President Donald Trump said Thursday he still believes China “would love to make” a new trade deal with the United States and might now regret backtracking on some agreements negotiators for the two countries had reached.

“We had a deal and they broke the deal,” Trump said at the White House. “I think if they had to do it again they wouldn’t have done what they did.”

Trump contended that tariffs he has imposed on hundreds of billions of dollars worth of Chinese imports has prompted some manufacturers in China to move their production to other countries.

“I think we’re doing very well with China,” he said, adding that tariffs have had little effect on inflation in the U.S.

Trade talks between officials of the world’s two biggest economies broke off recently, but U.S. Treasury Secretary Steven Mnuchin has said he likely will travel to Beijing “in the near future” to continue negotiations.

Meanwhile, Chinese Vice Foreign Minister Zhang Hanhui  accused the U.S. of engaging in “naked economic terrorism” in the trade war. He leveled the accusation in Beijing during a news briefing on President Xi Jinping’s official visit to Russia next week.

Beijing and Washington have been engaged in a trade war since last July, when Trump first imposed tariffs on hundreds of Chinese products worth billions of dollars, leading to a set of retaliatory tit-for-tit tariff increases. Trump and Xi had agreed to de-escalate the trade war last December while they started negotiations to reach a lasting deal.  

But Trump recently boosted taxes on $200 billion worth of Chinese goods after accusing Beijing of reneging on promises to make structural changes to its economic practices. He has threatened to add tariffs to all Chinese imports, which could amount to levies on another $300 billion worth of Chinese exports to the U.S.  

Zhang said while China does not want a trade war, it is not afraid of it, and described the Trump administration’s actions as “economic bullying.”

Beijing countered Trump’s levies by announcing new tariff increases on $60 billion worth of U.S. exports that will take effect Saturday.

An editorial Wednesday in The People’s Daily, the official newspaper of China’s ruling Communist Party, warned that China could end exports of rare earth minerals to the U.S. as leverage in the trade war. Rare earths are a group of 17 chemical elements used in everything from smartphones and other high-tech electronics to military equipment. 
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The highly-anticipated showdown on Wednesday night between Trish Regan of Fox Business and Liu Xin of China Global Television Network (CGTN) — the overseas arm of state-controlled China Central Television (CCTV) — turned out to be a tame question-and-answer session with little exchange of barbs.

Some observers say that, as both are neither policymakers nor experts on trade, their “disappointing” talks contributed nothing of substance, but stoked up emotions of national pride in China.

Others, however, welcome such dialogues that allow free exchange of differing views to continue and set an example for U.S. and Chinese officials to resume their trade negotiations.

The media hype has not only shed light on the increasingly sharp divide between the two countries over trade but also press freedom in China as well, they add.

Face-off

The buildup for the debate started last week when Liu released a commentary, accusing Regan of “economic warmongering,” which led to Regan’s invitation via Twitter for an “honest” debate and Wednesday’s face-off between them.

Liu appeared as a guest, via satellite from Beijing, on Regan’s U.S. based show.

Citing rights issues, CGTN wasn’t allowed to live-stream the segment, but many Chinese appeared to watch it on the internet.

As expected, during the 16-minute-long segment, Liu stuck closely to China’s talking points on every question Regan raised, be it China’s intellectual property (IP) theft, state capitalism or tariffs.

When asked by Regan to respond to a hypothetical question if the United States “forces” China’s Huawei to share its technological developments, Liu replied: “if it is through cooperation, if it is through mutual learning… if you pay for the use of this IP or this high-tech knowledge, I think it’s absolutely fine. Why not? We all prosper because we learn from each other.”

Liu, however, admitted that cases of IP theft do exist, but that doesn’t mean all Chinese people are stealing. And IP protection has been a consensus in China, she added.

Analysts, in general, believe Liu is on a mission to defend China’s trade stance although Liu insisted she is neither a member of the Communist Party of China, nor speaks for the party, which controls her station.

State mouthpiece?

“They [state media broadcasters including Liu] all come on the debate or shows with a mission. Many won’t show their true color as the mouthpiece of the Communist Party, but in fact, deep in their mind and thoughts, they have long joined the party,” Lu Nan, an outspoken Chinese dissident, who now lives in the United States, said during a Mingjin TV discussion.

Lu added that he gave Liu credit for having skillfully argued her way out in a language that is not her mother tongue although truth beat many of her arguments.

David Bandurski, co-director of the China Media Project, an independent research program in partnership with the Journalism & Media Studies Centre at the University of Hong Kong, also noted “the seemingly ever-present hand of the Chinese party-state,” saying that Liu can’t afford to act as she pleases in a country, where media professionals are asked to pledge loyalty to the party-state.

Stoking nationalistic emotions

“Their debate, so-called… could play a substantial role in stoking emotions of national pride in China, regardless of the outcome. Liu is already being portrayed on social media as a national champion,” Bandurski told VOA in an email, adding the show has little substance.

The show has indeed attracted so much attention in China that, right after it ended, the top-trending sentence on Weibo — a Twitter-like microblogging platform in China — was “Liu was interrupted by Trish three times in the first 30 seconds of the show.”

Many Chinese netizens cheered for Liu’s success.

One Weibo user praised Liu to be “neither overbearing nor servile and have showed good demeanor from a big country” while another wrote that Liu “stands to reason and has done a good job.”

There were, however, others who said they were disappointed with the show because it came nowhere near a heated debate.

Set an example

Nevertheless, Harley Seyedin, president of the American Chamber of Commerce in South China, said the conversation between Regan and Liu could set an example for both the United States and China to follow and reach a final resolution for the trade dispute.

“As these two super anchors can come to together and held a very civilized conversation on very difficult issues, I think, as two nations, we should be able to sit down at the table and resolve the issues,” Seyedin told a CGTN show right after the Regan-Liu talk.

Xu Huiming, an associate professor of journalism at Guangzhou University, agreed, saying talks are better than no talks.

“Shall there be no exchange of views, you won’t know what’s on the mind of the others. Any exchange of views, even if they differ from one another, raises attention to those who are interested in the matter,” the professor said.
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In recent weeks, Australia and India have re-elected incumbent prime ministers. These Asia-Pacific countries, who have a difficult relationship with China, are unlikely to make the kind of policy changes that Beijing has been seeking for a long time, analysts said.

Australia this month re-elected Prime Minister Scott Morrison stunning pollsters who had anticipated his defeat for several months. India gave a landslide victory to Prime Minister Narendra Modi’s Bharatiya Janata Party, who campaigned largely on a nationalistic agenda.

China wants support from Australia and India on issues like the U.S.-China trade war, the Huawei controversy, South China Sea controversy and the Belt and Road Initiative.

The Communist Party in Beijing attaches great importance to obtaining support from democratic countries as a means to enhance China’s global influence. It has spent huge sums to obtain the support of the relatively poor European countries like Greece in order to expand the Chinese footprint. But Australia and India are unlikely to support China on many of the issues that are core to Beijing’s foreign policy.

But there may be some exceptions. India has invited Huawei to start trials of its 5G telecommunications network while Australia has blocked it.

“Australia was the first country to reject Huawei’s 5G technology and it is very hard to see how it is going to revisit the decision,” said Richard McGroger, senior fellow at Lowy Institute in Sydney.

China’s official media expressed dissatisfaction over a statement by Morrison describing China as a customer of Australia and the United States as a friend. He made a clear distinction between the two countries when he said, “China is an incredibly important country for Australia’s future. Our relationship with China is of course different to our relationship with the United States,” he said during the elections.

McGregor said there was no reason to be upset over the remarks. “I think it was not a good choice of words. I am sure the Prime Minister did not intend to send any kind of wrong signal and I doubt very much he will be describing China that way again,” he said.

Beijing may have preferred a change of government in Australia which would revisit some of the decisions taken by the coalition under Morrison earlier. But Morrison is back as Prime Minister and he is unlikely to review past decisions.

Besides, Australia has its own domestic reasons to support the United States on issues like opposing China’s military build up in the South China Sea.

“Of course, Australia is worried about the Chinese bases in the South China Sea, since most Australian trade passes through those waters,” he said.

China-India relations

In his congratulatory message to India’s re-elected prime minister, Chinese President Xi Jinping called on Modi to continue joint efforts with China in “promoting multi-polarization and economic globalization as well as upholding multilateralism.”

Analysts see this statement as a sign that Xi wants India to join in a broad coalition against the dominating influence of the United States.

Xi’s choice of words is significant because they come ahead of the meeting of Shanghai Cooperation Organization in Kyrgyz Republic capital, Bishkek, on June 13-14. He will meet Modi along with Russian President Vladimir Putin, Pakistan Prime Minister Imran Khan and heads of central Asian countries. China will once again push forward its agenda for opposing U.S. trade policies.

