The costs seem to be mounting in the U.S. from President Donald Trump’s tit-for-tat trade tariff war with China, both for farmers whose sales of crops to China have been cut and U.S. consumers paying higher prices for imported Chinese products.

The government said Wednesday that to date it has paid out more than $8.5 billion to American farmers to offset their loss of sales to China and other trading partners because of foreign tariffs imposed by Beijing and other governments.​

​WATCH: Consumers Start to Feel Pinch From US, China Trade Standoff

Trump last year pledged up to $12 billion in aid to farmers — chiefly soybean, wheat and corn growers, and those who raise pigs. Trump says he could ask Congress for another $15 billion if U.S. farmers continue to be hurt by China’s tariffs of as much as 25%  on U.S. agricultural imports.

The U.S. had been shipping $12 billion worth of soybeans a year to China, but Beijing’s imposition of the tariff severely cut down on the U.S. exports as China bought the beans from other countries.

Trump said Tuesday on Twitter, “Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy. This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been ‘forgotten’ for many years. Their time is now!”

White House economic adviser Larry Kudlow acknowledged to a television interviewer last weekend that “to some extent” U.S. consumers will bear the brunt of higher costs on Chinese goods after Trump’s tariffs have been levied on the imported goods.

Trade Partnership Worldwide, a Washington economic consulting firm, estimates in a new study the typical American family of four people would pay $2,300 more annually for goods and services if Trump imposes a 25% tariff on all Chinese imports, as he says he is considering.

Such higher tariffs would hit an array of Chinese-produced consumer goods — clothing, children’s toys, sports equipment, shoes and consumer electronics — that are widely bought by Americans.

If that does not happen, but the existing U.S. tariffs remain in place, the research group says the average U.S. family would pay $770 in higher costs each year.

The U.S. imported almost $540 billion in Chinese goods in 2018, while the U.S. exported $120 billion, a trade imbalance that Trump is seeking to even out with imposition of the tariffs. The U.S. exported almost $59 billion in services to China, while importing only $18 billion, but services are not directly affected by tariffs.
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Ford Motor Co plans to start production of new luxury Lincoln models in China for that market as they are launched, starting with the new Corsair later this year, to benefit from lower costs and avoid the risk of tariffs, a top executive said Monday.

“It’s a huge, huge opportunity for Lincoln because we see China as ground zero for Lincoln given the size of the market and how well the brand has been received,” Chief Financial Officer Bob Shanks said at a Goldman Sachs conference in New York.

Ford has lower levels of localized production than rivals General Motors Co or Volkswagen AG, who make more vehicles in China for Chinese consumers, benefiting from lower labor and material costs, and avoiding tariffs in the burgeoning trade war between the United States and China.

Shanks said all new Lincoln models, with the exception of the Navigator assembled in Louisville, Kentucky, will also be produced in China.

He declined to say how much Ford will save through localized production.

Ford has been struggling to revive sales in China, the automaker’s second-biggest market. Ford sales slumped 37 percent in 2018, after a 6 percent decline in 2017.

Shanks said that all of the problems the automaker experienced in China last year were related to the Ford brand, not Lincoln, which is popular with Chinese customers.
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The typical routines of life on a family farm carry a heavier burden these days for Pam Johnson.

“First thing I do is make a pot of coffee,” she told VOA in an interview in one of the cavernous sheds that contain her green and yellow John Deere farming equipment. Once she has that coffee, she “(goes) to the computer and look at what grain prices have done overnight and usually do a gut clutch, because they’ve been going down. They’re at five-month lows.”

Driven there in part by retaliatory tariffs imposed by one of the largest importers of U.S. soybeans – China.

Johnson and her husband are proud sixth-generation farmers but say they are dealing with some of the harshest economic conditions of their lives.

“We’re all tightening our belts,” she says.

The ongoing trade dispute between the United States and China, initially sparked by U.S. tariffs on imported aluminum and steel, is now impacting most farms across the country. 

As U.S. farmers head to the fields to plant this spring, they are facing a potential sixth consecutive year of declining farm income, because of international tariffs that have depressed prices for their grain products as well as increased costs for the materials to produce and store them.

​Short-term concern over U.S. trade policy is turning into long-term fear for farmers, who face uncertainty over congressional support for a new trade agreement with Canada and Mexico, and the impact of China’s retaliatory tariffs on U.S. grain exports. 

“We hear it may be out to 2025 before we see some of those markets come back to us, if they ever do,” Johnson said. “I think that’s the thing that hurts the most is, what is the damage being done that is irreparable?”

It is damage her son Ben Johnson, the seventh generation in the family business, may eventually have to deal with.

“All farms are going to suffer because of this,” he explained. “There’s a difference between ‘making it’ and flourishing.”

The Johnsons feel there is a growing disconnect between farmers and the rest of the American workforce, fueled by politicians increasingly hostile to trade policies the agricultural industry depends on.

“We need as much trade as we can and to be openly trading with as many places as we can,” Ben Johnson says. “It’s no different to any business – you want as many customers as you can. And to intentionally discourage them is frustrating.”

Neither Johnson nor his mother voted for President Donald Trump in the 2016 presidential election, largely because if his trade positions, they say. 

​Nothing that has happened since the election has eased Pam Johnson’s concerns.

“Saying that ‘I’m a tariff man’ and that ‘trade wars are easy to win’ concerns me,” she says, quoting comments the president has made. “There are still a lot of farmers who still support President Trump. I think there are more seeds of doubt being planted as we look forward into 2019 and no resolution and the light at the end of the tunnel seems to be getting dimmer about getting these things done.”

Politics aside, Pam Johnson admits success for her family business is closely tied to U.S. trade policy.

“I don’t want to see President Trump fail in these trade endeavors. We all need him to make this work so that all of us win,” she says.

A win her son Ben says can’t come soon enough.

“We’ve already missed the peak soybean export season, so in a way, it’s already too late… I guess it’s never too late, but before now would have been great,” he says.

While negotiations continue, the Trump administration says it is actively working on a new financial assistance program to help farmers weather the continuing trade storm.
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The ongoing trade dispute between the United States and China is having an impact on most farmers across the country. Their corn and soybean crops are subject to tariffs and increasing competition from other suppliers. As VOA’s Kane Farabaugh reports, U.S. farmers aren’t just concerned about their bottom lines this year. They’re also worried about the long term consequences of a trade war on the only business many have ever known.
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Stocks climbed on Tuesday and clawed back a chunk of their losses from Monday’s rout, the latest whipsaw move as investors weigh just how badly the escalating U.S.-China trade war will hurt the economy. 

The day’s rally was nearly a mirror image of Monday’s plunge, when the S&P 500 had its worst day since early January, just not as severe: Technology companies led the way higher after bearing the brunt of the selling on Monday, Treasury yields rose modestly and gold gave back a bit of its gains. 

The S&P 500 rose 22.54 points, or 0.8%, to 2,834.41. It recovered nearly a third of its loss from Monday, and would now need to rise 3.9% to regain the record it set a couple weeks ago. The Dow Jones Industrial Average rose 207.06, or 0.8%, to 25,532.05, and the Nasdaq composite index jumped 87.47, or 1.1%, to 7,734.49. 

Of course, stocks are still lower than they were last week, following China’s pledge to raise tariffs on U.S. goods. Stocks also remain lower than they were on May 5, when President Donald Trump ignited this latest round of fear for markets by announcing on Twitter that the U.S. would raise tariffs on Chinese goods. 

Tuesday’s rally came after another round of morning Trump tweets on trade. He said, “When the time is right we will make a deal with China,” and he cited his “unlimited” respect for and friendship with China’s leader.

Investors are looking for a “place of equilibrium,” said Mark Hackett, chief of investment research for Nationwide Investment Management.

“My skepticism is that there’s really not a lot of news driving the rally,” he said. “It feels like an attempted recovery that may not have legs.”

‘Looking for path to progress’

In the meantime, any further hints of resolution on the trade dispute — or Twitter storms — could drive markets into their next swing. 

“We’re not counting on a full resolution,” said John Lynch, chief investment strategist at LPL Financial. “But, we’re looking for a path to progress.”

The worries about trade have shattered what had been a remarkably steady rise for stocks at the start of this year. As 2019 began, investors increasingly bet that a trade deal would happen, and the Federal Reserve said it would take a pause in raising interest rates, which helped the S&P 500 rocket to its best start to a year in decades. 

If the trade dispute gets worse, or lasts longer than many expect, it could hurt confidence among businesses and households. If that in turn drives spending lower, it would lead to lower economic growth and corporate profits. 

On Tuesday, at least, such worries eased. An index known as Wall Street’s “fear gauge,” which measures how much traders are paying to protect themselves from upcoming price swings for stocks, dropped 12.1%. A day earlier, it had spiked 28.1%. 

The VIX index remains higher than it’s been for much of the past five years, but fear is considerably lower than it was during the market sell-off late last year sparked by worries about a possible recession. 

Tech companies post gains

Investors also returned to stocks of tech companies, which may have the most to lose from a protracted U.S.-China trade battle because many of their customers and suppliers are abroad. Tech stocks in the S&P 500 jumped 1.6%, with semiconductor companies making particularly big gains. 

A day earlier, tech stocks had taken the market’s heaviest losses. 

On the flip side were utility stocks, which were the only one of the 11 sectors that make up the S&P 500 to fall. A day earlier, when all the fear in the market put an alluring spotlight on the utility sector’s steady profits and dividends, they had been the only S&P 500 sector to manage a gain. 

