This week is Thanksgiving in the United States, a national holiday during which people celebrate their blessings over the past year. Traditionally a large meal is shared with friends and family. Not everyone can afford to do that, though, so some food banks are providing special Thanksgiving meals to low-income families. VOA’s Deborah Block takes us to the largest food bank in northern Virginia, where Thanksgiving packages are being handed out so everyone can enjoy the holiday.
 

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Farmers across France are protesting poor economic and social conditions in the farming community. Hundreds of tractors disrupted traffic in Paris and other major cities in a demonstration organized by the National Federation of Agricultural Holders’ Unions and the union of young farmers. Farmers unloaded tires to block some roads and scattered hay bales across the Champs-Elysées, the central avenue in Paris. VOA’s Zlatica Hoke reports farmers demand a response from President Emmanuel Macron.
 

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Babies born with HIV benefit the most if treatment is started within hours or days of birth rather than waiting for them to be a little older, a study published Wednesday in the journal Science Translational Medicine found.

A Harvard-led study of 40 infected infants in Botswana found those treated within hours of birth developed a much smaller viral reservoir, the pool of virus that remains within the body during and after treatment and is responsible for later relapses. While babies who were given the medications starting at four months after birth did not fare as well.

The first group of babies also had more robust immune systems even than babies born without the virus.

The study was based on a case in the U.S. know as the “Mississippi Baby.” That case involved a baby who was treated within 30 hours of birth in July 2010. Her family stopped treatment when she was a toddler and she stunned the medical community by remaining in remission for 27 months before she relapsed and restarted treatment.

The findings of the Mississippi Baby case and the study in Botswana are particularly important to poorer nations where at-risk babies are not tested for HIV immediately after birth, as they are in the U.S., Europe and South Africa.

The availability of anti-HIV drugs can prevent infected moms from passing the virus on to their children but despite that, a study found that some 300-500 infants are thought to be infected every day in sub-Saharan Africa.

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U.S. President Donald Trump says he is “not looking for war” with Iran and willing to negotiate with its leaders without preconditions, but that under no circumstances can the Islamic Republic be allowed to mass a nuclear weapons arsenal.

Trump told NBC’s Meet the Press show that if the U.S. went to war with Iran, “It’ll be obliteration like you’ve never seen before.”

“But,” he added, “I’m not looking to do that.”

The U.S. leader said, “Here it is. Look, you can’t have nuclear weapons. And if you want to talk about it, good. Otherwise, you can live in a shattered economy for a long time.”

Trump’s comments, taped Friday, were aired after he announced Saturday, without providing any details, that he plans to impose “major” new sanctions on Iran on Monday. He said the sanctions would be dropped as soon as the country becomes “a productive and prosperous nation again.”

Iran cannot have Nuclear Weapons! Under the terrible Obama plan, they would have been on their way to Nuclear in a short number of years, and existing verification is not acceptable. We are putting major additional Sanctions on Iran on Monday. I look forward to the day that…..

— Donald J. Trump (@realDonaldTrump) June 22, 2019

Two other key U.S. officials, national security adviser John Bolton and Vice President Mike Pence, issued new warnings to Iran that Trump’s last-minute decision to not militarily retaliate for Tehran’s Thursday shoot-down of an unmanned U.S. drone near the Strait of Hormuz should not be viewed as a sign of “weakness.”

“Neither Iran nor any other hostile actor should mistake U.S. prudence and discretion for weakness,” Bolton said in Jerusalem ahead of a meeting with Israeli Prime Minister Benjamin Netanyahu.

“No one has granted them a hunting license in the Middle East,” Bolton said of Iran. “Our military is rebuilt new and ready to go.”

Pence told the CNN television network, “Iran must not take restraint for a lack of resolve. This is a president who hopes for the best for the Iranian people…but we will stand up to their provocations.”

Bolton said existing sanctions against Tehran already are having a sharp effect on the Tehran economy.

“Sanctions are biting,” he said. “Iran can never have nuclear weapons — not against the U.S.A. and not against the world.”

Trump spoke with reporters Saturday at the White House before leaving for the presidential retreat at Camp David outside Washington for a meeting with top administration officials, at one point saying as soon as Tehran agreed to renounce nuclear weapons, “I’m going to be their best friend.”

Trump’s tone was much softer on Saturday after a week of intense actions between the U.S. and Iran.

Concern about a potential armed confrontation between the U.S. and Iran has been growing since U.S. officials recently blamed Tehran for mine attacks on two oil tankers in the Strait of Hormuz, allegations Tehran denies, and Iran’s downing of the drone.

On Friday, Trump said that he had canceled late Thursday a retaliatory strike against several Iranian targets.

He tweeted that the United States was “cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it,” Trump tweeted, saying the action would have been disproportionate.

Pence said the U.S. was “not convinced” the downing of the drone “was authorized at the highest level” of the Iranian government. As Trump weighed how to respond last week, he said the shoot-down might have been launched on orders of a “loose and stupid” Iranian officer.

World powers have called for calm after the incidents.

German Chancellor Angela Merkel on Saturday urged for a political resolution of the crisis. “That is what we are working on,” she told Reuters.

On Sunday, Britain’s Middle East minister, Andrew Murrison, will travel to Tehran for talks with Iranian officials.

Britain’s Foreign Office said Murrison would call for “urgent de-escalation in the region.” He will also discuss Iran’s threat to cease complying with the nuclear deal that the United States pulled out of last year.  

James Phillips, a senior researcher at the conservative Washington-based Heritage Foundation, said he believes the immediate risk of a U.S.-Iran conflict has passed.

“It’s probably over as far as the incident goes with the shoot down of the drone. But, I think if there are further provocations, the president will respond in a strong and effective manner,” he said.

Phillips also said he does not expect Tehran to accept U.S. calls for negotiations while Trump continues a “maximum pressure campaign” of sanctions on Iran. “I doubt that Tehran will be serious until it sees who wins the next presidential election,” he said.

The U.S. announced this week it was authorizing another 1,000 troops — including a Patriot missile battery and additional manned and unmanned reconnaissance aircraft to bolster defenses at U.S. positions in Iraq and Syria.

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The ruling party candidate in the re-run of Istanbul’s mayoral election, Binali Yildirim, has conceded defeat to opposition candidate Ekrem Imamoglu.

Sunday’s vote was held because election authorities controversially annulled Imamoglu’s initial historic election victory in March on a technicality after President Recep Tayyip Erdogan disputed the defeat of his candidate.

Electoral authorities rejected Erdogan’s AKP Party’s claims of voting fraud, but ordered a revote on the grounds a number election officials were ineligible. The opposition condemned the decision and claimed the Sunday vote is now more than just about who runs the city.

In a sign of the importance of Sunday’s election, voting was brisk from the moment the Kadikoy district ballot station opened, in a city where people traditionally vote late.  Early heavy voting  was reported across the city.

“The election is very important for Turkey, this will change the face of Turkey,” said retiree Cengiz Demir, one of the first to vote in Kadikoy district. “We have to return to democratic settings. Maybe more than a majority have had enough of one man rule,” he added.

One man rule is a reference to President Erdogan who many of his opponents accuse of undermining democracy and turning Turkey into an authoritarian state.

“In the name of our Turkey, in the name of our Istanbul, we are going through a very important election,” Imamoglu said to hundreds of supporters after voting. “This is not only about the Istanbul metropolitan, municipal election but at the same time a day for the repair the damage of this unlawful process imposed on our nation for the sake of democracy in Turkey.”

Observers say Imamoglu’s strategy of avoiding polarizing politics and pledging inclusivity has been key to turning his CHP party’s fortunes around in the city.

“I have so many hopes for Turkey,” said Ayse, a teacher who only wanted to be identified by her first name, “Imamoglu is the only person who can make the change. Before I was so pessimistic.”

The importance of Sunday’s election has seen hundreds of thousands of people cut short their vacations to vote. The city’s airports and roads were full the night before the polls opened.

“This is so important,” said Deniz Tas speaking after voting, “I have traveled 12 hours on the road to vote and to right this injustice that has been done.”

Istanbul is Erdogan’s home city and has been his power-base for 25 years, since his rise to power started as the city’s mayor. The city accounts for a third of Turkey’s economy and nearly half the taxation, and the mayorship is widely seen as Turkey’s most important political prize after the presidency.

Underscoring the importance of the vote,  Erdogan has again put his political prestige on the line, campaigning heavily for Yildirm in the run-up to the election.  Erdogan too claims democracy is at stake, repeatedly accusing the opposition of voter manipulation. Observers say a second defeat for Erdogan could have significant consequences, damaging his reputation of electoral invincibility empowering opponents both in and outside his party.

In what was a bitter campaign Yildirim appeared conciliatory. “If we’ve ever made any wrongdoing to any rival or brother in Istanbul, I would like to ask for their forgiveness and blessing,” he said after casting his vote.

 Some AKP supporters expressed similar sentiments. “Re-vote happens in other countries, too, the voting can be repeated,” said a woman who didn’t want to be named.  “It is very normal that we have a repeat as well. The candidate who deserves it should win. The person with experience will win. Also, for us, Binali Yildirim has the experience to run Istanbul.”

 Both the leading candidates mobilizing thousands of lawyers and monitors to scrutinize the vote, claiming to defend democracy, Istanbul is bracing itself for a tense election.