As the re-elected government settles down in New Delhi after a stormy election, envoys from India and China are making swift preparations for a series of exchanges between the leaders. A meeting of foreign ministers will happen soon.

Modi is inviting Xi to his election constituency and pilgrimage city of Varanasi in northern India for an informal summit in September.

The first Mar-a-Lago style informal summit took place with the two leaders meeting each other without aides took place in the Chinese city of Wuhan last year. The idea is for the two leaders to understand each other, see issues from a larger canvass and give “strategic guidance” to their ministers on enhancing India-China relations.

The Wuhan summit took place one year after India and China were engaged in a 72-day long border spat at a place called Doklam near the Bhutan border.

“There will be some serious effort to improve relationship. I think they will also look at the possibility of finding an early solution to the border dispute between the two countries,” said Phunchok Stobdan, former Indian diplomat and strategic expert.

“They might also discuss the Dalai Lama issue,” he said. The Tibetan leader fled China and came to India in 1959. He has since been demanding “greater autonomy” for Tibetan speaking people in China while Chinese leaders describe him as a “separatist and splittist” element who is instigating a section of Tibetans to break up from China.

Modi will also be careful about allowing implementation of China’s Belt and Road Initiative because it can be an emotional issue, more so because the Indian public regards Beijing as Pakistan’s biggest ally and protection. Modi and his party fought the election speaking against what he regards as Pakistan based terrorists causing mayhem in India.

An important issue on Xi’s mind is to garner support from different countries against Washington’s aggressive trade actions, which has also affected India and other countries. An important question is whether he will manage to persuade Modi to come out openly against the trade war.

“India usually tries to stay middle of the road instead of choosing between the U.S. and China. It is unlikely to come out strongly against U.S. trade actions,” Stobdan said.

India cancelled oil shipments from Iran under pressure from Washington, incurring huge losses. But it is likely to go back to the earlier practice of importing Iranian oil despite U.S. sanctions, Stobdan said.

“India is ready to make exceptions when it comes to its long-term a relationship with Iran and Russia. Everyone’s watching if India would regard its relationship with China at the same level,” he said.
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Water restrictions are to be imposed in Sydney, Australia’s biggest city, for the first time in almost a decade because of falling reservoir levels and a long-standing drought. Residents who breach the regulations could be fined US$150.

The flow of rainwater into some of Sydney’s reservoirs is at its lowest since World War II. From Saturday, households will face restrictions that will target the use of water outdoors. Garden sprinklers will be banned, and tougher measures could follow. The New South Wales state government says that “early and decisive action” will help to conserve supplies as a record-breaking drought worsens.

Australia’s Bureau of Meteorology is predicting below-average rainfall and higher temperatures for the next three months across the much of the continent.

“With the lowest inflows into Sydney’s water storage since 1940, the government has come to a decision that it is best to go into water restrictions,” said Melinda Pavey, the New South Wales state Minister for Water. “We may get rain. The Bureau of Meteorology’s predictions are not fabulous, but as we know as we plan weekends, they are not always right and I hope that they are wrong. We are taking the appropriate course of action to take it to level one.”

New South Wales has been in drought since the middle of 2017.

Catherine Port, from Sydney Water, a government-owned company, says its officers will patrol to ensure the water ban is not broken.

“Sydney Water have a team of community water officers that will be out in the community to monitor and ensure that water restrictions are complied with. Penalties that will apply is AUD$220 for individuals and $550 for businesses,” she said.

Critics, though, insist that Sydney’s plight is in part the result of poor planning and a failure to take water recycling seriously.

Falling reservoir levels prompted authorities to switch on a multi-million dollar desalinization plant in January. At full capacity, it could supply Sydney, a city of 4.6 million people, with 15 per cent of its water needs.

Smaller towns in New South Wales, Australia’s most populous state, are also facing water crises. In Tamworth, residents are on level four restrictions that ban all use of water outdoors, and swimming pools cannot be filled or topped up. Level five restrictions are considered to be an emergency measure.

Australia is the world’s driest inhabited continent.

 
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The Trump administration said on Tuesday that no major trading partner met its currency manipulation criteria but nine countries, including China, required close attention as Washington presses tariffs and negotiations to address trade deficits.

The Treasury Department, in a semi-annual report to Congress, said it reviewed the policies of an expanded set of 21 major U.S. trading partners and found that nine required close attention due to currency practices: China, Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, and Vietnam.

“No major U.S. trading partner met the relevant 2015 legislative criteria for enhanced analysis” as a currency manipulator, the department said in a statement.

President Donald Trump has imposed tariffs on $200 billion worth of Chinese imports and begun the process of imposing tariffs on another $300 billion in Chinese goods.

Talks to end the trade dispute between the two countries collapsed earlier this month, with the two sides in a stalemate over U.S. demands that China change its policies to address a number of key U.S. grievances, including theft of intellectual property and subsidies for state enterprises.

The Treasury Department said Washington believes direct foreign exchange intervention by the People’s Bank of China has been limited in the past year.

“Treasury will continue its enhanced bilateral engagement with China regarding exchange rate issues, given that the RMB (yuan) has fallen against the dollar by 8 percent over the last year in the context of an extremely large and widening bilateral trade surplus,” Secretary Steven Mnuchin said in the statement.

China needs to aggressively address market-distorting forces, including subsidies and state-owned enterprises, the Treasury statement said. Improved economic fundamentals would support a stronger yuan and help reduce China’s trade surplus with the United States, it said.
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Officials in Zimbabwe say the bodies of eight illegal miners have been retrieved from an abandoned gold mine about 50 kilometers north of Harare. The news Monday was a reminder of the risk faced by desperate illegal miners trying to make a living in the economically troubled southern African country. Matopo is a gold rich area in southern Zimbabwe, and some men there enter such mines, despite the danger involved. 

These men are illegal miners, using a metal detector to search for gold at the Nugget Mine, about an hour’s drive from Bulawayo, Zimbabwe’s second largest city. 

​Piniel Ndingi-Nyoni is one of those who entered the mine, despite the recent collapse of a mine shaft that killed four men. 

Ndingi-Nyoni says he has no choice but to take the risk. 

“Problems at home force me to do this. We need school fees, you need food, there are medical bills to take care of, so all that force you to stay in the bush. It is not funny at all. In this cold weather, we sleep in shacks while the wife is at home. At times, we can go for three months without getting anything,” Ndingi-Nyoni said.

​A few minutes later, the illegal miners disappeared into the bush at the sight of officials in the area. Once the coast is clear, they re-appear.

No man gives up, is the motto 42-year-old Edward Madyauta lives by. He says he has gold rush dreams. But he says on several occasions, he has gone for months on a wild-goose chase. 

What about fears of being trapped under, as what happened a few meters away?

“I do not fear death, because (I) usually get gold before depth gets past my height. So that can’t collapse on me. But those who go under have a higher risk of the shaft collapsing on them,” Madyauta explained.

On Monday, searchers found the bodies of eight men working an abandoned mine in Mazowe, north of the capital. It was the third fatal incident involving illegal miners this year. 

Polite Kambamura, deputy minister of mines, says the government is worried about the trend and has embarked on a campaign to urge people to stay away from abandoned mines.

​“We are going to call on owners of such mines to show cause why they are not mining. We are risking the lives of many people. If a mine stays for long without any activity, the ground will weaken up,” Kambamura said. “Some of those miners are going underground to mine on pillars. The moment they mine on pillars, then there is no more support and the ground will fall off.”

But with Zimbabwe’s economy in meltdown and no recovery in sight, one wonders if any of the miners, like Nyoni and Madyauta in Matopo, will listen to the advice.
…

Zimbabwe’s disused mines continue to be a death trap for poor and desperate illegal miners in search of the precious minerals to earn a living. Columbus Mavhunga travelled to Matopo a gold rich area about 500 kilometers south of Harare, where mining continues despite some having been trapped earlier this month.
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President Donald Trump says he is “honored” to give U.S. farmers hurt by the trade war with China another $16 billion in aid. 

Flanked by potato growers, ranchers and dairymen in the White House, Trump said Thursday the aid “will help keep our cherished farms thriving and make clear that no country has a veto on America’s economic and national security.”

Trump added that trade has been “very unfair” to the farmers who he says support him politically.

This is the second multibillion-dollar bailout the Trump administration has provided to U.S. farmers who have seen Chinese markets for their products dry up because of tariffs China imposed on U.S. goods to retaliate for U.S. tariffs on Chinese products. The White House gave farmers $12 billion last year.