Other investments seen as safe harbors also dropped, such as U.S. government bonds. When a bond’s price falls, its yield rises, and the yield on the 10-year Treasury rose to 2.41% from 2.40% late Monday. It was at 2.45% at the end of last week. 

Gold is another investment that tends to do fade when investors are feeling more optimistic, and it fell $5.50 to settle at $1,296.30 per ounce. 

In overseas stock markets, European indexes gained. The French CAC 40 jumped 1.5%, the German Dax rose 1% and the FTSE 100 in London climbed 1.1%. Asian markets were mixed. The Hang Seng in Hong Kong dropped 1.5%, Japan’s Nikkei 225 fell 0.6% and South Korea’s Kospi ticked up 0.1%.

Silver jumps 4 cents

In the commodities markets, silver rose 4 cents to $14.81 per ounce, and copper gained a penny to $2.73 per pound.

Benchmark U.S. oil rose 74 cents to settle at $61.78 per barrel. Brent crude, the international standard, gained $1.01 to $71.24 a barrel. 

Natural gas rose 4 cents to $2.66 per 1,000 cubic feet, heating oil rose 2 cents to $2.06 per gallon and wholesale gasoline rose a penny to $1.98 per gallon. 

The dollar rose to 109.64 Japanese yen from 109.34 yen late Monday. The euro slipped to $1.1207 from $1.1231, and the British pound fell to $1.2905 from $1.2965. 
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A U.S. labor agency has concluded that ride-hailing company Uber Technologies Inc’s drivers are independent contractors and not its employees, which could prevent them from joining unions.

The National Labor Relations Board’s general counsel, in a memo released on Tuesday, said Uber drivers set their hours, own their cars and are free to work for the company’s competitors, so they cannot be considered employees under federal labor law.

San Francisco-based Uber in a statement said it is “focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value.”

Uber shares were up 6.4 percent at $39.46 in late trading on the New York Stock Exchange.

The memo dated April 16 came in an NLRB case against Uber that has yet to reach the five-member board, which is independent of the general counsel.

Under the National Labor Relations Act, independent contractors cannot join unions and do not have legal protection when they complain about working conditions.

In January, President Donald Trump’s appointees to the NLRB adopted a new test making it more difficult for workers to prove they are a company’s employees.

Uber, its top rival Lyft Inc, and many other “gig economy” companies have faced scores of lawsuits accusing them of misclassifying workers as independent contractors under federal and state wage laws.

Employees are significantly more costly because they are entitled to the minimum wage, overtime pay and reimbursements for work-related expenses under those laws.

Uber, in a filing with the U.S. Securities and Exchange Commission last week, said it would pay up to $170 million to settle tens of thousands of arbitration cases with drivers who claim they were misclassified. Uber denied any wrongdoing, but said settling the cases was preferable to drawn-out litigation.

The company has agreed to pay an additional $20 million to end long-running lawsuits by thousands of drivers in California and Massachusetts.

The U.S. Department of Labor in a memo released last month said an unidentified “gig economy” company’s workers were not its employees under federal wage law because it did not control their work.

The company, which appeared from the memo to provide house-cleaning services, had a similar relationship with its workers as Uber does with drivers. The memo signaled a shift from the Obama administration, which maintained that most workers should be considered companies’ employees.
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Technology stocks led the S&P 500 and the Nasdaq higher on Tuesday, with U.S. stocks reclaiming ground lost to Monday’s steep sell-off as investors took heart from a tonal shift in ongoing U.S. trade negotiations with China.

All three major U.S. indexes were in the black, recovering some ground from their worst one-day percentage losses in months. The bellwether S&P 500 was hovering more than 3% below its most recent all-time high reached two weeks ago.

Investors’ nerves were calmed after U.S. President Donald Trump referred to the escalating trade war with China as “a little squabble,” adding that “we have a good dialogue going.”

Beijing echoed that sentiment, with a Chinese Foreign Ministry spokesman telling reporters: “My understanding is that China and the United States have agreed to continue pursuing relevant discussions.”

“Either this is a bargain-hunting rally or a dead cat bounce, or there is some consensus that something meaningful is going to come out of the trade talks in the next four to six weeks,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

But Hellwig also feels the rollercoaster of the escalating trade war has had an effect on investor psychology.

“I’m starting to see some investors becoming anesthetized on the negotiations and focusing on what the market’s going to look like a year from now,” Hellwig added.

Boeing Co provided the biggest boost to the Dow, rising 2.1% as tariff-sensitive industrials buoyed the blue chip index.

Ralph Lauren Corp dropped 3.8% after the apparel company posted quarterly results.

Uber Technologies and ride-hailing peer Lyft Inc were both trading higher, reversing course after their post-debut slides. Their stocks were up 1.7% and 5.5%, respectively.

Walt Disney Co announced it would take control of Comcast Corp’s Hulu in a move to challenge Netflix and others in the global video streaming war.

Disney stock climbed 2.0%, while Comcast gained 2.4%. Netflix shares were up slightly.

The Dow Jones Industrial Average rose 344.71 points, or 1.36%, to 25,669.7, the S&P 500 gained 39.29 points, or 1.40%, to 2,851.16 and the Nasdaq Composite added 124.25 points, or 1.62%, to 7,771.27.

Of the 11 major sectors of the S&P 500, all but utilities were in the black. Technology stocks had the largest percentage gains, climbing 2.1%.

Chipmakers enjoyed a reprieve, with the Philadelphia SE Semiconductor Index rising 2.7% after suffering its worst one-day percentage loss since Jan. 3.

First quarter earnings season is winding down, with 453 of S&P 500 companies having reported, 75.3% of which beat analyst expectations, slightly below the 76% beat rate for the last four quarters.

Advancing issues outnumbered declining ones on the NYSE by a 3.70-to-1 ratio; on Nasdaq, a 2.74-to-1 ratio favored advancers. The S&P 500 posted 23 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 41 new highs and 79 new lows.
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U.S. President Donald Trump on Monday said U.S. tariffs on China bring billions of dollars into U.S. coffers. He said China’s retaliatory tariffs can have no effect on the U.S. economy. The escalation of the U.S.-China trade war sent stock markets tumbling on Monday, with the Dow Jones Industrial Average falling more than 600 points. Earlier, China announced new tariffs of up to 25 percent on $60 billion worth of U.S. goods, starting June 1. VOA’s Zlatica Hoke has more.
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As Washington and Beijing impose ever-higher tariffs, prompting financial markets to falter, U.S. lawmakers are expressing hope for a swift but comprehensive resolution of America’s deepening trade disputes with China. 

Unease prevailed on Capitol Hill after China retaliated against a new round of American tariffs by hiking duties on U.S.-made goods. Even so, senators of both parties say China must be confronted. 

“We need to challenge China to change a lot of its trade practices and its domestic business practices.”said Maryland Democrat Chris Van Hollen. “For example, they’ve been stealing U.S. (technological) secrets for a long time.”

But Van Hollen faults President Donald Trump’s focus on tariffs.

“What I see is a tariff-only strategy. I don’t see a more comprehensive strategy towards China,” Van Hollen said. “American consumers are paying more and more by the day. It’s not all about how many sales they (Chinese producers) are making and how many sales the United States is making to China.”

Among the most vocal about trade war concerns are American farmers. Republican Senator Roy Blunt represents agriculture-rich Missouri.

“We (Missouri farmers) were selling about one out of every four rows of soybeans just to China,” Blunt said. “Soybeans, corn, livestock  that’s a great market that’s being disrupted.”

But Blunt believes Americans understand that short-term economic pain is necessary to secure better trading terms with China.

“If there’s a trade fight worth having, it’s the trade fight with China,” Blunt said. “They have not been fair traders.”

While the U.S.-China dispute is grabbing most headlines, Blunt also urged Congress’ swift consideration of a new U.S.-Canada-Mexico free trade pact.
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A drop in the consumer outlook for inflation and intensifying trade tensions drew caution from Federal Reserve officials on Monday as policymakers faced fresh market volatility and a renewed set of risks.

While Fed officials have largely discounted the trade war so far as unlikely to derail the U.S. economic expansion, officials emphasized Monday that a protracted tit-for-tat battle between the United States and China was a different matter that might require a Fed response.

“If the impact of the tariffs — and whatever financial market reaction to those tariffs is — causes more of a slowdown, then we do have the tools available to us, including lower interest rates,” Boston Fed President Eric Rosengren, a voter this year on Fed rate policy, said in an interview with Reuters.

While Rosengren said he was “not necessarily” expecting a rate cut to be necessary, the market sell-off Monday was deep and potentially disruptive to the Fed’s core expectation that interest rates will remain on hold for some time to come.

Major U.S. equity markets were down between 2% and 3.5% on Monday, while bond investors sharply increased their bets that the Fed would be forced to cut rates this year. A closely watched spread between long- and short-term bonds turned negative, seen by some officials as a sign of weakened market confidence in the economic outlook.

After the collapse of U.S.-China talks last week and the threat of tariffs ratcheting ever higher, there was more reason to believe the tensions will last a while.

“If it’s the worst-case scenario and it’s ever-increasing tariffs for an extended period of time, that could change things, that could have a real effect on U.S. GDP growth,” Minneapolis Fed President Neel Kashkari said on CNBC. Traders and analysts on Monday said the volatility is likely to continue.

“You cannot game what two leaders … are going to do from day to day,” said Anthony Saglimbene, global market strategist with Ameriprise Financial Services in Troy, Michigan, of the high-stakes standoff between Trump and Chinese President Xi Jinping.

