The first round of negotiations between the US, Canada and Mexico begins this week on what President Donald Trump has called “the worst trade deal ever.” He blames the 2-decades-old North American Free Trade Agreement (NAFTA) for the loss of millions of manufacturing jobs in the US. Trump has vowed to scrap the agreement, unless the US gets a ‘fair deal.’ But trade experts warn that failure is not an option, especially when the stakes are so high. Mil Arcega reports.
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A decision by the United States to investigate China’s trade practices is a unilateralist “baring of fangs” that will hurt both sides, China’s state news agency Xinhua said Tuesday.

U.S. President Donald Trump on Monday authorized an inquiry into China’s alleged theft of intellectual property that administration officials said could have cost the United States as much as $600 billion.

U.S. Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and U.S. industry lobby groups say are harming U.S. businesses and jobs.

“While it is still too soon to say that the United States intends a showdown with China on trade, it is no exaggeration that the latest baring of fangs on Washington’s part against China, like all the other unilateral moves by Washington, will hurt not only China, but the United States itself in the long run,” Xinhua said.

Xinhua said while Chinese exporters could be the first to suffer from trade sanctions, the pain would soon spread to U.S. industries and households, adding that China was willing to resolve any disputes between the two sides through dialogue. 

The investigation is likely to cast a shadow over U.S. relations with China, its largest trading partner, just as Trump is asking Beijing to put more pressure on North Korea to give up its nuclear program.

Ken Jarrett, president of the American Chamber of Commerce in Shanghai, said in a statement Tuesday that trade and North Korea should not be linked, and said the investigation was a sign of growing U.S. discontent with Chinese trade practices.

“The president’s executive order reflects building frustration with Chinese trade and market entry policies, particularly those that pressure American companies to part with technologies and intellectual property in exchange for market access,” he said. “Chinese companies operating in the United States do not face this pressure.”

“We support actions that recognize the importance of U.S.-China commercial ties but which also encourage progress toward a more equitable trading relationship,” he said.
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China announced Monday it is banning imports of coal, iron ore, seafood and other products from North Korea in line with new United Nations sanctions approved earlier this month.

Chinese leaders had pledged to fully enforce the sanctions, which China and the other members of the U.N. Security Council unanimously adopted in response to North Korean ballistic missile tests.

The sanctions could block as much as $1 billion in North Korean exports.

China’s Commerce Ministry said the new trade ban will be fully in place by September 5.

U.S. President Donald Trump and other members of his administration have urged China to use its position as North Korea’s most important ally to pressure the country to give up its nuclear weapons program.

China has said it complies with U.N. resolutions, and on Monday the Chinese foreign ministry reiterated calls for restraint and the need to find a political resolution to the situation.
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A Chinese state newspaper warned Monday that President Donald Trump “could trigger a trade war” if he goes ahead with plans to launch an investigation into whether China is stealing U.S. technology.

In a commentary by a researcher at a Commerce Ministry think tank, the China Daily said Trump’s possible decision to launch an investigation, which an official says he will announce Monday, could “intensify tensions,” especially over intellectual property.

The official told reporters Saturday the president would order his trade office to look into whether to launch an investigation under Section 301 of the Trade Act of 1974 of possible Chinese theft of U.S. technology and intellectual property.

The Chinese government has yet to comment on the announcement.

A decision to use the Trade Act to rebalance trade with China “could trigger a trade war,” said the commentary under the name of researcher Mei Xinyu of the ministry’s International Trade and Economic Cooperation Institute.

“And the inquiry the U.S. administration has ordered into China’s trade policies, if carried out, could intensify tensions, especially on intellectual property rights.”

The commentary gave no indication of how Beijing might respond but Chinese law gives regulators broad discretion over what foreign companies can do in China.

If an investigation begins, Washington could seek remedies either through the World Trade Organization or outside of it.

Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily. It noted China has grown to become the biggest exporter and has the world’s largest foreign exchange reserves.

“The use of Section 301 by the U.S. will not have much impact on China’s progress toward stronger economic development and a better future,” said the newspaper.
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Beside rows of rusting shipping containers, a decorative wrought iron fence surrounds Taquería Mi Pueblo, one of the first family-run Mexican restaurants in southwest Detroit, Michigan.

Its owner, Jalisco-native José de Jesús López, surveys the trees he planted and his ornamental roosters.

“Everything was abandoned, a dump over there,” he said, walking down Dix Street. When he first arrived as an undocumented immigrant in 1981, López recalls a drug-addict-infested lot and overrun lawn.

“Mexicantown,” as the area is affectionately and marketably called today, is one of Metro Detroit’s most vibrant dining scenes for locals and tourists — and a model for other immigrant neighborhoods.

Landing destination

Like López, many foreigners stumbled upon Detroit, viewing the city as an economically viable “second landing destination” — friendly to immigrants, but with cheaper housing and commercial space than traditional immigrant hubs like New York and San Francisco.

Through the 2008 recession and recovery, native-born residents fled. But immigrants kept coming, starting new businesses, hiring local residents and making their neighborhoods a safer place for children.

A June study by Global Detroit and New American Economy reveals that the city’s immigrant population grew by 12.1 percent between 2010 and 2014, at a time when the city’s overall population declined by 4.2 percent. Though the four-year increase in immigrants amounts to merely 4,137 individuals, the study claims the effects have been widely felt.

Watch: Beleaguered Detroit Relying on Immigrants to Revitalize City

“Immigrants are leading in the city’s recovery,” said Steve Tobocman, director of Global Detroit, “particularly in its neighborhoods like Mexicantown, in Banglatown, where new residents are moving in and helping to stabilize working-class communities by fixing up homes, opening up businesses, and creating more consumers.”

Depopulation, Tobocman adds, remains Detroit’s biggest challenge moving forward, while immigrants are “our best hope to rebuilding,” especially on the neighborhood level.

No ‘magic bullet’

According to Americas Society/Council of the Americas (AS/COA) and Fiscal Policy Institute, more than one-third of Detroit-area “Main Street” business owners were immigrants as of 2013.

But data measuring their economic contributions can be misleading, says Stanley Renshon, CUNY professor of political science.

“Any economic activity is grabbed by economists as positive,” Renshon told VOA. “Yes, you increase the overall financial numbers of the country, but the people who benefit most from that are the immigrants themselves, and that’s fine. We want them to prosper, but don’t tell me that what you’re doing is saving the country or the city or the town.”

Detroit’s ongoing struggles, including a long history of political corruption and one of the highest murder rates in the country, can’t be solved by new immigrants, he added.

Hurting American workers?

Last week, White House senior adviser for policy Stephen Miller announced the administration’s support for an immigration bill that would cut legal immigration by half.

Their premise that less-skilled immigrants take away work opportunities from native-born Americans is an “America first” message intended to resonate with President Donald Trump’s base in depressed rust belt towns like Detroit.

“How is it fair, or right or proper that if, say, you open up a new business in Detroit, that the unemployed workers of Detroit are going to have to compete against an endless flow of unskilled workers for the exact same jobs?” asked Miller during a White House press briefing Aug. 2.

Global Detroit’s Tobocman says Trump’s proposed policies won’t produce any new jobs and may cost the Michigan economy hundreds of millions of dollars.

“[Trump’s actions would choke] off a critical supply of talent, of investment, and of global connections that are critical to the future of Michigan, to us being a mobility capital for the world,” Tobocman said.

Detroit suffered an unemployment rate of 28.4 percent during the great recession, but had rebounded to 7.8 percent in June.

Banglatown

Following the likes of Mexicantown, Metro Detroit’s second-most populous foreign-born community, from Bangladesh, hopes to follow suit and create a cultural tourist destination of its own: Banglatown.