U.S. Agriculture Secretary Sonny Perdue says farmers should see the first installment of the new $16 billion in aid in July or August. Perdue said he doubts if the United States and China can reach a trade deal by then.

Most of the money will go to farmers who grow and sell such crops as soybeans, corn, peanuts and wheat. Money will also be set aside to buy excess products from the farmers and send them to schools and food banks.

“I can’t recall a president more concerned about farmer well-being. We are working hard to assess trade damages and this package ensures farmers will not bear the brunt,” Perdue said.

While Trump said Thursday that many farmers told him he is “doing the right thing,” some trade experts call the bailout a political ploy and say farmers are more concerned about winning back the lost Chinese market.
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In a potential challenge to U.S.-led efforts to build consensus on the Boeing Co 737 MAX flying again, Canada and Europe said on Wednesday they would bring back the grounded aircraft on their own terms if their specific concerns are not addressed.

Global regulators will meet in Fort Worth, Texas, on Thursday where the U.S. Federal Aviation Administration hopes to reach an international consensus on how to move forward with the MAX, U.S. officials told Reuters.

The plane was grounded worldwide in March following a fatal Ethiopian Airlines crash just months after a similar Lion Air disaster in Indonesia which together killed 346 people.

Global airlines that had rushed to buy the fuel-efficient, longer-range aircraft have since canceled flights and scrambled to cover routes that were previously flown by the MAX.

“From our point of view, if we all work together and we all reach the same aim, fine. If we don’t, we’ll choose our own time to decide when the planes are safe to fly again,” Canadian Transport Minister Marc Garneau told Reuters in an interview.

“The number one focus for us is that we in Canada must be satisfied. It doesn’t matter what others do. So if we are not perfectly synchronized with certain other countries that’s how it going to be,” Garneau said.

Regulators are expected to discuss Boeing’s proposed software fix and new pilot training that are both key to re-starting flights. Boeing has not yet formally submitted its proposals to the FAA.

A spokesman for the European Aviation Safety Agency said on Wednesday that it would complete an additional independent design review of the plane once the FAA approves Boeing’s proposed changes and establishes “adequate training of Boeing MAX flight crews.”

Foreign regulators have already signaled disagreements over measures to end the grounding, with Garneau calling in April for pilots to receive simulator training for the MAX, rather than computer courses, going a step beyond FAA-backed proposals.

Acting FAA Administrator Dan Elwell told Congress last week the FAA is working closely with other civil aviation authorities “to address specific concerns related to the 737 MAX.”

United Airlines Chief Executive Oscar Munoz said on Wednesday that FAA approval is only the first step, with public and employee confidence key to deciding when to fly its 14 MAX jets again.
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British lawmakers are denouncing Prime Minister Theresa May’s latest proposal to withdraw from the European Union (EU) amid growing demands from her own Conservative Party for her resignation.

May said on Tuesday a bill she plans to present to Parliament next month would include a provision to vote on whether to hold a second referendum to leave the EU, a key demand of many opposition lawmakers.

May also offered closer trading arrangements with the EU as another incentive in what she called a “last chance” opportunity to finalize a Brexit deal.

Speaking before the House of Commons on Wednesday, May implored lawmakers to support her bill, warning a rejection would lead to “division and deadlock.”

May said her withdrawal bill would be disclosed Friday so that lawmakers would have time to study it.

Legislators previously spurned May’s exit deal three times and her latest attempt to win support faces an uphill fight. She plans to ask lawmakers to vote on the bill again during the week of June 3.

Members of May’s own Conservative Party accused her of relenting to pro-EU demands while opposition Labour Party lawmakers rejected her latest plan as too little too late.

On Tuesday, May said after Parliament votes on the measure, she will establish a timetable for her departure as leader of the Conservative Party and as prime minister.

A growing number of Conservative Party members, however, are pressing her to cancel the vote and step down sooner.

May is likely to face even more pressure when the results of this week’s European Parliament elections are released, as the Conservative Party is expected to suffer heavy losses.

The election will be held in Britain on Thursday, but the results won’t be announced until all European countries have finished voting late Sunday.

British citizens voted in a referendum to leave the EU three years ago and the country was scheduled to leave the EU on March 29, but the 28-nation bloc extended the deadline until October 31.

 
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Celebrity chef Jamie Oliver’s restaurant chain in Britain has filed for bankruptcy protection, closing 22 of its 25 eateries and leaving some 1,000 people out of work.

The remaining outlets, two Jamie’s Italian restaurants and a Jamie’s Diner at Gatwick Airport outside London, will stay open, the financial firm KPMG, which will oversee the process, said in a statement Tuesday.

Oliver said on Twitter he was “devastated that our much-loved UK restaurants have gone into administration,” a form of bankruptcy protection, and thanked people “who have put their hearts and souls into this business over the years.”

​Oliver gained fame as “The Naked Chef” on television, which aired in dozens of countries, after premiering in Britain some 20 years ago.  The television success was followed by a number of cookbooks. The restaurant chain included Jamie’s Italian, Jamie Oliver’s Diner and Barbecoa steakhouses.

Five branches of the Australian arm of Jamie’s Italian have also been sold and another put into administration.

Oliver’s restaurants started to lose revenue in 2016. Business got so bad for the restaurant group that Oliver injected millions of dollars of his own money in an effort to turn the tide. 

“The current trading environment for companies across the casual dining sector is as tough as I’ve ever seen,” Will Wright, an administrator at KPMG, said in a statement. “The directors at Jamie Oliver Restaurant Group have worked tirelessly to stabilize the business against a backdrop of rising costs and brittle consumer confidence.”

Other British chains have also had to close outlets.  Earlier this year, cafe chain Patisserie Valerie was forced to close 70 outlets, at the cost of 920 jobs.

Celebrity chefs in the U.S. have also fallen on hard times. Thomas Keller closed Bouchon in Beverly Hills in 2017, saying it couldn’t remain profitable. That same year, Guy Fieri closed Guy’s American Kitchen and Bar in New York’s Times Square and Daniel Boulud closed DBGB Kitchen and Bar in New York, saying it didn’t get enough business during the week.
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The Trump administration is considering payments of $2 per bushel for soybeans, 63 cents per bushel for wheat and 4 cents per bushel for corn as part of a package of up to $20 billion to offset U.S. farmers’ losses from the trade war with China, Bloomberg reported on Tuesday.

Caitlin Eannello, spokeswoman for the National Association of Wheat Growers, said that 63 cents per bushel for wheat is the number the organization has been hearing for the next round of U.S. trade aid. “That is the number that we’ve been hearing, she told Reuters.

Those payments would exceed the rates paid last year to farmers in a similar aid package.

President Donald Trump earlier this month directed the Department of Agriculture to work on a new aid plan for farmers as Washington and Beijing intensified their 10-month-old trade war by raising tariffs on each other’s goods.

Agriculture Secretary Sonny Perdue last week said the new aid package was likely to be $15 billion to $20 billion, exceeding the up to $12 billion in aid rolled out last year to farmers. Most of it was likely to be direct payments, sources told Reuters.

A spokeswoman for the Department of Agriculture said the details of the aid package would be released soon, without commenting on the reported payment rates. One lobbyist source said the plan was likely to be announced this week.

The USDA spokeswoman added that the aid was designed to avoid skewing planting decisions. “Farmers should continue to make their planting and production decisions with the current market signals in mind, rather than some expectation of what a trade mitigation program might or might not look like,” she said in emailed comments to Reuters.

However, the aid was seen encouraging more soy planting at a time when supplies are already at record-high levels.

“That [proposed $2 bean payout] is a pretty enticing carrot, and that tells me that they [farmers] are going to try to get as many bean acres in as possible, at the expense of corn,” said Matt Connelly, analyst at the Hightower Report in Chicago.

“The reason is beans [futures] went south is, they saw that $2 a bushel, and that will entice them to plant beans until the July 4th weekend.”

Chicago Board of Trade soybean futures turned lower on the report on worries that farmers would plant more of the crop. Top importer China continues to shun U.S. soybeans.

The administration last year paid $1.65 per bushel for soybeans, 14 cents per bushel for wheat and 1 cent per bushel for corn.

Negotiations between the United States and China have soured dramatically since early May, when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.

The dispute between the world’s two largest economies has cost billions, roiled global supply chains and rattled financial markets. American farmers, who helped carry Trump to his surprise 2016 election win, have been among the hardest hit.

Bloomberg, citing anonymous sources, said growers of other commodities were also to receive payments in this year’s aid package, but it did not provide rates. It said the plan could change as Trump could make adjustments.