Rate cuts back on radar 

Fed officials have been careful to say that nothing yet has changed their core outlook, which envisions rates to be held in their current range of between 2.25% and 2.5% until either growth demonstrably weakens and inflation falls further, justifying a rate cut, or faster inflation makes higher rates warranted.

As the trade war intensified over the last few days, however, traders in the federal funds futures market have moved decisively in favor of expecting a Fed rate cut in coming months. 

Data from the CME Group now sees the Fed cutting rates in October, with a near 10 percentage point shift since Friday in the probability of a rate reduction at that Fed meeting. The pressure on the Fed could come from several directions.

Economic growth overall could slow if the tariff wars continue and global trade declines; “wealth effects” could directly impact business and household confidence and spending if the stock declines continue; higher costs could hit company profits, and discourage hiring.

A further complication for the Fed: The inflation outlook among U.S. consumers dipped sharply in April, countering Fed policymaker hopes that inflation dynamics will improve and the pace of price increases soon rise toward their target level.

Survey data released by the New York Federal Reserve on Monday showed consumer expectations of the inflation rate over the next year fell to 2.6% from 2.82% in the March survey.

The nearly quarter point drop was the third-largest since the survey was launched in mid-2013. The outlook for inflation over the next three years also fell, to 2.69% from 2.86%, evidence that medium-term expectations have also weakened in recent weeks.

Following the Fed’s most recent meeting, Chairman Jerome Powell and others said they felt recent weak inflation readings were driven by “transitory” factors that would disappear over time and allow overall inflation to rise.

But a drop in inflation expectations is another matter, and could be evidence that households and businesses are losing faith in the Fed’s ability to deliver on its inflation goal — a worrying development for central bankers who feel their ability to keep expectations set around their inflation target is critical to meeting the goal.

As of the Fed’s last policy statement on May 1, officials said they felt expectations remained stable.

While consumer surveys are discounted by some officials as overly influenced by things like changes in gasoline prices and other costs that consumers closely monitor, some broader market expectation measures have also shifted.

Since late April, for example, a St. Louis Federal Reserve measure of the inflation rate expected five years from now, based on trading in different types of bonds, dipped to 1.9% from 2.1%, a sign traders also see weaker inflation ahead.
…

Usually, the U.S. ambassador in Hanoi brings American interests to Vietnam, but next month he plans to take Vietnamese companies to the United States.

U.S. Ambassador to Vietnam Daniel J. Kritenbrink and his team have been recruiting companies in the Southeast Asian country for a business delegation to Washington, D.C., which sparks a broader question: Is it time for Vietnam’s firms to go abroad?

“Investing in the United States is one of the best decisions that Vietnamese firms can make, especially as the country’s economy continues to rapidly expand,” Kritenbrink said. “As firms benefit from this expansion, they should look to expand into new markets and it’s only natural to consider one of Vietnam’s largest export markets, the United States.”

U.S. economic officers have been holding events in Hanoi and Ho Chi Minh City throughout the year to lobby them to join the delegation to Washington, which is scheduled for June 10-12.

The proposition comes as Vietnam’s economy is maturing, prompting more companies to consider if this is the time for them to take the next step in their growth and expand beyond the country’s borders.

As Kritenbrink noted, the U.S. is the biggest market for Vietnamese products, which is a reminder that the communist country already has a big presence in the international arena, having established itself as an export powerhouse in the past two decades.

​But Vietnam thinks it would be a major achievement if companies take it to the next level, no longer just shipping goods overseas, but actually setting up operations and offices overseas. 

Some corporations have done so already, whether it’s the electronics conglomerate FPT going to Japan or the telecommunications giant Viettel servicing markets from Burundi to Peru.

The trend, however, is broadening to businesses that are not as well resourced. Saigon Innovation Hub (Sihub) announced a program last year to provide support to startups that want to go abroad, a program known as Runway to the World. 

“Following our strategy toward 2020, Sihub targets to gather all local and international resources to realize the key mission of boosting economic growth,” Huynh Kim Tuoc said for the launch. He is the managing director of Sihub, which is under the Ho Chi Minh City Department of Science and Technology.

Supporters say going global is the natural next step in Vietnam’s evolution. In the 1980s, the communist government started allowing business activities typical of a market economy. In the 1990s, the United States lifted its trade embargo, and in the early 2000s, Vietnam joined the World Trade Organization. It has since become a leading exporter of rice, textiles and garments, and phones to the international market.

Standard Chartered Bank executive Nirukt Sapru said the context helps, as Vietnam is still seeing increases in gross domestic product, foreign direct investment (FDI) and FDI-driven manufacturing.

“Vietnamese mid-corporate manufacturers can capitalize on this and shield themselves from headwinds by pursuing strategies, such as investing in technologies and exploring new markets, which will help them move up the value chain,” said Sapru, who is the chief executive officer for Vietnam, Southeast Asia, and South Asia at the bank. “In fact, we are seeing an increasing number of local electronics players expressing interest to venture overseas for growth.”

The headwinds he mentioned include trade challenges that could hurt Vietnam’s exports if they hurt the global economy, such as the trade war between China and the United States, slowing growth in China that could affect demand for products and services elsewhere, and U.S. President Donald Trump’s other tariff fights, such as with Japan and the European Union.

By going abroad, Vietnam’s companies hope not just to strengthen their home economy from foreign trade tensions, but also to help build the national brand around the world.
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White House economic adviser Larry Kudlow on Sunday acknowledged that U.S. tariffs on Chinese goods will be paid by U.S. importers, contrary to President Donald Trump’s claims that China will pay for the U.S.-imposed levies. VOA’s Zlatica Hoke reports.
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The U.S. said Sunday it expects that China will retaliate with increased tariffs on U.S. exports after President Donald Trump sharply boosted levies on Chinese products headed to the United States.

Chief White House economic adviser Larry Kudlow told “Fox News Sunday” that “both sides will suffer” from the escalating trade war between the U.S. and China, the world’s two biggest economies.

In the U.S., he said that “maybe the toughest burdens” are on farmers who sell soybeans, corn and wheat to China. But he said the Trump administration has “helped them before on lost exports” with $12 billion in subsidies and that “we’ll do it again if we have to and if the numbers show that out.”

Trump on Friday more than doubled tariffs on $200 billion of Chinese goods, boosting the rate from 10 percent to 25 percent, while also moving to impose tariffs on an additional $300 billion of Chinese products, although Kudlow said it could take months for the full effect of the tariffs to be felt. China had previously imposed taxes on $110 billion of American products, but has not said how it might retaliate against Trump’s latest increase in tariffs.

Trade talks between the two economic super powers have been going on in Beijing and Washington for months, but they recessed again in the U.S. capital on Friday without a deal being reached.

“We were moving well, constructive talks and I still think that’s the case,” Kudlow said. “We’re going to continue the talks as the president suggested.”

Kudlow said Trump and Chinese President Xi Jinping are likely to discuss trade issues at the G-20 summit in Japan at the end of June.

The economic adviser renewed U.S. claims that China had backtracked from earlier agreements reached in the talks, forcing negotiators to cover “the same ground this past week.”

“You can’t forget this: This is a huge deal, the broadest scope and scale…. two countries have ever had before,” Kudlow said. “But we have to get through a lot of issues. For many years, China trade was unfair, non-reciprocal, unbalanced in many cases, unlawful.”

The U.S. has claimed that China steals technology and forces U.S. companies to divulge trade secrets it uses in its own production of advanced technology products.

On Saturday, Trump suggested that China could be waiting to see if he wins reelection next year, but said Beijing would be “much worse” off during a second term of his in the White House.

“I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win,” he said, “in which case they would continue to rip-off the USA for $500 Billion a year.”

“Such an easy way to avoid Tariffs?” the U.S. leader said, “Make or produce your goods and products in the good old USA. It’s very simple!”

 
…

President Donald Trump’s combative approach to trade has been one of the constants among his often-shifting political views. And he’s showing no signs of backing off now, even as the stakes intensify with the threat of a full-blown trade war between the world’s two biggest economies.  

The president went after China on Day 1 of his presidential bid, promising to “bring back our jobs from China, from Mexico, from Japan, from so many places.” 

Trump’s views on trade helped forge his path to victory in states such as Pennsylvania, Michigan, Wisconsin and Ohio, where he linked the loss of manufacturing jobs to the North America Free Trade Agreement and other trade deals. He warned the worst was yet to come with President Barack Obama’s proposed Trans-Pacific Partnership.  

His trashing of existing and proposed trade agreements grabbed the headlines, but he also made clear his view that globalization had been bad for America and that he would use tariffs to protect national security and domestic producers. He cited the nation’s Founding Fathers, Abraham Lincoln and Ronald Reagan as leaders whose footsteps he was following when it came to trade and tariffs. 

Our original Constitution did not even have an income tax,'' Trump told voters in Monessen, Pa., four months before the 2016 presidential election.Instead, it had tariffs, emphasizing taxation of foreign, not domestic production.” 

​Taking on China

No. 7 on his list of trade promises in that speech: taking on China for “its theft of American trade secrets.” 

“This is so easy. I love saying this. I will use every lawful presidential power to remedy trade disputes, including the application of tariffs consistent” with existing trade laws, Trump said. 

Those laws include Section 232 of the Trade Expansion Act, which Trump cited to enact tariffs on steel and aluminum imports from China, Canada, Mexico and elsewhere. 

They also include Section 301 of the Trade Act, which Trump used last year to apply 25 percent tariffs on $50 billion worth of Chinese goods and 10 percent tariffs on $200 billion of goods. That 10 percent was increased to 25 percent on Friday. Trump is laying the groundwork to extend the 25 percent tariff to all of China’s exports to the U.S. 

