Iran said on Tuesday U.S. President Donald Trump was mistaken to expect Saudi Arabia and other oil producers to compensate for supply losses caused by U.S. sanctions on Iran, after OPEC production rose only modestly in July.

The comments, from Iran’s OPEC governor, came a day after a Reuters survey showed OPEC production rose by 70,000 barrels per day in July. Saudi production increased but was offset by a decline in Iranian supply due to the restart of U.S. sanctions, the survey found.

“It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Hossein Kazempour Ardebili told Reuters. “Now they and Russia sell more oil and more expensively. Not even from their incremental production but their stocks.”

He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the United States grants waivers to buyers of Iranian crude.

“They are also calling for the use of the U.S. SPR [Strategic Petroleum Reserve]. This will also mean higher prices. U.S. waivers to our clients if they come is due to the failure of bluffers [Saudi and the other producers] and, if not given, will again push the prices higher,” he said.

“So they hanged him [Trump] on the wall. Now they want to have a mega OPEC, congratulations to President Trump, Russia and Saudi Arabia.”

OPEC governors represent their respective country on the organization’s board of governors and are typically the second most senior person in a country’s OPEC delegation after the oil minister.

“The longer-term solution, Mr President, is to support and facilitate capacity building in all countries, proportionate to their reserves of oil and gas. And we will remain the biggest opportunity,” Kazempour said.

 
…

McDonald’s is fighting to hold onto customers as the Big Mac turns 50, but it isn’t changing the makings of its most famous burger.

The company is celebrating the 1968 national launch of the double-decker sandwich whose ingredients of “two all-beef patties, special sauce, lettuce, cheese, pickles, onions and a sesame seed bun” were seared into American memories by a TV jingle. But the milestone comes as the company reduces its number of U.S. stores. McDonald’s said Thursday that customers are visiting less often. Other trendy burger options are reaching into the heartland.

The “Golden Arches” still have a massive global reach, and the McDonald’s brand of cheeseburgers, chicken nuggets and french fries remains recognizable around the world. But on its critical home turf, the company is toiling to stay relevant. Kale now appears in salads, fresh has replaced frozen beef patties in Quarter Pounders, and some stores now offer ordering kiosks, food delivery and barista-style cafes.

The milestone for the Big Mac shows how much McDonald’s and the rest of fast-food have evolved around it.

“Clearly, we’ve gotten a little more sophisticated in our menu development,” McDonald’s CEO Steve Easterbrook said in a phone interview.

As with many of its popular and long-lasting menu items, the idea for the Big Mac came from a franchisee.

In 1967, Michael James “Jim” Delligatti lobbied the company to let him test the burger at his Pittsburgh restaurants. Later, he acknowledged the Big Mac’s similarity to a popular sandwich sold by the Big Boy chain.

“This wasn’t like discovering the light bulb. The bulb was already there. All I did was screw it in the socket,” Delligatti said, according to “Behind the Arches.”

McDonald’s agreed to let Delligatti sell the sandwich at a single location, on the condition that he use the company’s standard bun. It didn’t work. Delligatti tried a bigger sesame seed bun, and the burger soon lifted sales by more than 12 percent.

After similar results at more stores, the Big Mac was added to the national menu in 1968. Other ideas from franchisees that hit the big time include the Filet-O-Fish, Egg McMuffin, Apple Pie (once deep-fried but now baked), and the Shamrock Shake.

“The company has benefited from the ingenuity of its small business men,” wrote Ray Kroc, who transformed the McDonald’s into a global franchise, in his book, “Grinding It Out.”

Franchisees still play an important role, driving the recent switch to fresh from frozen for the beef in Quarter Pounders, Easterbrook says. They also participate in menu development, which in the U.S. has included a series of cooking tweaks intended to improve taste.

Messing with a signature menu item can be taboo, but keeping the Big Mac unchanged comes with its own risks. Newer chains such as Shake Shack and Five Guys offer burgers that can make the Big Mac seem outdated. Even White Castle is modernizing, recently adding plant-based “Impossible Burger” sliders at some locations.

A McDonald’s franchisee fretted in 2016 that only one out of five millennials has tried the Big Mac. The Big Mac had “gotten less relevant,” the franchisee wrote in a memo, according to the Wall Street Journal.

McDonald’s then ran promotions designed to introduce the Big Mac to more people. Those kind of periodic campaigns should help keep the Big Mac relevant for years to come, says Mike Delligatti, the son of the Big Mac inventor, who died in 2016.

“What iconic sandwich do you know that can beat the Big Mac as far as longevity?” said Delligatti, himself a McDonald’s franchisee.
…

U.S. companies seeking to be exempted from President Donald Trump’s tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests.

Robert Miller, president and CEO of NLMK USA, said objections raised by U.S. Steel and Nucor to his bid for a waiver are “literal untruths.” He said his company, which imports huge slabs of steel from Russia, has already paid $80 million in duties and will be forced out of business if it isn’t excused from the 25 percent tariff. U.S. Steel and Nucor are two of the country’s largest steel producers.

“They ought to be ashamed of themselves,” said Miller, who employs more than 1,100 people at mills in Pennsylvania and Indiana.

Miller’s resentment, echoed by several other executives, is evidence of the backlash over how the Commerce Department is evaluating their requests to avoid the duty on steel imports. They fear the agency will be swayed by opposition from U.S. Steel, Nucor and other domestic steel suppliers that say they’ve been unfairly hurt by a glut of imports and back Trump’s tariff.

U.S. Steel said its objections are based on detailed information about the dimensions and chemistry of the steel included in the requests. “We read what is publicly posted and respond,” said spokeswoman Meghan Cox. Nucor did not reply to requests for comment.

The 20,000-plus waiver applications that the Commerce Department has received illustrate the chaos and uncertainty ignited by Trump’s trade war against America’s allies and adversaries. It’s a battle that critics of his trade policy, including a number of Republican lawmakers, have warned is misguided and will end up harming U.S. businesses.

Trump and European leaders agreed this past Wednesday not to escalate their dispute over trade, but the tariff on steel and a separate duty on aluminum imports remains in place as the U.S. and Europe aim for a broader trade agreement. The metal taxes would continue to hit U.S. trading partners such as Canada, Mexico and Japan even if the U.S. and the EU forge a deal.

Miller bristled over insistence by Nucor and U.S. Steel that steel slab is readily available in the United States. “That’s just not true,” he said.

His company isn’t the only one looking overseas for a product described as being consistently in short supply. California Steel Industries, a mill east of Los Angeles in Fontana, described the slab shortage as “acute” on the West Coast and declared that its waiver request is critical to its survival.

Aiming to rebuild the U.S. steel industry, Trump relied on a rarely used 1962 law that empowers him to impose tariffs on particular imports if the Commerce Department determines those goods threaten national security. He added a twist: Companies could be excused from the tariff if they could show, for example, that U.S. manufacturers don’t make the metal they need in sufficient quantities.

But there are hurdles to clear on the path to securing an exemption. A single company may have to file dozens of separate requests to account for even slight variations in the metal it’s buying. That means a mountain of paperwork to be filled out precisely. If not, the request is at risk of being rejected as incomplete. All this can be time-consuming and expensive, especially for smaller businesses.

The requests are open to objections. The Commerce Department posts the exemption requests online to allow third parties to offer comments — even from competitors who have an interest in seeing a rival’s request denied. But objections are frequently being submitted just as the comment period closes, undercutting the requester’s ability to fire back.

Willie Chiang, executive vice president of Plains All American Pipeline, told the House Ways and Means subcommittee on trade last week that his company had no opportunity to respond to objections that contained “incorrect information” before the Commerce Department denied its exclusion request. Chiang didn’t say who submitted the inaccurate information.

“The intent here is to restrict imports on a broad scale,” said Richard Chriss, executive director of the American Institute for International Steel, a free trade group opposed to tariffs. “It wouldn’t make sense from the administration’s perspective to design a process that readily granted exclusions.”

The Commerce Department declined to comment for this story.