“You will hardly find any vacant spot right now,” said Ehsan Taqbeem, founder of Bangladeshi-American Public Affairs Committee (BAPAC), driving his Jeep Grand Cherokee past South Asian restaurants, fabric and fish shops in Detroit and neighboring Hamtramck.

“The value of the homes have gone up since [the recession], businesses have been thriving, and traffic has gone up tremendously,” he said.

Unlike Mexicantown, Banglatown is a concept still in its early stages. There are no traditional rickshaws carrying tourists down Conant Avenue — at least not yet.

But Taqbeem, who runs an automotive retrofitting service, along with other local business owners, sees the benefit of being a branded community in a global-minded city.

Mahabub Chowdhury, part-owner of Aladdin Sweets & Cafe, found success in nourishing his neighborhood and patrons, a majority of whom are non-Bangladeshis. One regular customer, whom he describes as a nice “American white person,” calls him directly.

“Sometimes his car is broken, and he calls us, ‘Can you pick me up from my house?’ And we go to his house and bring him to our restaurant,” Chowdhury said.

‘​Believing in Detroit’

In Mexicantown, Lopez’s eyes well as he recalls his early days on a Jalisco ranch, before finding eventual success in Detroit.

“My main dream was to be able to buy a truck for my dad,” Lopez said. “I worked all my life, and when I had the money, I didn’t have my father anymore.”

Now an American citizen, López, a father of four, says he accomplished the American Dream by creating something that will outlive him and provide for the community long after he has passed.

What Detroit still needs, he said, is more people to call it home. 

“That’s happening little by little,” Lopez said. “The greatest changes won’t happen overnight.”

“They happen slowly, and that’s part of believing in oneself, believing in Detroit,” he said.

 
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Detroit, Michigan, knows hardship and recovery. One of the hardest hit areas in the country during the Great Recession, the Midwestern Rust Belt city has since found an ingredient to its economic revitalization through empowerment of its immigrant communities. But not everyone is convinced that the solution is viable or helps anyone beyond the immigrants themselves. Ramon Taylor has more.
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Around the world, support is growing for electric cars. Automakers are delivering more electric models with longer range and lower prices, such as the Chevrolet Bolt and the Tesla Model 3. China has set aggressive targets for electric vehicle sales to curb pollution; some European countries aim to be all-electric by 2040 or sooner.

Those lofty ambitions face numerous challenges, including one practical consideration for consumers: If they buy electric cars, where will they charge them?

The distribution of public charging stations is wildly uneven around the globe. Places with lots of support from governments or utilities, like China, the Netherlands and California, have thousands of public charging outlets. Buyers of Tesla’s luxury models have access to a company-funded Supercharger network. 

Charging stations scarce

But in many places, public charging remains scarce. That’s a problem for people who need to drive further than the 200 miles or so that most electric cars can travel. It’s also a barrier for the millions of people who don’t have a garage to plug in their cars overnight.

“Do we have what we need? The answer at the moment is, ‘No,’” said Graham Evans, an analyst with IHS Markit.

Take Norway, which has publicly funded charging and generous incentives for electric car buyers. Architect Nils Henningstad drives past 20 to 30 charging stations each day on his 22-mile (35-kilometer) commute to Oslo. He works for the city and can charge his Nissan Leaf at work; his fiancee charges her Tesla SUV at home or at one of the world’s largest Tesla Supercharger stations, 20 miles away.

It’s a very different landscape in New Berlin, Wisconsin, where Jeff Solie relies on the charging system he rigged up in his garage to charge two Tesla sedans and a Volt. Solie and his wife don’t have chargers at their offices, and the nearest Tesla Superchargers are 45 miles (72 kilometers) away.

“If I can’t charge at home, there’s no way for me to have electric cars as my primary source of transportation,” said Solie, who works for the media company E.W. Scripps.

Small percentage of electric vehicles

The uneven distribution of chargers worries many potential electric vehicle owners. It’s one reason electric vehicles make up less than 1 percent of cars on the road.

“Humans worst-case their purchases of automobiles. You have to prove to the consumer that they can drive across the country, even though they probably won’t,” said Pasquale Romano, the CEO of ChargePoint, one of the largest charging station providers in North America and Europe.

Romano says there’s no exact ratio of the number of chargers needed per car. But he says workplaces should have one charger for every 2.5 electric cars and retail stores need one for every 20 electric cars. Highways need one every 50 to 75 miles, he says. That suggests a lot of gaps still need to be filled.

Filling the charging gap

Automakers and governments are pushing to fill them. The number of publicly available, global charging spots grew 72 percent to more than 322,000 last year, the International Energy Agency said. Navigant Research expects that to grow to more than 2.2 million by 2026; more than one-third of those will be in China.

Tesla Inc., which figured out years ago that people wouldn’t buy its cars without roadside charging, is doubling its global network of Supercharger stations to 10,000 this year. BMW, Daimler, Volkswagen and Ford are building 400 fast-charging stations in Europe. Volkswagen is building hundreds of stations across the U.S. as part of its settlement for selling polluting diesel engines. Even oil-rich Dubai, which just got its first Tesla showroom, has more than 50 locations to charge electric cars.

But there are pitfalls. There are different types of charging stations, and no one knows the exact mix drivers will eventually need. A grocery store might spend $5,000 for an AC charge point, which provides a car with 5 to 15 miles of range in 30 minutes. But once most cars get 200 or 300 miles per charge, slow chargers are less necessary. Electric cars with longer range need fast-charging DC chargers along highways, but DC chargers cost $35,000 or more.

That uncertainty makes it difficult to make money setting up chargers, says Lisa Jerram, an associate director with Navigant Research. For at least the next three to five years, she says, deep-pocketed automakers, governments and utilities will be primarily responsible for building charging infrastructure.

There’s also the question of who will meet the needs of apartment dwellers. San Francisco, Shanghai and Vancouver, Canada, are now requiring new homes and apartment buildings to be wired for EV charging.

But without government support, plans for charging stations can falter. In Michigan, a utility’s $15 million plan to install 800 public charging stations was scrapped in April after state officials and ChargePoint objected.

Solie, the electric car owner in Wisconsin, likes Europe’s approach: Governments should set bold targets for electric car sales and let the private sector meet the need.

“If the U.S. were to send up a flare that policy was going to change … investments would become very attractive,” he said. 
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U.S. President Donald Trump will call Monday for his chief trade adviser to investigate China’s intellectual property practices, the website Politico reported, citing an unnamed administration official.

Trump had been expected to order a so-called Section 301 investigation under the 1974 Trade Act earlier this month, but action had been postponed as the White House pressed for China’s cooperation in reining in North Korea’s nuclear program.

Politico said it was not clear how much detail Trump would provide in his announcement, but that administration officials expected U.S. Trade Representative Robert Lighthizer to open a Section 301 probe.

Officials at the White House and U.S. Trade Representative’s office were not immediately available for comment.

Trump has suggested he would go easier on China if it were more forceful in getting North Korea to rein in its nuclear weapons program.

While China joined in a unanimous U.N. Security Council decision to tighten economic sanctions on Pyongyang over its long-range missile tests, it is not clear whether Trump thinks Beijing is doing enough.

“We lose hundreds of billions of dollars a year on trade with China. They know how I feel,” he told reporters Thursday. “If China helps us, I feel a lot different toward trade.”

Trump will make a day trip to Washington, D.C., on Monday, briefly interrupting his 17-day August working vacation, a White House official said Friday.

Politico said the investigation would not mean immediate sanctions, but would ultimately lead to steep tariffs on Chinese goods.