“Such an easy way to avoid Tariffs? Make or produce your goods and products in the good old USA. It’s very simple!” Trump tweeted on Saturday. 

Of course, America’s trading partners haven’t let Trump’s tariffs stand without taking similar action themselves. Farmers, boat makers, and whiskey and wine producers are just some of the U.S. industries caught in the middle. 

Farming is a very small-margin, small-profit business. We rely on lots of volume and lots of sales to generate a profit,'' said Brent Bible, a soybean and corn farmer in Lafayette, Ind., who has seen prices for both commodities drop in the past year.We are operating at a loss now.” 

Trump’s philosophy on some issues has evolved over the years. 

He once described himself regarding the abortion issue as very pro-choice.'' Now, his administration promotes him as the mostpro-life president in American history.” 

​Complaint about Japan

On trade, not so much. In Trump: The Art of the Deal, Trump complained of the Japanese that “what’s unfortunate is that for decades now they have become wealthier in large measure by screwing the United States with a self-serving trade policy that our political leaders have never been able to fully understand or counteract.” 

Fast-forward nearly three decades, and Trump declared in his 2015 announcement for the presidency that other nations were prospering at America’s expense. “When was the last time anybody saw us beating, let’s say, China, in a trade deal? They kill us. I beat China all the time,” Trump said. 

Trump’s approach on trade is a dramatic departure for the Republican Party, but GOP lawmakers have declined to take action that would block his tariffs. They credit his tactics for getting improvements to a trade deal with Canada and Mexico to replace NAFTA, and for getting China to the negotiating table. 

President Trump is the first president to take China head-on,'' said Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee. He saideveryone knows I’m not a fan of tariffs, but I think everyone knows as well that China has been cheating for far too long.” 

Trump has received some encouragement from Democratic leaders. Senate Minority Leader Chuck Schumer, D-N.Y., tweeted to Trump: “Don’t back down. Strength is the only way to win with China.” 

Current and former officials in the administration believe that voters will give the president credit for standing up to China, and not blame him for any pain that may result from the tariffs war. 

Overall, AP VoteCast found Americans critical in their assessments of Trump on trade. But that’s not the case with his supporters. According to the survey of more than 115,000 midterm voters nationwide, 45% approved of Trump on trade, while 53% disapproved. Among voters who approved of Trump’s job overall, fully 88% approved of his handling of trade. 

​Who pays?

While Trump casts his tariffs as being paid for by China, they actually are paid by the American companies that bring a product into the U.S. This can help some U.S. producers, though, because it makes their goods more competitive pricewise. Still, the burden of Trump’s tariffs on imports from China and other countries falls entirely on U.S. consumers and businesses that buy imports, said a study in March by economists from the Federal Reserve Bank of New York, Columbia University and Princeton University. 

Republican-leaning business groups such as the U.S. Chamber of Commerce have warned that the tariffs threaten to derail the economy raise unemployment, but with economic growth at 3.2 percent last quarter and the unemployment rate at 3.6 percent, Trump isn’t changing strategy now. 

“Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch!” Trump tweeted on Friday. 
…

President Donald Trump let loose with a morning round of tweets Friday that downplayed the possible consequences of his trade war with China.   

Trump minimized the worth of China’s purchases of U.S. goods and services, which support nearly 1 million jobs in the U.S.; misstated the trade deficit; and ignored the inevitable rise in many costs to consumers when imports are heavily taxed.  

The tweets came as his tariffs kicked in on $200 billion worth of Chinese goods, with another round of tariffs in the offing, and as U.S. and Chinese officials negotiated in Washington. With trade relations between the economic giants seemingly rupturing and the stock market sinking, Trump called the talks “congenial.”  

A look at some of his statements:  

Trump: “Your all time favorite President got tired of waiting for China to help out and start buying from our FARMERS, the greatest anywhere in the World!”  

The facts: The notion that China doesn’t buy from U.S. farmers is false. China is the fourth-largest export market for U.S. agriculture. It bought $9.3 billion in U.S. agricultural products last year.  

As for calling himself “your” favorite president, polls find Trump’s approval rating to be high among Republicans, but it generally ranges between 35% and 45% among Americans overall.   

Trump: “We have lost 500 Billion Dollars a year, for many years, on Crazy Trade with China. NO MORE!”  

The facts: That’s wrong. When sizing up the trade deficit, Trump always ignores trade in services — where the U.S. runs a surplus with China — and speaks only of goods. Even in that context, he misstated the imbalance.  

The U.S. trade deficit with China last year was $378.6 billion, not $500 billion. On goods alone, the deficit was $419.2 billion.      

Trump is also misleading when he puts the deficit in that ballpark for many years. It’s true that the imbalance has long been lopsided, but the U.S. trade representative’s office notes that exports of goods to China have increased by nearly 73% since 2008 and U.S. exports to China overall are up 527% since 2001.  

Nor is the trade gap a “loss” in a pure sense. U.S. consumers and businesses get electronics, furniture, clothing and other goods in return for their money. They are buying things, not losing cash.  

Trump: “Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S.”  

The facts: This is not how tariffs work. China is not writing a check to the U.S. Treasury. The tariffs are paid by American companies, which usually pass the cost on to consumers through higher prices. One theory in support of such tariffs is that higher prices for Chinese imports will encourage consumers to buy goods made in the U.S. or elsewhere instead. But the risk is that consumers could simply respond by spending less than they otherwise would, which would hurt growth. 

The burden of Trump’s tariffs on imports from China and other countries falls entirely on U.S. consumers and businesses that buy imports, said a study in March by economists from the Federal Reserve Bank of New York, Columbia University and Princeton University. By the end of last year, the study found, the public and U.S. companies were paying $3 billion a month in higher taxes and absorbing $1.4 billion a month in lost efficiency.  

A coalition of U.S. trade organizations representing retail businesses, tech, manufacturing and agriculture said this week: For 10 months, Americans have been paying the full cost of the trade war, not China.'' It said:To be clear, tariffs are taxes that Americans pay, and this sudden increase with little notice will only punish U.S farmers, businesses and consumers.” 

Trump: “Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source!”  

The facts: In addition to repeating the canard that China pays the tariffs, he’s failing to account for the damage that tariffs can do.  

By most private estimates, a trade war leads to slower growth rather than the prosperity that Trump is promising. The president’s tweet also goes beyond past claims that tariffs are simply a negotiating tactic to force better terms with China. Trump appears to be suggesting that a tariff increase would generate revenues that could then be spent on farm products and infrastructure, something that might in theory require support from Congress.  

But on their own, tariffs are a clear drag on growth.  

Analysts at the consultancy Oxford Economics estimate that implementing and maintaining the latest increase would trim U.S. gross domestic product by 0.3%, or $62 billion, in 2020. This would be equal to a loss of about $490 per household.  

Economists at Nomura note that gross domestic product this year could take a hit of as much as 0.4% if Trump expands the taxes to all Chinese imports, as business confidence slumped and financial conditions tightened. 
…

With a ring of the opening bell, Uber began picking up passengers as a newly minted public company Friday and investors waited to bet on a service with huge potential, but a long way from turning a profit.

Shares in the ride-hailing giant were sold in an initial public offering for $45 each, raising $8.1 billion, but it will take several hours for new investors to show how much they’re interested. Officials expect trading to start around 11:30 a.m.

CEO Dara Khosrowshahi and other company officials stood on a balcony above the New York Stock Exchange and clapped as the bell rang to signal the start of the day’s trading.

The IPO price on Thursday came in at the lower end of Uber’s targeted price range of $44 to $50 per share. The caution may have been driven by escalating doubts about the ability of ride-hailing services to make money since Uber’s main rival, Lyft, went public six weeks ago.

Jitters about an intensifying U.S. trade war with China have also contributed to the caution. Stocks opened broadly lower on Wall Street after the two countries failed to reach a deal before Friday’s tariff deadline.

Even at the tamped-down price, Uber now has a market value of $82 billion — five times more than Lyft’s.

Before the opening bell, Khosrowshahi tried to manage expectations for the first day of trading.

“Today is only one day. I want this day to go great, but it’s about what we build in the next three to five years,” he said in an interview with CNBC. “And I feel plenty of pressure to build over that time frame.”

Uber, Khosrowshahi said, is dealing with a potential $12 trillion market so “it makes sense to lean forward.”

He predicted that younger generations will not want to own cars. “I think more and more you’re going to have transportation on demand services, essentially de-bundle the car. They’re going to want to push a button and get the transportation they want.”

Austin Geidt, one of Uber’s first employees, rang the opening bell. She joined the company nine years ago and is now head of strategy for the Advanced Technologies Group, working on autonomous vehicles. Over the years, she helped to lead its expansion in hundreds of new cities and countries.

Both Uber co-founders Travis Kalanick and Garrett Camp were present at the exchange but absent from the podium during the bell ringing.

A black Uber logo was hanging over exchange floor and bright green Uber Eats trucks were parked outside. Men in black T-shirts and hats with the Uber Eats logo handed out drinks and snacks on the trading floor while photos of sedans, helicopters and Jump bikes were shown on screens above.

No matter how Uber’s stock swings Friday, the IPO has to be considered a triumph for the company most closely associated with an industry that has changed the way millions of people get around. That while also transforming the way millions of more people earn a living in the gig economy.

Uber’s IPO raised another $8.1 billion as the company it tries to fend off Lyft in the U.S. and help cover the cost of giving rides to passengers at unprofitable prices. The San Francisco company already has lost about $9 billion since its inception and acknowledges it could still be years before it turns a profit.