The Trump administration wants any trade deal with China to include purchases of more than $1.2 trillion worth of American products, including agricultural commodities and industrial goods.
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The Portuguese economy is resisting the prevailing gloom in Europe.

Activity remained strong, with GDP rising by 0.5% in the first quarter, or 1.8% at an annual rate, compared with 1.2% in the euro zone, forecasts Brussels.

Following the trend of 2018, Portugal’s good economic health comes mainly from private consumption fueled by rising wages and employment dynamics. The preliminary data, says the national statistics institute, “reflect a significant acceleration in investment.”

The government deficit has fallen from 7.2% of GDP to 0.5% of GDP since 2014, and the unemployment rate from a peak of 17.9% in early 2013, to about 6% currently.

“The tourism sector has been the largest driver of the export recovery in Portugal,” Ben Westmore, the head of the Portugal desk in the Economics Department of the OECD, confirmed to VOA.

These numbers make Portugal the darling of international financial institutions. The head of the International Monetary Fund, Christine Lagarde, praised Portugal’s economic recovery recently in Lisbon. “Portugal and the Portuguese people deserve huge credit for their efforts, for which they should be proud,” Lagarde said.

Low wages

Despite the spectacular recovery and the fall of unemployment, a sense of precariousness and low wages are everywhere in Portugal. The minimum wage is only $669 (€600) per month — a number that has not prompted the return of many young adults, who left during the crisis. Between 2008 and 2014, 120,000 people left Portugal per year. Twenty percent were highly skilled workers, according to professor Joao Miguel Trancoso Lopes.

This sociologist undertook a study and interviewed many of them to understand their motivations to stay abroad or come back in their country.

“They do not feel Portugal is full of opportunities. The low wages are a real hurdle for them. They look for better jobs, outside of the country. Unlike the previous generations, the young Portuguese leaving abroad do not dream of returning home,” he explained to VOA.

This professor used to be paid $3,345 (€3,000) per month before the crisis. Today, he earns $2,901.99 (€2,600) per month. The health care system is another sector that was heavily targeted for budget cuts during the crisis.

Bruno Maia is a neurologist in Lisbon. He acknowledges the current government took some measures to lift the burden, such as hiring of doctors and nurses.

“The damages made to our health care system are so pronounced that these new jobs do not compensate what was lost during the crisis. It is not enough. Problems are accumulating and we are struggling,” he underscores to VOA. For example, Maia says non-emergency procedures, like an MRI, could take up a year to be performed in Portugal.

Besides these issues, Antonio Costa, the Socialist prime minister who vowed in 2015 to overturn austerity, remains popular in Portugal. His party and its allies likely will win the coming European elections on May 26.

“Euroskepticism, which grew a lot during the crisis, it is not as important today. We do not expect a defeat as the Socialist Party is popular in Portugal,” Andre Freire, a political science professor at Lisbon University Institute, told VOA.

Portugal has 21 seats at the European Parliament.
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More than 170 American shoe manufacturers and retailers, including such well-known athletic shoe brands as Nike, Under Armour and Adidas, urged President Donald Trump on Tuesday to exempt footwear from any further tariffs he imposes on imported goods from China.

The lobby for the shoe industry, the Footwear Distributors and Retailers of America, told Trump in a letter that his proposed 25 percent tariff on shoes imported from China “would be catastrophic for our consumers, our companies and the American economy as a whole.” The industry imported $11.4 billion worth of shoes from China last year, although some manufacturers have been shifting production elsewhere, especially to Vietnam and Cambodia.

It said the proposed tariffs on shoes made in China could cost U.S. consumers more than $7 billion annually on top of existing levies.

“There should be no misunderstanding that U.S. consumers pay for tariffs on products that are imported,” the 173 companies said, rejecting Trump’s frequent erroneous statement that China pays the tariffs and that the money goes directly to the U.S. Treasury.

Trump has been engaged in a string of reciprocal tariff increases with China on imported goods arriving in each other’s ports as the world’s two biggest economies have tried for months — unsuccessfully so far — to negotiate a new trade pact.

After Trump imposed new 25 percent taxes on $200 billion worth of Chinese products earlier this month, he also set in motion plans to impose a new round of levies on virtually all Chinese imports, another $300 billion worth of goods, including shoe imports, clothing and electronics.

The U.S. leader said that if American companies did not like the tariffs on Chinese imports, they could move their production inside the United States or to another country whose manufactured products are not taxed when they are sent to the U.S. But the footwear lobby rejected Trump’s suggestion.

“Footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes,” the industry told Trump.

The U.S. Trade Representative’s office has published a list of products that would be covered by the expanded tariffs and set a hearing for June 17.
…

Turkey’s Trade Ministry will implement a reciprocal reduction in tariffs on U.S. imports after the United States halved tariffs on Turkish steel imports last week, two Turkish sources said on Tuesday.

The White House last week terminated Turkey’s eligibility for the Generalized System of Preferences (GTS) program, in a move Turkey said contradicted trade goals, but also halved some of the tariffs it had raised last August amid a diplomatic row between the NATO allies.

The sources said the reciprocal reduction will halve tariffs on some U.S. imports, including passenger cars, alcoholic drinks, tobacco, cosmetics and PVC. The lowered tariffs will take effect with a presidential decree this week, the sources said.

 
…

The founder of Chinese telecom giant Huawei is dismissing the decision by the United States to blacklist the company on the grounds it poses a threat to U.S. national security.

In a series of interviews with state-run news outlets Tuesday, Ren Zhengfei said the Trump administration’s actions underestimate his company’s true capabilities to continue operating and developing the next generation of mobile technology commonly referred to as 5G. 

Last week’s order would curb the future transfer of hardware, software and services to Huawei, possibly limiting the Chinese company’s expansion globally and its efforts to overtake South Korea’s Samsung as the world’s biggest smart phone manufacturer.

The world’s second biggest smartphone maker sustained a major blow Monday when the giant U.S. search engine Google announced it will restrict Huawei from access to its popular Android operating system in compliance with the order.

Google services were already banned in China, so analysts say the impact of the curb on technology sales could mostly affect Huawei’s international sales, making its phones less attractive to customers if they do not have Google features. Last year, Huawei sold nearly half of its production of 208 million smart phones overseas and the rest in China.

The U.S. Commerce Department on Monday granted Huawei a 90-day license to continue providing software updates to existing Huawei smartphones and maintain existing networks. 

The Chinese firm is at the center of ongoing trade disputes between Washington and Beijing. The U.S. contends that Huawei’s technology could be used to spy on Americans, allegations Huawei has repeatedly denied.

The U.S. battle with Huawei has also ensnared Ren Zhengfei’s daughter, Meng Wanzhou, who serves as the company’s chief financial officer. Meng was arrested last December in Vancouver on a U.S. warrant charging her with violating sanctions on Iran, a move that angered China and led to the arrest of two Canadian nationals in an apparent retaliation against Canada.

China and the U.S. are in the midst of months-long trade talks with the world’s two biggest economies engaging in tit-for-tat tariff increases on hundreds of billions of dollars’ worth of exports.
…

The U.S.-China trade war has not spared European companies in China. More than one-third of them are feeling a direct impact on their businesses and fear the situation will worsen in the coming weeks.

“They [European companies] are feeling more anxious than they felt last year, rising tensions such as the trade tensions that we are facing currently that don’t seem to be on the point of being sorted out quickly,” European Chamber Vice President Charlotte Roule told VOA.

The trade conflict has come on top of several other problems faced by European companies in China.

“Macroeconomic challenges such as the Chinese economic slowdown and global economic slowdown are worrying them,” Roule said.

In a survey conducted last January and released Monday, the European Chamber of Commerce in China reported the trade war has impacted 25% of its members engaged in U.S.-bound exports from their operations in China.  

Since January, the United States has since expanded its tariff measures against China-made goods, while Beijing has announced its own set of retaliatory measures. These moves would affect a larger number of European companies, including those that import products from the U.S.

Significantly, the survey showed that only five percent of the chamber’s member companies see the trade tussle as an opportunity for themselves.

Intertwined relations

The trade war involves two countries at the political level, but has impacted other businesses with overlapping interests and intertwined connections across regions and industry segments.

Nick Marro, an analyst at the Economic Intelligence Unit, cited the example of China-based joint ventures between European and China companies engaged in producing electronic components. They will be hit by Washington’s decision to raise taxes on goods made in China. Similarly, U.S.-based European companies exporting to China would be affected.

“Trade wars are very complicated. You can’t isolate these effects to one or two countries,” Marro said.

The extent of the trade war’s impact varies from one industry sector to another, said Jacob Gunter, the chamber’s policy and communications coordinator.  But Gunter said there is considerable fear that the impact might prove to be widespread and severe.