 
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U.S. stock market indexes posted gains in Friday’s trading, a change in direction after several down days amid tensions between President Donald Trump and North Korea.

In New York, the Standard & Poor’s 500 index and the Dow Jones industrial average each advanced about one-tenth of a percentage point, while the Nasdaq composite index rose almost eight-tenths of a percentage point. Earlier, stocks in Paris and London were off 1 percent, while Hong Kong stocks fell 2 percent and Korean shares slid nearly as much.

Global stock prices had been falling for several days, losing nearly $1 trillion in value during angry exchanges between the U.S. and North Korea, which continued Friday.

Investors have reason for concern, according to Rajiv Biswas, Asia-Pacific chief economist of IHS Markit. He said the economic consequences of even a conventional conflict would most likely be “horrific” and “devastate” the South Korean economy, hurting that nation’s trading partners, particularly Japan.  

In an email exchange with VOA, Biswas called the possibility that North Korea could actually use nuclear weapons a “nightmare but still low probability scenario” and noted there had been prior incidents of rising tensions on the peninsula.  

A similar view came from Brad McMillan, chief investment officer for Commonwealth Financial Network, who wrote, “All parties, including the North Koreans, have substantial incentives to once again cut a deal rather than fight. Based on past crises, there will be a great deal of theater, only to end in some kind of deal.”

He wrote that military action was “unlikely” in the short term, suggesting “worry is overdone at the moment.” But he wrote that military action “is actually very possible in the medium term.”  

McMillan wrote that such a conflict could have “dramatic and substantial” impact on many economies because South Korea “is a major trading and manufacturing hub.” That means “disruption there would break supply chains around the world” and might last “for months or years.”  

He wrote that rising uncertainty would prompt money to move out of stocks and into less risky investments, which would drive down stock market prices: “Clearly, there are real reasons to try to avoid a war.”
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Rising tensions between the United States and North Korea brought a wave of falling stock prices recently as worried investors moved money out of equities and into the perceived safety of gold, Swiss currency and similar products. At one point, this change of investment strategy cut $1 trillion from the value of global stock markets.

For some perspective on these concerns, VOA’s Jim Randle spoke with IHS Markit’s Rajiv Biswas in Singapore. IHS Markit employs thousands of financial, data, and other experts who track economic issues worldwide. Biswas is the company’s chief economist for APEC. His comments here were edited for brevity and clarity.

Randle: Why do rising nuclear tensions prompt falling stock prices?

Biswas: In the nightmare, but still low-probability scenario in which North Korea were to succeed in using nuclear weapons against South Korea, the devastation of the Korean peninsula would be catastrophic. Global financial markets would also suffer a tremendous shock in the short term, with massive flight to safe haven assets such as gold, USD and CHF. The humanitarian crisis and economic reconstruction of the Korean peninsula after such a nuclear conflict would require large-scale international cooperation led by China, the U.S. and EU, and would likely take over a decade to rebuild the economy.

Even a conventional war would result in considerable destruction to the South Korean economy… and likely result in tremendous casualties in both South and North Korea. The economic consequences … would likely be horrific, and … also result in a temporary shock to global financial markets. The greatest vulnerability would be for the South Korean financial markets and Korean won. Other regional East Asian financial markets would also be vulnerable, particularly Japanese financial markets, with risks of disruption to Northeast Asian regional trade and investment flows and manufacturing supply chains.

The South Korean economy accounts for around 1.9% of world GDP, and a severe drop in South Korean GDP … would have negative effects on key trade partners. Japan is also concerned that North Korea could launch missiles at Japanese targets, particularly… U.S. military bases in Japan. The reconstruction and rebuilding of South Korea’s economy after a major conflict would likely take many years, with significant international support needed to help South Korea with the reconstruction task.

Randle: Why do worried investors seek gold, oil, and Swiss currency?

Biswas: If international investors fear that the probability of a military conflict on the Korean peninsula is rising, they will likely reduce their exposure to global growth assets, such as Asian equities and Asian currencies…  as they fear that the world economy and Asian countries near North Korea could suffer economic dislocation and trade disruption in the event of a conflict.

In times of geopolitical crisis, the traditional safe haven assets for global investors are gold, U.S. dollars, U.S. Treasuries and Swiss francs, as these are very stable, internationally traded liquid assets. These safe haven assets tend to rise in value when investors fear that geopolitical crises could weaken global growth prospects as investors switch their investments out of global equities and emerging market currencies into the safe haven assets.

Randle: Are U.S. stocks ripe for a fall? 

Biswas: While geopolitical risks due to escalating tensions on the Korean peninsula have been reflected in some modest declines in some international equity markets in recent days, there has been many previous episodes of rising military tensions on the Korean peninsula. Global investors have previously shown considerable resilience to earlier bouts of geopolitical tensions on the Korean peninsula, such as North Korea’s sinking of the South Korean navy warship Cheonan and the North Korean artillery shelling of South Korea’s Yeonpyeong Island in 2010

During 2017 to date, the U.S. equity market has been driven by a wide range of positive factors, including sustained U.S. economic growth momentum, planned corporate tax cuts by the Trump administration, moderate inflation pressures and positive U.S. corporate earnings growth prospects, so geopolitical risks from North Korea are not the only factor impacting on the U.S. equity market outlook.

Randle: Even if actual hostilities don’t break out, could these nuke worries be enough, in theory, to spark a sharp drop in financial markets? 

Biswas: “The canary in the coal mine that will signal rising international financial markets’ risk aversion [worry] is likely to be South Korean asset classes. The South Korean stock market and the Korean won are likely to be most vulnerable to declines in response to rising international investor concerns that military tensions are escalating further. One measure of financial risk are the South Korean sovereign credit default swap (CDS) spreads, with IHS Markit data indicating that South Korean CDS spreads widened in July following North Korea’s ICBM tests, and spiked up further this week following North Korea’s threat to attack Guam. So far, these widening spreads only signal a moderate increase in financial markets perceptions of geopolitical risks on the Korean peninsula, but a sharp further widening of the South Korean sovereign CDS spread would be a clear signal of rising investor anxiety.”
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The U.S. Equal Employment Opportunity Commission has determined there is reasonable cause that the civil rights of Somali-American Muslims were violated when agri-business giant Cargill refused to allow them to pray at a meatpacking plant it owns in the western state of Colorado.

The finding was reached almost two years after about 150 workers walked off the job after supervisors informed them they could no longer pray during lunch breaks. Cargill, the largest private company in the U.S., then fired the workers for violating attendance protocol at the meatpacking plant in the city of Fort Morgan.

Cargill has maintained the issue was misconstrued by supervisors and employees.

“We do what is required by law and go further to provide additional religious accommodation in our U.S. locations,” Cargill said in a statement Wednesday.

The EEOC, which enforces anti-discrimination federal laws, also determined last week that the local Teamsters union did not provide fair representation to the Muslim workers.

“The findings of the EEOC against Teamsters and Cargill reaffirms our strongly held belief that the Somali workers that were terminated were done so in violation of their federally protected rights,” said Qusair Mohamedbhai, a lawyer with a Denver-based law firm that is representing the employees.

The EEOC’s decisions were also applauded by the Council on American-Islamic Relations.
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U.S. lawmakers will have three weeks to raise America’s $20 trillion borrowing limit and avert a potential debt default when Congress gets back to work next month — the first such deadline to occur during the Trump administration.

If recent history is a guide, raising the debt ceiling will be anything but drama-free, with lawmakers demanding concessions in return for votes to prevent an outcome that could throttle global finances: the U.S. government unable to pay its bills.

The White House is pushing for a so-called “clean” debt ceiling increase with no conditions attached, something Congress delivered dozens of times prior to the Obama administration.