That sobering reality is one reason that Uber fell short of reaching the $120 billion market value that many observers believed its IPO might attain.

Another factor working against Uber is the cold shoulder investors have been giving Lyft’s stock after an initial run-up. Lyft’s shares closed Thursday 23% below its April IPO price of $72.

Uber “clearly learned from its `little brother’ Lyft, and the experience it has gone through,” Wedbush Securities analysts Ygal Arounian and Daniel Ives wrote late Thursday.

Despite all that, Uber’s IPO is the biggest since Chinese e-commerce giant Alibaba Group debuted with a value of $167.6 billion in 2014.

“For the market to give you the value, you’ve either got to have a lot of profits or potential for huge growth,” said Sam Abuelsamid, principal analyst at Navigant Research.

Uber boasts growth galore. Its revenue last year surged 42% to $11.3 billion while its cars completed 5.2 billion trips around the world either giving rides to 91 million passengers or delivering food.

Uber might be even more popular if not for a series of revelations about unsavory behavior that sullied its image and resulted in the ouster of Kalanick as CEO nearly two years ago.

The self-inflicted wounds included complaints about rampant internal sexual harassment, accusations that it stole self-driving car technology, and a cover-up of a computer break-in that stole personal information about its passengers. What’s more, some Uber drivers have been accused of assaulting passengers, and one of its self-driving test vehicles struck and killed a pedestrian in Arizona last year while a backup driver was behind the wheel.

Uber hired Khosrowshahi as CEO to replace Kalanick and clean up the mess, something that analysts say has been able to do to some extent, although Lyft seized upon the scandals to gain market share.

Kalanick remains on Uber’s board and while he kept a relatively low profile on Friday, he can still savor his newfound wealth. At $45 per share, his stake in Uber will be worth $5.3 billion. Hundreds, if not thousands, of other Uber employees are expected to become millionaires in the IPO.

Meanwhile, scores of Uber drivers say they have been mistreated by the company as they work long hours and wear out their cars picking up passengers as they struggle to make ends meet. On Wednesday, some of them participated in strikes across the United States to highlight their unhappiness ahead of Uber’s IPO but barely caused a ripple. A similar strike was organized ahead of Lyft’s IPO to the same effect.

In its latest attempt to make amends, Uber disclosed Thursday that it reached a settlement with tens of thousands of drivers who alleged they had been improperly classified as contractors. The company said the settlement covering most of the 60,000 drivers making claims will cost $146 million to $170 million.

Now, Uber will focus on winning over Wall Street.

Uber may be able to avoid Lyft’s post-IPO stock decline because it has a different story to tell than just the potential for growth in ride-hailing, says Alejandro Ortiz, principal analyst with SharesPost. Uber, he said, has plans to be more than a ride-hailing company by being all things transportation to users of its app, offering deliveries, scooters, bicycles and links to other modes of transportation including public mass transit systems.

“Whether or not that pitch will work kind of remains to be seen. It’s nearly impossible to tell now,” he said. “Obviously the risk to the company now is they have a lot more shareholders that they have to convince.”

 
…

The United States and China appear to have ended their latest round of trade negotiations without announcing any agreement.

On Friday, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer met briefly with the Chinese delegation led by Vice Premier Liu He. After the talks, Mnuchin briefly spoke to reporters saying that discussions had been “constructive.”

There have been no further comments from the administration.The Chinese delegation is scheduled to return to Beijing late Friday.

After the talks ended, U.S. President Donald Trump tweeted Friday that the relationship with Chinese President Xi Jinping remains “a very strong one” and that conversations “will continue” but that the U.S. is imposing tariffs on China which “may or may not be removed.”

Earlier in the day, Trump sent a series of tweets on the escalating trade war with China, as the U.S. increased tariffs from 10% to 25% on $200 billion worth of Chinese imports.  Beijing has vowed to retaliate for the U.S. action.

“We have lost 500 Billion Dollars a year, for many years, on Crazy Trade with China. NO MORE!”

Trump went on to tweet that trade talks with China are proceeding in a “congenial manner” and “there is absolutely no need to rush” to finalize a trade agreement.

​

The president threatened to impose 25% tariffs on an additional $325 billion worth of Chinese goods. He noted that Washington sells Beijing about $100 billion worth of goods, and with the more than $100 billion in tariffs received, the U.S. will buy agricultural products from U.S. farmers and send them as humanitarian assistance to nations in need.

While some taxes are paid directly to the government when products are imported, these taxes, also known as customs duties, are frequently added to the price of the imported product. This means the taxes are paid by those who buy the product. In this case, it would be the American consumer.

Trump also chided China for trying to “redo” the deal at the last minute after the terms already had been set.

​Trump said he also received “a beautiful letter” from Chinese President Xi Jinping that expressed a sentiment of “let’s work together.”

Trump told reporters he believes “tariffs for our country are very powerful,” and would benefit America’s economy.

Some economists, however, predict such tariffs would cut the U.S. economic growth rate. 

David French of the U.S. National Retail Federation said in a VOA interview “a negotiating strategy based on tariffs is the wrong direction” and expressed hope the Chinese “make substantial concessions to avert this disaster.”

Shanghai University economics professor Ding Jianping told VOA the tariffs would also adversely impact the U.S. financial markets, which have climbed to record highs. Jianping said the record performance makes the markets “most vulnerable” because they are “not supported by science and technology.” He added, “The peak created by fiscal and monetary policy is unsustainable.”

The Trump administration hopes the new tariffs will force changes in China’s trade, subsidy and intellectual property practices.  The two sides have been unable to reach a deal due, in part, to differences over the enforcement of an agreement and a timeline for removing the tariffs.
…

The International Chamber of Commerce, the world’s largest business organization, has become the latest group to criticize a proposed change to Hong Kong law that would allow for criminal extradition to mainland China. 

In a scathing letter issued to legislators Wednesday, the ICC questioned why Hong Kong is fast-tracking such significant changes to its legal system with a limited public consultation, calling the move “most unbecoming in terms of public governance.” 

The ICC’s letter follows similar concerns echoed by the European Union, the American Chamber of Commerce, the Hong Kong Bar Association and US Consul General Kurt Tong. 

The bill was introduced in April and is set to be voted on in July by its semi-democratic legislature, in which the majority is held by pro-establishment legislators. 

If passed, it would allow the city to extradite to other jurisdictions where it lacks a permanent extradition agreement, including China and Taiwan, on a case by case basis. Chief Executive Carrie Lam has previously said that such changes would close legal “loopholes.”

​It follows a high profile murder case last year in which a Hong Kong man was accused of murdering his pregnant girlfriend while on holiday in Taiwan, where the autonomous Chinese city also lacks a long term extradition agreement. The government has said speed is necessary as the murder suspect, who is serving a prison sentence on related money laundering charges, could be released as early as October. 

The changes, however, and the speed at which they have been introduced have raised international concern about the future of Hong Kong’s legal system and its global reputation. 

Hong Kong, an autonomous special administrative region until 2047, has a dramatically different legal system from the mainland because of its former status as a British colony. Its strong rule of law has led dozens of multinational firms to make the city their Asia headquarters, although the ICC said this could change if the extradition law is put in place. 

“Enactment of the amendment bill would mean more people in Hong Kong will be put to risk of losing freedom, property, and even their life in future of being surrendered, than merely passing judgment on the convicted of the Taiwan murder case,” the ICC said, urging lawmakers to take more time on the bill. 

Earlier this week, the U.S. China Economic and Security Review Commission also added its concern to the growing list and said the extradition agreement could “create serious risks for U.S. national security and economic interests in the territory” and “pose increased risks for U.S. citizens and port calls in the territory.” 

It also said the new law could impact the 1992 US-Hong Kong Policy Act, which grants the city special trading privileges, different from mainland China. 

In late April, an estimated 130,000 Hong Kong residents participated in a protest against the extradition agreement, according to organizers, in the largest demonstration in years. Police estimates put the figure at closer to 23,000. 
…

The United States has increased tariffs from 10% to 25% on $200 billion worth of Chinese imports.

China on Friday said it “deeply regrets” the increased tariffs and will take the “necessary countermeasures” without giving any details.

The increases are going into effect amid talks between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

On Thursday the U.S. and Chinese trade negotiators ended the first of two days of talks aimed at saving a trade deal even as President Donald Trump said the new “very heavy tariffs” on Chinese products would go ahead.

The White House said Thursday evening that “Ambassador Lightizer and Secretary Mnuchin met with President Trump to discuss the ongoing trade negotiations with China. The ambassador and secretary then had a working dinner with Vice Premier Liu He and agreed to continue discussions tomorrow morning at USTR.”

Talks on Friday

Liu He is leading the Chinese negotiating team for the talks, which threatened to collapse after the Trump administration accused Beijing of backtracking.

“We were getting very close to a deal, then they started to renegotiate the deal,” said Trump Thursday in the Roosevelt Room of the White House.

“It was their idea to come back” and resume discussion ahead of the Friday deadline for additional tariffs, the president said.

Trump said he had also received “a beautiful letter” from Xi that expressed a sentiment of “let’s work together.”

Trump told reporters that he happens “to think tariffs for our country are very powerful,” in line with a view he has been expressing that such increased punitive taxes would be good for America’s economy.

​Tariffs and economic growth

Some economists, however, predict such tariffs would cut in half the U.S. economic growth seen in the first quarter of this year.

Earlier officials in Beijing said they have “made all necessary preparations” if Trump followed through on the pledge to impose the new set of tariffs.