Department officials have so far made public only a small number of their rulings.

An analysis of the numbers by the office of Rep. Jackie Walorski, an Indiana Republican and one of the most vocal opponents of the steel tariff on Capitol Hill, shows that 760 requests have been approved while 552 have been denied. The department hasn’t yet approved a waiver request that triggered objections, according to Walorski’s review.

The congresswoman’s office also examined the more than 5,600 publicly available comments and found they were submitted on average about four days before the end of the 30-day comment period. More than 50 percent of the comments weren’t delivered until 48 hours or less before the comment window closed. It took department an average of nine days to post comments online after receiving them, according to the analysis. The most prolific commenters were Nucor and U.S. Steel with 1,064 and 1,009, respectively.

A waiver request Seneca Foods Corporation submitted for tinplated steel it had already agreed to purchase from China was among the denials. U.S. Steel had objected, calling the tinplate a “standard product” that’s readily available in the United States. In fact, U.S. Steel said it currently supplies the material to Seneca Foods, the nation’s largest vegetable canner.

The New York-based Seneca Foods declined to comment. But in its waiver application, the company said domestically made tinplate “is of inferior quality to imported material.” Seneca Foods also said it’s unclear, at best, if U.S. suppliers have the ability or willingness to expand their production in the long term to meet the company’s annual demand for the material.

Philadelphia-based Crown Cork & Seal, a manufacturer of metal packaging for food and beverages, submitted a sharply worded attachment to its waiver application that anticipated pushback from domestic manufacturers. American steel mills, the document said, cannot meet aggregate demand for tinplate and have no plans to increase their capacity.

“We anticipate the U.S. mills will attempt to rebut this statement when they object to this exclusion request, but we encourage the Department of Commerce to see through their manipulative attempt to exploit the rules of the exclusion request process,” the application said.

Daniel Shackell, Crown Cork & Seal’s vice president for steel sourcing, said he’s not optimistic about the company’s chances of getting all 70 of its waiver requests approved. Eight have been granted so far primarily because the metal specified in those requests is not made in the United States. Twelve others have been denied, leaving 50 still to be decided.

“It’s hard not to interpret that the Commerce Department wants domestic suppliers to have an edge,” Shackell said.

Jay Zidell, president of Tube Forgings of America, a small company in Portland, Oregon, said he’s filed 54 exclusion requests and U.S. Steel has objected to 38 of them. U.S. Steel declared it is “willing and ready to satisfy” Tube Forgings’ demands for carbon steel tubing. But Zidell said the comments ignored past problems with metal quality and workmanship that led his company to sever a prior relationship with U.S. Steel.

Still, he’s worried the Commerce Department won’t approve all of the requests. Tube Forgings already has spent $600,000 on tariffs, he said, and may be on the hook for much more than that.

“The entire system is just screwed up,” Zidell said.
…

Mexican President-elect Andres Manuel Lopez Obrador says he wants to create 400,000 jobs by planting 1 million hectares (2.47 million acres) with timber and fruit trees.

Lopez Obrador said in a video posted Sunday that he wants to plant half the total amount in 2019, focusing on timber species like cedar and mahogany. The other half would be planted in 2020.

Referring to the Usumacinta river basin near the border with Guatemala, Lopez Obrador said 50,000 to 100,000 hectares could be planted there. He said the upper canopy of timber species could provide cover for cacao plantings beneath. Cacao is the source of chocolate.

Lopez Obrador sees the planting program as a way to offer rural Mexicans work in their home communities, so they do not have to emigrate.
…

Some European companies are rethinking their strategies to cushion the impact of trade tensions between the world’s two biggest economies, the United States and China.

The focus will switch back to China after a truce on tariffs emerged from U.S. President Donald Trump’s meeting with European Commission President Jean-Claude Juncker on July 25.

Trump and Juncker agreed to suspend any new tariffs on the European Union, including a proposed 25 percent levy on auto imports, and hold talks over duties on imports of European steel and aluminum. However, Trump retained the power to impose tariffs if no progress is made.

In the case of China, Trump threatened that he was ready to impose tariffs on an additional $500 billion of imports.

The United States has already imposed tariffs on $34 billion of Chinese imports. In return, China has levied taxes on the same value of U.S. products.

Below are recent comments from European companies on trade tensions:

Russian steelmaker MMK has delayed the launch of a project in Turkey, which was expected to add $90-$100 million to its core earnings, due to uncertainty created by global trade wars, the company said.
Siemens Healthineers plans to cushion the impact of U.S.-China trade tensions by changing its supply routes to ship goods from its European factories. The firm expects tariffs to have a low single digit million euro impact on Healthineers' results this year, which could rise to a double-digit million euro effect next year.
German automaker BMW said it would increase suggested retail prices of the relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent. The company has said that it would be unable to "completely absorb" a 25 percent Chinese tariff on imported U.S.-made models.
China-based car dealers said Mercedes maker Daimler moderately raised prices in the country of its GLE midsize SUV which is produced in Alabama. Daimler is looking at ways to mitigate the impact of the trade tensions, including reviewing whether to shift some U.S. production to Asia. The company blamed tariffs for a 30 percent drop in second-quarter profit.
Wind turbine maker Siemens Gamesa warned that trade tensions would drive up U.S. costs by 2 to 4 percent, depending on the product and whether further tariffs are imposed. The company is working to reduce the impact on margins by optimizing its supply chains.
French electrical equipment company Schneider Electric foresees growth slowing in the second half of the year and expects the first extra costs linked to higher U.S. tariffs, which could reach 20 million euros.
"If the trade war escalates we are more concerned about the consequences that it can have on global macro environment," STMicro said, adding that the direct impact of trade war risks were currently negligible.
Fiat Chrysler cut its 2018 outlook, hurt by a weaker performance in China. Its operating profit for the second-quarter was negatively impacted by China import duty changes.
French mining group Eramet warned that current favorable markets could be hurt by trade rows.
Philips confirmed its sales growth target for this year but added that trade worries and the consequences of Brexit continued to cause uncertainty.
Finnish steel maker Outokumpu sees a double impact from the U.S. tariffs, with surging imports to Europe resulting in heavy price pressure, whilst in the Americas base prices have risen, benefiting local manufacturers itself.
Fellow Finnish company Valmet said tariff increases could derail the recovery and depress its medium-term growth prospects.
Chinese-owned Volvo Cars  said it was shifting production of its top-selling SUV production for the U.S. market to Europe from China to avoid Washington's new duties on Chinese imports.
The Alliance of Automobile Manufacturers, whose members include General Motors, Volkswagen AG and Toyota, also warned on the impact of the tariffs. A study released by a U.S. auto dealer group warned that the tariffs could cut U.S. auto sales by 2 million vehicles.
Sweden's Electrolux said U.S. tariffs announced in July would have an impact of $10 million plus this year. In the third quarter. It expects raw material costs to rise by 0.5 billion Swedish crowns.
Belgian steel wire maker Bekaert reported it sees underlying operating profit 20 percent below analysts' estimates in the first half, blaming wire rod costs partly driven up by tariffs.
Swedish lock maker Assa Abloy sees a further increase in steel prices in the second part of the year in the U.S., partly due to new import tariffs.
Austrian steelmaker Voestalpine said about a third of its U.S. sales would be impacted by import tariffs, adding it was talking to its customers about who would bear the cost.
Norway's REC Silicon booked an impairment charge of $340 million "due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside China."

…

Spanish taxi drivers blocked major city streets including Barcelona’s Gran Via and Madrid’s Castellana on Monday in a protest to pressure the government to curb licenses to online ride-hailing services such as Uber.

Union representatives were due to meet officials of Prime Minister Pedro Sanchez’s government later in the day to try to resolve the dispute, in which taxi drivers have choked main roads and snarled airports, bus and train stations since Saturday.

Along with counterparts in many other European countries, Spain’s taxi drivers say that ride-hailing apps have made it impossible to compete.

“Uber and Cabify are putting the viability of the taxi sector and 130,000 jobs at risk … The union considers this unfair competition intolerable,” the UGT union said in a statement.

