higher than one year ago,
near a 40-year high, and voters
routinely cite rising prices as
among their top election-year irri-
tations.
With inflation threatening the
Democrats’ prospects in Novem-
ber’s congressional elections,
Biden said this month that he is
eyeing changes to the tariffs of up
to 25 percent, which apply to
about two-thirds of U.S. imports
from China, or roughly $335 bil-
lion annually.
While Trump’s first China tar-
iffs minimized the consumer im-
pact by targeting industrial prod-
ucts, the levies eventually expand-
ed to household items including
AirPods, refrigerators, televisions,
clothing and toys. Now, U.S. cor-
porations that have opposed the
tariffs from the start hope to capi-
talize on the inflation scare to win
their removal.
“It’s a no-brainer to reduce tar-
iff burdens on Americans at a time
of high inflation,” said Myron Bril-
liant, executive vice president of
the U.S. Chamber of Commerce.
“Hopefully they will do some-
thing, but will they go far enough?
That’s the billion-dollar question.”
Yet even eliminating all of the
tariffs on Chinese goods — which
no one anticipates — would have
only a modest impact on prices

before the midterm elections. A

study by economists Gary Huf-

bauer, Megan Hogan and Yilin

Wang of the Peterson Institute for

International Economics con-

cluded that lower import prices

resulting from the end of tariffs

would reduce the consumer price

index (CPI) inflation measure by

0.3 percentage points.

If such tariff cuts had been in

effect in April, the 8.3 percent

inflation rate would instead have

been 8 percent.

A separate Peterson study by

economist Kadee Russ of the Uni-

versity of California at Davis, who

served in the Obama White

House, found a similar effect,

which she described as “a small,

short-lived dent in overall infla-

tion.”

Hufbauer said there would be

an additional benefit as the prices

of domestic goods that compete

with Chinese imports also fell,

bringing the total reduction in

inflation to about one percentage

point. But he said that could take

nine to 15 months to materialize.

“In other words, the full benefit

would not be felt before the No-

vember election,” Hufbauer wrote

via email.

Even those estimates are opti-

mistic, because they assume the

elimination of all tariffs on more

than 10,000 Chinese goods and

Biden is likely to keep most of the

existing trade taxes in place.

At least two options are under

consideration, according to busi-

ness executives who spoke on the

condition of anonymity to discuss

confidential deliberations. The

president could make it easier for

importers to win waivers from the

import levies. Or he could drop

tariffs on some Chinese products

while launching a new investiga-

tion of Chinese trade practices

that could result in fresh tariffs on

high-tech products or those ben-

efiting from what the United

States says are improper govern-

ment subsidies.

For Biden, there are few easy

fixes for inflation. Many econo-

tween fiction and an interesting

academic exercise.”

Like any negotiator, Tai does

not want to surrender a bargain-

ing chip without getting some-

thing in return. But she also

doesn’t want to abandon tariffs to

address an immediate inflation

problem at the expense of the

country’s long-run economic cli-

mate. Tai sees the tariffs as encour-

aging investment in U.S. indus-

tries that would be less attractive

if they were unprotected against

unfair Chinese competition.

The debate over whether to

maintain the tariffs comes as most

analysts describe them as having

failed. Trump imposed the trade

fees in 2018 to shrink the mam-

moth U.S. trade deficit with China

and to compel the Chinese to

abandon several unfair trade

practices, including coercing

American companies into sharing

their technology secrets.

Instead, the deficit with China

is on track to set a record. Through

the first quarter, U.S. imports of

Chinese goods exceeded U.S. ex-

ports to China by $101 billion, up

from $79 billion during the same

period in 2017, before the tariffs

were introduced.

“They didn’t achieve their ob-

jectives,” said William Reinsch, a

trade specialist at the Center for

Strategic and International Stud-

ies. “China’s behavior isn’t any

different than it was then, and

they caused a lot of collateral dam-

age.”

But the political cost of cutting

tariffs could be steep. The AFL-

CIO and other Biden-backing la-

bor unions want them to contin-

ue. And Republicans would be

certain to pounce on tariff cuts as

a sign of Democratic weakness

toward Beijing.

Republican hostility toward

China has been evident on the

campaign trail in states such as

Missouri, Pennsylvania and Ohio.

In a March Gallup poll, 49 percent

of Americans identified China as

the country’s “greatest enemy,” up

from 45 percent last year.

White House split on lifting China tari≠s to curb inflation

Eliminating levies on imported Chinese goods would have only a modest pre-midterm impact, economists find, and GOP hawks would gain a line of attack

mists say his free-spending re-

sponse to the pandemic in 2021 is

partly to blame for today’s soaring

prices. But it’s too late to do any-

thing about that. Chronic supply

chain problems, and product

shortages, are a major inflation

driver that have defied Federal

Reserve forecasts of imminent im-

provement for the past year.