Chinese Commerce Ministry spokesman Gao Feng told reporters in Beijing Thursday that China will not bow to any pressure and warned it has the “determination and ability to defend its own interests.”

The ministry issued an earlier statement vowing to take any necessary countermeasures if the tax is implemented.

The Trump administration hopes the new tariffs will force changes in China’s trade, subsidy and intellectual property practices.

The two sides have been unable to reach a deal thanks, in part, to differences over the enforcement of an agreement and a timeline for removing the tariffs.

Trump says despite being poised to impose the additional tariffs, he is not looking for a trade war with Beijing.

“I want to get along with China,” he told reporters. 
…

A strike by Uber and Lyft drivers in cities across the United States this week caused barely a ripple to passengers looking to catch a ride, highlighting the challenges in launching a labor movement from scratch in an industry that is by nature decentralized.

Activists and others involved in the labor movement are still declaring it a success. It grabbed headlines, trended on Twitter and won the support of several Democrats running for president. The action was also closely watched by labor organizers, who are brainstorming about ways to build worker power in the 21st-century economy.

Drivers say they wanted to draw the attention of the public, technology investors and political leaders to their plight: low pay and a lack of basic rights on the job.

“The goal is to bring awareness to the incredible disregard for workers,” said Lyft driver Ann Glatt, who helped organize the San Francisco strike and protest outside Uber headquarters.

Starting to organize

App-based workers are thought to comprise a small fraction of the economy, but there are still millions of people making a living in gig work. Uber alone says it has nearly 4 million drivers, while Lyft has more than 1 million.

In pockets around the country, workers are starting to organize themselves, often with the help of workers’ rights groups and labor unions. In Silicon Valley, a workers’ rights group established Gig Workers Rising, which helped with Wednesday’s strike. In New York state, the AFL-CIO is pushing the Legislature to take steps to protect workers who get jobs through digital platforms. A campaign that started in Washington state this year pressured shopping service Instacart to stop counting tips toward workers’ base pay, and even won them back pay.

Among the Lyft and Uber drivers’ top issues are pay, a lack of transparency that makes it difficult to understand how much they were paid and why, and no due process when they are “deactivated,” or barred from the service.

The drivers and workers at other app-based platforms such as Instacart or food delivery service DoorDash are classified by the companies as independent contractors, leaving them without the same safeguards traditional workers receive, such as minimum wage, unemployment insurance, workers compensation and health and safety protections.

Uber settlement

Uber on Thursday disclosed ahead of its Friday IPO that it had reached an agreement to settle with tens of thousands of drivers who dispute the company’s contention that they are independent contractors. It said the payments and attorneys’ fees could reach $170 million.

Uber maintains the drivers are independent because they choose whether, when and where to provide services, are free to work for competitors and provide their own vehicles. It said it has taken steps to make drivers’ earnings more consistent and to improve working conditions, including by providing discounts on gasoline and car repairs and tuition reimbursement for some drivers.

Lyft also pushed back on the complaints, saying its drivers’ hourly earnings have increased 7% in the last two years, that on average, they earn more than $20 per hour and that three-quarters of its drivers work fewer than 10 hours per week.

Legislation push

In California, labor leaders are pushing legislation to classify many gig workers and other independent contractors as regular employees, after a state high court ruling last year.

Nicole Moore is a Lyft driver and organizer with the Los Angeles-based group Rideshare Drivers United. This week’s action came out of a strike drivers held in Los Angeles in March to protest Lyft’s IPO and a cut in Uber’s reimbursement rate from 80 cents to 60 cents per mile. Drivers after that action wanted to do more, and this week’s protest was hatched.

A core group of about 25 drivers organized it, she said, with many of the other 4,300 driver members pitching in to help.

Drivers in different cities described how they spread the word. Some spoke to fellow drivers face-to-face in driver hotspots: airport parking lots, car washes and gas stations. They reached out to driver networks in different immigrant communities and took out targeted ads on Facebook and Google.

Organizing people who don’t work in the same job location can be difficult and requires new, tech-savvy approaches, said Rachel Lauter, executive director of the Seattle-based workers’ rights group Working Washington. The group has helped organize in industries such as fast food and domestic workers, and last year started talking to workers in the gig economy about what mattered to them.

Success vs. Instacart

Their efforts galvanized this year when Instacart changed its pay model and began counting tips toward its shoppers’ base pay. The group launched a campaign using text messages, Facebook, Reddit, online petitions and other digital tools to reach out to workers and customers to let them know about the change. They encouraged customers to give only a minimal tip to send a message of protest to the company then add a tip after delivery or tip in cash. They also created online calculators to help workers understand how much Instacart was actually paying them. They held Zoom conference calls where hundreds of Instacart workers and customers called in to coordinate.

The work paid off when Instacart in February announced a number of steps “to more fairly and competitively compensate” its workers, including leaving tips out of it when they calculate how much each worker will be paid.

Mario Cilento, president of the New York State AFL-CIO, said it isn’t fair that gig platforms don’t have to pay minimum wage, payroll taxes, unemployment insurance and other expenses that traditional employers pay.

“We must get ahead of this now,” Cilento said. “We liken it to where we were with the Fair Labor Standards Act in 1938, when they came up with the eight-hour day, and child labor laws and overtime pay.” 
…

Nike wants to meet your feet.

The sneaker seller will launch a foot-scanning tool on its app this summer that will measure and remember the length, width and other dimensions of customers’ feet after they point a smartphone camera to their toes. The app will then tell shoppers what size to buy each of its shoes in, which Nike hopes will cut down on costly online returns as it seeks to sell more of its goods through its websites and apps. 

But Nike will also get something it has never had before: a flood of data on the feet of regular people, a potential goldmine for the shoemaker, which says it will use the information to improve the design of its shoes. Nike mainly relies on the feet of star athletes to build its kicks.

“Nikes will become better and better fitting shoes for you and everyone else,” said Michael Martin, who oversees Nike’s websites and apps. 

Nike won’t sell or share the data to other companies, Martin says. And he says shoppers don’t have to save the foot scans to their Nike accounts. But if they do, they’ll only have to scan their feet once and Nike’s apps, websites and stores will know their dimensions every time they need to buy sneakers. Workers at Nike stores will also be equipped with iPods to do the scanning, replacing those metal sizing contraptions. 

The challenging part for Nike is convincing people they need to measure their feet in the first place. Most think they already know what their shoe size is, says Brad Eckhart, who was an executive at shoe store chain Finish Line and is now a principal at retail consultancy Columbus Consulting, 

But Nike says it gets half a million complaints a year from customers related to fit and sizing. And it admits what many shoppers have already suspected: Each of its shoe styles fit differently, even if they are in the same size. A leather sneaker may be tighter and require a bigger size. Knit ones may be more forgiving. And shoelaces can throw everything off.

Shoe size is “effectively a lie,” said Martin. “And it’s a lie that we’ve perpetuated.”

Matt Powell, a sports industry analyst at NPD Group Inc., says the tool might be most valuable for people who want to run or play basketball in their sneakers, since the wrong fit can cause injury. But Powell says most people buy sneakers just to walk around in.

Still, finding the right size is a problem for shoppers: “There really is no industry standard for what is a size 10,” Powell said. 
…

China is “fed up” with hearing complaints from the United States about its Belt and Road program to re-create the old Silk Road, the government said on Thursday, following stinging criticism from U.S. Secretary of State Mike Pompeo.

The initiative, a key thrust of President Xi Jinping’s administration, has hit opposition in some countries over fears its opaque financing could lead to unsustainable debt and that it aims more to promote Chinese influence than development.

China sought to tackle those concerns at a summit in Beijing last month, promising to make the program sustainable and green and follow international standards, especially regarding debt.

The United States has been particularly critical, and Pompeo, speaking in London on Wednesday, slammed China for peddling “corrupt infrastructure deals in exchange for political influence” and using “bribe-fueled debt-trap diplomacy”.

In Beijing, Foreign Ministry spokesman Geng Shuang said various people in the United States had been making “irresponsible comments” on the program, especially before the summit when, he said, such criticism reached a crescendo.

“But what was the result? One hundred and fifty countries, 92 international organizations and more than 6,000 delegates from various countries attended the second Belt and Road Forum for International Cooperation, including 50 delegates from the United States,” Geng told reporters.

“I think this is the international community taking actual actions to cast a vote of confidence and support in the Belt and Road initiative, and the best response to the words and actions of the United States.”

In the past two days, some Americans have been “singing the same old tune”, seeking to attack and smear the program, he added.

“They’re not fed up with saying it; we’re fed up with hearing it,” he said.

“I want to remind them again, don’t overestimate your ability to create rumors, and don’t underestimate the judgment of others. If they want to, let them continue talking. We will continue getting on with things.”

The spat has fueled already tense relations between Beijing and Washington, most notably over their trade war, which the two countries have been seeking to end.

Vice Premier Liu He will hold talks in Washington on Thursday and Friday aimed at salvaging a deal that appeared to be unraveling after U.S. officials accused China of backtracking on earlier commitments and President Donald Trump threatened to hike tariffs on Chinese goods on Friday.

 
…

President Donald Trump said Wednesday U.S. automaker General Motors will invest $700 million in Ohio and create 450 jobs, selling one of its shuttered plants to a company that will produce electric trucks.

“GREAT NEWS FOR OHIO!” Trump tweeted.

Trump said he had talked to GM chief Mary Barra who told him of plans to sell the Lordstown, Ohio plant to Workhorse, a company that focuses on producing electric delivery vehicles.