Union representatives say the current law of one ride-hailing license for every 30 taxi licenses is not being respected and want an end to the practice of transferring ride-hailing permits between drivers.

With backers including Goldman Sachs and BlackRock and valued at more than $70 billion, Uber has faced protests, bans and restrictions around the world as it challenges traditional taxi operators, angering some unions.

London cab drivers are examining the possibility of bringing a class action suit against Uber after the mobile app was granted a temporary license renewal to operate in the British capital.
…

White House economic adviser Larry Kudlow said Sunday he believes the 4.1 percent growth the U.S. recorded in the last three months is sustainable in the coming months despite skepticism expressed by independent economists.

“There’s just a lot of good things going on,” Kudlow told CNN.  He said President Donald Trump “deserves a victory lap,” with “low tax rates, rolling back regulations, opening up energy, for example. Trade reform I think is already paying off. The fundamentals of the economy look really good.”

He said “business investment spending is really booming. That’s a productivity creator. That’s a job creator. That’s a wage creator for ordinary mainstream folks, terribly important.”

Kudlow said the five calendar quarters occurring fully during Trump’s 18-month presidency have now been recorded with average economic growth of 2.9 percent for the world’s largest economy.

“I don’t see why we can’t run this for several quarters,” Kudlow said.

As the 4.1 percent growth rate for the April-to-June period was announced Friday, Trump boasted that the U.S. was on track to hit its highest annual growth rate in its gross domestic product in 13 years and predicted that as the country reaches new trade deals with other countries, the U.S. would exceed its second quarter advance.

“These numbers are very, very sustainable,” he said. “This isn’t a one-time shot.”

On Sunday, Trump said on Twitter, “The biggest and best results coming out of the good GDP report was that the quarterly Trade Deficit has been reduced by $52 Billion and, of course, the historically low unemployment numbers, especially for African Americans, Hispanics, Asians and Women.”

Skeptics less upbeat

Some independent economists, however, voiced skepticism that the $18.6 trillion annual U.S. economy would continue to advance at the same pace as the last three months.

Some forecasters said the gains in recent months were mostly, although not totally, the result of temporary factors, such as the initial boost from tax cuts Trump supported that took effect earlier this year. Most analysts say that for all of 2018 the U.S. could reach 3 percent growth, which would be the best since a 3.5 percent gain in 2005, but not again hit the annual 4.1 percent growth rate recorded last quarter.

“We believe quarter two will represent a growth peak as the boost from tax cuts fades, global growth moderates, inflation rises, the Fed tightens monetary policy and trade protectionism looms over the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Mark Zandi, chief economist at Moody’s Analytics, said, “The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending.”

In the U.S., consumer spending accounts for about 70 percent of the economy, with Ian Shepherdson, the chief economist of Pantheon Macroeconomics, saying that such spending accounted for the robust second quarter.

“Consumers were really on a tear,” he said. “So to grow at 4 [percent] probably tells you people were spending the tax cuts that they enjoyed back in January, but that’s extremely unlikely to happen again.”

 
…

Agriculture ministers from the G-20 countries criticized protectionism in a joint statement Saturday and vowed to reform World Trade Organization (WTO)

rules, but did not detail what steps they would take to improve the food trade system.

In the statement, they said they were “concerned about the increasing use of protectionist nontariff trade measures, inconsistently with WTO rules.”

The ministers from countries including the United States and China, in Buenos Aires for the G-20 meeting of agriculture ministers, said in the statement they had affirmed their commitment not to adopt “unnecessary obstacles” to trade, and affirmed their rights and obligations under WTO agreements.

The meeting came amid rising trade tensions that have rocked agricultural markets. China and other top U.S. trade partners have placed retaliatory tariffs on American farmers after the Trump administration put duties on Chinese goods as well as steel and aluminum from the European Union, Canada and Mexico.

U.S. growers are expected to take an estimated $11 billion hit due to China’s retaliatory tariffs. Last week, the Trump administration said it would pay up to $12 billion to help farmers weather the trade war.

U.S. Agriculture Secretary Sonny Perdue told Reuters in an interview on the sidelines of the meeting that Trump’s plan would include between $7 billion and $8 billion in direct cash relief that U.S. farmers could see as early as late September.

Despite the payments, the measures are “not going to make farmers whole,” Perdue said.

Citing the Trump administration’s relief measures, German Agriculture Minister Julia Kloeckner said farmers “don’t need aid, [they] need trade.”

“We had a very frank discussion about the fact that we don’t want unilateral protectionist measures,” Kloeckner said in a news conference after the meeting.

The ministers, whose countries represent 60 percent of the world’s agricultural land and 80 percent of food and agricultural commodities trade, did not specify which measures they were referring to in the statement. Asked for details, Kloeckner said the ministers did not want to “criticize a single

country.”

“We all know what happens if a single person or country doesn’t adhere to WTO rules, trying to get a benefit for themselves through protectionism,” she said. “This will usually lead to retaliatory tariffs.”

In the statement, the ministers said they agreed to continue reforming the WTO’s agricultural trade rules.

“Independent of all the news there was surrounding [the meeting], we managed to reach a unanimous consensus,” Argentine Agriculture Minister Luis Miguel Etchevehere said.

U.S. President Donald Trump and European Commission President Jean-Claude Juncker struck a surprise deal on Wednesday that ended the risk of further escalating trade tensions between the two powers.

After the meeting, Trump said the European Union would buy “a lot” of U.S. soybeans.

Earlier, Kloeckner told Reuters that the trade relationship between the United States and the European Union was improving, but that there was no guarantee the bloc would import the quantity of soybeans that Washington expects.
…

President Donald Trump falsely claimed he’s pulled off “an economic turnaround of historic proportions.”

Speaking at the White House Friday after the government reported that the economy grew at an annual rate of 4.1 percent in the second quarter, Trump declared that the gains were sustainable and would only accelerate. Few economists outside the administration agree with this claim.

His remarks followed events Thursday in Iowa and Illinois, where Trump falsely repeated a claim that the U.S. economy is the best “we’ve ever had” and incorrectly asserted that Canada’s trade market is “totally closed.”

WATCH: Trump Says Economy Numbers Sustainable, But Experts Doubtful

A look at the claims:

Historic turnaround

TRUMP: “We’ve accomplished an economic turnaround of historic proportions.” — remarks Friday at the White House.

THE FACTS: Trump didn’t inherit a fixer-upper economy.

The U.S. economy just entered its 10th year of growth, a recovery that began under President Barack Obama, who inherited the Great Recession. The data show that the falling unemployment rate and gains in home values reflect the duration of the recovery, rather than any major changes made since 2017 by the Trump administration.

While Trump praised the 4.1 percent annual growth rate in the second quarter, it exceeded that level four times during the Obama presidency. But quarterly figures are volatile and strength in one quarter can be reversed in the next. While Obama never achieved the 3 percent annual growth that Trump hopes to see, he came close. The economy grew 2.9 percent in 2015.

The economy faces two significant structural drags that could keep growth closer to 2 percent than 3 percent: an aging population, which means fewer people are working and more are retired, and weak productivity growth, which means that those who are working aren’t increasing their output as quickly as in the past.

Both of those factors are largely beyond Trump’s control.

Trade deficit

TRUMP: “One of the biggest wins in the report, and it is, indeed a big one, is that the trade deficit — very dear to my heart because we’ve been ripped off by the world — has dropped.”

THE FACTS: Trump is correct that a lower trade deficit helped growth in the April-June quarter, but it’s not necessarily for a positive reason.

The president has been floating plans to slap import taxes on hundreds of billions of dollars of foreign goods, which has led to the risk of retaliatory tariffs by foreign companies on U.S. goods.

This threat of an escalating trade war has led many companies to increase their levels of trade before any tariffs hit, causing the temporary boost in exports being celebrated by Trump.

Richard Moody, chief economist at Regions Financial, said the result is that the gains from trade in the second quarter will not be repeated.