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India says it is proud of its secular credentials as it rejected a U.S. report that said that religious freedom in the country has come under attack in recent years.

The latest U.S. State Department Report on International Religious Freedom released Friday said that right wing Hindu-groups claiming to protect cows that Hindus consider holy had used “violence, intimidation, and harassment” against Muslims and low-castes. It also noted that Christians have been targeted for proselytizing.

In a statement, the Indian Foreign Ministry said that no foreign government had the right to criticize its record. “We see no locus standi for a foreign entity to pronounce on the state of our citizens’ constitutionally protected rights.” It said that India is proud of “its status as the largest democracy and a pluralistic society with a longstanding commitment to tolerance and inclusion.”

New Delhi’s sharply worded statement comes ahead of a visit by U.S. Secretary of State Mike Pompeo to India starting Tuesday. His talks in New Delhi are expected to lay the ground for a meeting between U.S. President Donald Trump and Indian Prime Minister Narendra Modi on the sidelines of a Group of 20 summit in Japan later next week.

The ruling Bharatiya Janata Party also rejected the U.S. report on religious freedom saying that the presumption that “there is some grand design behind anti-minority violence is simply false.”

In a statement, party media head Anil Baluni said that Prime Minister Modi and other BJP leaders have strongly deplored violence against minorities and weaker sections of the society.

The U.S. report had said that senior BJP officials had last year made “inflammatory speeches” against religious minorities and that despite Indian government statistics indicating that communal violence has increased sharply over the past two years, the Modi administration has not addressed the problem.

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The giant e-commerce technology company, Amazon, has announced that it expects to start delivering orders to shoppers’ homes by drones in the coming months. The details are still in the works, but the innovation could change the way we get packages. VOA’s Kevin Enochs reports.
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Rising trade tensions between the U.S. and China have sparked worries about the 17 exotic-sounding rare earth minerals needed for high-tech products like robotics, drones and electric cars. 

China recently raised tariffs to 25% on rare earth exports to the U.S. and has threatened to halt exports altogether after the Trump administration raised tariffs on Chinese products and blacklisted telecommunications giant Huawei.  

With names like europium, scandium and ytterbium, the bulk of rare earth minerals are extracted from mines in China, where lower wages and lax environmental standards make production cheaper and easier.  

But trade experts say no one should panic over China’s threats to stop exporting the elements to the U.S. 

There is a U.S. rare minerals mine in California. And Australia, Myanmar, Russia and India are also top producers of the somewhat obscure minerals. Vietnam and Brazil both have huge rare earth reserves.  

The sky is not falling,'' said Mary B. Teagarden, a China specialist, professor and associate dean at the Thunderbird School of Global Management in Phoenix.There are alternatives.” 

Simon Lester, associate director of the center for trade policy studies at the Cato Institute think tank in Washington, agreed. “Over the short term, it could be a big disruption, but companies that want to stay in business will find a way,” he said.    

Although the U.S. is among the world’s top 10 countries for rare earths production, it’s also a major importer of the minerals, looking to China for 80% of what it buys from other countries, according to the U.S. Geological Survey. China last year produced 120,000 metric tons of rare earths, while the United States produced 15,000 metric tons.  

Mountain Pass Mine

The United States also depends on China to separate the minerals pulled from Mountain Pass Mine, the sole rare earths mine in the U.S., which was bought two years ago by the Chicago-based JHL Capital Group LLC .  

“We need to develop a U.S.-based supply chain so there is no possibility we can be threatened,” said Ryan S. Corbett, managing director of JHL Capital. 

The mine’s top products are neodymium and praseodymium, two elements that are used together to make the lightweight magnets that help power electric cars and wind turbines and are found in electronics such as laptop hard drives. 

Mountain Pass, located in San Bernardino County, Calif., was once the top supplier of the world’s rare earth minerals, but China began taking over the market in the 1990s and the U.S. mine stopped production in 2002.  

Mountain Pass later restarted production, only to close again amid a 2015 bankruptcy. Corbett said extraction resumed last year after JHL Capital purchased the site with QVT Financial LP of New York, which holds 30%, and Shenghe Resources Holding Co. Ltd. of China, a nonvoting shareholder with 9.9%.  

Since then, Mountain Pass has focused on achieving greater autonomy with a $1.7 billion separation system set to go online late next year that would allow it to skip sending rare earths ore to China for that step. 

China could hurt itself in the long run by cutting off the U.S., specialists said.  

David Merriman, a rare earths analyst for Roskill commodity research in London, said that during a similar trade flap with China in 2011, Japan began looking to other countries, including Australia, for the minerals needed to manufacture electronics.   

Australian rare earths production giant Lynas Corp. Ltd. this month announced a proposed deal with Blue Line Corp. of Texas for a separation facility at an industrial site in Hondo, Texas.  

Other deposits

There may be other options, too. Deposits of rare earths have been detected in other U.S. states, including Wyoming and Alaska, as well in several remote areas of Canada. The Interior Department is calling for more prospecting and mining of “critical minerals,” including on public lands currently considered off-limits, and even in oceans. 

We have to be more forward-thinking,'' said Alexander Gysi, an assistant professor in geology and geological engineering at the Colorado School of Mines in Golden.It would be better for the U.S. to have a greater range of sources for rare earths.”
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Financial leaders of the Group of 20 gathered Saturday to brainstorm ways to adapt global finance to an age of trade turmoil and digital disruptions.

The central bank governors and other financial regulators meeting in this southern Japanese port city also flagged risks from upsets to the global economy as Beijing and Washington clash over trade and technology.

Asked if other financial leaders attending the meetings in Fukuoka were raising concerns over the impact on global markets and trade from President Donald Trump’s crusade against huge, chronic U.S. trade deficits, especially with China, U.S. Treasury Secretary Steven Mnuchin said no.

Trump and members of his administration contend that the ripple effects of the billions of dollars in tariffs imposed by Washington on Chinese exports over the past year are creating new business opportunities for other businesses in the U.S. and other countries.

But Mnuchin acknowledged that growth has been slowing in Europe, China and other regions.

“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.

The G-20 officials were expected to express their support for adjusting monetary policy, for example by making borrowing cheaper through interest rate cuts, in a communique to be issued as meetings wrap up on Sunday.

Their official agenda on Saturday was focused on longer-term, more technical issues such as improving standards for corporate governance, policing cyber-currencies and reforming tax systems to ensure they are fair for both traditional and new, online-based industries.

Ensuring that governments capture a fair share of profits from the massive growth of businesses like Google and Amazon has grown in importance over the many years the G-20 finance chiefs have been debating the reforms aimed at preventing tax evasion and modernizing policies to match a financial landscape transformed by technology.

One aim is to prevent a “race to the bottom” by countries trying to lure companies by offering unsustainably and unfairly low tax rates as an incentive.

Mnuchin said he disagreed with details of some of the proposals but not with the need for action.

“Everyone, we are now facing a turning point,” Japanese Finance Minister Taro Aso told the group. “This could be the biggest reform of the long established international framework in over 100 years.”

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. France and Britain have already enacted stop-gap tax systems for digital businesses, but they are not adequate, said French Finance Minister Bruno Le Maire.

“For the time being there is no fair taxation of this new economic model,” Le Maire said, adding that the hope is to have an agreement by the year’s end.

The issue is not confined to the wealthiest nations. Indonesia, a developing country of 260 million with more than 100 million internet users, is also struggling to keep up.

“The growth has been exponential but we cannot capture this growth in our GDP as well as in our tax revenue,” said Indonesian Finance Minister Mulyani Indrawati.

Mobile banking, big data, artificial intelligence and cloud computing are among many technologies that are expanding access to financial services for many people who in the past might not have even used banks.

But such innovations raise questions about protecting privacy and cybersecurity, Aso said.

“We need to stay vigilant against risks or challenges,” Aso said.

Japan, the world’s third-largest economy, is hosting the G-20 for the first time since it was founded in 1999. The venue for the annual financial meeting, Fukuoka, is a thriving regional hub and base for start-ups.

The G-20 groups include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.
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One down, still others to go. President Donald Trump claimed a victory after Washington and Mexico agreed on measures to stem the flow of Central American migrants into the United States.

Trump called off plans to impose a 5% tax on Mexican exports, and Treasury Secretary Steven Mnuchin, speaking to reporters Saturday in Fukuoka on the sidelines of a meeting of financial leaders of the Group of 20 major economies, urged China to follow suit and return to stalled negotiations.

Mnuchin said he planned to have a private conversation with the head of China’s central bank, Yi Gang. In a G-20 group meeting later in the day, the two were seen exchanging friendly remarks, but there were no fresh signs Beijing is ready to compromise in the dispute over trade and technology.

“From our perspective of where we are now, it is a result of them backtracking on significant commitments,” Mnuchin said. “I don’t think it’s a breakdown in trust or good or bad faith. … If they want to come back and complete the deal on the terms we were negotiating, that would be great.”

Mnuchin said he had no direct message to give to Yi, who has participated in the 11 rounds of talks so far on resolving the dispute between the world’s two largest economies over technology and trade.

He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are due to meet in Osaka for the G-20 summit on June 28-29.

“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin said. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

The deal with Mexico helps alleviate uncertainty over the deal Washington recently reached on revising the North American Free Trade Agreement. The new U.S.-Mexico-Canada deal has been heading toward a vote in Congress and might have been stymied by new tariffs. But the U.S. is still negotiating new trade deals with Japan after withdrawing from a Pacific Rim arrangement, the Obama-era proposed Trans-Pacific Partnership.