“I respectfully urge Congress to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible,” Treasury Secretary Steven Mnuchin wrote to congressional leaders earlier this year.

Call for spending cuts

On Capitol Hill, Republican fiscal hawks are demanding spending cuts.

“Most Republicans want to do something to lower the trajectory of the debt,” Republican Congressman Tom Cole of Oklahoma said Tuesday on MSNBC. “A clean debt ceiling hike is like having a credit card and saying, ‘I’ve reached my [credit] limit. I’m going to make the limit higher without changing my spending habits.’”

“The biggest conflict we’ve seen so far on this issue isn’t between the parties,” noted political analyst Molly Reynolds of the Washington-based Brookings Institution. “It’s within the Republican Party, where some rank-and-file members, especially in the House, have been pushing back against the idea of a clean [debt ceiling] increase.”

Democrats

Some Democrats, meanwhile, have a demand of their own: that Republicans forgo any debt-incurring tax cuts.

“It’s going to be very hard to raise the debt limit if their [Republicans’] intent is to increase the debt by massive tax cuts on the very wealthy,” Senate Minority Leader Chuck Schumer, a New York Democrat, said last month.

In 2011, protracted congressional wrangling over the borrowing limit led to a downgrade of America’s creditworthiness. Much as they do today, Republicans demanded fiscal reforms as a condition for hiking the debt ceiling.

“At a time when we’re borrowing 40 cents out of every dollar we spend, we want to make sure we take a significant step to reduce spending,” Republican Senator Lamar Alexander of Tennessee said days before the 2011 fiscal deadline.

Congressional Democrats responded by accusing Republicans of taking the U.S. economy hostage through debt ceiling demands. At the White House, then-President Barack Obama argued that linking the debt ceiling to spending reforms was misguided.

 “It’s not a vote that allows Congress to spend more money,” Obama said. “Raising the debt ceiling simply gives our country the ability to pay the bills that Congress has already racked up. It gives the United States of America the ability to keep its word.”

Standoff feared

In the end, Congress raised the debt ceiling in 2011 while also imposing spending caps. Shortly thereafter, Standard and Poor’s downgraded the U.S. government’s credit rating based on what it saw as chronic political chaos in Washington.

That chaos could prove even more severe in the current debt ceiling standoff, according to analysts.

“Breaching the [debt] limit is sufficiently consequential that we should always be worried about whether Congress, especially in periods of dysfunction, can get it done,” Reynolds said. “Also, even if Congress has historically managed to do what’s necessary, how they’ve done that has come with consequences.”

In reality, the federal government reached its borrowing limit in March of this year. To avoid default, the Treasury Department took what it termed “extraordinary measures” such as postponing investments in a variety of pension programs for federal retirees.

Secretary Mnuchin has advised that Treasury’s ability to use bookkeeping slight-of-hand to avoid default runs out on September 29.
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Egypt’s official statistics agency says the country’s inflation rate has jumped to 33 percent in July – up from 29.8 percent in June.

The announcement comes as Egyptians struggle in the face of steep price hikes as part of the government’s economic reform plan.

The Central Agency for Public Mobilization and Statistics made the announcement Thursday.

Economists believe the hike is driven by an increase in fuel prices. They expect inflation to remain above 30 percent over the next two months, especially after an increase in electricity, transportation and drinking water prices.

Egypt raised fuel prices in June by 55 percent for the commonly used 80-octane gasoline and diesel. It also doubled the price of the butane gas canisters, used in the majority of Egyptian households for cooking.
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China and Malaysia broke ground on Wednesday on a $13 billion rail project linking peninsular Malaysia’s east and west, the largest such project in the country and a major part of Beijing’s Belt and Road infrastructure push.

The planned 688-km (430-mile) East Coast Rail Link will connect the South China Sea, large parts of which are claimed by China, at the Thai border in the east with the strategic shipping routes of the Straits of Malacca in the west.

It is among the most prominent projects in China’s controversial Belt and Road Initiative, which aims to build a modern-day “Silk Road” connecting the world’s second-largest economy by land corridors to Southeast Asia, Pakistan and Central Asia and maritime routes opening up trade with the Middle East and Europe.

“The ECRL is indeed yet another ‘game changer’ and a ‘mindset changer’ for Malaysia as it will significantly cut travel time to and from the east coast of the peninsula,” Malaysian Prime Minister Najib Razak said at the ceremony halfway along the route in Kuantan, which faces the South China Sea.

For China, the project is another expansion of its soft power in Malaysia, which also lays claim to some disputed South China Sea islands, and is critical for China’s geopolitical and strategic interests.

“The China government has attached great importance to the China-Malaysia relations and has always considered Malaysia a dear neighbor and trustworthy partner who is committed to seeking mutually beneficial cooperation and common development in the country,” Chinese State Councillor Wang Yong said at the ceremony, heading up a 100-strong delegation in Kuantan.

Najib said the project would be financed with an 85 percent loan from China Exim Bank and the balance through a “sukuk” Islamic bond program managed by local investment banks.

The project is being built by China Communications Construction Co. Ltd.

Beijing has repeatedly come to the rescue of Najib over the last year, as he sought foreign investment that would help him pay off a massive debt piled up by scandal-plagued state fund 1Malaysia Development Berhad (1MDB).

Najib has announced a spree of infrastructure projects in the last few months, many funded by China, as he builds up momentum for a general election that he has to call by mid-2018.

A Nomura research report last month said foreign direct investment inflows from China into Malaysia surged by 119 percent in 2016 and continued to grow at 64 percent year on year in the first quarter of 2017.

The growing closeness to China has raised eyebrows among Najib’s opponents who have argued that the country has become too reliant on Chinese funds.

But Najib dismissed the concerns in a speech on Tuesday, saying turning away from Chinese FDI made “no economic sense.”

There have been protests in Sri Lanka and Thailand over the Belt and Road initiative. A planned rail link through Thailand hit some resistance with what critics said were Beijing’s excessive demands and unfavorable financing.

But Thailand’s cabinet last month approved construction of the first phase of a $5.5 billion railway project to link the industrial eastern seaboard with southern China through landlocked Laos.
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The extreme volatility of Venezuela’s exchange rate has the crisis-hit country’s shop owners hurriedly marking up their merchandise and consumers balking at the higher price tags.

Just last week, the bolivar currency fell around 70 percent on the black market, according to DolarToday, the opaque U.S.-based website that dictates the black market rate.

Although the currency roared back this week to around 10,387 bolivars to the U.S. dollar, prices for often imported products have already been adjusted, heaping more hardship on Venezuelans who often earn only a handful of dollars per month.

“How is it possible that I bought rice a few days ago at 8,000 bolivars, which was already expensive, and now it’s at 17,000,” said housewife Senovia Gonzalez, 64, standing in a line to buy food in the Paraguana Peninsula that juts out into the Caribbean.

The monthly minimum wage in Venezuela is 97,531 bolívars, or not even $1 per day on the parallel exchange rate, making it the lowest in Latin America despite President Nicolas Maduro’s frequent increases. To that is added a 153,000-bolivar food ticket.

His unpopular socialist government has dispatched inspectors to try to contain the price hikes with fines, but that strategy has been largely ineffective in the midst of an economic crisis with triple-digit inflation, recession, and food and medicine shortages.

“If we do not adjust prices, we have to close, fire employees, work for someone else or leave the country,” said Victor Moreno, a seller of home appliances at a mall in Paraguana.

The opposition-controlled parliament said Wednesday that inflation in the first seven months of the year was 248.6 percent. The Central Bank has not published official figures for almost two years, when numbers began to worsen.