​Best economy ever

TRUMP: “We’re having the best economy we’ve ever had in the history of our country.” — remarks in Granite City, Illinois.

THE FACTS: Even allowing for Trump’s tendency to exaggerate, this overstates things.

The unemployment rate is near a 40-year low and growth is solid, but by many measures the current economy trails other periods in U.S. history. Average hourly pay, before adjusting for inflation, is rising around a 2.5 percent annual rate, below the 4 percent level reached in the late 1990s when the unemployment rate was as low as it is now.

Pay was growing even faster in the late 1960s, when the jobless rate remained below 4 percent for nearly four years. And economic growth topped 4 percent for three full years from 1998 through 2000, an annual rate it hasn’t touched since.

Canada market closed

TRUMP: “The Canadians, you have a totally closed market … they have a 375 percent tax on dairy products, other than that it’s wonderful to deal. And we have a very big deficit with Canada, a trade deficit.” — remarks in Peosta, Iowa.

THE FACTS: No, it’s not totally closed. Because of the North American Free Trade Agreement, Canada’s market is almost totally open to the United States. Each country has a few products that are still largely protected, such as dairy in Canada and sugar in the United States.

Trump also repeated his claim that the U.S. has a trade deficit with Canada, but that is true only in goods. When services are included, such as insurance, tourism, and engineering, the U.S. had a $2.8 billion surplus with Canada last year.
…

Friday’s positive numbers on the U.S. economic growth are “very, very sustainable,” according to U.S. President Donald Trump. His comments came after figures showed U.S. GDP growth hit 4.1 percent in the second quarter. The question is whether that growth is sustainable, as VOA’s Bill Gallo reports from the White House.
…

Twitter’s share price fell more than 20 percent Friday after the social media giant reported a drop in active users. 

Twitter said it had 335 million monthly users in the second quarter of the year, which was down a million from the amount of monthly users in the first quarter of the year, and below the 339 million users Wall Street was expecting.

Twitter said that the number of monthly users could continue to fall next quarter as the company continues to ban accounts that violate its terms of service and as it makes other accounts less visible.

The company says it is putting the long-term stability of its platform above user growth. However, the move has made it more difficult for investors to value the company, as they rely on data pertaining to the platform’s potential user reach.

Shares in Twitter tumbled 20.5 percent to close at $34.12 Friday. The fall in the share price came despite Twitter’s report of higher than expected revenue. During the last quarter, Twitter posted a profit of $100 million, marking the company’s third consecutive profitable quarter.

The drop in Twitter’s share price came a day after Facebook lost 19 percent of its value. Facebook said Thursday that slower user growth in big markets and increased spending to improve privacy would hit margins for years, leading to the company’s worst trading day since it went public in 2012.

Both Twitter and Facebook have been under pressure from regulators in several countries to protect user data as well as stamp out hate speech and misinformation.
…

Facebook Inc and its chief executive, Mark Zuckerberg, were sued Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Kacouris said the marketplace was “shocked” when “the truth” began to emerge Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants.

The lawsuit seeks class-action status and unspecified damages. A Facebook spokeswoman declined to comment.

Shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large.

Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the U.K. firm Cambridge Analytica. Many have been consolidated in the federal court in San Francisco.

Thursday’s plunge also hit Zuckerberg’s bottom line.

Zuckerberg had been tied with Warren Buffett as the world’s fourth-richest person, but the Berkshire Hathaway Inc chairman’s current $83 billion fortune tops Zuckerberg’s $66 billion, Forbes magazine said.

Buffett now ranks third among the world’s billionaires, while Zuckerberg is sixth.

Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.
…

Some European companies are rethinking their strategies to cushion the impact of trade tensions between the world’s two biggest economies, the United States and China.

The focus will switch back to China after a truce on tariffs emerged from U.S. President Donald Trump’s meeting with European Commission President Jean-Claude Juncker on July 25.

Trump and Juncker agreed to suspend any new tariffs on the European Union, including a proposed 25 percent levy on auto imports, and hold talks over duties on imports of European steel and aluminum.

However, Trump retained the power to impose tariffs, if no progress is made.

In the case of China, Trump threatened this month that he was ready to impose tariffs on an additional $500 billion of imports.

The United States has already imposed tariffs on $34 billion of Chinese imports. In return, China has levied taxes on the same value of U.S. products.

Below are recent comments from European companies on trade tensions:

• Mercedes maker Daimler blamed U.S.-China tariffs for a 30 percent drop in second-quarter profit announced on July 26 and prefigured in a profit warning last month.

• French electrical equipment company Schneider Electric said on July 26 that it foresaw growth slowing in the second half of the year and expected the first extra costs linked to higher U.S. tariffs, which could reach 20 million

euros.

• “If the trade war escalates we are more concerned about the consequences that it can have on global macro environment,” STMicro’s new Chief Executive Jean-Marc Chery, said on July 25, adding that direct impact of trade war risks were currently “negligible.”

• Fiat Chrysler cut 2018 outlook on July 25, hurt by weaker performance in China. Its operating profit for the second-quarter was negatively impacted by China import duty changes.

• French mining group Eramet warned that current favorable markets could be hurt by trade rows.

• Chief Executive Frans van Houten confirmed Philips’ sales growth target for this year on July 23, but added that trade worries and the unknown consequences of Brexit continued to cause uncertainty.

• Finnish steel maker Outokumpu sees two-fold impact from the U.S. tariffs, with surging imports to Europe resulting in heavy price pressure, whilst in the Americas, base prices have risen throughout spring benefiting local manufacturers, including the company.

• Fellow Finnish company Valmet said tariff increases could derail the recovery and depress its medium-term growth prospects.

• Chinese-owned Volvo Cars (IPO-VOLVO.ST) said it was shifting production of its top-selling SUV production for the U.S. market to Europe from China to avoid Washington’s new duties on Chinese imports.

• German automaker BMW said this month that it would be unable to “completely absorb” a new 25 percent Chinese tariff on imported U.S.-made models and would have to raise prices on the vehicles made in South Carolina.

• The Alliance of Automobile Manufacturers, whose members include General Motors Co, Volkswagen AG and Toyota Motor Corp, also warned on the impact of the tariffs. A study released by a U.S. auto dealer group warned

that the tariffs could cut U.S. auto sales by 2 million vehicles.

• Sweden’s Electrolux said on July 18 that the U.S. tariffs announced at the beginning of July would have an impact of $10 million plus this year. In the third quarter, it expects raw material costs to rise by 0.5 billion Swedish

crowns.

• Belgian steel wire maker Bekaert reported on the same day that it sees underlying operating profit 20 percent below analysts’ estimates in the first half, blaming wire rod costs partly driven up by tariffs.

• Swedish lock maker Assa Abloy’s CEO said on July 18 that he sees an important further increase in steel prices in the second part of the year in U.S., partly due to new import tariffs. He expects price hikes to compensate better for the higher cost in the last six month of the year than in the second quarter.

• Austrian steelmaker Voestalpine said on June 6 that about a third of its U.S. sales would be impacted by Washington’s steel import tariffs, adding that it was talking to its customers about who would bear the cost.

• Norway’s REC Silicon booked an impairment charge of $340 million “due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside

China.”

“We need the U.S. and Chinese governments to cooperate in ending the solar trade dispute … to prevent additional job losses and to enhance the value of the solar industry in the U.S. and China.”
…

Starbucks and other employers in California must pay workers for minutes they routinely spend off the clock on tasks such as locking up or setting the store alarm, the state Supreme Court ruled Thursday.

The unanimous ruling was a big victory for hourly workers in California and could prompt additional lawsuits against employers in the state.

The ruling came in a lawsuit by a Starbucks employee, Douglas Troester, who argued that he was entitled to be paid for the time he spent closing the store after he had clocked out.

Troester said he activated the store alarm, locked the front door and walked co-workers to their cars — tasks that he said required him to work for four to 10 additional minutes a day.