America’s huge trade deficit with China — a record $379 billion last year — is one factor driving Trump’s frustrations with Beijing.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.

“As the president has said, if we can get the right agreement, that’s great. If we can’t, we will proceed with tariffs,” he said.

 
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In May, Arkansas became the latest state to cash in on the sale of medical marijuana. Lines of people wrapped around a newly opened dispensary, drawing in customers from all four corners of the Southern U.S. state.

“I see them standing outside the window with a big smile on their face,” said Bud Watkins, manager of Doctor’s Orders RX in Hot Springs. “They love it.”

In the first week of business, Arkansan dispensaries sold more than 22.6 kg (50 pounds) of cannabis in nearly 5,000 transactions.

According to Marijuana Business Daily, that revenue will contribute to a growing national market of retail medical and recreational cannabis that is expected to eclipse $12 billion in sales by the end of 2019.

​Business good, money managing isn’t

Passed in the 2016 general election by popular vote, the Arkansas Medical Marijuana Amendment made the state one of only a few in the South to allow legal purchase of the drug. It joined, however, a majority of U.S. states that had passed similar legislation.

While business is doing well, managing the money is difficult. Despite more states coming on board, plant-touching businesses are still operating as mostly cash-only enterprises.

Plant-touching businesses handle the cannabis plant itself, either cultivating, distributing or processing it. These tend to be the businesses most people think of when they imagine the cannabis industry. Plant-touching businesses are generally subject to the strictest regulations and licensing processes in the industry, as well.

“The vast majority of the businesses that touch the plant have a very difficult time finding banking partners,” said Sal Barnes, a director at Marijuana Policy Group. “The majority of those that do (bank) are going to be through credit unions and state banks, especially in California and Colorado, where we have what we like to call an adult-use market, and that is essentially just a glorified checking account.”

​Federally outlawed since 1970

Since 1970, cannabis has been officially outlawed at a federal level for any use, including medical. This means that federally insured banks operate under prohibitive restrictions about doing any business with any plant-touching businesses, which affects everyone along the supply chain, from the growth of the plant to the production or sale of a cannabis gummy.

In spite of this, states have increasingly passed legislation to allow for the legal purchase, putting them at odds with the federal government.

“The industry is hindered. Right now, the current as-is method is not safe. You literally have companies hiring ex-Marines to guard their cash, and that just doesn’t fly,” Barnes said.

Not having access to banking services means that cannabis businesses must pay for everything in cash, from salaries to taxes. And, because the cash is usually stored on-site, robberies are very common.

“We have one of the most secure buildings in the state,” said Watkins, who didn’t want to go into too many details.

Marijuana in the mainstream

Legalizing marijuana is no longer considered a fringe issue. According to a 2018 Gallop poll, two-thirds of Americans support legalizing marijuana.

There is also bipartisan traction in Congress. In March, a U.S. House of Representatives committee passed the Secure and Fair Enforcement Banking Act of 2019, more commonly known as the SAFE Banking Act. It would provide legal protection from persecution for banks and federally regulated creditors that do business with state-legal cannabis businesses.

State attorneys, including Arkansas’ Leslie Rutledge, are now also applying pressure to see changes in federal law.

“After careful consideration and speaking with members of the banking industry, as well as our state regulatory authority, the attorney general felt that it was important for the office to support the SAFE Banking Act to help minimize fraud, tax evasion and money laundering that arises from cash only businesses,” said Rutledge’s office in an emailed statement.

Earlier this month, 38 Republican and Democratic state attorneys general sent a letter in support of the SAFE Banking Act.

“This is not just an issue facing Arkansans, but affects a majority of states,” Rutledge’s office stated. “If passed, this legislation will help Arkansas minimize the dangerous problems seen by other states, such as burglaries and robberies of dispensaries who can maintain a large quantity of cash, while at the same time, allowing legitimate businesses and service providers to also conduct business within the regulated banking system.”

As for whether the SAFE Banking Act eventually makes it to a vote, or future federal bills attempt to change banking regulations, Barnes said it’s only a matter of time.

“Next year, no. Next two to three years, possibly. Within the next four to five, definitely,” he said.
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Uber is parting ways with two of its top executives less than a month after the company’s rocky stock market debut.

CEO Dara Khosrowshahi told employees in an email Friday that he plans to be more involved in day-to-day operations now that the initial public offering of stock has passed. He said the heads of the company’s global rides and food-delivery teams will report directly to him, and Chief Operating Officer Barney Harford will leave the company.

Khosrowshahi said he plans to combine the marketing, communications and policy teams, and Chief Marketing Officer Rebecca Messina also will leave the company.

“It’s increasingly clear that it’s crucial for us to have a consistent, unified narrative to consumers, partners, the press and policymakers,” Khosrowshahi said.

Stock struggling

San Francisco-based Uber’s stock has struggled since its initial public offering last month. The company posted strong revenue growth in its first quarter as a public company, but also $1 billion in losses.

The stock closed Friday down 76 cents, or 1.7%, at $44.16. It went public at $45 a share.

“This is Dara asserting more control over the company and taking over the wheels at a time the company really needs to execute in the eyes of the public investors,” said Dan Ives, managing director of equity research at Wedbush Securities. “It’s a double-edged sword for him, because it’s going to put that much more pressure on the success of Uber riding on his shoulders.”
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Two key U.S. legislators want answers from Boeing and federal regulators about why the company waited more than a year to disclose that a safety alert in its 737 Max plane wasn’t working properly. 

U.S. Reps. Peter DeFazio of Oregon and Rick Larsen of Washington sent letters to Boeing and the Federal Aviation Administration seeking details on what they knew when, and when airlines were told. 

The feature is designed to warn pilots when a sensor provides incorrect information about the pitch of the plane’s nose. 

Boeing admitted in May that within months of the plane’s 2017 debut, engineers realized that the sensor warning light worked only when paired with a separate, optional feature. 

The sensors malfunctioned during flights in Indonesia and Ethiopia. Both planes crashed, killing 346 people in all.
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Finance ministers and central bank governors meeting in Japan this weekend will try to make headway on long-standing issues such as how much global giants like Facebook and Amazon should pay in taxes. 

They’re likely to end up focusing a large share of their attention on how to keep global growth on track when the world’s two biggest economies are entrenched in an escalating trade war. 

U.S. Treasury Secretary Steven Mnuchin, who has headed trade talks with Beijing along with U.S. Trade Representative Robert Lighthizer, was due to meet with Yi Gang, governor of China’s central bank, on the sidelines of the G-20’s annual financial gathering in Fukuoka in southern Japan. 

But it was unclear if their meeting, a possible prelude to talks at the G-20 summit later this month between President Donald Trump and Chinese President Xi Jinping, might lead to a restart of those talks after weeks of stalemate. 

China’s ability to endure

As the Trump administration prepares to expand retaliatory tariff hikes of up to 25% to another $300 billion of Chinese products, Beijing has sought to highlight China’s capacity to endure and overcome hardship.  

Yi told Bloomberg Television in an interview broadcast Friday that he expected the meeting with Mnuchin to be “difficult.” But he said China’s central bank, the People’s Bank of China, had plenty of room to maneuver to help keep the economy growing despite the pounding the country’s export manufacturers are taking as the toll from higher tariffs mounts. 

Speaking Thursday in France, Trump said he plans to make a decision about ramping up tariffs on China after speaking with Xi at the summit in Osaka at the month’s end.

“I will make that decision, I would say, over the next two weeks — probably right after the G-20,” he said.

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing China of resorting to predatory tactics to give Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. These tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

Trade deficit

Trump has also complained repeatedly about America’s huge trade deficit with China — a record $379 billion last year — which he blames on weak and naive negotiating by previous U.S. administrations.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

Unease over trade tensions and their potential impact on other economies has deepened since Trump announced he would impose a 5% tax on Mexican products starting Monday — a tax that would reach 25% by Oct. 1 if the Mexican government fails to stop the flow of Central American migrants into the United States.

While the tariffs have taken a minor toll on the U.S. economy, the uncertainty and slowing demand are rippling across the globe. Earlier this week, the World Bank downgraded its forecast for the global economy in light of trade conflicts, financial strains and unexpectedly sharp slowdowns in wealthier countries.

Slashing rates

The weakness has prompted central banks, most recently in Australia and India, to slash interest rates to fend off recession. 

Japan, hosting the G-20 for the first time since it was founded in 1999, has plumbed the limits of that strategy. The Bank of Japan’s policy interest rate has been at minus 0.1% for years, to keep credit cheap and support a modest pace of expansion.

As the trade conflicts percolate, the officials gathering in Fukuoka, a bustling port city on the southern main island of Kyushu, will carry on chipping away at financial reforms and other perennial issues. 

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. 

Japan’s Kyodo News service reported Friday, citing a draft communique, that the finance leaders are also discussing the issue of how developing countries are handling debts incurred through major construction projects, efforts to combat money laundering, and efforts to prevent terrorist groups from using cybercurrencies as a source of funding.
…

In a double blow for Mexico, credit ratings agency Fitch downgraded the nation’s sovereign debt rating on Wednesday, citing risks posed by heavily indebted oil company Pemex and trade tensions, while Moody’s lowered its outlook to negative.

The Mexican peso weakened as much as 1.3% on the news.