Many Venezuelans are horrified at the weakening bolivar, which has lost well over 99 percent of its value in the last three years. Social media users promoted the hashtag #worktoeat this week.

‘Speculators’ threatened with jail

Maduro blames an “economic war” waged by U.S.-backed coup plotters seeking to bring him down. He has threatened to jail “speculators” who raise prices.

Critics say decade-old currency controls and excessive money printing contribute to inflation and a weakening exchange rate.

But with the government increasingly short of dollars to supply the currency control system, more imports are obtained using the black market rate.

In the first half of the year, about 25 percent of all imports were made by private companies using the black market, according to local consultancy Ecoanalitica.

That means Venezuelan prices are even more sensitive to changes on the black market.

“Prices are reacting with aggressive speed,” said the head of Ecoanalitica, Asdrubal Oliveros.

“Not only shop owners, but all the economic actors in the country see that although the rate has strengthened again, it is not sustainable in the long term and in a month will weaken again,” he added.
…

The Trump administration’s decision on Wednesday to slap sanctions on eight members of Venezuela’s all-powerful constitutional assembly brings to 30 the number of government loyalists targeted for human rights abuses and violations of democratic norms since anti-government protests began in April.

But even as the list of targeted individuals grows longer, promised economic sanctions have yet to materialize amid an outcry by the U.S. oil industry that a potential ban on petroleum imports from Venezuela — the third-largest supplier to the U.S.  — would hurt U.S. jobs and drive up gas costs.

The sanctions announced Wednesday focused on current or former Venezuelan government officials accused by the U.S. of supporting President Nicolas Maduro’s creation of a special assembly charged with rewriting Venezuela’s constitution — a move the U.S. says is an attempt by Maduro to shore up his grip on power.

Since its election last month, the 545-member assembly has declared itself superior to all other government institutions and ousted Venezuela’s chief prosecutor, a vocal critic of Maduro.

The U.S. Treasury Department took the unusual step of sanctioning Maduro himself last month, freezing any assets he may have in the U.S. and blocking Americans from doing business with him.

Newest additions

The newest additions on Wednesday include Adan Chavez, the older brother of Hugo Chavez, who is credited with introducing the late president to Marxist ideology in the 1970s, and a national guard colonel lionized by the government after he physically shoved congress President Julio Borges during a heated exchange caught on video.

While most Venezuelan officials wear U.S. sanctions as a badge of honor — and are frequently rewarded with promotions as a result — Maduro faces a far greater threat if Trump follows through on economic sanctions against the OPEC nation.

For all of Maduro’s anti-capitalist rhetoric, Venezuela, which sits atop the world’s largest oil reserves, remains highly dependent on oil exports to the U.S., especially for importing food and medicine — items in short supply as crude prices have fallen and triple-digit inflation wreaks havoc on the economy.

The Trump administration warned last month that it would take “strong and swift economic actions” against Maduro if he went ahead with plans to seat the constitutional assembly.

But since the election last month, no such action has materialized, leading some of Maduro’s opponents to wonder whether the U.S. president has lost his nerve.

Venezuelan crude and the U.S.

The prospect of an import ban has alarmed U.S. oil companies that rely on Venezuelan crude.

Nine companies, including Chevron, Valero, Citgo and Phillips 66, currently process Venezuelan crude in more than 20 U.S. refineries, most of them located along the Gulf Coast, according to data from the U.S. Energy Information Administration. Many of these refineries are designed for the type of heavy crude that Venezuela exports and replacing those supplies would be disruptive and costly.

An influential industry group whose member include the nine companies has written two letters to Trump warning there is no guarantee that other key sources of U.S. crude imports — Canada, Mexico and Colombia — could provide enough additional supply to replace the Venezuelan oil. Many refineries would likely turn to Saudi Arabia but the higher costs associated with such a shift “could significantly impact fuel costs for U.S. consumers,” according to the letter by the American Fuel & Petrochemicals Manufacturers.

“We want to make sure that we don’t have the unintended consequence of doing more harm to U.S. refineries than the Maduro regime,” said Chet Thompson, the CEO of the group, which represents 95 percent of the U.S. refining sector.

He added that he is hopeful his lobbying is gaining traction.

“We think we’ve come a long way from early July when these sanctions were first being kicked around. … We think folks are a lot smarter on this issue than they used to be,” he said. “We certainly have not received any commitments or promises as far as what they are going to do. But we have done our job.”

The oil industry is finding allies in the U.S. Congress, particularly among lawmakers from the Gulf states.

Six Republican congressmen from three of the states that process Venezuela’s heavy crude — Texas, Mississippi and Louisiana — recently wrote a letter to Trump warning that banning Venezuelan oil imports would do more harm than good.  While applauding the president for his efforts to counter “the disturbing decline of democracy” in Venezuela, the lawmakers, led by Rep. Randy Weber of Texas, said that it could jeopardize 525,000 refining-related jobs along the Gulf Coast.

“We fear that potential sanctions will harm the U.S. economy, impair the global competitiveness of our energy business and raise costs to consumers,” according to the July 28 letter, a copy of which was provided to The Associated Press by a senior Venezuelan official and whose authenticity was confirmed by one of the signatories, Rep. Clay Higgins of Louisiana.

Some Senate Republicans could soon join the chorus. Sen. Bill Cassidy, a Louisiana Republican who sits on the Senate Committee on Energy and Natural Resources, is preparing a letter to Trump raising similar concerns about the impact on the U.S. fuel market, according to his spokesman, John Cummings, who said the senator is rounding up signatories.  

Energy analysts, however, have been more circumspect about the effect on global markets and prices at the pump. A recent analysis by Wells Fargo Securities concluded that one impact would be to raise foreign heavy crude prices by about $3.50 a barrel. However, the ban would not affect demand for gasoline or reduce the overall supply of crude on the global market, as Venezuela would likely redirect its shipments to countries in Asia and elsewhere, albeit at a painful discount.

“We do not believe there would be significant impact on retail prices to U.S. consumers given that the net availability of worldwide crude oil volumes would be unchanged,” the Wells Fargo report said.
…

Tesla said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric carmaker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.

The move to issue junk bonds — lower-quality investments that offer higher yields — represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit.

Tesla shares are up 67 percent this year, pushing the company’s market value to about $60 billion, above that of top U.S. automakers General Motors and Ford Motor Co., even though Tesla has yet to make an annual profit.

“Bond investors, who typically don’t love companies that don’t make money, will be far more forgiving when it comes to Tesla,” said bond expert Robbie Goffin, managing director of FTI Consulting, citing the company’s stellar stock market value.

Automaker draws a ‘B-‘ 

Tesla was to start pitching potential investors on Monday, IFR reported, citing lead bankers on the deal.

So far, Tesla has been raising money to pay its bills with a combination of equity offerings and convertible bonds, which eventually convert into shares. In March, the company raised $1.4 billion through a convertible debt offering.

Following the announcement, Standard & Poor’s reaffirmed its negative outlook for the automaker and assigned a “B-” rating for the bond issue — deep into junk credit territory. S&P also maintained its “B-” long-term corporate credit rating on Tesla.

“We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns,” S&P said in a statement on the bonds.

Rating outlook is stable

Moody’s assigned a junk “B3” rating to the bond issue and said the company’s rating outlook was stable.

The rating agency said the overall company’s “B2” rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of “considerable value” to other automakers.

The automaker’s debt load increased significantly last year when it bought solar panel maker SolarCity.

CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds “at least into mid-2018.”

“There is a risk they could still run out of money,” he said. “Then you’d go back to the equity markets and hope it’s not too late” to raise more money.