Starbucks said it was disappointed with the ruling. In a brief filed with the California Supreme Court, attorneys for Starbucks said Troester’s argument could lead to “innumerable lawsuits over a few seconds of time.” The U.S. Chamber of Commerce in a court filing also warned of the possibility of “significant liability” to businesses in the state.

A U.S. District Court rejected Troester’s lawsuit on the grounds that the time he spent on those tasks was minimal. But the California Supreme Court said a few extra minutes of work each day could “add up.”

Troester was seeking payment for 12 hours and 50 minutes of work over a 17-month period. At $8 an hour, that amounts to $102.67, the California Supreme Court said.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” Associate Justice Goodwin Liu wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”

Trivial and not trivial

The ruling also applies to tasks done before the workday begins, said Bryan Lazarski, an attorney in Los Angeles who handles wage claims against employers.

Lazarski said he expects the ruling to open the door to additional lawsuits by workers in similar situations as Troester. But he also expects lawsuits that “test the boundary of what this case says” to determine how much time spent doing work off the clock is enough to get paid.

The court in Thursday’s ruling said it was not closing the door on all claims by employers that the amount of additional work was too negligible.

“The court is saying, ‘We haven’t really drawn a line with regard to what is trivial and what is not trivial, but in this case, the time that the employee was not compensated was significant,'” said Veena Dubal, a labor law expert at the University of California, Hastings College of the Law.

Associate Justice Leondra Kruger wrote separately to say that there may be some periods of time that are “so brief, irregular of occurrence, or difficult to accurately measure or estimate,” that requiring an employer to account for them would not be reasonable.

She cited as examples a glitch that delays logging in to a computer to start a shift or having to read and acknowledge an email or text message about a schedule change while off the clock.

Tracking time

The federal court that threw out Troester’s lawsuit also said it would be hard for an employer to track the additional time that he worked. But Liu said employers could use technology for that or restructure employees’ work so they don’t have any tasks after they clock out.

Employers can also estimate the additional time, he said.

Troester appealed the U.S. District Court’s decision to the 9th U.S. Circuit Court of Appeals. The appeals court asked the California Supreme Court to determine whether a federal rule permitting employers under some circumstances to require employees to work as much as 10 minutes a day without compensation applied under state law.

The lawsuit now returns to the 9th Circuit. 
…

Social media giant Facebook, which has weathered storms about privacy and data protection, is now looking at cooler growth following a years-long breakneck pace.

Shares in Facebook plummeted 19 percent to close at $176.26 Thursday, wiping out $100 billion. It was believed to be the worst ever single-day evaporation of market value for any company.

The plunge came one day after the firm missed revenue forecasts for the second quarter and warned that growth would be far weaker than previously estimated.

Chief Financial Officer David Wehner warned Wednesday in an earnings call with analysts that revenue growth had already “decelerated” in the second quarter and would drop “by high single-digit percentages” in coming quarters.

At one point during the call, Facebook shares were trading down as much as 24 percent, an unprecedented drop for a large firm.

On the call, Jefferies & Co. analyst Brent Thill said that “many investors are having a hard time reconciling that deceleration. … It just seems like the magnitude is beyond anything we’ve seen.”

Facebook said the slowdown would come in part from a new approach to privacy and security, but also appeared to acknowledge the limits of growth in advertising, which accounts for virtually all its revenue.

Brian Sheehan, a Syracuse University professor of communication and advertising, said the weak forecast “made investors nervous about more basic long-term issues” with the huge social network, notably its diminished appeal to younger users.

“With or without privacy issues, investors are scared that Facebook’s interactions, particularly with those under 25, are falling,” Sheehan said.

For the second quarter, profit was up 31 percent at $5.1 billion; revenues rose 42 percent to $13.2 billion, only slightly below most forecasts.

User base still growing

Facebook reported its user base was still growing but not as fast as some expected. Monthly active users rose 11 percent to 2.23 billion — below most estimates of 2.25 billion.

Richard Windsor, a technology analyst who writes the Radio Free Mobile blog, said the new outlook should not be surprising.

“This is a direct result of scale as it becomes increasingly difficult to grow at such high rates when a company hits this size,” Windsor wrote.

Windsor added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the limits of artificial intelligence.

“Weaknesses in AI are forcing [Facebook] to keep hiring humans to do the jobs that the machines are incapable of,” he said.

Brian Wieser at Pivotal Research Group said the company appears to have hit a “wall” on growth in advertising.

In a research note, he said Facebook’s outlook “suggests that while the company is still growing at a fast clip, the days of 30 percent-plus growth are numbered.”

Until Wednesday, Facebook shares had been at record highs as investors seemed to shrug off fears about data protection and probes into the hijacking of private information by the political consultancy Cambridge Analytica.

Chief Executive Mark Zuckerberg said Facebook has invested heavily in “safety, security and privacy” after being rocked by concerns of manipulation of the platform to spread misinformation, warning of an “impact” on profitability.

Some analysts however said it was too soon to write off Facebook or its growth prospects, and that the company may have simply been warning of the worst-case scenario.

“The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter,” said Gene Munster of Loup Ventures. “We suspect Facebook is sticking with its historical playbook and will, in fact, beat these lower numbers.”

A positive view

Richard Greenfield of BTIG Research said he remained upbeat on Facebook despite the abrupt forecast shift.

“Facebook is actively choosing to make less money, deprioritizing near-term monetization to drive engagement to even higher levels,” Greenfield said in a note to clients.

Greenfield said he could “sense the fear/panic in investors’ voices” after the Facebook analyst call, but that he had maintained his outlook.

“Mobile is eating the world and Facebook is a core holding to benefit from that shift,” he said.

RBC Capital Markets analyst Mark Mahaney said the drop creates a rare buying opportunity for Facebook shares.

“Facebook stills owns two of the largest media assets in the world [Facebook and Instagram] and the two largest messaging assets in the world [Messenger and WhatsApp],” Mahaney said in a note to clients, adding that he sees “no material change in marketer views of the attractiveness” of Facebook platforms. 
…

U.S. President Donald Trump, a day after reaching a truce in the escalating trade dispute with Europe, characterized his talks with European Commission President Jean-Claude Juncker as a big economic victory and a historic agreement. But he provided few details.  

“We just opened up Europe for you farmers,” Trump said at a roundtable event in Iowa. “You have just gotten yourself one big market.”

Iowa is among the Midwestern farming states hit by retaliatory tariffs on soybeans and other products, imposed by China in response to tariffs imposed on Chinese goods by the U.S. president. 

Later in the afternoon, Trump addressed steelmakers in Granite City, Illinois, saying, “We’re not going to give China or any other country a veto on United States national security.” 

Europe has “agreed to purchase, almost immediately, large amounts of American soybeans because China tried to hurt the American farmer,” Trump said.

The president said his administration had taken the “toughest-ever actions in response to China’s very abusive trade practices,” accusing Beijing of massive theft of American intellectual property.

Trump also said that as a result of his tariffs imposed on trading partners, “idle factories throughout our nation are roaring back to life.”

Amid the vague commitments for European purchases of soybeans, and constructing terminals to store additional liquified natural gas from the United States, Trump and Juncker on Wednesday committed to holding off on additional tariffs while trans-Atlantic negotiations are held.

U.S. Treasury Secretary Steven Mnuchin describes it as “an agreement in principle,” while Trump told the Iowa audience he and Juncker “agreed to a letter of intent.”

French President Emmanuel Macron on Thursday threw cold water on any sweeping agreement, arguing “the context doesn’t allow it.”

Macron explained he is against agricultural discussions in the trade talks, also adding that the Trump administration must make clear gestures over the “illegal” steel and aluminum tariffs still in place.

Commerce Secretary Wilbur Ross, speaking to reporters during the Air Force One flight to Iowa, credited Trump’s tariffs on the metals for the previous day’s breakthrough at the White House.

“To get there, we had to take a route of trying to make it more painful for the other parties to continue bad practices than to drop them,” Ross said. “This is a real vindication of the president’s trade policy.”

While no auto tariffs will be imposed on the EU while talks continue, Ross said, “We’ve been directed by the president to continue the investigation, get our material together but not actually implement anything, pending the outcome of the negotiation.”