Cutting Mexico’s rating to BBB, nearing junk status, Fitch said the financial woes of state oil company Pemex were taking a toll on the nation’s prospects.

Fitch said mounting trade tensions influenced its view, according to a statement issued shortly after the end of a meeting in the White House in which Mexican officials tried to stave off tariffs U.S. President Donald Trump has vowed to impose next week.

Following a surge in mostly Central American migrants arriving at the U.S. border, Trump threatened blanket tariffs on Mexican imports if it did not do more to stem the flow.

“Growth continues to underperform, and downside risks are magnified by threats by U.S. President Trump,” Fitch said.

Mexican President Andres Manuel Lopez Obrador took office in December with ambitious plans to build a $8 billion refinery, a decision ratings agencies and investors warned would divert funds from its more profitable production and exploration business.

“Further evidence that medium-term growth is in decline, whether as a result of policies that actively undermine growth or because of continued policy unpredictability, would put downward pressure,” Moody’s said in a statement.

Mexico’s finance ministry declined to comment.

Lopez Obrador has said the ratings agencies were punishing Mexico for the “neo-liberal” policies of previous administrations.

A Reuters analysis of Pemex accounts from the past decade shows debt increased by 75% during the term of Lopez Obrador’s predecessor, Enrique Pena Nieto, amid a landmark energy reform.

Pemex

Moody’s highlighted the risks posed by Pemex, formally known as Petroleos Mexicanos, the world’s most indebted oil company.

“The impact of the contingent liability represented by Pemex weighs increasingly heavily on the sovereign credit profile,” Fitch said in a statement.

The latest moves by the ratings agencies on Mexico’s sovereign rating could also ratchet up pressure on the oil company’s own rating, which is teetering on the brink being downgraded from investment grade.

In March, S&P cut its stand-alone assessment of Pemex by three notches, following Fitch’s move to downgrade its credit in January. S&P pegs the rating of Pemex to that of the sovereign rating and the stand-alone assessment does not equal a rating.
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U.S. refiners warned the Trump administration that tariffs on imports from Mexico could deliver a punishing blow to refiners and raise the cost of gasoline just as the U.S. driving season kicks into high gear, according to sources familiar with the discussions.

Trump surprised Mexico last week with a threat to impose 5% tariffs on all its exports to the United States unless the Mexican government took measures to stem the flow of illegal immigrants into the United States.

The United States imports more than 650,000 barrels of crude per day from Mexico, about 10% of total crude imports, according to U.S. government data. Refiners are also worried that Mexico could retaliate with tariffs on its imports of U.S. fuel, a major source of revenue for the U.S. industry.

“If these tariffs take hold, particularly if they’re able to get up to 25%, that could really impact the overall competitiveness of the U.S. refining industry,” said Chet Thompson, chief executive of the American Fuel and Petrochemical Manufacturers trade association. The group has had discussions with the administration and Congress on the issue, Thompson said.

​Mexico oil complements US oil

Mexico’s oil is heavy and refiners need it to blend with lighter U.S. oil to produce diesel fuel, gasoline and other products. Tariffs would drive up the cost of those imports — and Trump has said he would increase levies by 5% monthly until they reach 25% in October.

Mexico is a prime supplier of heavy crude, which has been harder to come by since the United States imposed sanctions on Venezuela in January.

Gasoline prices have remained subdued as global oil prices have declined because of worries about worldwide economic demand. But without enough heavy crude, U.S. refineries could run plants at lower rates to save money if heavy crude feedstock becomes too costly, lobbyists said.

“The heavy crude market is tight and it’s only Mexico at the moment. The tariff would essentially make the crude uneconomical and we may have no choice but to consider run cuts,” said one Washington-based refinery lobbyist.

Refiners have said that could drive up the price of gasoline at the pump, just as American drivers take to the road in the period of the highest gasoline demand in the United States.

Texas lawmakers alarmed

International crude prices are near a six-month low, so any rise in gasoline prices is unlikely to be prohibitive.

Right now a regular gallon of gasoline in the United States averages $2.80, according to the American Automobile Association, but it tends to rise in the summer months.

“We are trying to educate the administration on what this means for gas prices,” the lobbyist said. The potential for tariffs has alarmed lawmakers of both major U.S. parties, including members of Congress from Texas, a reliably Republican state that voted for Donald Trump in 2016 but depends on the oil industry and cross-border trade with Mexico, which accounts for 39 percent of the state’s exports, according to the Texas-Mexico Trade Coalition.

“We shouldn’t be imposing tariffs on Mexico,” said Senator Ted Cruz, Republican of Texas. He told Reuters that Republican senators “had a vigorous and frank discussion” with White House officials on the issue.

Texas has 5.7 million barrels of daily refining capacity, more than any other state.

U.S. refiners are also concerned about retaliatory actions by Mexico, which buys about one-quarter of U.S. refined product exports. In March, Mexico bought about 1.3 million bpd of oil products from the United States, according to U.S. Energy Department data.

“It would be pretty devastating to us,” a second Washington-based lobbyist said.
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Lazaro Hernandez, who has made a good living showing U.S. cruise ship passengers around Havana in his pink 1950s Chevrolet, says the new U.S. ban on cruises to Cuba will wipe out 90% of his business overnight.

Hernandez is one of thousands of Cubans who benefited from the boom in American visitors to the Caribbean’s largest island following the loosening of travel restrictions under former U.S. President Barack Obama during the short-lived 2014-2016 detente between the Cold War foes.

Obama’s successor, President Donald Trump, aims to punish Cuba’s Communist government, especially for its alliance with Venezuela, by tightening the rules once more. Yet Cubans say those who will really suffer are the people, including the private-sector workers the United States purports to support.

“This is a fatal blow for us,” said Hernandez, 27, who makes $30 an hour — the equivalent of the average monthly state salary — doing tours of Havana. “If there’s no tourism, we don’t have work.”

​Second-biggest group of tourists

U.S. travelers excluding Cuban-Americans became the second-biggest group of tourists on the island in recent years after Canadians, with cruise travelers making up half of those.

Although they typically contributed less to the economy as they stayed on ships rather than in hotels or bed-and-breakfasts, they hired drivers and tour guides and spent at private shops, bars and restaurants.

“We bought T-shirts as souvenirs and bags,” said Sarah Freeman, 42, one of the passengers on the last U.S. cruise ship to sail from Havana, using a handcrafted wooden Cuban fan to fend off the Caribbean heat.

The new restrictions on U.S. travel to Cuba also include the elimination of so-called group people-to-people educational travel, one of the most popular exemptions to the overall ban on U.S. tourism to Cuba.

‘Negative perceptions’

William LeoGrande, a Cuba expert at American University in Washington, estimated the measures could reduce the number of non-Cuban-American U.S. visitors by two-thirds or more.

That could cut overall tourist arrivals in Cuba by about 10%, he said. Another expert, John Kavulich, said the drop could be as much as 20%.

“Optically, not having Carnival, Norwegian and Royal Caribbean in the marketplace will recreate negative perceptions about Cuba,” said Kavulich, president of the U.S.-Cuba Trade and Economic Council Inc., referring to the three main cruise lines forced to cancel service.

Earlier restrictions cut revenues

Tourism revenues, the country’s second-biggest source of hard currency, already slumped nearly 5% last year, according to official data.

That was partly the result of an earlier round of Trump administration restrictions.

Washington says it is pressuring Cuba to reform and tamp down its support for socialist Venezuelan President Nicolas Maduro, whom Trump has been seeking to force out in favor of opposition leader Juan Guaido, who is backed by most Western countries.

Critics say Trump is seeking to drum up support from the Cuban-American community in the swing state of Florida ahead of next year’s election.

Starting Thursday, many Cubans will be feeling the sudden absence in revenue from cruise passengers.

“For me, it will have a domino effect,” said Nichdaly Gonzalez, who earns her living posing for photos, dressed up in her colorful colonial garb, adding she expected to have to rein in her spending. As such, it will have a trickle-down impact on the local economy, especially in the ports of Havana, Santiago de Cuba and Cienfuegos that received the U.S. cruise ships.

The Cuban government has said it is aiming for tourism income to increase 5.8% this year, but it is hard to see how it can reach that goal now.

“We’ve lived with U.S. hostility now for 60 years, since the revolution, so we’ll get by,” said Abel Amador, 46, selling sketches to tourists on a cobbled street. “But this new move will still affect us.”
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The trade war between the United States and China could cut world economic growth next year, the International Monetary Fund (IMF) warned Wednesday.

IMF Managing Director Christine Lagarde said U.S. President Donald Trump’s threat to tax all trade between the two countries would shrink the global Gross Domestic Product (GDP) by one-half of one percent.

This amounts to a loss of about about $455 billion, larger than the size of South Africa’s economy,” Lagarde said in a briefing note for the Group of Twenty (G-20), a collection of the world’s largest advanced and emerging economies. “These are self-inflicted wounds that must be avoided… by removing the recently implemented traded barriers and by avoiding further barriers in whatever form,” she added.

The warning came as G-20 finance ministers and central bankers prepare to meet in Japan this weekend. They will gather just weeks after U.S.-China talks collapsed amid claims of broken promises and another round of punishing tariffs.

Lagarde urged governments to adopt polices that support economic growth to avoid a global economic decline. “Should growth substantially disappoint,” she wrote, policymakers must do more, including “making use of conventional and unconventional monetary policy and fiscal stimulus.”