“European companies share many of the U.S.’ concerns, but strongly oppose the blunt use of tariffs,” according to the chamber.

The trade war was ranked fourth among the concerns of European companies when the survey was taken last January. But the companies were more concerned about the economic slowdown in China and the world, besides the rising labor cost in China.

“European firms confront the same challenges facing their U.S. rivals, such as local protectionism or burdensome administrative processes. And developments in the trade war to date have yielded little immediate progress on these issues,” said Marro.

Even without the trade war, European companies face considerable difficulties due largely to regulatory controls and inadequate implementation of market access rules made by the central government in Beijing.

Chamber members presented a bleak outlook of the business situation in China in the coming years.  About 47% of those surveyed said they expect regulatory obstacles to actually increase in the next five years.

The survey reported that business optimism on growth over the next two years dropped from 62% in 2018 to 45% in 2019.

Joining hands

Analysts said China will increasingly try to woo the European Union and its markets in order to protect itself from aggressive U.S. trade actions.  But the bloc is undecided on what stance to take, because any move in favor of China would not be lauded in Washington.

“The EU is kind of in a difficult position. People are pushing the EU to choose the U.S. or China. I think the EU is choosing the EU,” Gunter said. “The EU is taking necessary measures to protect its own interest and expand business relations with China,” he said.

“There is an opportunity for China and the EU to work together. As far as the trade conflict is concerned, it should try to mediate the conflict, instead of taking sides,” he said.

European companies said there is no sign of the Chinese government trying to make life easier for them, even after battling the United States in the trade conflict for 10 months.

Last January, most European companies told surveyors they have not changed their strategy owing to the trade war. But analysts said many of them will have to rethink the way they do business.

“European companies will seek to minimize their exposure to political risk by adopting their global supply chains, said Max Zenglein, head of economic research at the Mercator Institute for China Studies (MERICS) in Berlin.

“Export-oriented businesses, in particular at the lower end of the value chain, are likely to shift to other Southeast Asian nations. This is, however, a process that takes time,” he said.
…

Ford plans to cut 7,000 jobs, or 10 percent of its global workforce, as part of a reorganization as it revamps its vehicle offerings, the company said Monday.

The reorganization will involve some layoffs and reassignments and should be complete by the end of August, a Ford spokeswoman said. Ford has been phasing out most sedan models in the United States as more consumers have opted for pickup trucks and sport utility vehicles.

The move, which began last year, will lead to 800 layoffs in North America in total, including about 500 this week, said Ford spokeswoman Marisa Bradley.

The company has yet to determine the specifics in other regions, she said.

“As we have said, Ford is undergoing an organizational redesign process helping us create a more dynamic, agile and empowered workforce, while becoming more fit as a business,” Bradley said.

“We understand this is a challenging time for our team, but these steps are necessary to position Ford for success today and yet preparing to thrive in the future.”

Ford had signaled it expected significant job cuts in April 2018 when it announced a plan to phase out several small models in North America. At the same time, the company is ramping up investment in electric cars and autonomous driving technology.

General Motors has also undertaken job cuts over the last year for similar reasons.

Shares of Ford dipped 0.4 percent to $10.25 in early trading.

 
…

Vietnam and Europe could be swapping more pomelo fruit and Portuguese cheese soon if a new trade deal comes into effect, linking two regions that have been looking for an alternative to the trade tensions brought on by the United States.

The European Parliament is scheduled to discuss the trade deal on May 28, after years of negotiations between Vietnam and the European Union. The deal is significant not only because it facilitates exports, like tropical fruit, but also as it lays out commitments on human rights, labor unions, and protection of the environment. Critics, though, say the EU-Vietnam Free Trade Agreement would not really enforce human rights standards and would continue the offshoring of jobs that has left workers vulnerable.

For the EU, the deal is one more way to access Asia’s fast-growing economies, set a model for trading with developing countries, and hold Vietnam’s one-party state accountable on its promise to level the business playing field. 

For Vietnam, it is a chance to call itself a country open for business, with many trade deals, as well as raise quality standards to those expected by European customers. 

“It includes a lot of commitments to improve the business environment in Vietnam,” Le Thanh Liem, standing vice chair of the Ho Chi Minh City People’s Committee, said at a European Chamber of Commerce in Vietnam event.

Vietnamese officials often say that it helps to have an external factor to get difficult internal reforms over the finish line. For example it might be hard to convince conservatives to allow workers to form their own labor unions. But if there is an outside incentive, such as greater trade with the EU, that could bring conservatives on board. 

Labor unions were one concern for Europeans. Another is the loss of blue-collar jobs to Asia, including to Vietnam. European workers worry that as they take gig jobs, like food delivery, in place of their old stable jobs, there is less of a safety net through long-term employers or through tax-funded government programs. And there is one more concern raised through the trade deal:“We have some concerns about human rights in Vietnam, but that has been discussed,” Eurocham chair Nicolas Audier said at the chamber event. 

​Amnesty International reported this month that the number of Vietnam’s political prisoners jumped to 128 from 97 last year, despite the fact that Hanoi says it does not jail people for political reasons.

Some question if the EU is applying consistent standards as it moves toward the trade deal with Vietnam, even while punishing nearby Myanmar and Cambodia for human rights abuses. Brussels is pulling back its Everything But Arms scheme of preferential trade access for the two other countries, based in part on Cambodia’s crackdown on opposition politicians in the 2018 election and on Buddhist-majority Myanmar’s mass killing of the mostly Muslim Rohingya.

But both Vietnam and the EU want more trade options because a major trading partner, the United States, is turning away from the world economy. Washington pulled out of the Trans-Pacific Partnership trade deal in 2017, removing a key reason that Hanoi signed the deal, which was to get Vietnamese textile and garment companies more access to U.S. customers. Europe was also hit when Washington slapped tariffs on foreign steel and aluminum in 2018, and now it is threatening more import duties on European cars. 

So the EU and Vietnam are still working on their trade deal, and it is reflected in Prime Minister Nguyen Xuan Phuc’s schedule. He paid a visit to EU member states Romania and the Czech Republic in April, then hosted a state visit from Romania in May. Lobbying for the deal continued as he welcomed the Swedish crown princess this month, and he will return the courtesy, with the next trip on his calendar planned for Stockholm. 
…

Huawei Technologies’ founder and chief executive said Saturday that the growth of the Chinese tech giant “may slow, but only slightly,” because of recent U.S. restrictions.  

In remarks to the Japanese press and reported by Nikkei Asian Review, Ren Zhengfei reiterated that the Chinese telecom equipment maker had not violated any law. 

“It is expected that Huawei’s growth may slow, but only slightly,” Ren said in his first official comments after the U.S. restrictions, adding that the company’s annual revenue growth might undershoot 20%.  

On Thursday, Washington put Huawei, one of China’s biggest and most successful companies, on a trade blacklist that could make it extremely difficult for Huawei to do business with U.S. companies. China slammed the decision, saying it would take steps to protect its companies. 

Trade, security issues

The developments surrounding Huawei come at a time of trade tensions between Washington and Beijing and amid concerns from the United States that Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied. 

A similar U.S. ban on China’s ZTE Corp. had almost crippled business for the smaller Huawei rival early last year before the curb was lifted. 

The U.S. Commerce Department said Friday that it might soon scale back restrictions on Huawei. 

Ren said the company was prepared for such a step and that Huawei would be “fine” even if U.S. smartphone chipmaker Qualcomm Inc. and other American suppliers would not sell chips to the company. 

Huawei’s chip arm HiSilicon said Friday that it had long been prepared for the possibility of being denied U.S. chips and technology, and that it was able to ensure a steady supply of most products. 

The Huawei founder said that the company would not be taking instructions from the U.S. government. 

“We will not change our management at the request of the U.S. or accept monitoring, as ZTE has done,” he said.

In January, U.S. prosecutors unsealed an indictment accusing the Chinese company of engaging in bank fraud to obtain embargoed U.S. goods and services in Iran and to move money out of the country via the international banking system. 

Ren’s daughter, Huawei Chief Financial Officer Meng Wanzhou, was arrested in Canada in December in connection with the indictment. Meng, who was released on bail, remains in Vancouver and is fighting extradition. She has maintained her innocence.  

Ren has previously said his daughter’s arrest was politically motivated.
…

Senior Chinese diplomat Wang Yi told U.S. Secretary of State Mike Pompeo on Saturday that recent U.S. words and actions had harmed the interests of China and its enterprises, and that Washington should show restraint, China’s Foreign Ministry said. 

