Publications

The Wall Street Journal reports that Canada is taking a tough stance on certain provisions in the second round of NAFTA negotiations, which may prove difficult for U.S. and Mexican negotiators. Canada is pushing provisions that will prevent countries from purposely cutting environmental regulatory policies to draw investment, and is advocating for international labor standards. WSJ

The Wall Street Journal reports that Treasury Secretary Mnuchin says that the Trump administration and top Congressional Republicans will release a more detailed tax plan in the coming weeks.  After Congress returns from its August recess, leaders are set to meet with the administration to hash out a more comprehensive framework for making tax cuts and simplifying the tax code. WSJ

Patricia Cohen of the New York Times writes that despite Republican efforts to incentivize American firms to repatriate profits held abroad, there is often little effect on real investment as a result of repatriation. Cohen argues that profits brought back to the U.S. from overseas are largely used to pay dividends to shareholders or buy back stock, not to reinvest. NYT

According to the Wall Street Journal, hotel developers are slowing down new construction as some markets are becoming overbuilt. Many developers rushed to build as the economy recovered from the deep recession, though declining revenues and escalating labor and materials costs have slowed growth in recent months. WSJ

Vipal Monga of the Wall Street Journal writes that Republican plans to scale back tax deductions on corporate interest could harm the U.S. bond market. If the Republican tax plan eliminates net interest payment deductions from taxable income, companies may shift borrowing to foreign countries where the tax deductions still exist, thereby weakening U.S. capital markets. WSJ

The Financial Times reports that Moody’s has upgraded its growth forecasts for the European Union while slashing its forecast for U.S. growth. Moody’s says that the U.S. economy has been weaker than expected and points to subdued infrastructure investment in 2017 as a factor hindering economic growth. FT

The Wall Street Journal reports that one of the key points of debate in the renegotiation of the North American Free Trade Agreement (“NAFTA”) is the stubbornly low Mexican minimum wage, which currently sits at $4.50 a day. American negotiators argue that Mexico’s low wages create unfair competition for U.S. and Canadian workers, and that Mexico should raise minimum wages and enact stronger labor standards. WSJ

According to the New York Times, Hurricane Harvey is expected to cause tens of billions of dollars in damage, though many expect the region to recover quickly and some even anticipate a boost to Houston’s economic activity from rebuilding efforts. Economists say that while the catastrophic storm will temporarily shut-in a significant portion of refining capacity, the effects of rebuilding homes and replacing vehicles could last into the fourth quarter of 2017 and beyond. NYT

The Wall Street Journal writes that Hurricane Harvey will test the resilience of the U.S. shale industry. The industry, which has lost an estimated 400,000 to 500,000 barrels per day of production due to the storm, faces the risk of some shut-down wells not returning to pre-storm production levels. WSJ