The GDP is a monetary measure of the value of all goods and services produced in an economy during a specific period of time.
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Christy Lee of VOA’s Korean Service contributed to this report.

The escalating trade dispute between the United States and China could distract Beijing from dealing with nuclear North Korea and undermine its efforts to enforce international sanctions, potentially hampering the U.S. attempt to denuclearize the country, experts said.

Even as the Trump administration pursues its “maximum pressure” campaign to push North Korea to denuclearize, Washington has engaged in rounds of talks with China that have turned into a bitter tit-for-tat trade war. 

With the aim of making American-made goods competitive in the United States relative to cheaper Chinese imports, the U.S. launched an investigation into Chinese trade policies in 2017. Washington imposed tariffs on more than $250 billion out of total $539 billion worth of Chinese goods the United States imported in 2018.

Beijing retaliated by raising tariffs on $110 billion of a total $120 billion U.S. goods imported last year. 

The latest hike came earlier in May when the Trump administration raised U.S. tariffs on $200 billion in Chinese imports from 10% to 24%. Trump threatened to add a 24% tariff on the remaining $325 billion worth of imports from China.

This was followed by Beijing’s retaliatory tariff hike on American goods as high as 25% from 10%, affecting $60 billion in American imported goods starting June 1. 

China has accused the United States of starting what it called “the largest war in economic history” and an “economic terrorism.” On Sunday, China said it will “not back down’ in the escalating trade war with the United States.

Tension between Beijing and Washington over a trade deal has caused concern among North Korean watchers wondering if the dispute will affect the U.S. effort to denuclearize North Korea. 

China, as North Korea’s largest trading partner, is responsible for approximately 90% of its imports and exports. As such, Beijing could play a pivotal role in denuclearizing the nation on its southeastern border, because according to William Overholt, a senior research fellow and Asia expert at Harvard’s Kennedy School of Government, “China is very determined to eliminate North Korea’s nuclear weapons.”

The consuming battles in the U.S.-China bilateral trade agreements could distract China from the North Korean nuclear issue, said Scott Snyder, director of the U.S.-Korea policy program at the Council of Foreign Relations.

“The main impact of trade tensions between the U.S. and China is (lowering) the priority of North Korea as an issue on the agenda of U.S.-China relations,” said Snyder. “And so, it’s going to be harder to get China to cooperate as much as the United States would like because they’re focused on other issues in the relationship.”

The biggest role China could play in denuclearizing North Korea is enforcing international sanctions issued since 2016. Targeting Pyongyang’s key export commodities such as coal and seafood, the sanctions were designed to cut off foreign income that could be used to support its nuclear weapons and missile programs.

Joseph DeTrani, a former U.S. special envoy for nuclear talks with North Korea, emphasized China’s role in enforcing sanctions, saying, “Failure to work in concert (with China) in sanctions implementation would weaken our efforts to succeed with North Korea and its nuclear and missile programs.”

But a drawn-out trade war could make Beijing do less to enforce the sanctions, according to Ryan Hass, who served as the director for China, Taiwan and Mongolia at the National Security Council from 2013 to 2017. 

“The level of rigor that sanctions are enforced (with) depends upon the level of manpower and the level of resources that are devoted to the task,” said Hass.“It isn’t necessarily the case that China would turn its back on the sanctions, but it may just choose to allocate its resources and its manpower to other priorities.”

After all, Beijing is more concerned with achieving its chief objective of stability than it is with sanctions, said Robert Manning, a senior fellow at the Atlantic Council.

“While the sour climate and rising tensions in U.S.-China relations complicates U.S. diplomacy on North Korea, China’s cooperation was never a favor to the U.S.,” said Manning. “Beijing’s interests on the Korean Peninsula toward North Korea (have) been based on a sober assessment of China’s desire to see a non-nuclear Korea and stability on the Korean Peninsula.”

China, as one of five permanent members of the United Nations Security Council (UNSC), joined the rest of the UNSC members in issuing stronger sanctions on North Korea in response to multiple missile and nuclear tests it conducted in 2016 and 2017. 

When Washington and Pyongyang began engaging diplomatically in 2018, culminating in their first historical summit in Singapore in June 2018, Beijing suggested international sanctions on North Korea be eased. Several months after the Singapore summit, a report by the U.S.-China Economic and Security Review Commission came out indicating China has relaxed enforcing sanctions on North Korea.

Diplomatic efforts have been stalled since the breakdown of their second summit in Hanoi in February. At issue were conflicting demands and expectations: Pyongyang wanted all sanctions lifted before undertaking a step-by-step denuclearization process, while Washington wanted full denuclearization before lifting sanctions. Given that, the trade disagreements between Washington and Beijing could push China to truncate its support on sanctions, said Stapleton Roy, former U.S. ambassador to China during the George H.W. Bush and Bill Clinton administrations.

“Under those circumstances, it’s not clear whether China will be as willing as it was before to support very strong sanctions on North Korea,” said Roy.

Bruce Klingner, former CIA deputy division chief for Korea and current senior research fellow at the Heritage Foundation, said Beijing could not threaten outright to refuse to implement sanctions as a trade negotiations tactic since doing so would be defying the U.N. But “Beijing could, however, be less vigilant in implementing and enforcing U.N. sanctions,” said Klingner.

Complicating the matter, Snyder said if Beijing views Washington attempting to prevent China’s economic ascendency over the U.S. while engaged in the trade war, its interpretation of the U.S. attitude could induce it to curtail “the amount of cooperation that (it could) provide the United States on North Korea.”

 
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Vietnam is likely to make concessions to the United States so it can escape a U.S. watch list of possible currency manipulators and head off a hit to its fast-growing economy led by exchange rate-sensitive exports, analysts who follow the country say.

The Southeast Asian country, they forecast, will probably talk to the U.S. side over the next six to nine months, consider approving fewer changes in its foreign exchange rate and accept more high-value American imports.

Those measures would help Vietnam get off the U.S. Treasury’s list of nine countries that Washington will examine further for whether those states are currency “manipulators.” Manipulation implies deliberate state-driven currency rate changes that favor a country’s own exporters and make trade more costly for importers. The U.S. list released in late May added Vietnam, Malaysia and Singapore.

The policy changes might place a speed bump in the economy, which has grown around 6% every year since 2012, but a “manipulator” label could lead to tariffs on Vietnamese goods shipped to the United States and choke economic expansion.

“I think they’ll definitely (take action), because they’re extremely worried about this matter, so they’ll carry out some necessary communications and make some adjustments,” said Tai Wan-ping, Southeast Asia-specialized international business professor at Cheng Shiu University in Taiwan. “If they keep going, to be on this list is disadvantageous for Vietnam.”

Exports and the local currency

Vietnam, a growing manufacturing powerhouse that reels in factory investors from around Asia for its lost costs, posted a $39.5 billion surplus in trade with the United States last year and a $13.5 billion surplus in the first quarter this year.

The same country also adjusts its dong currency exchange rate within a band but trending toward weakness versus the U.S. dollar. That trend favors exporters, a majority of the $238 billion Vietnamese economy.

“The reality is, it’s what we call in economics a dirty float currency. It’s not grossly manipulated — it basically reflects market rate for the dong,” said Adam McCarty, chief economist with Mekong Economics in Hanoi. 

“But it’s sort of controlled to stop big fluctuations, so that the change in the exchange rate month to month is rather small, but it’s always been slowly and steadily in the direction of depreciation of the Vietnamese dong,” McCarty said.

​Inflows of “hot money” into Vietnam, which could hurt exports eventually, sometimes require the country to adjust its foreign exchange rate, Tai said.

Measures to get off the list

Vietnam’s limiting of any further fluctuations would put the U.S. government more at ease, said Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit.

“The U.S. Treasury did say that Vietnam should reduce its intervention in the exchange rate and let the currency move in line with economic fundamentals,” Biswas said. “If you’re not intervening in your currency, that automatically reduces the risk of being named a currency manipulator.”

But Vietnamese net purchases of foreign currency last year came to just 1.7% of GDP, below the 2% that Washington uses to define “persistent one-sided intervention in the foreign exchange market,” Hanoi-based SSI Research said in a note Monday. Governments can adjust exchange rates by buying or selling foreign currency.

Vietnam, where many of the top companies are state-invested, could reduce the trade balance by buying more “capital intensive equipment” and aerospace goods such as aircraft from the United States, Biswas said.

India left the U.S. list in May after easing a trade surplus, though China – in the thick of a trade dispute with Washington – was kept on it.

There are few other “policy levers” Vietnam can use to answer the U.S. Treasury concerns, said Gene Fang, an associate managing director with Moody’s Investors Service in Singapore.

Negotiations with Washington

Vietnam will probably remain on the U.S. list over at least the next half a year, when the document is due for an update, analysts believe. The two sides are likely to discuss the currency rate and the trade imbalance as Vietnam deliberates its response measures, they say.

Eventually the U.S. government could seek negotiations with Vietnam and place tariffs on Vietnamese exports if it sees fit, Fang said.

“I guess one of the things we could see as a result would be that the U.S. places higher tariffs on Vietnamese exports to the U.S., and that would be certainly negative from a growth perspective,” he said.
…

VOA’s Michael Bowman contributed to this story.

President Donald Trump said Tuesday he is “more likely” than not to impose a new 5% tariff on imported products from Mexico next week.