He said they would submit their report on auto tariffs sometime in August. Imposing them “may not be necessary,” he added.

In the meantime, “steel and aluminum tariffs stay in place,” Ross said.

The comments by Trump and Ross indicate the administration could be willing to negotiate a pact akin to the Transatlantic Trade and Investment Partnership (TTIP), on which negotiations have stopped.

A day before the Oval Office meeting between Trump and Juncker, the U.S. Agriculture Department announced it was making $12 billion available to American farmers harmed by tariffs.

Pressed whether the money was a bailout, Mnuchin on Thursday responded, “We’re not bailing out any farmers, that’s a ridiculous comment. It’s not a bailout.” He added that when “other countries unfairly and illegally target our farmers, we will stand up and fight for them.”

Appearing before the Senate Appropriations Subcommittee for Commerce on Thursday, U.S. Trade Representative Robert Lighthizer told lawmakers, “It is certainly not our plan to have small business or agriculture or anyone else in America feel the brunt of a change in trade policy which is designed to make the U.S. stronger and richer, help our exports, and help all American businesses and farmers and ranchers.”

The tariffs imposed by the Trump administration came under criticism during the hearing, including from members of Trump’s party.

Tennessee Republican Lamar Alexander said the “tariff taxes that the administration had placed began to look like, ‘I’ve got a problem, so I’ll shoot myself in one foot; I’ve got [another] problem, so I’ll shoot myself in the other foot.'”

Another Republican senator, Jerry Moran of Kansas, said, “Trade and exports are how we earn a living in Kansas, and farmers, ranchers, and our nation’s manufacturers cannot afford a prolonged trade war.”

Following a closed-door meeting of congressional Republicans, Representative Roger Williams, who owns a car dealership in Texas, said dealers are canceling orders with auto manufacturers because they are fearful of tariffs, as well as rising interest rates.

Twenty-two Republican members of the House Ways and Means Subcommittee on Trade have sent a letter to Trump urging him to meet directly with Chinese President Xi Jinping to forge a trade agreement.

“Our shared objective is long-term and enduring reform in Chinese subsidies, tariffs, and other trade barriers,” the lawmakers say in their letter. “While tariffs cause short-term economic pain to China, they also boomerang on American companies, farmers, workers, and consumers — and we hear every day from Americans who are caught in a destructive cycle of escalation. A lasting solution can be established only through fundamental change to the Chinese system. Timely and astute negotiations under your leadership are essential to accomplishing this goal.”

Mike Bowman contributed to this report.
…

Mexican and Canadian officials are stressing that talks on the North American Free Trade Agreement will remain a three-way negotiation, despite suggestions by U.S. President Donald Trump that he might pursue separate trade deals with both countries.

Mexican Foreign Minister Luis Videgaray says “Canada and Mexico not only share geography, history and friendship, but also principles and common goals, and we are a team and act as a team.”

Visiting Canadian Foreign Affairs Minister Chrystia Freeland also stressed that NAFTA is a three-country agreement. She said that Canada also opposes a “sunset” clause proposed by Trump that would allow countries to opt out of the pact every five years.

Freeland also met Wednesday with Mexican President-elect Andres Manuel Lopez Obrador, who will take office on December 1.
…

Leaders from the five BRICS nations sounded the alarm over what South Africa’s president described as recent threats to multilateralism and sustainable global growth — a not-so-coded reference to a brewing trade war between the U.S. and BRICS’ wealthiest member, China.

Chinese President Xi Jinping raised his concerns as the three-day summit began in South Africa.

“A trade war should be rejected because there will be no winner,” he said. “Economic hegemony is even more objectionable, because it will undermine the collective interest of the international community. Those who pursue this cause will only hurt themselves.”

South African President Cyril Ramaphosa echoed his sentiments.

“We are meeting here, ladies and gentlemen, at a time when the multilateral trading system is facing unprecedented challenges,” Ramaphosa said. “We are concerned by the rise in unilateral measures that are incompatible with World Trade Organization rules and we are worried about the impact of these measures, especially as they impact developing countries and economies. These developments call for thorough discussion on the role of trade in growing and in promoting sustainable development, particularly inclusive growth.”

BRICS comprises Brazil, Russia, India, China and South Africa. The bloc admitted South Africa in 2010 as part of its aim of leveling the global playing field by representing nontraditional powers.

U.S. President Donald Trump has threatened to slap tariffs on all $505 billion worth of Chinese imports, a move that has caused global concern. Summit watchers say his blunt rhetoric will influence this year’s summit.

“I think that something that is pertinent that relates to the United States and President Trump’s administration is of course their protectionist measures that they have put on in terms of trade, and the trade wars that have every country in the globe speaking,” analyst Luanda Mpungose told VOA. “But something that the BRICS have actually come out and actually spoken about quite strongly, is that they want to support multilateralism and a rules-based world order.”

But, she says, BRICS may use that adversity to seek to build a new world order, even beyond the five-member bloc.

“Something that’s different about BRICS this year, specifically about South Africa as a host country, is that this initiative is not only about the BRICS member countries, the five countries, but actually, we’ve actually seen an outreach of neighborhood countries being invited,” she said. “So this is taking along the Africa developmental agenda and bringing it Into the BRICS agenda, I mean countries like Rwanda, like Senegal, like Togo have been invited to come and attend.”

The summit continues through Friday.
…

Sergio Marchionne, a charismatic and demanding leader who engineered two long-shot corporate turnarounds to save both Fiat and Chrysler from near-certain failure, died Wednesday. He was 66.

The holding company of Fiat’s founders, the Agnelli family, announced in a statement Marchionne’s death after complications from surgery in Zurich.

“Unfortunately what we feared has come to pass,” Fiat heir John Elkann said. “Sergio Marchionne, man and friend, is gone.”

Marchionne built the dysfunctional companies into the world’s seventh-largest automaker almost by personal force of will, living on a corporate jet crossing the Atlantic to push employees to accomplish what most people thought was impossible amid a devastating global recession.

Marchionne, who was Italian and Canadian, had revived Fiat by 2009 when he was picked by the U.S. government to save U.S.-based Chrysler from its trip through bankruptcy protection after being owned by a private equity company.

“It’s highly unlikely that Chrysler would exist today had he not taken that gamble,” said Autotrader.com analyst Michelle Krebs. “The company was in such bad shape, being stripped of any kind of resources by the previous owners.”

Marchionne met most of his goals, even though at times he was doubted by nearly everyone in the automobile business. But he didn’t live long enough to complete his last two: personally hand over the reins of Fiat Chrysler Automobiles to a hand-picked protege and lay out plans for transforming supercar maker Ferrari.

Marchionne had shoulder surgery in summer 2018, and the company said last weekend that complications meant he would not be able to return.

The manager, known for his folksy, colorful turns of phrase and for his dark cashmere sweaters no matter the occasion, was the darling of the automotive analyst community. Even when expressing doubts at his audacious targets, they expressed admiration for his adept deal-making. That included getting GM to pay $2 billion to sever ties with Fiat, key to relaunching the long-struggling Italian carmaker, and the deal with the U.S. government to take Chrysler without a penny down in exchange for Fiat’s small-car technology.

Marchionne joined Fiat after being tapped by the Agnelli family to save the company. Fiat had for generations been a family-run enterprise, and having someone at the helm from outside Italy’s clubby management circles — even a dynamo like Marchionne — was an enormous change.

Other key corporate moves included the spinoff of the heavy industrial vehicle and truck maker CNH and of the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs led by John Elkann. Elkann came into his own under Marchionne’s stewardship, taking over as chairman in 2010 having been tapped more than a decade earlier by his grandfather, the late Gianni Agnelli, to run the family business.

As Marchionne’s health failed following surgery, a clearly emotional Elkann delivered what amounted to an impromptu eulogy and message of gratitude to a man he called his mentor.

“He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people,” Elkann said over the weekend. “He taught us that the only question that’s worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference.”