So debate within the adminis-

tration has turned to tariff-cut-

ting, which many economists sup-

port on principle, even if its im-

mediate benefits are likely to dis-

appoint.

Chinese products, for one

thing, have not been among the

main contributors to inflation.

Gasoline prices are up 44 per-

cent from a year ago, according to

the Bureau of Labor Statistics.

Used cars cost almost 23 percent

more. And food cooked at home is

up nearly 11 percent.

The cost of Chinese imports,

however, has increased by 4.6 per-

cent over the past 12 months, well

below the overall jump in the cost

of living.

That doesn’t mean getting rid

of the tariffs — which are support-

ed by labor unions and some do-

mestic manufacturers — will be

easy.

“Tariffs are sticky,” said Craig

Allen, president of the U.S.-China

Business Council. “They’re easy to

put up and really hard to bring

down.”

Whatever inflation benefit the

president might realize from tariff

cuts would not be costless. Before

he can act, Biden must referee a

split among his advisers that is

tied to broader questions about

the administration’s strategy for

addressing the competitive threat

from China.

At a meeting Wednesday of

Group of Seven finance ministers,

Treasury Secretary Janet L. Yellen

endorsed modifying the China

tariffs.

“It seems as though they im-

pose more harm on consumers

and businesses and aren’t very

strategic in the sense of address-

ing real issues we have with China,

whether it concerns supply chain

vulnerabilities, national security

issues or other unfair trade prac-

tices,” she told reporters in Bonn,

Germany. “... Some relief could

come from cutting some of them.”

Indeed, American importers

pay roughly $142 million each day

in the China tariffs, according to

Steve Lamar, president of the

American Apparel and Footwear

Association.

Yellen acknowledged “a variety

of opinions” within the adminis-

tration and suggested a decision

was not imminent.

Katherine Tai, the president’s

trade representative, is less enam-

ored of potential tariff reductions.

During a recent appearance at the

Milken Institute, she derided Huf-

bauer’s study as “something be-

QILAI SHEN/BLOOMBERG NEWS

Shipping containers are seen Jan. 11, 2021, at the Yangshan Deep-Water Port in Shanghai.

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provisions could stand, including

that people banned from the plat-

forms should be able to access

their data for 60 days and that the

companies should disclose their

rules clearly.

The panel found that tech com-

panies’ moderation decisions are

protected by the First Amend-

ment, which prohibits the govern-

ment from regulating free speech.

“Taking stock: We conclude

that social media platforms’ con-

tent-moderation activities — per-

mitting, removing, prioritizing,

and deprioritizing users and

posts — constitute ‘speech’ within

the meaning of the First Amend-

ment,” the court wrote.

The ruling comes after a sur-

prise decision earlier this month

by the 5th Circuit Court of Ap-

peals that allowed a Texas law

that bans companies from dis-

criminating against people based

on viewpoint to come into force.

Tech companies have filed an

BY CAT ZAKRZEWSKI

The U.S. Court of Appeals for
the 11th Circuit on Monday ruled
it is unconstitutional for Florida
to bar social media companies
from banning politicians, in a
major victory for tech companies
that are fighting another appeals
court ruling that allowed a similar
law in Texas to take effect.
In a detailed 67-page opinion, a
three-judge panel of the court —
all appointees of Republican pres-
idents, including one named by
Donald Trump — unanimously
rejected many of the legal argu-
ments that conservative states
have been using to justify laws
governing the moderation pol-
icies of major tech companies
after years of accusing the tech
companies of bias against their
viewpoints.
Though the court struck down
the most controversial aspects of
the law, it did rule that some

11th Circuit p anel blocks

major provisions of

Fla. social media law

nies’ content moderation deci-

sions should be protected by the

First Amendment.

“That’s really likely to prod the

Supreme Court to act,” said Corb-

in K. Barthold, an Internet policy

counsel at TechFreedom, a tech

policy think tank, during a public

discussion about the provision on

Twitter.

Any decision would have wide-

ranging effects in statehouses and

on the floor of Congress, where

emergency application with the

Supreme Court to block that law,

which awaits a response from

Justice Samuel A. Alito Jr.

After the 11th Circuit decision

was published, lawyers represent-

ing the tech companies submitted

it to the Supreme Court for con-

sideration in the Texas case.

The apparent split between the

circuit courts could add pressure

on the Supreme Court to weigh in

on whether social media compa-

MARTA LAVANDIER/ASSOCIATED PRESS

Florida Gov. Ron DeSantis (R). A court struck down key parts of a

law barring social media companies from banning politicians.