Trump offered his assessment at a London news conference with British Prime Minister Theresa May.

He made his comments even as U.S. and Mexican officials were in Washington talking about tariffs and the surge of Central American migrants traveling through Mexico to reach the United States.

“Mexico should step up and stop this invasion into our country,” Trump said, contending that “millions and millions” of undocumented migrants from Guatemala, Honduras and El Salvador are entering the U.S. to escape poverty and violence in their homelands.

“I think Mexico will step up and do what they need to,” Trump said. “I want to see security at our border and great trade. We are going to see if we can do something, but I think it’s more likely the tariffs go on, and we will probably be talking during the time that the tariffs are on.” 

Trump has threatened to increase the tariffs monthly in 5% increments if the migration is not curbed.

Some Republican lawmakers, normally political allies of Trump, are wondering whether to try to pass legislation to block his imposition of the tariff. They fear the extra taxation would be passed on to U.S. consumers in the form of higher retail prices on an array of goods, including automobiles and farm produce.

But Trump said, “I think if they do that, it’s foolish,” citing his high political standing among Republican voters, even as surveys in the U.S. show that overall, American voters disapprove of his performance as president.

Bob Carter, Toyota’s head of sales for North America, said in a letter sent to news agencies that the new tariffs on Mexico could cost the U.S. car industry billions.

Sixty-five percent of the popular Tacoma pickup truck that Toyota plans to sell in the United States is imported from a Mexican plant.

Talks between the U.S. and Mexico started Monday. Secretary of State Mike Pompeo plans to meet with Mexican Foreign Minister Marcelo Ebrard on Wednesday at the White House. 

Ebrard says he believes a deal can be reached to avoid tariffs, but if not, Mexico plans to announce its response Thursday. It is unclear exactly what the Trump administration considers sufficient migration control to cancel the tariffs. 

Mexican officials say they could only go so far in meeting Trump’s demand to block migrants’ passage through Mexico. The officials specifically ruled out a “third safe country” agreement requiring U.S. asylum-seekers to first apply for refuge in Mexico.

“There is a clear limit to what we can negotiate, and the limit is Mexican dignity,”said Mexico’s ambassador to the United States, Martha Barcena.

U.S. lawmakers sharply criticized Trump’s latest tariff tactic aimed at a major U.S. trading partner.

“This [tariffs] is not a popular concept,” said Republican Sen. John Cornyn of Texas, adding that his state is Mexico’s biggest export market.

Another Republican, Missouri Sen. Roy Blunt, expressed concerns that trade friction could harm a newly negotiated free trade pact between the United States, Mexico and Canada.

“I’m not a big advocate of tariffs, and I’d like to get the USMCA agreement approved. I don’t see how the addition of a tariff [on Mexican goods] right now helps make that happen,” Blunt told VOA.

“Mexico is a critical trading partner of the United States,” Democratic Sen. Ben Cardin of Maryland said. “You put up barriers, it’s going to end up costing us jobs, and it’s going to cost consumers.”

Cardin added that Trump’s threatened tariff “would be counterproductive,” as far as boosting U.S. border security.

“If we need cooperation on the southern border, they [Mexican officials] are not going to give us cooperation. Why bother if we’re going to have an antagonistic relationship?” Cardin said.
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Michael Bowman contributed to this report.

Mexico warned Monday that President Donald Trump’s threatened new tariff on its exports to the United States would hurt both countries’ economies and cause even more Central American migrants to travel through Mexico to reach the United States.

At the start of talks in Washington, Mexican officials said they could only go so far in meeting Trump’s demand to block migrants’ passage through Mexico to avert Trump’s imposition of a 5% tariff next week. The officials specifically ruled out a “third safe country” agreement requiring U.S. asylum-seekers to first apply for refuge in Mexico.

​”There is a clear limit to what we can negotiate, and the limit is Mexican dignity,” Mexico’s ambassador to the United States, Martha Barcena, said.

Barcena added that U.S. tariffs “could cause financial and economic instability,” reducing Mexico’s capacity to address the flow of migrants and “offer alternatives” to people fleeing Guatemala, Honduras and El Salvador.

Mexican officials contended that an additional quarter million migrants could try to reach the U.S. if the tariff is imposed, on top of the tens of thousands already reaching the southern U.S. border each month.

Trump showed no sign of softening his demand as he tweeted during a visit to London.

Mexican President Andres Manuel Lopez Obrador remained confident the two sides would reach an agreement, telling reporters Monday that he was optimistic.

He said his government would not engage in confrontation, and would always defend those who migrate out of necessity due to violence or a lack of food or job opportunities. He also remained positive that no matter what happens in the dispute with the United States, Mexico has “exception, extraordinary,” people and can push through any adversity.

U.S. Secretary of State Mike Pompeo and Mexican Foreign Relations Secretary Marcelo Ebrard are due to hold further talks about the dispute on Wednesday.

U.S. lawmakers returning to Washington after a weeklong congressional recess sharply criticized Trump’s latest tariff tactic aimed at a major U.S. trading partner.

“This (tariffs) is not a popular concept,” Republican Sen. John Cornyn said of public opinion in Texas, which he represents. “Mexico is our biggest export market.”

Another Republican, Missouri Sen. Roy Blunt, expressed concerns that trade friction could harm a newly negotiated free trade pact between the United States, Mexico and Canada.

“I’m not a big advocate of tariffs, and I’d like to get the USMCA agreement approved,” Blunt told VOA. “I don’t see how the addition of a tariff (on Mexican goods) right now helps make that happen.”

“Mexico is a critical trading partner of the United States,” Democratic Sen. Ben Cardin of Maryland said. “You put up barriers, it’s going to end up costing us jobs, and it’s going to cost consumers.”

Cardin added that Trump’s threatened tariff “would be counterproductive,” as far as boosting U.S. border security.

“If we need cooperation on the southern border, they (Mexican officials) are not going to give us cooperation. Why bother if we’re going to have an antagonistic relationship?” Cardin said.
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The United States is again calling on European allies to be careful of what it says are security risks posed by Chinese telecommunication company Huawei, as countries build out their 5G networks.

“We’ve been clear: our ask is that our allies and our partners and our friends don’t do anything that would endanger our shared security interests or restrict our ability to share sensitive information,” said U.S. Secretary of State Mike Pompeo on Monday after meeting with Dutch Foreign Minister Stef Blok in The Hague.

The top U.S. diplomat’s remarks come amid the Dutch intelligence agency’s reported investigation over alleged hidden backdoors in the software that could have given Huawei unauthorized access to users’ data.

Huawei’s CEO Ren Zhengfei has maintained his company would not share confidential user information and Huawei denies it is controlled by Beijing. The company also says it does not work with the Chinese government, an assertion Pompeo and other U.S. officials have rejected.

Blok said while his government wants to align policies with allies, the Dutch will make its own security decisions as it prepares to auction off new 5G internet rights.

“There is a specialist committee working now to decide on what criteria to add to the 5G option and somewhere this summer those criteria will be published,” said the Dutch foreign minister.

Pompeo and Blok met on the sidelines of a three-day Global Entrepreneurship Summit co-hosted by the U.S. and the Netherlands in The Hague.

This preeminent annual gathering convenes entrepreneurs, investors, and their supporters from more than 120 countries.

Eyeing China, Pompeo said the United States is seeking terms for fair trade practices.

“Authoritarian states can steal ideas and prop up their own business enterprises, but they’ll never match the entrepreneurship and innovation found in free societies,” said Pompeo, stressing the importance of intellectual property rights protection, the rule of law, as well as a predictable and consistent legal system.

Friday, Pompeo warned German authorities that the U.S. could withhold national security information if Germany adopts 5G networks run by Huawei because “it is not possible to mitigate” the security risks.

The White House has effectively blacklisted Huawei, making it harder to continue doing business with American companies.

In response, China says it plans to target organizations or individuals that deemed to damage Chinese companies’ interests in a so-called “unreliable foreigners list.”

 
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Mexican President Andres Manuel Lopez Obrador reiterated on Sunday the need for oil independence as his government said it would tender six construction contracts in June for a planned oil refinery in the southern state of Tabasco.

Tensions between Mexico and the United States have been running high in recent days after President Donald Trump threatened to impose punitive tariffs on Mexican goods unless Mexico halts a surge in illegal migration.

“We, our children and grandchildren aspire to live in a free, independent, sovereign country and we do not want to be a colony of any foreign country,” Lopez Obrador told a cheering crowd at an event to mark the start of the refinery’s construction.

“The most important thing at this moment in time is producing petroleum,” he added, saying the country needed to work toward “energy self-sufficiency.”

Much of Mexico’s gasoline need is met by U.S. imports, and Lopez Obrador wants Mexico to be able to cover its own demand.

“We have, I repeat, a good relationship with the United States, and with all governments in the world, but we do not want to be exposed and therefore it’s important that we are self-sufficient,” the president added.

Lopez Obrador has used similar language in the past when talking about oil, but his comments were lent extra weight because of the recent flare-up in tensions with Trump.

At the event, he repeated his desire to have good relations with Trump, but was at pains to say that maintaining the friendship of the American people was of paramount importance.

Mexican Energy Minister Rocio Nahle said at the same event that Mexico would tender six contracts for the plan to build the country’s first oil refinery in four decades.

“We will be tendering six construction contracts at the end of June so that all the parts that are under construction can start at the same time and we can finish the refinery in three years,” she said, without giving more details.