In November, GM shuttered five U.S. plants, including auto assembly plants in Michigan and Ohio, as part of a 15 percent cut in its workforce worldwide — cutting around 14,000 employees — a move which drew Trump’s wrath on Twitter.

But in March, GM announced plans to invest $1.8 billion in U.S. operations creating 700 new jobs. About $300 million will be geared towards production of electric vehicles at the auto giant’s Orion plant in Michigan, creating 400 jobs, the company said in a statement.

“I have been working nicely with GM to get this done. Thank you to Mary B, your GREAT Governor, and Senator Rob Portman. With all the car companies coming back, and much more, THE USA IS BOOMING!” Trump said.

The U.S. president has repeatedly berated companies by name to pressure them into investing more or reversing decisions on job cuts.

 
…

In the U.S., there’s an old saying that there are only two things that are certain in life: death and taxes.

But as it turns out, death is way more certain than taxes in the United States.

Corporations and some wealthy individuals, including President Donald Trump, are able to legally avoid any federal taxation in some years by deducting business expenses such as capital investments, charitable donations, interest on their home loans, health care costs and numerous other write-offs from their corporate or personal income.

In a report late Tuesday, The New York Times said from 1985 to 1994, Trump lost more than $1 billion in his real estate business operations and paid no federal income taxes in eight of those 10 years.

Trump called the report inaccurate but did not dispute any specific facts. He said it was “sport” for developers to game the U.S. tax code so they did not have to pay taxes.

Unlike U.S. presidents for the past four decades, Trump has balked at releasing his tax returns, although opposition Democratic lawmakers in the House of Representatives are seeking, so far unsuccessfully, to get him to divulge his returns for the last six years. A court fight over the dispute is possible.

The independent Tax Policy Center estimates that in 2018, 44% of Americans paid no federal income tax under the country’s progressive sliding scale of taxation, where those making the most money, in the hundreds of thousands of dollars, pay a higher percentage tax than those with way less annual income.

Various provisions of the U.S. tax code, such as the standard deduction to reduce taxable income or such allowable itemized deductions as for making donations to charities or for expenses to operate a business from home, can sharply reduce income subject to federal taxation.

But even those individuals not subject to any federal taxation, however, likely have paid payroll taxes, payments to cover mandatory withholding from their paychecks to fund the government’s pension plan for older and retired workers, and health insurance for Americans over 65. About three-quarters of American households pay federal income taxes, the payroll taxes or both.

The median annual U.S. household income is $56,516, meaning half earn more, half less.

According to one recent survey of nearly 130,000 American consumers, the average American spends $10,489 each year in federal, state, and local income taxes, about 14% of the average survey respondent’s gross income.

In the corporate world, however, with the tax overhaul pushed to passage by Trump and Republican lawmakers in 2017 that cut the basic federal corporate tax rate from 35% to 21%, 60 of the biggest U.S. corporations avoided paying any taxes last year, according to the Washington-based Institute on Taxation and Economic Policy.

The research group said these companies should have paid a collective $16.4 billion in federal income taxes, but instead, with various legal deductions from their income, received a net tax rebate of $4.3 billion.

It reported that among the 60 profitable U.S. corporations paying no federal income taxes last year were some of the country’s best known businesses, including General Motors, Amazon, Chevron, Netflix, Delta Air Lines, IBM, Goodyear Tire & Rubber, and Eli Lilly.

 
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If a rising tide lifts all boats, then Vietnam may find that there is a related saying in economics: when the tide goes out, you will see who was swimming naked.

The Southeast Asian country has fared fairly well amid the trade frictions around the world, with its foreign investment and gross domestic product continuing to grow. But even Vietnam is not immune if a recession hits the global economy, as some are expecting, which is why they are bracing for a hard landing. News this week that U.S. President Donald Trump plans to increase tariffs on Chinese goods has just added to the frictions, sending Asian stock markets plummeting.

An economic downturn — in other words, the tide going out — could expose vulnerabilities for Vietnam, the equivalent of those swimming naked. Most analysts are forecasting slower GDP growth for Vietnam in the year ahead.

Economic slowdown ahead

It “is important to recognize that the region continues to face heightened pressures that began in 2018 and that could still have an adverse impact,” said Andrew Mason, who is acting as the chief economist for the World Bank in the East Asia and Pacific region. “Continued uncertainty stems from several factors, including further deceleration in advanced economies, the possibility of a faster-than-expected slowdown in China, and unresolved trade tensions.”

His office projects the Vietnamese economy will expand 6.6 percent in 2019, while researchers at Capital Economics peg growth at an even lower rate of 6 percent year-on-year. That compares with the annualized rate of 7.1 percent in 2018.

The pending slowdown, if it comes, would be due to a variety of reasons, not least among them global demand. If more and more countries see their economies decelerate — because of the trade wars or otherwise — they will buy fewer goods from Vietnam. As an export-led economy based on factory products, Vietnam is extremely sensitive to the knock-on effects of foreign trade and consumption.

Another key risk factor for the economy is the portfolio of state-owned enterprises. The government has not divested its shares in the enterprises as quickly as planned. At the same time it faces a growing burden from tax and spending needs.

Public debt and a budget deficit

“Fiscal policy is also likely to become less supportive. Vietnam has one of the highest levels of public debt and the largest budget deficit in the region,” Capital Economics, an economic research company, said in a note to investors. “Tighter policy, in the form of slower spending growth and higher taxes, is needed to bring debt levels down to more sustainable levels.”

Both the company and the World Bank agree that, besides public debt, private debt poses a notable challenge in the country as well, especially at banks. Lenders have not completely offloaded their non-performing loan problem, which refers to loans that are unlikely to be repaid. That contributes to tightening credit, which can be a blessing and a curse.

“On the plus side, weaker credit demand is needed to reduce risks in the financial sector and put the economy on a more sustainable footing,” Capital Economics wrote. “But in the near term a slowdown in credit growth will drag on consumption and investment growth.”

Large trade deals

All of this comes during a transition period for Vietnam, which is preparing for new trade deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the European Union-Vietnam Free Trade Agreement. Academic researchers Tran Thi Bich Nhan and Do Thi Minh Huong say the transition period will create plenty of opportunities, but not everyone will come out ahead.

“In terms of society, the increased competition from participating in FTAs can push some companies in developing countries, primarily state-owned enterprises and companies with outdated production technology, into difficulties, bringing along the possibility of unemployment for a portion of the workforce,” Nhan and Huong wrote in the finance ministry’s official newspaper.

If Vietnam adds to that a slowdown in the global economy, workers and other vulnerable groups are most likely to be hardest hit. While the overall impact of a recession is generally negative, some say there is a silver lining. When the tide goes out, it can help distinguish between the efficient and inefficient companies, distinguish between an economy’s strengths and the weaknesses to be addressed. But no one expects it to be a pleasant process.
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U.S. stocks slid Tuesday as escalating trade tensions between the United States and China triggered global growth fears and drove investors away from riskier assets.

The Dow Jones Industrial Average posted its second-biggest daily percentage drop of the year, while the S&P 500 and Nasdaq registered their third-biggest percentage drops, even as the major indexes pared losses to end off their session lows.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin said late Monday that China had backtracked from commitments made during trade negotiations. Those comments followed President Donald Trump’s unexpected statement Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

Beijing said Tuesday that Chinese Vice Premier Liu He will visit the United States Thursday and Friday for trade talks. Additional tariffs are set to take effect Friday if a trade agreement is not reached by then.

Investor concerns

Monday’s comments from Lighthizer and Mnuchin raised concerns among some investors that trade talks between China and the United States could take much longer to resolve than previously thought.

“Week after week, we’ve heard there has been progress and that a deal would be reached,” said Kate Warne, investment strategist at Edward Jones in St. Louis. “Now the goalposts have moved. There’s been quite a shift in expectations.”

Investors expressed concern that additional tariffs, if imposed, could interrupt supply chains and hamper economic growth.

“The threat of tariffs has not been trotted out since the end of December,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. “It could disrupt the symbiosis between (China and the United States).”

Stocks sensitive to trade 

Trade-sensitive industrial and technology stocks marked the biggest percentage declines among the S&P 500’s major sectors. All 11 sectors were in the red, with only utilities and energy falling less than 1%.

Shares of Boeing Co., the largest U.S. exporter to China, slipped 3.9%, and shares of Caterpillar Inc., another industrial stalwart sensitive to China, declined 2.3%.

Among technology stocks, Microsoft Inc. shares slid 2.1%, while Apple Inc. shares dropped 2.7%. Apple and Microsoft were the top two drags on the S&P 500.

The CBOE Volatility Index, a gauge of investor anxiety, spiked to its highest level in more than three months.

The Dow Jones Industrial Average fell 473.39 points, or 1.79%, to 25,965.09, the S&P 500 lost 48.42 points, or 1.65%, to 2,884.05 and the Nasdaq Composite dropped 159.53 points, or 1.96%, to 7,963.76.

Bright spots

In a bright spot, American International Group Inc. shares jumped 6.8% after the insurer reported a quarterly profit that blew past expectations.

With earnings season now in its homestretch, first-quarter profits are now expected to rise 1.2%, a sharp improvement from the 2.3% decline expected at the start of the earnings season.

Of the 414 S&P companies that have reported earnings so far, about 75% have surpassed analysts’ estimates, according to Refinitiv data.

Conversely, Mylan NV shares tumbled 23.8%, the most among S&P 500 companies, after the drugmaker reported lower-than-expected quarterly revenue and failed to provide greater clarity on a potential revamp of the company’s strategy.