Burning cash

The latest effective yield on single-B rated bonds maturing in seven to eight years, the class for a Tesla issue, is around 5.5 percent, according to Bank of America/Merrill Lynch Fixed Income Index data.

Tesla’s bond will price later this week after several days of meetings with credit investors, who will weigh factors including the absence of a borrowing history, its lack of profit and its high cash-burn rate against its growth potential and its attractiveness as an environmentally friendly “green” issuer.

Ultimately, the depth of investor interest will determine the bond’s interest rate.

Tesla is counting on the Model 3, its least pricey car, to become a profitable, high-volume manufacturer of electric cars.

Tesla said last week that it had 455,000 net pre-orders for the Model 3, which has a $35,000 base price, and that the sedan was averaging 1,800 reservations per day since it launched late last month.

At the launch, Musk, however, warned that Tesla would face months of “manufacturing hell” as it increases production of the sedan.

Tesla had over $3 billion in cash on hand at the end of the June quarter, compared with $4 billion on March 31.

The company has said it expects capital expenditures of $2 billion in the second half of this year to boost production at its Fremont, California assembly plant and a battery plant in Reno, Nevada.

Tesla’s cash burn has prompted short-sellers like Greenlight Capital’s David Einhorn to bet against the Palo Alto, California company.

Goldman Sachs, Morgan Stanley, Barclays, Bank of America Merrill Lynch, Citigroup, Deutsche Bank and RBC are the book-runners on the bond offering, IFR reported.

Shares of Tesla closed down 0.5 percent at $355.17 on Monday.

 
…

For Jisi Lazuo, the torch festival in her village in southwest China should be a celebration involving colorful ethnic clothes and eating freshly slaughtered pig.

Instead, it’s a time of stress.

“In my heart I always get worried when the torch festival comes along,” said Jisi, 37, who supports a family of two grandparents and four children.

“Traditional clothes are quite expensive, but for my own kids I can only buy whatever I can get,” she said.

Jisi belongs to the isolated Yi ethnic community. They have a distinct language and culture, and are among the poorest in China.

Most live in Liangshan, a mountainous district in the southwestern province of Sichuan and one of 14 areas of “concentrated poverty” identified by the central government.

Average incomes in Liangshan are just 27 percent of the national average, official data shows.

An ambitious poverty reduction campaign is seeking to change this, ensuring by 2020 that no one is living in poverty — defined by the government as less than 2,300 yuan a year.

China has lifted hundreds of millions of its citizens out of poverty over the past few decades, but doing the same for groups like the Yi poses a different set of challenges.

“A lot of that poverty is not as easily accessible for the government,” said Ben Westmore, a senior economist at the Organization for Economic Co-operation and Development (OECD).

“It’s people who live in mountainous areas who are not very well connected, or they’re more dispersed at the provincial level across the prefectures,” he said.

From road building to subsidies, the central government has spent large amounts of money on poverty relief in places like Liangshan.

In 2016, the Liangshan government distributed 940 million yuan ($139 million) in basic income assistance for the poorest in the region, according to the government website.

Officials in charge of Liangshan’s anti-poverty campaign declined to comment on the programs. The State Council poverty alleviation office in Beijing also declined to comment.

While many Yi welcome the state’s help, some question whether cash handouts are sustainable.

“Just giving out money is useless because one day the money will eventually run out,” said Emu Zhiji, one of the few people in his village to receive a university education.

Emu said he hopes to become a sports teacher, something that would be impossible for many Yi. Thirty percent are illiterate, compared to 4 percent nationally, and many do not speak Mandarin, the main language in China. As a result, they have limited options for earning a living beyond farming.

The government has tried to improve access to education for the Yi, but it struggles to recruit teachers to work in such a remote area. Many students battle to keep up with lessons taught in Mandarin.

Emu said more needs to be done to allow the Yi to develop within their own culture if they are to alleviate the poverty and a dependency on government programs.

“If we had better jobs we’d be able to feed and clothe ourselves on our own, but for that we need to be able to use our own language,” he said.
…

Nebraska regulators opened a final hearing on TransCanada Corp’s proposed Keystone XL pipeline on Monday, a week-long proceeding that marks the last big hurdle for the long-delayed project after President Donald Trump approved it in March.

The proposed 1,179-mile (1,897-km) pipeline linking Canada’s Alberta oil sands to U.S. refineries has been a lightning rod of controversy for nearly a decade, pitting environmentalists worried about spills and global warming against business advocates who say the project will lower fuel prices, shore up national security and bring jobs.

Nebraska has last word

Trump’s administration handed TransCanada a federal permit for the pipeline in March, reversing a decision by former President Barack Obama to reject the project on environmental grounds. But the line still needs a nod from regulators in Nebraska — which would be the last of three states to approve its proposed path into the heartland.

A lawyer for opponents of the line opened the hearing in front of the five-member Nebraska Public Service Commission on Monday morning by grilling an executive for the Canadian company about how the pipeline will be disposed of after its anticipated 50-year lifetime.

“Do we have to clean up TransCanada’s abandoned pipeline?” attorney David Domina asked TransCanada executive Tony Palmer.

On Sunday, hundreds of pipeline opponents, including members or Indian tribes, marched through downtown Lincoln under police escort, following a rally at the Nebraska Capitol.

Decision expected in November

Nebraska’s Public Service Commission is meant to weigh whether the project is in the state’s public interest, and will announce a decision by November. The arguments of opponents are constrained by the rules of the commission, however: the commission is not permitted to consider the risk of spills because the route already has an environmental permit.

Opponents — including scores of landowners on the proposed route — will instead argue the jobs are temporary and the risks of the pipeline to local industries like cattle ranching too great. They will also note that if the commission approves the line, TransCanada could seek to seize property along the route using eminent domain law — a politically unpalatable option in the conservative state.

Proponents, meanwhile, will argue the project will bring in hundreds of jobs and millions of dollars in revenue.

Job numbers different

Trump has said the project would create 28,000 jobs nationwide, but a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs.

The 830,000 barrel-per-day Keystone XL would link Alberta to an existing pipeline network feeding U.S. refineries and ports along the Gulf of Mexico.

The project could be a boon for Canada, which has struggled to bring its reserves to market. But demand for the line has declined since it was first proposed, due to surging U.S. production, lower prices, and other Canadian pipeline projects.

 
…

Russia will speed up work on reducing dependency on U.S. payment systems and the dollar as a settling currency, RIA news agency cited Deputy Foreign Minister Sergei Ryabkov as saying on Monday.

It is a response to the new sanctions against Russia reluctantly signed into law last week by U.S. President Donald Trump. The sanctions targeted Russia’s energy sector, with new limits on U.S. investment in Russian companies.

“We will of course intensify work related to import substitution, reduction of dependence on U.S. payment systems, on the dollar as a settling currency and so on. It is becoming a vital need,” Ryabkov was quoted as saying.

“[Otherwise] we will always sit on their hook, exactly what they need,” he said, referring to the United States.

Russia has already introduced a new national payment system to cut reliance on Western systems, such as Visa and MasterCard.

Those operators stopped providing services to clients of one Russian bank after Washington imposed sanctions over Moscow’s role in the Ukraine crisis, including its annexation of Crimea from Kiev and support of pro-Russian separatists in eastern Ukraine.

The Russian payment system is called Mir, which translates as “World” or “Peace”.

“Your card is free from external factors. Created in Russia,” runs an advertisement for Mir cards.

To date, more than 13.9 million Mir cards have been issued in Russia, according to the Russian National System of Payment Cards (NSPK), or about 10 percent of the country’s population. NSPK was established in 2014 and is 100 percent owned by the central bank.

More than 380 banks working in Russia accept these cards which are issued by 120 banks. Practically all trade and service points, including cafes, shops, restaurants and petrol stations accept payments with Mir cards.