Speaking to Pompeo by telephone, Wang said the United States should not go “too far” in the current trade dispute between the two sides, adding that China was still willing to resolve differences through negotiations but that the nations should be on an equal footing. 

On Iran, Wang said China hoped all parties would exercise restraint and act with caution to avoid escalating tensions. U.S. State Department spokeswoman Morgan Ortagus said in a statement that Pompeo spoke with Wang and discussed bilateral issues and U.S. concerns about Iran, but she gave no other details. 

Tensions between Washington and Tehran have increased in recent days, raising concerns about a potential U.S.-Iran conflict. Earlier this week the United States pulled some diplomatic staff from its Baghdad embassy following attacks on oil tankers in the Persian Gulf. 

Harder line

China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world’s two largest economies would be meaningless unless Washington changed course. 

The tough talk capped a week that saw Beijing unveil fresh retaliatory tariffs, U.S. officials accuse China of backtracking on promises made during months of talks, and the Trump administration level a potentially crippling blow against one of China’s biggest and most successful companies. The United States announced on Thursday it was putting Huawei Technologies Co. Ltd., the world’s largest telecom equipment maker, on a blacklist that could make it extremely hard to do business with U.S. companies.  

The U.S. Commerce Department then said on Friday that it might soon scale back restrictions on Huawei. It said it was considering issuing a temporary general license to “prevent the interruption of existing network operations and equipment.” 

Potential beneficiaries of this license could, for example, include telecom providers in thinly populated parts of U.S. states such as Wyoming and Oregon that purchased network equipment from Huawei in recent years. 

On Friday, Chinese Foreign Ministry spokesman Lu Kang, asked about state media reports suggesting there would be no more trade negotiations, said China always encouraged resolving disputes with the United States through dialogue and consultations.
…

U.S. diplomats warned Saturday that commercial airliners flying over the wider Persian Gulf faced a risk of being “misidentified” amid heightened tensions between the U.S. and Iran.

The warning relayed by U.S. diplomatic posts from the Federal Aviation Administration underlined the risks the current tensions pose to a region crucial to global air travel. It also came as Lloyd’s of London warned of increasing risks to maritime shipping in the region.

Concerns about a possible conflict have flared since the White House ordered warships and bombers to the region to counter an alleged, unexplained threat from Iran that has seen America order nonessential diplomatic staff out of Iraq. President Donald Trump since has sought to soften his tone.

Meanwhile, authorities allege that a sabotage operation targeted four oil tankers off the coast of the United Arab Emirates, and Iran-aligned rebels in Yemen claimed responsibility for a drone attack on a crucial Saudi oil pipeline. Saudi Arabia directly blamed Iran for the drone assault, and a local newspaper linked to the al-Saud royal family called on Thursday for America to launch “surgical strikes” on Tehran.

This all takes root in Trump’s decision last year to withdraw the U.S. from the 2015 nuclear accord between Iran and world powers and impose wide-reaching sanctions. Iran just announced it would begin backing away from terms of the deal, setting a 60-day deadline for Europe to come up with new terms or it would begin enriching uranium closer to weapons-grade levels. Tehran long has insisted it does not seek nuclear weapons, though the West fears its program could allow it to build atomic bombs.

The order relayed Saturday by U.S. diplomats in Kuwait and the UAE came from an FAA Notice to Airmen published late Thursday in the U.S. It said that all commercial aircraft flying over the waters of Persian Gulf and the Gulf of Oman needed to be aware of “heightened military activities and increased political tension.”

This presents “an increasing inadvertent risk to U.S. civil aviation operations due to the potential for miscalculation or misidentification,” the warning said. It also said aircraft could experience interference with its navigation instruments and communications jamming “with little to no warning.”

The Persian Gulf has become a major gateway for East-West travel in the aviation industry. Dubai International Airport in the United Arab Emirates, home to Emirates, is the world’s busiest for international travel, while long-haul carriers Etihad and Qatar Airways also operate here.

In a statement, Emirates said it was aware of the notice and in touch with authorities worldwide, but “at this time there are no changes to our flight operations.”

Qatar Airways similarly said it was aware of the notice and its operations were unaffected.

Etihad, as well as Oman Air, did not respond to a request for comment Saturday about the warning.

The warning appeared rooted in what happened 30 years ago after Operation Praying Mantis, a daylong naval battle in the Persian Gulf between American forces and Iran during the country’s long 1980s war with Iraq. On July 3, 1988, the USS Vincennes chased Iranian speedboats that allegedly opened fire on a helicopter into Iranian territorial waters, then mistook an Iran Air heading to Dubai for an Iranian F-14. The Vincennes fired two missiles at the airplane, killing all aboard the flight.

Meanwhile, Lloyd’s Market Association Joint War Committee added the Persian Gulf, the Gulf of Oman and the United Arab Emirates on Friday to its list of areas posing higher risk to insurers. It also expanded its list to include the Saudi coast as a risk area.

The USS Abraham Lincoln and its carrier strike group have yet to reach the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a third of all oil traded at sea passes. A Revolutionary Guard deputy has warned that any armed conflict would affect the global energy market. Iran long has threatened to be able to shut off the strait.

Benchmark Brent crude now stands around $72 a barrel.

 
…

The U.S. Commerce Department may soon scale back restrictions on Huawei Technologies after this week’s blacklisting made it nearly impossible for the Chinese company to purchase goods made in the United States, a 

department spokeswoman said Friday. 

The Commerce Department may issue a temporary general license to allow time for companies and people who have Huawei equipment to maintain reliability of their communications networks and equipment, the spokeswoman said. 

The possible general license would not apply to new transactions, according to the spokeswoman, and would last for 90 days. 

A spokesman for Huawei did not immediately respond to a request for comment. 

The Commerce Department on Thursday added Huawei to a list of entities that are banned from doing business with U.S. companies without licenses. 

The entities list identifies companies believed to be involved in activities contrary to the national security or foreign policy interests of the United States. 

Potential beneficiaries of the temporary license could include internet access and mobile phone service providers in thinly populated places such as Wyoming and eastern Oregon that purchased network equipment from Huawei in recent years. 
…

Bogged down in a sprawling trade dispute with U.S. rival China, President Donald Trump took steps Friday to ease tensions with America’s allies: lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe. 

By removing the metals tariffs on Canada and Mexico, Trump cleared a key roadblock to a North American trade pact his team negotiated last year. As part of Friday’s arrangement, the Canadians and Mexicans agreed to scrap retaliatory tariffs they had imposed on U.S. goods, according to four sources in the U.S. and Canada who spoke on condition of anonymity ahead of an announcement. 

In a joint statement, the U.S. and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. China has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting U.S. producers. 

Some in Washington were urging Trump to take advantage of the truce with U.S. allies to get even tougher with China.

China is our adversary,'' said Sen. Ben Sasse, R-Neb.Canada and Mexico are our friends. The president is right to increase pressure on China for their espionage, their theft of intellectual property and their hostility toward the rule of law. The president is also right to be deescalating tension with our North American allies.”

Earlier Friday, the White House said Trump was delaying for six months any decision to slap tariffs on foreign cars, a move that would have hit Japan and Europe especially hard.

Trump still is hoping to use the threat of auto tariffs to pressure Japan and the European Union into making concessions in trade talks. “If agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken,” White House press secretary Sarah Sanders said in a statement. 

Trade weapon

In imposing the metals tariffs and threatening the ones on autos, the president was relying on a rarely used weapon in the U.S. trade war arsenal — Section 232 of the Trade Expansion Act of 1962 — which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security. 

But the steel and aluminum tariffs were also designed to coerce Canada and Mexico into agreeing to a rewrite of North American free trade pact. In fact, the Canadians and Mexicans did go along last year with a revamped regional trade deal that was to Trump’s liking. But the administration had refused to lift the taxes on their metals to the United States until Friday. 

The new trade deal — the U.S.-Mexico-Canada Agreement — needs approval of the legislatures in the U.S., Canada and Mexico. Several key U.S. lawmakers were threatening to reject the pact unless the tariffs were removed. And Canada had suggested it wouldn’t ratify any deal while the tariffs were still in place. 

Trump had faced a Saturday deadline to decide what to do about the auto tariffs. 

Taxing auto tariffs would mark a major escalation in Trump’s aggressive trade policies and likely would meet resistance in Congress. The United States last year imported $192 billion worth of passenger vehicles and $159 billion in auto parts. 

Legitimate use?

“I have serious questions about the legitimacy of using national security as a basis to impose tariffs on cars and car parts,” Iowa Republican Sen. Chuck Grassley, chair of the Senate Finance Committee, said in a statement Friday. He’s working on legislation to scale back the president’s authority to impose national security tariffs under Section 232.