Declining issues outnumbered advancing ones on the NYSE by a 4.13-to-1 ratio; on Nasdaq, a 3.32-to-1 ratio favored decliners. The S&P 500 posted four new 52-week highs and seven new lows; the Nasdaq Composite recorded 44 new highs and 62 new lows.

Volume on U.S. exchanges was 7.8 billion shares, compared to the 6.71 billion average for the full session over the last 20 trading days.
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U.S. President Donald Trump’s intention to further hike U.S. tariffs on Chinese goods has alarmed American lawmakers of both parties who fear dire economic consequences from escalating tensions between the United States and its trading partners.

“I’m anxious for the tariff war to come to an end,” Republican Sen. Jerry Moran of agriculturally rich Kansas told VOA on Tuesday. “Exports are very important to the economy of my state. I would encourage the rapid resolution between the United States and China, because it has an immediate and consequential effect on the livelihoods of lots of people.”

“The [president’s] whole tariff policy has been dangerous folly,” New Jersey Democratic Sen. Robert Menendez said. “I hear it from New Jersey companies that recently, just this past week, told me about tariffs they have to pay on particular products that they can’t get anywhere else [but foreign suppliers].”

​Who’s paying?

On Sunday, Trump announced that tariffs on $200 billion of Chinese goods would rise from 10% to 25% as of Friday. He tweeted that “China has been paying” U.S. tariffs and that China’s “payments are partially responsible for our great economic results.”

Such assertions are disputed by many lawmakers, including Republicans who, on other matters, often come to the president’s defense.

“Currently, U.S. importers have paid the U.S. government over $16 billion in tariffs on imports from China,” Oklahoma Republican Sen. James Lankford said via Twitter. “This tax is not paid for by Chinese exporters, this is all paid by U.S. importers.”

​Trade talks to continue

Despite Trump’s tariff threat, Chinese officials have signaled they intend to continue trade discussions with Washington, prompting some lawmakers to applaud what they see as the White House’s hardball negotiating stance toward Beijing.

“The only reason that China is at the [negotiating] table is because of these tariffs, let’s not kid ourselves,” Republican Sen. John Kennedy of Louisiana said. “China has been cheating … and it’s got to stop. And President Trump has been the first president to call their hand.”

Some Democrats, meanwhile, credit Trump for confronting China over its trade practices but fault the strategy and tactics the president has employed.

“I commend President Trump for saying the status quo with China is not working,” Virginia Democratic Sen. John Warner said. “China is not playing by the rules, and my fear is the president may end up with a deal where the president sells an extra $100 billion of [American] soybeans, but these broader issues around technology … and [China’s] ongoing theft of intellectual property go unaddressed.”

“Tariff policy by tweet does not work,” said Massachusetts Sen. Elizabeth Warren, who is seeking next year’s Democratic presidential nomination. “We’ve had two years of experience now [with Trump], and it just seems to be getting worse and worse.”

​Beyond China

Tariff concerns on Capitol Hill extend beyond China. A group of Republican lawmakers has urged Trump to halt tariffs targeting Canadian and Mexican goods, warning the measures could torpedo Congress’s consideration of a newly negotiated free trade pact between the United States and both nations.

Regarding the president’s new tariff threat on Chinese exports, some Republicans are willing to give the president the benefit of the doubt — for now.

“Perhaps the president is espousing additional tariffs for purposes of getting China’s attention and to negotiate an agreement. That would be a wonderful outcome,” Moran said. “The challenge is: it’s not just one country that can impose tariffs. So, when the United States [previously] imposed tariffs, China retaliated on products from the United States. And that is very damaging to the ability to earn a living.”
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German sports car maker and Volkswagen subsidiary Porsche will pay a 535-million-euro ($598 million) fine over diesel vehicles that emitted more harmful pollutants than allowed, Stuttgart prosecutors said Tuesday.

“The Stuttgart prosecutor’s office has levied a 535-million-euro fine against Porsche AG for negligence in quality control,” the investigators said.

Porsche “abstained from a legal challenge” against the decision, the prosecutors office added.

Tuesday’s levy against Porsche is the latest in a string of fines against VW over its years-long “dieselgate” scandal.

The auto behemoth admitted in 2015 to manipulating 11 million vehicles worldwide to appear less polluting in laboratory tests than they were in real driving conditions.

Following fines against VW, high-end subsidiary Audi and now Porsche, no further investigations over “administrative offences” remain open against the group, a spokesman told AFP.

But legal proceedings against individuals, including former chief executive Martin Winterkorn, remain open.

Meanwhile, thousands of investors are suing the company for the losses they suffered on its shares when news of the scandal broke, while hundreds of thousands of drivers are also demanding compensation.

In its own statement, Porsche said the negligence punished by prosecutors was identified “several levels below the board.”

The firm also said that the cost of the fine was included in a provision of around one billion euros booked by the VW group in the first quarter.

So far the total costs of “dieselgate” for the Wolfsburg-based behemoth have mounted to 30 billion euros.

Shares in VW were down 2.2 percent around 2:00 pm in Frankfurt (1200 GMT) at 154.10 euros, against a DAX index of blue-chip shares down 0.7 percent.
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China has confirmed that its top trade negotiator will travel to the United States to conduct a new round of trade talks later this week, even after U.S. President Donald Trump threatened higher tariffs on billions of dollars of Chinese goods after he complained the process is taking too long.

The Commerce Ministry issued a statement Tuesday that Vice Premier Liu He, President Xi Jinping’s top economic advisor, will meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for two days of talks beginning Thursday.

Trump’s Twitter comments on Sunday about the new tariffs sent Asian stocks and U.S. futures tumbling Monday and added uncertainty over the future of U.S.-China trade negotiations. Despite the market drop, China’s official media stayed silent on Trump’s comments all morning.

Hours later, Foreign Ministry spokesman Geng Shuang told reporters that China is “trying to get more information” about Trump’s comments about new tariffs but stressed that Beijing’s negotiating team is still preparing to travel to the U.S. for talks this week. Geng did not say whether Vice Premier Liu would lead the delegation.

“The tweet is a big wrench in China’s foreign trade policy,” Nick Marro, analyst at The Economist Intelligence Unit (The EIU), told VOA. “There were a lot of expectations that at least the groundwork for a deal will be finalized this week,” he said, explaining why Beijing should be upset by the new threat.

Tweet with teeth

In his tweet, Trump said he would increase tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent on Friday. This would reverse a decision Washington took last February to keep it at 10 percent in the midst of trade talks.

“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!,” Trump said, expressing dissatisfaction about the pace of trade negotiations and what he considered a Chinese attempt to renegotiate some aspects of the proposed deal.

Lighthizer on Monday confirmed that tariffs will be imposed Friday. He and Treasury Secretary Mnuchin told reporters Trump had learned over the weekend that Chinese officials “were trying to go back on some of the language” that had been negotiated in 10 earlier rounds of talks. They did not offer details.

Trump also said his policy of hiking taxes on Chinese goods had paid dividends.

“These payments are partially responsible for our great economic results,” he said.

He went further, saying another $325 billion of Chinese goods which “remain untaxed” will be taxed at 25 percent. He did not specify a timeline for making this change.

Unaffected stance

In its response Monday, the Chinese foreign ministry expressed hope that there is no change in the situation, and the two countries will continue to strive for an end to the trade war.

“What is of vital importance is that we still hope the United States can work hard with China to meet each other half way, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect,” Geng said.

Echoing China’s confidence that trade talks would not be disrupted by Trump’s tweet, Shanghai-based expert Shen Dingli said, “China and the U.S. have big and overlapping stakes in bilateral trade. They will overcome any difficulties for a successful outcome of the trade talks.”

 
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The United States will impose a 17.5 percent tariff on Mexican tomato imports starting on Tuesday, as the two countries were unable to renew a 2013 agreement that suspended a U.S. anti-dumping investigation, a Mexican official said on Monday.

The U.S. Commerce Department said in early February that the United States would resume an anti-dumping investigation into Mexican tomatoes, withdrawing from a so-called suspension agreement that halted the anti-dumping case as long as Mexican producers sold their tomatoes above a pre-determined price. U.S. growers and lawmakers say that deal has failed.

At the time, Commerce said it was giving the required 90-day notice before terminating the six-year-old agreement.

“As of tomorrow a tariff of 17.5 percent will be applied on the value of the product … Mexican exporters will be affected, it’s going to affect their financial flows but that is going to be directly transferred to U.S. consumers,” said Mexican Deputy Economy Minister Luz Maria de la Mora.

She added that the U.S. measures will remain in place until a new suspension agreement is reached.

“We’re very disappointed but the good news is that negotiations continue, looking for a solution. And we hope that in the coming weeks we can in fact reach an agreement,” said de la Mora.

Mexico exports around $2 billion worth of tomatoes to the United States annually, according to de la Mora.

A trade war over tomatoes was averted twice since the 1990s, most recently in the 2013 deal that put a price floor on Mexican tomatoes sold in the United States while barring U.S. growers from pursuing anti-dumping charges against Mexican exporters.

Fruit and vegetable growers in the southeastern U.S. had persuaded the Trump administration to seek the ability to impose seasonal anti-dumping duties against Mexican produce in negotiations to update the North American Free Trade Agreement.

But this demand was withdrawn in the final talks over the U.S.-Mexico-Canada trade deal reached last October.

A month later, the Florida Tomato Exchange, which represents growers in the state, had petitioned the Commerce Department to terminate the 2013 tomato pact. It argued that the agreement could not be enforced and contained too many loopholes through which Mexican growers could dump tomatoes in the U.S. market.
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