It was Marchionne’s success in turning around a pair of Swiss businesses that drew the attention of the Agnelli family. He joined Fiat’s board in May 2003, four months after the death of Gianni Agnelli. He became CEO in June 2004, following the death of Gianni Agnelli’s brother, Umberto, Fiat’s chairman, leaving a family void in the company.

As an outsider, Marchionne was unfettered by local loyalties and he set about cutting jobs and expenses, slimming management ranks and increasing shareholder value along the way. He brought in other outsiders to key positions and relaunched the iconic 500, which became one of the new Fiat’s calling cards as it expanded abroad.

While he started small with limited industrial alliances, his ambitions soon grew. The bankruptcy of Chrysler gave him the opportunity to create a global car company with brands including Jeep, Ram, Alfa Romeo, Ferrari and Maserati that he envisioned would grow to 6 million cars a year. A global economic crisis that bottomed out car sales in key U.S. and European markets prevented him from reaching that goal, but his industrial vision never faltered as he spun off CNH and Ferrari into stand-alone entities.

His most quoted presentation to analysts, titled “Confessions of a Capital Junkie,” argued that consolidation was inevitable in the investment-heavy car industry. But though he tried for another merger with General Motors, talks never led to a deal. Still, newspaper photographs of a chain-smoking Marchionne awaiting talks with German Chancellor Angela Merkel outside the Chancellery in Berlin on the role of GM’s then-subsidiary, Opel, made clear just how personally he took the negotiations.

Marchionne had planned to step down as CEO of FCA after the close of 2018, with the presentation of the year-end results in April. He always insisted that his successor would come from inside — so it was no surprise when British manager Mike Manley, who helped boost Jeep to global success and get Fiat a foothold in Asia, was named as his successor as Marchionne’s health failed.

He had never indicated plans for Ferrari or CNH, leaving many to speculate that the tireless manager known for his short sleep cycles and globe-trotting style would use those positions to keep a foothold in the automotive world.

In June, he laid out FCA’s five-year plan — raising the eyebrows of analysts who pointed out he would not be the one to execute the plans. He responded by expressing confidence in his hand-picked team that helped draft the targets.

The plans included launching electrified powertrains across Fiat brands — a tacit acknowledgement that the company had lagged in introducing hybrid, hybrid-electric and full-electric engines. They also were to put Ferrari engines in Maserati cars as Marchionne sought to take on electric-car pioneer Tesla — but unlike at Tesla, which has so far failed to turn a profit, earnings were fundamental at FCA.

Marchionne’s penchant for numbers was always clear in his attentive quarterly presentations. He let his real satisfaction show during the June 2018 presentation when he announced the company had reached zero debt, by donning a necktie for the first time in a decade — albeit briefly.

His next major move was to be the presentation of a new business plan in September for Ferrari, which he aimed to turn into a luxury company beyond just cars to further boost earnings.

At his last public appearance in his role as CEO, Marchionne in June attended a ceremony in Rome where a Jeep was presented to the paramilitary Carabinieri police. Marchionne began his brief remarks noting that he grew up in a household where his father was a Carabinieri officer.

He said he recognized in the Carabinieri “the same values at the basis of my own education: seriousness, honesty, sense of duty, discipline and spirit of service.”

Marchionne was divorced. He is survived by his companion, Manuela Battezzato, and two adult sons.

 
…

Harley-Davidson executives said Tuesday they had seen no U.S. sales hit so far over its decision to relocate some American manufacturing overseas as it navigates amid trade conflicts.

“We’ve actually done quite a lot of consumer research… and we see no discernible shift in the sales patterns” or to brand favorability, chief executive Matt Levatich said on an analyst conference call.

The motorcycle company found itself in the firing line of President Donald Trump, who repeatedly attacked the company on Twitter after Harley announced the move on June 26 in response to European Union tariffs on US-made bikes.

Trump’s attacks on Harley for being the first to “wave the White Flag” had raised fears among investors that the company’s sales could be impacted given the president’s popularity in areas of the United States where Harleys sell well.

But Harley executives said direct consumer research, as well as sales, showed no evidence of a hit due to the uproar.

“We’ll continue to be sure we monitor it… and correct errors in interpretation that seem to pop up from time to time,” he said. “We’re on it.”

Trump’s name did not come up during a 60-minute earnings conference call, although Levatich did say at one point that the company was working with US administration officials and other governments to “get these tariffs removed.”

Shares of Harley-Davidson jumped after it reported a second-quarter dip of six percent in profits to $242.3 million. But the results topped analyst expectations in terms of earnings-per-share and revenues.

Harley-Davidson suffered another fall in US motorcycle sales, this time by 6.4 percent from the year-ago period to 46,490.

Executives characterized the drop as part of a longterm challenge as it steps up marketing campaigns to lure in young consumers that have so far shown lackluster interest in motorcycles.

Harley signaled it expects lasting business impacts from the EU tariffs, which targeted Harley and other brands from politically consequential regions of the United States and were taken in response to US tariffs on imported steel and aluminum.

Harley is based in Wisconsin, home to House Republican leader Paul Ryan.

The EU tariffs add $90 to $100 million in annual costs to EU sales. Executives said they hope to mitigate those effects in 2019 through corporate efficiencies and by shifting production from the US to an overseas plant.

Harley-Davidson has not reached a decision whether the EU-market bikes will be manufactured at existing overseas plants in Brazil or India or at a new plant being built in Thailand.

The company trimmed its 2019 profit margin to a range of 9 to 10 percent from the prior 9.5 to the 10.5 percent. Trade actions will subtract $45 to $55 million in 2018, with $30 to $35 million due to the EU tariffs and the rest coming from US tariffs on steel and aluminum.

“We never contemplated moving our European volume out of the United States,” Levatich said.

Shares jumped nine percent to $45.16 in late- morning trading.

 
…

The International Monetary Fund warned Tuesday there are few indications international trade imbalances are narrowing, a trend that could raise trade tensions and lower economic growth.

In its annual External Sector Report, the IMF also said almost half of the world’s current-account balances are excessive and that current-account surpluses and deficits are increasingly concentrated in developed countries.

Excessive current-account balances mean they cannot be defended by a country’s fundamentals, such as unemployment and supply and demand, and its ideal economic policies.

The current account documents a country’s transactions with the rest of the world over a defined period of time.

The annual IMF report gauges the trade position and exchange rates of the world’s largest economies. Tuesday’s report was based on data and IMF staff projections as of June 22.

The report said China’s current account surplus grew slightly last year to 1.7-percent of its gross domestic product. The IMF also included China on the list of countries with excessive balances. Germany, South Korea, the Netherlands, Sweden and Singapore are also listed.

Countries with excessive current account deficits, those that borrow too much money, included the U.S., Britain, Argentina and Turkey, the report said.

The IMF said big trade surpluses in Germany and China, coupled with the large U.S. trade deficit, could worsen trade conflicts that are engulfing much of the world.

“Large and sustained excess external imbalances in the world’s key economies — amid policy actions detrimental to external balances — pose risk to global stability,” the report said.

U.S. President Donald Trump’s tax cuts and increased U.S. government spending are contributing to an increase in borrowing rates, a stronger U.S. dollar and a ballooning U.S. current-account deficit, according to the report.

In addition to potentially exacerbating trade tensions, the report said the trends could weaken emerging markets by causing interest rates to increase faster than expected.
…

U.S. President Donald Trump’s family business has outlined its 150-million-pound ($196 million) investment plan for the second phase of development of its golf course north of Aberdeen in Scotland.

The Trump Organization’s proposals submitted to Aberdeenshire Council include 50 cottages, a sports center and equestrian facilities at the Menie estate near Balmedie. The first phase of development included a championship golf course, clubhouse and hotel.

The controversial development, which was first approved in 2008, has been accused of failing to deliver on promises of investment and jobs.

But the Trump company says the next phase will support nearly 2,000 jobs during construction, and some 300 permanent jobs.

Eric Trump, who leads the business with his brother Donald Jr, says “the timing is now right for us.”