Furthermore, Mir cards are welcome in sanctions-hit Crimea where Western banks are prohibited to operate.
…

The British government denied Monday that it has agreed on the amount of its European Union exit bill, after a report emerged that it plans offer the bloc 36 billion pounds ($47 billion).

Britain’s outstanding tab to settle commitments it made as an EU member is one of the biggest issues confronting the divorce talks. The EU says it won’t discuss future trade relations with Britain until there is progress on the bill and other key issues.

The EU has not put an official number on the size of the bill, but estimates have ranged as high as 100 billion euros ($118 billion).

Britain voted in a referendum last year to quit the 28-nation bloc and is due to leave in March 2019.

EU budget commissioner Guenther Oettinger told Germany’s Bild newspaper in comments published Monday that Britain would remain bound by some previous commitments to long-term projects after Brexit and “will therefore have to transfer funds to Brussels at least until 2020.”

The size of the bill is a hot political issue in Britain, with some anti-EU politicians insisting the country should pay nothing at all.

The Sunday Telegraph reported that British officials have decided to offer 36 billion pounds, or 40 billion euros, in a bid to move talks on to the key issue of trade. But Prime Minister Theresa May’s spokesman, James Slack, said “I don’t recognize” the figure.

He added, however, that Britain was prepared to pay a “fair settlement” of its obligations.

Oettinger said in the long term, Britain’s withdrawal will mean a loss of about 10 to 12 billion euros ($11.8-14 billion) per year to the EU budget, which will be made up through a combination of cuts and higher payments from other members.

He estimated that Germany would face an “additional single-digit billion” increase.

 
…

A Trump Organization company has applied for four new trademarks in the Asian gambling hub of Macau, including one for casinos, public records show. The new applications highlight the ethical complexity of maintaining the family branding empire while Donald Trump serves as president, and are likely to stoke speculation about the organization’s future business intentions in Macau, where casino licenses held by other companies come up for renewal beginning in 2020.

The applications for the Trump brand were made in June by a Delaware-registered company called DTTM Operations LLC. They cover gambling and casino services, as well as real estate, construction and restaurant and hotel services. The applications were first reported by the South China Morning Post.

The new applications are identical to four marks applied for in 2006, and granted, but lapsed earlier this year. It was not clear from public records why, though under Macau law trademarks can be forfeited for non-use. There are currently no Trump-branded businesses in Macau.

Trump’s trademarks have been a source of concern to ethics lawyers and Democratic officials, who fear they can give foreign governments the opportunity to try to influence the White House. China has approved dozens of Trump trademarks since the president took office. Three U.S. lawsuits against the president contend that the Chinese marks constitute gifts from a foreign state and stand in violation of the emoluments clause of the U.S. Constitution. Trump and his lawyers reject that argument and contend that trademarks are a crucial defense against squatters seeking to exploit his name.

Beijing says it has been fair and impartial in its handling of trademarks for the president and his daughter Ivanka Trump.

Macau’s six casino operators, including Las Vegas Sands, Wynn Resorts and MGM Resorts, face renewals for their licenses starting in 2020. The government of the former Portuguese colony, now ruled by China, has released few details on the renewal process, which will be the first since it ended a decades-long casino monopoly and opened bidding to foreign companies in 2001.

Authorities are expected to grant renewals to all six operators, given the big investments they’ve poured into the city, but there has been speculation that they could issue one additional license to a new investor.

Macau is the world’s largest gambling market, raking in about five times more revenue last year than the Las Vegas Strip. It’s the only place in greater China where casinos are legal.

Donald Trump began applying for a sweep of trademarks in Macau in 2006. The government’s unwillingness to uphold all of them was a source of intense irritation to Trump, who became enmeshed in a lawsuit over rights to the use of his name. He wrote to then-U.S. Commerce Secretary Gary Locke in 2011 that the courts of China and Macau were “faithless, corrupt and tainted.”

“Who could expect anything different from a deceitful culture?” he added. “Their behavior should be a clear warning to the rest of the world to refrain from any trade practice or business relationship with them!”

Trump finally prevailed in that case last year after his opponent, a local company that had filed for a “Trump” mark for food and beverage services, let his trademark expire.

Trump has pledged to conduct no new foreign deals while in office and handed control of his business to his sons, though he retains ownership. He also has veered away from the casino business. Hard Rock International bought up the last vestiges of his failed Atlantic City gambling empire this year, paying just $50 million for the shuttered Trump Taj Mahal casino, which cost more than $1 billion to build.

Back in 2001, Donald Trump was part of a consortium of billionaire investors — including two men subsequently convicted of bribery and money laundering — that bid unsuccessfully for a casino license in Macau, the Wall Street Journal reported last year.
…

Cuban authorities have ordered the closure of one of the island’s fastest-growing cooperatives, days after announcing that they would stop issuing new permits for some private enterprise.

Scenius, which provides accounting and business consulting services, will have until December 31 to liquidate, the cooperative’s founder and director, Luis Duenas, told The Associated Press on Saturday.

Duenas said the Ministry of Finances and Prices told him the decision to close Scenius was “based on an analysis of our social purpose, or of the activities that we have approved.”

Duenas called the decision an “error” that has no place in the policy of economic opening announced by Cuban officials.

On Tuesday, Cuba’s government said it would suspend the issuance of permits for a range of occupations and ventures, including restaurants and renting out rooms in private homes.

The suspension included the growing field of private teachers as well as street vendors of agricultural products, dressmakers and the relatively recent profession of real estate broker. The announcement did not say when the issuing of permits would resume and said that enterprises already in operation could continue.

Expansion in 2010

President Raul Castro expanded an opening of the economy to private-sector employment in 200 categories of business in 2010. The government says nearly 570,000 people are employed in the enterprises, including hundreds of restaurants and guest houses. It later also legalized nonagricultural cooperatives.

Both recent moves have created fears that Cuba is putting the brakes on plans to reform its centrally planned economy, though officials say the country is not going back on its economic opening.

Duenas regretted that Scenius’ closing occurred days after the package of restrictions on independent work.

“There are many ways to do things, timing is very important, and the country is greatly affected by these things,” Duenas said.

Scenius began in January 2015 with two or three partners and in two years had more than 200. All its 70 clients are state-owned enterprises or business groups in agriculture, industry and communications.

According to official figures, there are more than 400 nonagricultural cooperatives in Cuba.
…

Supporters of the United Auto Workers say they’re not giving up their fight to unionize a Nissan auto assembly plant in Mississippi after a stinging defeat, even as UAW opponents say Friday’s loss proves workers don’t want the union.

More than 62 percent of workers voting in a two-day election at Nissan Motor Co.’s Canton plant voted against the UAW, with 2,244 ballots against the union according to the National Labor Relations Board. Voting for union representation were 1,307 workers, or 38 percent.

“They know we didn’t need it,” said Nissan worker Kim Barber, an outspoken union opponent who said she was celebrating Friday’s result. “We didn’t need outside interference coming into our plant.”

UAW defiant

Amid tears at a union office near the plant just north of Jackson, UAW supporters voiced defiance, with some calling for the election to be rerun after the minimum six-month wait. The union filed charges moments before the polls closed Friday night making new allegations that Nissan had broken federal labor law and intimidated workers into voting “no.” If the labor board agrees, it could order a new election at the plant.

“It hurts,” said union supporter Phillip White. “We ran against a machine; we ran against a monster; we ran against all the lies.”