In a statement, the White House said that Commerce Secretary Wilbur Ross has determined that imported vehicles and parts are a threat to national security. Trump deferred action on tariffs for 180 days to give negotiators time to work out deals but threatened them if talks break down. 

In justifying tariffs for national security reasons, Commerce found that the U.S. industrial base depends on technology developed by American-owned auto companies to maintain U.S. military superiority. Because of rising imports of autos and parts over the past 30 years, the market share of U.S.-owned automakers has fallen. That has caused a lag in research and development spending that is “weakening innovation and, accordingly, threatening to impair our national security,” the statement said. 

The market share of vehicles produced and sold in the U.S. by American-owned automakers, the statement said, has declined from 67% in 1985 to 22% in 2017.

But the statistics don’t match market share figures from the industry. A message was left Friday seeking an explanation of how Commerce calculated the 22%.  

In 2017, General Motors, Ford, Fiat Chrysler and Tesla combined had a 44.5% share of U.S. auto sales, according to Autodata Corp. Those figures include vehicles produced in other countries. 

It’s possible that the Commerce Department didn’t include Fiat Chrysler, which is now legally headquartered in the Netherlands but has a huge research and development operation near Detroit. It had 12% of U.S. auto sales in 2017. 

The Commerce figures also do not account for research by foreign automakers. Toyota, Hyundai-Kia, Subaru, Honda and others have significant research centers in the U.S. 
…

The United States must show sincerity if it is to hold meaningful trade talks, China said on Friday, after U.S. President Donald Trump dramatically raised

the stakes with a potentially devastating blow to Chinese tech giant Huawei.

China has yet to say whether or how it will retaliate against the latest escalation in trade tension, although state media has taken an increasingly strident tone, with the ruling Communist Party’s People’s Daily publishing a front-page commentary that evoked the patriotic spirit of past wars.

China’s currency slid to its weakest in almost five months, although losses were capped after sources told Reuters that the central bank would ensure the yuan did not weaken past the key 7-per-dollar level in the immediate term.

The world’s two largest economies are locked in an increasingly acrimonious trade dispute that has seen them level escalating tariffs on each other’s imports in the midst of negotiations, adding to fears about risks to global growth and knocking financial markets.

Foreign ministry spokesman Lu Kang, asked about state media reports suggesting there would be no more U.S.-China trade talks, said China always encouraged resolving disputes between the two countries with dialog and consultations.

“But because of certain things the U.S. side has done during the previous China-U.S. trade consultations, we believe if there is meaning for these talks, there must be a show of sincerity,” he told a daily news briefing.

The United States should observe the principles of mutual respect, equality and mutual benefit, and they must also keep their word, Lu said, without elaborating.

On Thursday, Washington put telecoms equipment maker Huawei Technologies Co Ltd, one of China’s biggest and most successful companies, on a blacklist that could make it extremely difficult for the telecom giant to do business with U.S. companies.

That followed Trump’s decision on May 5 to increase tariffs on $200 billion worth of Chinese imports, a major escalation after the two sides appeared to have been close to reaching a deal in negotiations to end their trade battle.

‘Wheel of destiny’

China can be expected to make preparations for a longer-term trade war with the United States, said a Chinese government official with knowledge of the situation.

“Indeed, this is an important moment, but not an existential, live-or-die moment,” the official said.

“In the short term, the trade situation between China and the United States will be severe, and there will be challenges. Neither will it be smooth in the long run. This will spur China to make adequate preparations in the long term.”

The impact of trade friction on China’s economy is “controllable,” the state planner said on Friday, pledging to take countermeasures as needed, Meng Wei, a spokeswoman for the National Development and Reform Committee (NDRC), told a media briefing.

The South China Morning Post, citing an unidentified source, reported that a senior member of China’s ruling Communist Party said the trade war with the United States could reduce China’s 2019 growth by 1 percentage point in the worst-case scenario.

Wang Yang, the fourth-most senior member of the Communist Party’s seven-member Standing Committee, the top decision-making body, told a delegation of Taiwan businessmen on Thursday that the trade war would have an impact but would not lead to any structural changes, the paper said, citing an unidentified source who was at the meeting.

One company that says it has been making preparations is Huawei’s Hisilicon unit, which purchases U.S. semiconductors for its parent.

Its president told staff in a letter on Friday that the company had been secretly developing back-up products for years in case Huawei was one day unable to obtain the advanced chips and technology it buys from the United States.

“Today, the wheel of destiny has turned and we have arrived at this extreme and dark moment, as a super-nation ruthlessly disrupts the world’s technology and industry system,” the company president said in the letter.

The letter was widely shared on Chinese social media, gaining 180 million impressions in the few hours after it was published on the Weibo microblogging site.

“Go Huawei! Our country’s people will always support you,” wrote one Weibo user after reading the letter.
…

The Afrobytes and Viva Tech conferences in Paris this week have provided an opportunity to look at the progress that high-tech startups have made in Africa, where fundraising is booming.

According to Partech Africa, a venture capital firm, 146 startups in 19 African countries raised $1.16 billion for African digital entrepreneurs in 2018. Kenya, Nigeria and South Africa received 78% of the total funding, with Egypt close behind. 

In French-speaking Africa, Senegal is the leading hub with $22 million raised in four deals. Compared with their Anglophone peers, Africa’s Francophone countries operate in smaller markets, and lack capital and mentors.  

A key: Seeking advice

Marieme Diop, a venture capital investor at Orange Digital Ventures, said that “unfortunately in Francophone Africa, it is not in our DNA. People who succeed in business or in electing positions do not necessarily reach back to help their peers to show them how to be successful. In the Anglophone world, it is a must for anyone who wants to start something: seeking advice. So the gap is not only financial” between the regions. 

Africa is seen by many as the next frontier for venture capital, with its booming population and mobile-first economy. That’s why Google, Facebook and PayPal participated in Paris in Afrobytes 2019.  

“We do not want people globally to see African high-tech as an exotic stuff,” said Afrobytes CEO Ammin Youssouf. “We want to be heard and talk about AI, blockchain, what is happening in Silicon Valley, because it has an impact on us. We already have brilliant minds in Africa, especially in tech, to have those conversations.”

Unlike the global trend, where men dominate the high-tech industry, women are leading the movement in Africa.

“Actually, what we see in the statistics is that women’s involvement and participation on in the African continent is much higher than what you would find in New York, for example, or San Francisco,” said Ben White, chief executive officer of venture capital platform VC4Africa, who has been supporting startups on the continent for more than 10 years. “I think it is an advantage. It also means having women investors who are very sensitive to gender-related questions and can also ensure that the system we are building is inclusive.”

Governments’ role

Governments in Africa are trying to regulate the activity and even support the sector. Forty Senegalese startups last November secured a total of $2 million in government funding. But some experts say governments lack the skills needed to pick good investments.

Kenza Lahlou, co-founder and managing partner at Outlierz Ventures, said the public sector “should not invest [in startups]. States should build funds of funds. We have that in Morocco in partnership with the World Bank. The government started Innov Invest, to invest in local venture capitalist funds, to lower the risk for local funds.”

With a population expected to reach 1.4 billion people by 2021, and a continent that will put about 1 billion smartphones into use within two years, Africa is a promising area for the world’s leading high-tech and telecom companies.
…

President Donald Trump’s high-profile trade offensives have grabbed headlines and rattled financial markets around the world. He’s battling China over the industries of the future, strong-arming Canada and Mexico into reshaping North American trade and threatening to tax cars from Europe. 

But his trade warriors are fighting dozens of more obscure battles — over laminated woven sacks from Vietnam, dried tart cherries from Turkey, rubber bands from Thailand and many others.

Under the radar, the Trump administration has launched 162 investigations into allegations that U.S. trading partners dump products at cut-rate prices or unfairly subsidize their exporters — a 224% jump from the number of cases the Obama administration pursued in the same time in office.  

If the U.S Commerce Department finds that U.S. companies have been hurt — and ultimately if the independent International Trade Commission goes along — the offending imports are slapped with duties that can price them out of the market.

On Thursday, for instance, the department announced levies of up to 337% in combat over kitchen and bathroom countertops — or at least over the imported quartz slabs from China that many of them derive from. 

These cases have nothing directly to do with the mother of all Trump’s trade wars: a cage match with China over Beijing’s aggressive push to transform Chinese companies into world leaders in cutting-edge industries like artificial intelligence and electric cars. In that one, the world’s two biggest economies have slapped tariffs on hundreds of billions of dollars’ worth of each other’s products. 