Investors in highly indebted state oil company Pemex, which will build the refinery, have repeatedly expressed concern that the project would divert funds from the more profitable exploration and production business. 
…

Joyce Huang contributed to this report.

China says Washington bears the “sole and entire responsibility” for the breakdown in trade talks earlier this month and that Beijing won’t back down on matters of principle. In a defiant rebuttal of who is to blame, China released a white paper Sunday, arguing that it is the United States that has backtracked in the talks and that tariffs will not resolve the two country’s trade issues.

Since talks broke down earlier this month, Beijing has doubled-down, issuing its own tit-for-tat tariffs in response to Washington’s increase to 25% of a tax on $200 billion in Chinese goods. Beijing has also been stepping up anti-American propaganda through state media. On Friday, China’s Commerce Ministry announced the establishment of a “non-reliable entity list.”

That move was a response to Washington’s ban on the sale of American made goods to Huawei and 68 of its affiliates. The ban is expected to go into effect in less than 90-days.

Speaking at a press conference on Sunday, China’s vice minister of commerce Wang Shouwen said it was Washington, not Beijing that was backpedaling.

“If the U.S. side wants to use extreme pressure, to escalate trade friction, to force China to submit and make concessions, this is absolutely impossible,” he said. Wang is a member of China’s trade negotiating team.

Speaking to reporters, he said that by announcing a decision to raise tariffs earlier this month while talks were ongoing and then later launching procedures for tariffs to cover $300 billion more in Chinese goods, Washington had broken an agreement reached by President Donald Trump and Xi Jinping late last year in Argentina.

“During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard,” he said.

In Argentina, Xi and Trump agreed to a temporary truce on raising tariffs. But there was no agreement to take that option off the table. Trump originally agreed to 90 days and later extended that period in early March citing progress in talks.

In early May, however, Trump Tweeted that talks were moving too slowly and accused Chinese negotiators of trying to renegotiate the text of the agreement.

That was one instance where the white paper argues that Washington backtracked, it also gives two other examples.

The white paper also said American negotiators “insisted on mandatory requirements concerning China’s sovereign affairs in the deal.” It was not clear what that refers to, but earlier reports have suggested that having an enforcement mechanism as part of a trade agreement between the two sides has long been a tough pill for Beijing to swallow.

In an April interview with CNBC, Treasury Secretary Steven Mnuchin said that the countries had “pretty much agreed” on an enforcement mechanism, adding that both sides would set up “trade offices.”

It is unclear when the two sides may be able to resume talks, if at all. President Trump has said he is willing to meet with Xi later this month on the sidelines of Group of 20 Nations summit in Japan. China has yet to confirm the meeting.

When asked about it on Sunday, Wang said he did not have any information to provide.

One thing that is clear from the white paper is that China cares a lot about tariffs. The white paper said that one prerequisite for a trade deal is that the U.S. should remove all additional tariffs imposed on Chinese exports and keep demands for Beijing’s purchase of goods “realistic.”

The paper gave several examples of how tariffs are having an impact on the United States and not good for either country or the global economy, but those critiques have all been part of the robust debate that is ongoing in the United States and elsewhere.

In China, however, as Beijing struggles with a slowing economy, concerns about jobs and ballooning debt, authorities have clamped down on any reporting about the trade war that strays from the communist party’s narrative.

China has also stepped up anti-American propaganda, airing decades old movies about the Korean War, which Beijing fought alongside the North against international forces led by the United States.

The Global Times claims the trade dispute “reminds Chinese of the military struggles between China and the U.S. during the Korean War.” Some state media have called the trade war a “people’s war” and there have been suggestions Chinese consumers should boycott American goods. But the effort to stir up nationalist fervor is a risky one for Beijing, analysts note.

Too much public backlash could have an impact on stability and hurt investment as well, said Liu Meng-chun, director of the Chung-Hua Institution of Economic Research’s mainland China division in Taiwan.

“The reason why there are arising calls or nationalistic sentiment is because China is to a certain degree trying to reach a consensus in society and rally support behind the government so that the country can shoulder the consequences of the breakdown of the trade talks,” Liu said.

 
…

The Trump administration had taken steps in recent weeks to work with Democratic and Republican lawmakers to address concerns about the proposed United States-Mexico-Canada trade agreement — and then came the threat of a new tariff.

President Donald Trump said this past week that he would put a 5% tariff on Mexican imports unless America’s southern neighbor cracked down on Central American migrants’ efforts to cross the U.S. border.  

His recent decision to remove U.S. tariffs on steel and aluminum imports from Canada and Mexico had appeased mostly Republicans who were using their trade votes as leverage to do away with those penalties. 

The administration also had committed to meeting with a group of House Democrats to allay their concerns. That gesture created goodwill, and as House Speaker Nancy Pelosi, D-Calif., described it, put Democrats “on a path to yes.” 

Now it’s unclear where that path may lead. 

​Jobs at stake

Influential business groups fear that Trump’s threat against Mexico could derail the proposed trade agreement. 

“The last thing we want to do is put that landmark deal — and the 2 million manufacturing jobs that depend on North American trade — in jeopardy,” said Jay Timmons, president and CEO of the National Association of Manufacturers. 

The U.S. Chamber of Commerce said it was considering legal action to block the tariffs from going into effect.  

Some GOP senators are rankled, too, most notably Charles Grassley of Iowa, chairman of the Senate Finance Committee. 

“This is a misuse of presidential tariff authority and counter to congressional intent,” Grassley said. 

Congressional aides from both parties said that it’s too soon to say whether Trump’s proposal will derail the agreement. But it does make it harder for lawmakers to assess how the agreement would improve the economic landscape if the tariffs on Mexico go into place.  

Democrats seem mostly concerned with other breaking developments. 

Hours before Trump announced his tariff plan, his administration tried to set up the agreement for a possible congressional vote before the August recess. The administration completed the formal steps necessary to start the clock for submitting legislation to Congress.   

​Not ‘positive’

Pelosi said that was not a positive step'' andindicates a lack of knowledge on the part of the administration on the policy and process to pass a trade agreement.” 

Democrats want to strengthen enforcement of labor and environmental standards in Mexico.  They have pushed for Mexico to change labor laws that have encouraged wages as low as $1 or $2 per hour at some plants, giving U.S. companies a strong incentive to move operations south of the U.S.-Mexico border. 

Mexico lawmakers have approved a law that requires secret-ballot union votes and proof of workers’ consent for contracts. Democrats in Washington want to ensure follow-through, and Pelosi still holds the final say in determining when, or whether, the agreement comes up for a vote. 

Pelosi also joined several Republican senators in slamming Trump’s tariff threat, saying it is “not rooted in wise trade policy but has more to do with bad immigration policy on his part.” 

“Yet again, the president is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi said. 

White House counselor Kellyanne Conway said the tariffs should not jeopardize passage of the trade pact and that the president simply wants Mexico to do more to stem the flow of migrants. 

She said the White House is confident it would pass the Democratic-run House, if Pelosi put it to a vote. 

​Investors unhappy

Trump said he had the authority to impose a 5 percent levy on all goods imported from Mexico and pledged to increase those duties to as high as 25 percent if Mexico did not dramatically reduce the number of migrants crossing the border. 

Investors have responded negatively, with the Dow Jones industrial average closing Friday down roughly 355 points, or 1.4%. 

Still, Conway told reporters that “tariffs are a good way to get a trading partner’s attention, and apparently it did.” 

Mexico’s foreign relations secretary, Marcelo Ebrard, announced that he and Secretary of State Mike Pompeo would lead talks Wednesday in Washington, a move seen as potentially easing tensions and avoiding retaliatory tariffs.  

Both Mexico and Canada are moving ahead with steps toward ratifying the trade agreement. 

Canada’s foreign minister, Chrystia Freeland, indicated that it’s up to the U.S. and Mexico to work out their dispute. “This is a bilateral issue,” she said. 
…

VOA News Center associate producer Jesusemen Oni contributed reporting from Washington. 

Mexico’s president suggested Saturday that his country could clamp down on migration, and he said he thought the United States was ready to discuss its threatened use of tariffs as a means to combat illegal migration from Central America.

President Andres Manuel Lopez Obrador said at a Mexico City news conference that “there is willingness on the part of U.S. government officials to establish dialogue and reach agreement and compromises.”

His comments came ahead of talks in Washington next week, and Obrador said he said he expected “good results.” He added that Mexico was willing to “reinforce” existing “measures without violating human rights.”

Mexican Foreign Minister Marcelo Ebrard said Friday that he began negotiating with U.S. officials after U.S. President Donald Trump threatened to impose tariffs on Mexican products related to the migrant surge at the border.

Ebrard said on Twitter that he had spoken to U.S. Secretary of State Mike Pompeo by phone and said face-to-face talks between the two would take place Wednesday in Washington.

“We will be firm and defend the dignity of Mexico” at the talks, Ebrard said.

Obrador also responded Friday to the U.S. tariff threats with caution, urging “dialogue” over “coercive measures.” 

“I want to reiterate that we are not going to fall into any provocation. But we are going to be prudent, and we are going to respect the authorities of the United States and President Donald Trump,” Obrador said.  

That statement followed a two-page letter to Trump made public late Thursday, similar in tone, responding to Trump’s announcement on Twitter earlier in the day that the United States would begin imposing an escalating tax on imports from Mexico. 

