The US finalizes a stimulus of almost $900,000

After months of the frustrating pursuit of a deal, Democratic and Republican leaders found common ground on a nearly $900 billion stimulus. The Senate leader himself, Republican Mitch McConnell, acknowledged on Wednesday having made a breakthrough in his negotiations with the House of Representatives’ Speaker, Democrat Nancy Pelosi, and other front-row legislators.

Among them also stood out the Democratic leader, Chuck Schumer, and his Republican counterpart in the House of Representatives, Kevin McCarthy. The ongoing project began to gain momentum after setting aside the most controversial measures to dates, such as funding from state and local governments and shielding companies and other entities from their legal responsibility related to the pandemic.

In this way, the Republican senator from South Dakota, John Thune, announced that the agreement would provide direct payments of 600 to 700 dollars per taxpayer.

The project would also have approximately $300 billion in aid for small businesses, including more funds for non-repayable loans from the Payroll Protection Program (PPP). Funding will increase to accelerate the distribution of the coronavirus vaccine, tests and aid to hospitals.

Legislators have increased their search for consensus. On Wednesday, the Commerce Department stated that retail sales fell 1.1% in November. It is the most significant drop in 7 months. If an agreement is not reached, 12 million people are at risk of losing unemployment benefits the day after Christmas and millions more could face eviction.

It is expected that the stimulus, once endorsed by both Houses, must be approved on December 18.

Currency manipulation

Meanwhile, on Wednesday, the US Treasury Department officially labelled Switzerland and Vietnam as currency manipulators. It added three new names (Taiwan, Thailand and India) to a watch list of countries suspected of devaluing their currencies against the dollar. This list already includes China, Japan, Korea, Germany, Italy, Singapore and Malaysia.

In its semi-annual report, the Department led by Steven Mnuchin indicated that until June 2020, both Switzerland and Vietnam had intervened in the currency markets to avoid effective adjustments in the balance of payments. He also stressed that Vietnam had acted to obtain an unfair competitive advantage in international trade.

To be considered currency manipulators, countries must have at least a bilateral trade surplus of more than 20,000 million dollars with the United States, an intervention in foreign currency that exceeds 2% of GDP and a global current account surplus that exceeds the 2% of GDP.