Companies target competitors

The smaller anti-dumping and “countervailing duty” (aimed at unfair subsidies) cases are usually brought by U.S. companies or industries that say they’re being victimized by foreign competitors. But for the first time in more than 25 years, the administration in 2017 brought a case on its own — against a common alloy aluminum sheet from China — without waiting for an industry’s plea for help. 

“They’re much more aggressive in every way,” said Mary Lovely, a Syracuse University economist.  

Commerce Secretary Wilbur Ross says that the administration’s trade policies have irrevocably changed the conversation on trade'' and that the dumping and subsidy caseshelp level the playing field for U.S. companies and workers.” 

Like any conflict, though, the battles over remote patches of the commercial marketplace leave winners and losers. Lovely says the Trump administration’s intervention in trade cases risks “tilting the playing field toward particular industries,” driving up prices and making the economy less efficient by driving away competition. 

Whatever the impact, the administration’s America First approach to trade is encouraging more companies to bring more cases.  

“Everybody knows that this administration is concerned about unfair trade and is very willing to offset unfair trade where that is warranted.,” said Gilbert Kaplan, the Commerce Department’s undersecretary for international trade. 

The dollar amounts in anti-dumping and countervailing duty cases are too small to make a real dent in the $21 trillion U.S. economy. But for the companies involved, the stakes often couldn’t be higher. 

Newsprint duties

America’s struggling newspapers, for instance, saw their costs spike when the Commerce Department last year imposed anti-dumping and countervailing duties on Canadian newsprint. Some newspaper companies planned layoffs as a result. But in August, the trade commission, which acts as an independent tribunal in trade cases, overturned the duties, sparing newspapers devastating cost increases. 

The newsprint case was brought by a single company: a hedge fund-owned paper producer in Washington state.  

Likewise, the offensive against imported quartz slabs from China originated from a single complaint: Cambria, a maker of quartz products, including high-end kitchen and bathroom countertops, based in Le Sueur, Minn.  

Cambria CEO Martin Davis says the U.S. marketplace was flooded by low-priced quartz slabs from China. Commerce Department figures show that imports from China surged 78% in 2016 and 54% in 2017. The influx, Davis said, was subsidized by the Chinese government. 

“My company was going down,” he said. 

Davis sought relief from the government. He said that pursuing the case has cost him $5 million. Commerce agreed to impose anti-dumping and countervailing duties on Chinese quartz slabs last year.  

On Thursday, the department announced its final decision on the duties, hitting Chinese quartz slabs with anti-dumping duties of up to 337% and with countervailing duties of up to 191%.  

​’We will lose money’

The levies are bad news for U.S. companies that make countertops from imported quartz. Jeff Keck of Marble Uniques in Tipton, Ind., says the higher duties struck while his company was working on a contract to provide quartz countertops to an apartment complex. 

“We will lose money on the project,” he said. 

Making things worse from his perspective: The duties are retroactive to August. 

Paul Nathanson, spokesman for the American Quartz Worker Coalition set up to fight the duties, said that Cambria is abusing trade law. 

“They are using the U.S. government to try to wipe out their competitors,” he said. 

The ITC held a hearing last week at which opponents of the duties argued that high-end Cambria doesn’t actually compete with inexpensive Chinese imports. The commission is expected to rule on the case next month. If it finds that Cambria wasn’t hurt by the imports, the ITC could strike down the duties. 

For now, the sanctions on quartz imports are helping some businesses, and not just Cambria. Among them is Blackbird Manufacturing, an Owensboro, Ky., company that makes stone countertops. CEO David Thomas said that Blackbird couldn’t compete with low-priced Chinese quartz for contracts with penny-pinching hotel chains. 

Now that Chinese quartz slabs are now being taxed out of the market, “we’re getting jobs landing twice a week, and they’re big jobs,” Thomas said. Blackbird has hired about 15 workers since June and now has a staff of 52. He plans to add 20 more this year. 

But as the administration mounts trade cases in dozens of industries, many companies, especially small ones, can be blindsided by duties they didn’t see coming, said Paula Connelly, a trade lawyer in Woburn, Mass. 

“I’ve been in this business a long time, and I’ve never seen this volume of investigation,” she said.  

Recently, she has fielded calls from importers who were hit unexpectedly by the big tariffs on quartz. One business owner said he might have to close shop. 

“They had two days to come up with a couple of hundred thousand dollars in anti-dumping and countervailing duties,” she said. 
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Executives from major global retailers played down the threat to employment in stores from artificial intelligence and automation on Thursday and pledged more training to help staff adopt more high-value tasks as machines take over their work.

Retail is one of the largest employers in many developed economies and experts have predicted automation puts millions of low-skilled jobs in the sector at risk, particularly as the introduction of self-checkouts makes cashiers redundant.

“Technology can liberate people from repetitive tasks,” Barbara Martin Coppola, chief digital officer at Swedish furniture giant IKEA, told Reuters on the sidelines of the World Retail Congress, an annual industry gathering.

“These jobs are not gone. We are believers in the talent we have in our house and we look to repurpose it into more fulfilling tasks.”

Martin Coppola said IKEA needs far fewer people to select the goods displayed on the firm’s website, known as online merchandising, as algorithms get more sophisticated. But these people can be trained in digital marketing instead.

“It is important to see technology as an enabler and not to let it be at the expense of human beings and the planet,” she said.

Walmart, the world’s biggest private employer with 2.2 million staff, has been adding self check-outs and announced last month that it would be rolling out automated shelf scanners, to check product availability, and cleaning robots.

“Cleaning the floor is not a thing that brings a person fulfillment,” said Tom Faitak, Walmart’s senior manager for AI, robotics and automation, adding that automating repetitive tasks gives staff more time to help customers.

“Robots are not fantastic at interacting with people,” he said. “Robots are good at doing the same task over and over, not finding an item on the shelf.”

Walmart staff who are freed up from some repetitive tasks are increasingly being redeployed to pick orders placed online and prepare them for curbside pickup.

Consultants McKinsey estimate that 53 percent of activities in retailing are automatable, particularly in stock management and logistics. It predicts that next generation automated grocery stores could see the number of labor hours for inventory and stocking cut by two thirds.

Walmart and Kroger – the biggest U.S. supermarket chain — say they are committed to developing their store workers so they are not left behind.

Walmart offers training to tens of thousands of associates through an “Academy” program, while Kroger launched a new scheme last year to promote continued education, from high school certificates to doctorates.

Kroger Chairman and Chief Executive Rodney McMullen, who started out as a store clerk at the chain and had his college education supported by the company, noted that U.S. unemployment was at its lowest for decades, pushing automation.

“Part of it is because you just can’t find people,” he said, noting that the company was creating higher-paid jobs in software engineering as it seeks to modernize the business. The Cincinnati-based company has built robot-aided warehouses and is trying out self-driving vehicles to improve delivery.
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As the U.S. and China escalate their trade standoff, consumers in both countries are starting to see the impact. VOA’s Mykhailo Komadovsky reports from Washington.
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The acting head of the Federal Aviation Administration defended the way his agency certifies airline safety after two deadly crashes of the now-grounded Boeing 737 Max jet.

Daniel Elwell called the system in which FAA-approved employees at plane manufacturers inspect the aircraft they built themselves “a good system.”

But skeptical Democrats on the House Transportation Committee questioned the agency’s credibility.

They told Elwell that the closeness between Boeing and the FAA may be one of the reasons it took the agency a relatively long time to ground the Boeing jets.

“The public perception is you were in bed with those you were supposed to be regulating,” Nevada’s Dina Titus said, while committee chairman Peter DeFazio wanted to know “How can we have a single point of failure on a modern aircraft?”

A Boeing 737 Max crashed off the coast of Indonesia in October and another 737 Max crashed in Ethiopia in March, killing a total of 346 people.

Both planes were equipped with a system designed to push the nose downward to prevent a midair stall.

Faulty sensor readings kept pushing the planes down while the pilots struggled to regain control.

The pilots did not know the planes were equipped with the anti-stall system and their manuals had no explicit information.

Elwell defended the FAA’s approval of the system on the Boeing jets, but admitted the system should have been better explained in the pilots’ operational and flight manuals.

He also faulted Boeing for failing to inform airlines and the FAA that a light that is supposed to flash when there is a faulty reading from the sensors did not work.

But Elwell said pilot error may have also contributed to the Indonesian and Ethiopian disasters.

The Justice Department has opened a criminal investigation of Boeing, and Congress is looking into the relationship between Boeing and federal regulators.

Boeing plans to submit changes to the 737 Max software to the FAA, which will study the new software and carry out tests flights. Boeing will train pilots before allowing the planes to fly again.

 
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