“On June 10, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,” Trump tweeted. Until “the illegal immigration problem is remedied,” tariffs will continue to rise monthly, going as high as 25% by Oct. 1. 

U.S. border agents have apprehended an increasing number of people, largely from Central America, who crossed the southern U.S. border without authorization in recent months. 

In contrast to previous spikes in arrivals, recent groups have included a large number of children, prompting U.S. officials to scramble to support families and children traveling without parents — some of whom are seeking asylum.  

In an indication of the pressing demands at the border, U.S. Customs and Border Protection solicited bids for the purchase of tens of thousands of diapers, baby wipes and bottles this past week, according to documents reviewed by VOA on a government contracting website.

Trump’s announcement of the new tariffs came on the same day Mexico began the formal process of ratifying the United States-Mexico-Canada Agreement (USMCA) on trade. 

Mexico’s deputy foreign minister for North America, Jesus Seade, said such tariffs would be disastrous, expressing more alarm than the Mexican president. 

“If this threat is carried out, it would be extremely serious,” he told reporters. “If this is put in place, we must respond vigorously.” 

For one trade expert, who previously served as Mexico’s ambassador to China — a top trading partner for that country and the U.S. — the timing of Trump’s tariff statement raised questions about the future of the USMCA. 

“By mixing two things — immigration and now, just lately, drug flow, with trade — I think it confuses the issue,” said Jorge Guajardo, a senior director at the Washington-based international trade consulting firm McLarty Associates.  

The trade deal “was a triumph for all three countries, and now of course, that all comes into doubt,” Guajardo added. 

Some Republican members of Congress but no Democrats were consulted about White House plan, according to acting White House Chief of Staff Mick Mulvaney. 

Asked in a hastily arranged conference call with reporters about benchmarks Mexico would need to achieve to have the tariffs lifted, Mulvaney said there needed to be significant and substantial reductions in arrivals from Central America crossing into the United States. 

“We’re going to take this and look at it on a day-to-day and week-to-week basis,” said Mulvaney. “We are interested in seeing the Mexican government act tonight, tomorrow.” 

Trump has repeatedly accused Mexico of not doing enough to stop Central American migrants from traveling through the country on their way to the United States. 

The U.S. system, however, is not infallible. While the country has increased its apprehension rate at the border in recent years, U.S. border agents stop an estimated 65% to 80% of people crossing into the country without authorization, according to a 2018 DHS report.
…

The Trump administration is committed to making fossil fuels cleaner rather than imposing “draconian” regulations on coal and oil, U.S. Energy Secretary Rick Perry said Thursday at an energy conference in Salt Lake City.

Perry previously said the administration wants to spend $500 million next year on fossil fuel research and development as demand plummets for coal and surges for natural gas. 

“Instead of punishing fuels that produce emissions through regulation, we’re seeking to reduce those emissions by innovation,” Perry said at the conference.

Fossil fuel emissions have been cited by scientists as a major source of global warming. 

U.N. Secretary-General Antonio Guterres recently said the world must change how it fuels factories, vehicles and homes to limit future global warming.

Perry said the Trump administration has proven it can make energy cleaner, but he provided no details involving coal and other fossil fuels, other than the closing of old, inefficient coal-burning power plants and exporting increasing volumes of natural gas, an alternative to coal.  

Department of Energy spokesman Dirk Vande Beek didn’t immediately return an email and voicemail seeking more details about Perry’s claim.

Perry pointed to an overall drop in emissions as proof of progress.

Greenhouse gas emissions dropped 13 percent from 2005 to 2017, according to the most recent report from the Environmental Protection Agency.

Lindsay Beebe of the Sierra Club in Utah said trying to make fossil fuels cleaner is misspent energy.

“I don’t know that it’s possible right now, but what is ready right now are renewables. Wind, solar and geothermal are commercially viable and at scale,” Beebe said.

The summit Thursday was briefly interrupted when 15 protesters took the stage to criticize the administration’s fixation on fossil fuels. 

They said the misguided approach ignores climate change. Police then escorted them out.

After they left, Utah Gov. Gary Herbert, who sponsored the event, said he and other leaders appreciated the “youthful enthusiasm” but their call to immediately discard fossil fuels and shift entirely to renewable energy isn’t realistic.

They would like us to quit by Friday and not take anything out of the ground,'' Herbert said.That obviously doesn’t work from a practical standpoint.”

Americans burned a record amount of energy in 2018, with a 10% jump in consumption from booming natural gas helping lead the way, the U.S. Energy Information Administration said.

Fossil fuels in all accounted for 80% of Americans’ energy use. 
…

The International Monetary Fund said on Thursday it had not pressured Venezuela to release economic indicators after years of silence, while two sources said the country’s surprise data release this week was due to pressure from China.

The central bank on Tuesday unexpectedly released data confirming Venezuela is suffering hyperinflation and massive economic contraction. The release reversed President Nicolas Maduro’s unofficial policy of classifying economic indicators as state secrets.

The data reported a 22.5 percent contraction in Venezuela’s economy in the third quarter of 2018 from the same period of the previous year. The bank did not provide a full-year 2018 figure for economic activity.

Monthly inflation in April 2019 was 33.8 percent, while 2018 full-year inflation reached 130,060 percent, the bank said.

The IMF said it suspended work with Venezuela on its economic data in January, when opposition leader Juan Guaido invoked the constitution to assume the interim presidency, arguing Maduro’s 2018 re-election was illegitimate.

Most Western countries, including the United States, have backed Guaido as the OPEC nation’s interim head of state.

However, Maduro and ruling socialist party continue to control state institutions including the military, state oil company PDVSA and the central bank.

The Fund said in March it was awaiting guidance from member countries on whether to recognize Guaido as the country’s leader. The United States and Venezuelan ally China are important IMF members, as they have the world’s two largest economies.

“Work in this area has been suspended since late January as political developments gave rise to questions regarding government recognition,” the spokesman said.

Last year, the IMF issued a “declaration of censure” against Venezuela for failing to report timely and accurate economic data, such as gross domestic product and inflation.

The move was a warning that Caracas could be barred from voting on IMF policies, and eventually expelled, unless it resumed timely and accurate reporting.

Maduro has repeatedly dismissed the IMF as an agent of U.S. colonialism and criticized the institution for leading harsh austerity programs in developing countries.

China, which has for years sought to increase its influence within the IMF, had pressured Maduro’s government to release the data, according to two sources with knowledge of the matter.

One of the sources said China had hoped releasing the data would help bring Venezuela into compliance with the IMF, making it harder for the institution to recognize Guaido.

An IMF spokesman said the fund could not fully assess the quality of the data because there was no contact with the government.

“We cannot offer a view on data quality as we have not had the opportunity to make a full assessment in the absence of contacts with the authorities,” the spokesman said.
…

U.S. stocks lost ground again on Thursday, as conflicting comments on trade talks from President Donald Trump and Beijing  reinforced investor nervousness that a lengthy battle could be in the offing and harm global growth.

Trump said talks with China were going well but those comments were countered by a senior Chinese diplomat who said provoking trade disputes is “naked economic terrorism.”

The lack of clarity around the trade battle has rattled investors of late, after the S&P 500 had risen more than 17% through the first four months of the year on optimism a trade deal between the two countries could be reached.

That optimism has faded, however, as the escalating dispute between the two countries has weighed heavily on Wall Street in May, with each of the three main indexes declining at least 5% for the month. The benchmark S&P 500 is nearly 6% lower from its closing high on April 30.

“The market is coming to that realization that we are not getting really clean or clear information and it is going to be a lot of noise and just prepare for that,” said Ben Phillips, chief investment officer at Eventshares in Newport Beach, California.

“It is a difficult market right now. There are a lot of macro signals that are starting to roll over and the question is the trade dispute causing that or is it other factors.”

A government report on Thursday showed U.S. inflation was much weaker than initially thought in the first quarter on a sharp slowdown in domestic demand, while growth was also slightly lower than estimated in April.

The Dow Jones Industrial Average fell 27.59 points, or 0.11%, to 25,098.82, the S&P 500 lost 2.11 points, or 0.08%, to 2,780.91 and the Nasdaq Composite dropped 9.19 points, or 0.12%, to 7,538.12.

The trade jitters helped sustain demand for safe haven debt, as U.S. Treasury yields held near 20-month lows. The yield curve between three-month bills and 10-year notes remained inverted, the inversion the widest in nearly 12 years.

That, in turn, weighed on interest-rate sensitive bank stocks, which dropped 1.5% and were on track for a third straight day of declines, while the broader financial sector declined 0.8%.

The energy sector fell 1.3%, as oil prices continued their slump in part due to a smaller-than-expected decline in U.S. crude inventories. The sector has fallen more than 10% this month.

Among stocks, Dollar General Corp jumped 7.2% after the discount retailer’s same-store sales and profit topped expectations.

Viacom Inc climbed 3.6% after report that CBS Corp is preparing for merger talks with the media company. CBS rose 2.5%.

PVH Corp plunged 14.2% as the worst performer on the S&P 500, after the Calvin Klein owner cut its annual profit forecast as it grapples with tariffs and slowing retail growth.

Declining issues outnumbered advancing ones on the NYSE by a 1.11-to-1 ratio; on the Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 had 1 new 52-week high and 25 new lows; the Nasdaq Composite 25 new highs and 119 new lows.
…