The UAW has never fully organized an international automaker in the traditionally anti-union South, although it did persuade some maintenance workers to join at a Volkswagen AG plant in Tennessee. The UAW’s lack of influence among southern autoworkers has reduced its bargaining power when Detroit automakers lose market share and close plants. After pouring resources into the organizing drive at Nissan, this loss could leave UAW leaders with tough decisions.

Odds of success 

“The result of the election was a setback for these workers, the UAW and working Americans everywhere, but in no way should it be considered a defeat,” UAW President Dennis Williams said in a statement.

Kristen Dziczek of the Center for Automotive Research said that although the UAW was the underdog, odds were unlikely to improve soon, as President Donald Trump’s appointees take over the National Labor Relations Board. A corruption scandal involving union employees allegedly taking bribes from a former Fiat Chrysler executive also threatened to spread.
…

The U.S. job market exceeded expectations last month adding 209,000 new workers to the economy in July and lowering the national unemployment rate to 4.3 percent. But wages continue to underperform, as did the nation’s labor participation rate. Economists say that’s because millions of working-age Americans are choosing to remain on the sidelines, some going back to school, others staying at home to take care of their families. Why does that matter? Mil Arcega explains.
…

Rajeev Sakhuja has kept a hectic schedule in recent months as he makes scores of presentations in Delhi and surrounding towns about why and how to invest in equities.

The investment adviser has an attentive audience as traditional avenues of gold and real estate lose their luster and as stock markets trade at record highs. Tens of thousands of ordinary Indians are now investing more money into mutual funds.

“That old-fashioned investment, people are not interested. So where should they switch, where to invest, what to do, nobody has any clue,” said an upbeat Sakhuja, whose firm, PTIC India, is doing brisk business.

India’s stock markets have been among Asia’s top performers this year. The benchmark BSE Sensex has gained more than 16 percent since the start of the year, buoyed by optimism about the world’s fastest-growing economy. But unlike the past, when foreign investors were at the helm of a bull run, there has been a huge pickup in domestic investment.

That’s good news, say economists. The government has long fretted that most of the country’s household savings go into unproductive assets such as gold and real estate and has been trying to nudge domestic investors toward channeling more of their savings into equities, a source of corporate finance.

There is a huge market to be tapped. The total investment of Indian household savings into stocks is much smaller compared with those in many other countries.

Gaurav Mehta, portfolio manager at Ambit Investment Advisors in Mumbai, said the rising interest of domestic investors is part of a structural shift that signals a more modernizing and transparent economy.

“Till five, six years ago, physical assets were a good two-thirds of all household savings,” Mehta said. “That ratio now has swung in favor of financial assets.”

‘More formalized’ savings

The trend has been accelerated by a crackdown on the black economy. Last November, the government banned high denomination notes in a bid to flush out illegal cash.

“As savings become more formalized, then obviously you don’t need to park them in spurious places like land, real estate, et cetera,” Mehta said. “So a lot of this money is now moving into financial assets.”

And to tap that market, the mutual fund industry is reaching out to potential investors through television advertisements, social media and billboards, pitching the funds as attractive alternatives.

The sales pitch is not difficult: In the last four years, the Sensex has climbed 60 percent, whereas gold has fallen by 5 percent, real estate markets are down sharply and declining bank interest rates cannot keep pace with inflation. And the government is offering favorable tax policy for investors in mutual funds.

Most small investors are opting for mutual funds, hoping to grow their savings to beat inflation.

After hearing from friends about investment avenues in stock markets, Kumar Gautam, 31, opted for a $50 monthly plan. “Bank interest rates were coming down 4, 5, 6 percent … people told me to opt for a monthly plan. I will have tax savings and get better returns,” he said.

Some, like Bharti Gupta, 33, have been bolder and chosen to trade directly in stocks. “I studied some books, there are courses also that I joined, and there is a WhatsApp group that I have joined, which has some 150 to 200 people, so that is also quite helpful.” She said she had been able to make her investment grow quite well.

And whereas most investors lived in big cities in the past, small-town residents are also investing in equities now.

Vidya Bala, head of research at FundsIndia.com, said one-third of the firm’s customers now are from outside the country’s 15 big cities.

According to Bala, even in very remote places where there are no financial firms or mutual fund offices, people are investing online. “People who are away from the happening cities can also have access to good, regulated products as long as they are digitally aware. This is really set to take off,” Bala said.

Reassurance

Economists say the greater participation of domestic investors is also reassuring for a country that has long worried about the predominant role of foreign money in equities, because that used to play a decisive role in the movement of stock markets.

Meanwhile, ordinary, first-time investors are simply keeping their fingers crossed, hoping that stock markets will continue to do well in the long run and that their investments will be safe.
…

Under a best-case scenario, a newly negotiated North American Free Trade Agreement (NAFTA) would not be implemented before the end of next year or the start of 2019, Mexico’s economy minister said Thursday.

Among other issues, NAFTA talks would focus on how to provide more certainty in dispute resolutions, Economy Minister Ildefonso Guajardo said in a radio interview.

“According to the possible calendars of approval, the best of the scenarios that we could have … would be the start of implementation almost at the end of 2018 or the start of 2019,” Guajardo said.

Mexico has set out the goals of prioritizing free access for goods and services, greater labor market integration and a strengthening of energy security.

Last week, U.S. Agriculture Secretary Sonny Perdue said during a visit to Mexico that he hoped farm business with Mexico would not suffer due to President Donald Trump’s drive to get a better deal for manufacturers.

Speaking in Japan on Thursday, Mexican Foreign Minister Luis Videgaray said the best way to calm Trump’s worries about commerce with Mexico were through more trade, not less.

Videgaray said negotiators would need to be careful not to tweak trade rules on sourcing components too much or they could risk driving up the costs of goods like electronics.

“The important thing that we are not going to do is hurt the region’s competitivity, and much less the region’s consumers,” Videgaray said, according to a transcript.
…

U.S. President Donald Trump is expected to increase pressure on China to change its trade practices and do more to stop North Korea’s weapons programs. 

Reports by financial news media Thursday predicted Trump will sign an order in the coming days to open an investigation of Chinese demands that foreign companies share technology secrets in exchange for access to the massive Chinese market.

White House officials said no developments were expected Friday, as the original reports had indicated. The expected investigation could lead to higher tariffs on Chinese-made products headed for the U.S. market, which is the world’s largest.

Trade experts warned such actions might violate commitments the United States has made to the World Trade Organization. Nevertheless, Commerce Secretary Wilbur Ross recently criticized China’s trade practices, including forced technology transfer, as unfair measures that hurt U.S. exports and contribute to a $347 billion trade deficit in China’s favor.

As a presidential candidate, Trump denounced China’s trade policies. He also has said that China, as North Korea’s neighbor and major trading partner, could do far more to stop Pyongyang’s efforts to improve nuclear weapons and missiles. U.S. experts have warned that North Korea’s missile tests and nuclear development efforts pose an increasing threat to the United States and many other nations.

Trump’s tough stance on trade issues helped him win support from working-class voters who believe they have lost jobs due to unfair foreign competition. His approach was a break with the Republican Party’s traditional pro-trade and pro-business stance. The president’s opponents in the Democratic Party have accused him recently of talking tough about trade issues but failing to take effective action.

Steve Herman at the White House contributed to this report.
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Women in the United States are starting bushiness at one and a half times the rate of their male peers. Effective entrepreneurship could help cut the economic gap between women and men, which the World Economic Forum says could otherwise take decades to close around the globe. As VOA’s Jim Randle reports, experts say more than one-third of U.S. businesses are headed by women and they expect that percentage to grow.
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U.S. President Donald Trump has endorsed a measure that would dramatically reduce the number of low-skilled immigrants admitted to the United States, and introduce a merit-based points system. VOA White House correspondent Peter Heinlein reports.
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