 
…

Checking out a speedboat, a fighter jet and a giant industrial magnet parked on the White House driveway, President Donald Trump showcased an array of “Made in America” products Monday as his administration pushes back aggressively against critics who say his punishing tariffs on imported goods threaten to harm the U.S. economy.

Trump’s event with a smorgasbord of American goods came at the start of a week in which trade discussions are expected to dominate, including talks with European officials and a trip to Illinois in which the president is planning to visit a community helped along by his steel tariffs.

Trump has vowed to force international trading partners to bend to his will as he seeks to renegotiate a series of trade deals he has long argued hurt American workers. But as he deepens the U.S. involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs — and whether the president will incur a political price for his nationalistic trade policies in the 2018 midterm elections.

“Our leaders in Washington did nothing, they did nothing. They let our factories leave, they let our people lose their jobs,” Trump said at the White House. “That’s not free trade, that’s fool’s trade, that’s stupid trade and we don’t do that kind of trade anymore.”

Trump noted that he would be meeting Wednesday with European officials, including European Commission President Jean-Claude Juncker. The U.S. and European allies have been at odds over the president’s tariffs on steel imports and are meeting as the dispute threatens to spread to the lucrative automobile business. “Maybe we can work something out,” he said.

On Thursday, the president will visit Granite City, Illinois, the home of a U.S. Steel Corp. mill that has reopened after he imposed tariffs on steel imports.

On the South Lawn, the president walked among a number of products manufactured across the nation, including a Lockheed Martin F-35 aircraft from Maryland, a Ford F-150 pickup truck from Michigan, a Newmar recreational vehicle from Indiana and a Ranger speedboat from Arkansas.

National security

Trump has already put taxes on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that enrages staunch U.S. allies such as the European Union and Canada.

He’s threatening to use the national security justification again to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

And he’s already imposed tariffs on $34 billion in Chinese imports in a separate dispute over Beijing’s high-tech industrial policies. He has threatened to ratchet that up past $500 billion.

“He likes tariffs,” said William Reinsch, a former U.S. trade official under President Bill Clinton now at the Center for Strategic and International Studies. “His preferred remedy is always tariffs, whether it makes any sense or not.”

“It’s a policy of victimization: ‘Other people have been taking advantage of the United States for years. … Now they have to pay,”‘ Reinsch said, echoing the president’s argument.

Trade analysts say the United States has not pursued such aggressive trade policies in decades.

“I can’t think of another time when you had as many battles and, particularly, as many battles with no resolution in sight,” said Edward Alden, senior fellow at the Council on Foreign Relations.

Trade war

In 1971, President Richard Nixon imposed a broad 10 percent import tax for four months to pressure Japan and European countries to drive up the value of their currencies. The idea: provide relief to American exporters, who were being put at a price disadvantage by a strong dollar.

In 1930, the U.S. raised tariffs dramatically to protect American industry, encouraging other countries to do the same in a global trade war that made the Great Depression worse.

Economists said the tariffs that Trump has imposed so far — and the resulting retaliation — are unlikely to do much economic damage. But things could escalate rapidly.

“If you look at what’s teed up, particularly with China and with the auto tariffs, pretty soon you are talking about some pretty large numbers. Those will do some real damage,” Alden said.

Oxford Economics has calculated that a full-blown U.S.-China trade war — in which each country taxes all the other’s imports — would shave 1 percent off the U.S. economy and wipe out 700,000 jobs in the United States by 2020.

The Peterson Institute for International Economics has estimated that a trade war over autos could cost up to 1.2 million American jobs.

Critics said Trump’s aggressive approach makes it tough for other countries to offer concessions, lest they be seen by their own people as caving in to bullying.

“The Trump administration has not left an easy path to walk away from the fights they’ve created,” Alden said.
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International investors are looking to Tuesday’s meeting of the Turkish central bank as a critical test of whether the bank can remain independent of President Recep Tayyip Erdogan, his increasing powers, and what some criticize as his Islamist agenda.

The Turkish currency has fallen sharply as concerns mount on whether he will impose unorthodox economic policies on the bank.

Erdogan, who has called for Islamic banks to make up a quarter of the country’s banking sector, strongly opposes interest rates and has described them as “the mother and father of all evil.” The president rejects economic orthodoxy that increasing rates reduces inflation.

Investors are looking to the Turkish central bank meeting to hike rates to rein in rampant inflation, currently running at over 15 percent — among the highest in the developed world.

“If the central bank cannot find the opportunity to hike, then the markets will take it very negatively,” economist Inan Demir of Nomura Securities said. “If it can hike then the market will see this as the first market-friendly action by the new administration.”

Investors’ concerns saw the Turkish lira plunge about 30 percent since the start of the year. Adding to the unease is Erdogan’s move to assume sweeping executive powers after last month’s presidential elections.

During his campaign, Erdogan pledged to take greater control over the economy, including the independent central bank. The appointment of his son-in-law, Berat Albayrak, as Turkey’s finance minister has further raised international investor concerns.

In the past, Albayrak voiced support for Erdogan’s stance on interest rates. The new cabinet announced earlier this month saw the removal of Mehmet Simsek and Naci Agbal, who investors saw as strong advocates of orthodox economic policies.

Uncertainty over the outcome of Tuesday’s central bank meeting is fueling investors’ fears that Ankara could adopt radical new measures to prevent capital from leaving the country.

“Investors are starting to ask if capital controls will be imposed,” Demir said. “If there is no monetary policy to counter the lira depreciation by the central bank, then investors will start to assume worst case scenario, the capital control scenario.”

“Such a fear,” he continued, “will mean an acceleration of capital outflows out of the country, which would bring capital inflows to the fore, so there is the risk of a self-fulfilling prophecy.”

Analysts warn capital controls would be tantamount to economic suicide, killing Turkey’s credit rating and thus its ability to borrow the $5 billion a month it needs to cover the shortfall of its current account deficit, or the difference between what it imports and exports.

In the past few days, Albayrak has sought to ease investor concerns by stating support for the central bank.

“We aim for an effective central bank. The central bank sees and builds the fiscal life in a correct way. Turkey will never again be this attractive for foreign investors,” he said Sunday.

Albayrak, accompanied by internationally respected economic experts, met Monday with his counterparts from countries at the G20 meeting of finance ministers in Buenos Aires, where he underscored his message that Turkey remains market-friendly.

Erdogan has also refrained from visibly advocating his opposition to interest rates, a move seen as helping investor sentiment. But analysts warn actions, not words, will determine how financial markets will ultimately react towards Turkey.

If the central bank does hike rates it could enhance Albayrak’s reputation among international investors, some analysts say.

“He can correct his own image going forward,” said Demir.

On the other hand, with Turkish interest rates already among the highest in the developed world at over 17 percent, a further hike will likely bring problems.

“[Turkish] private banks are already not adding to their loans because they realize at these rates, repaying will be very difficult,” political analyst Atilla Yesilada of Global Source Partners said. “That is going to hit economic growth.”

Both Turkish consumers and companies are already heavily indebted and economists predict a severe economic slowdown — if not a recession — by the end of the year.

Analysts warn even if the bank were to raise interest rates Tuesday and Erdogan were to abandon his unorthodox economic policies, investors would be looking for Ankara to do more to rein in public spending and avert a dramatic slide.

“The problem now is discretionary spending on mega projects, welfare projects which are simply not bearable, this needs to be corrected,” Yesilada said.
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Amid escalating trade friction with the United States, China appears to be courting Europe to fill the gaps in providing opportunities for technology transfers. Analysts, however, are urging Europe to be wary in its dealings with China. They say it will be political and economically unwise for Europe to take advantage of the Sino-U.S. dispute and allow China to continue unfair trade practices that include forced tech transfers and intellectual property theft.

The U.S. has accused China of using “state-led efforts to force, strong-arm and even steal U.S. technology and intellectual property.”

Rob Atkinson, who heads the Washington, D.C.-based Information Technology & Innovation Foundation (ITIF), says Europe should stop cutting deals with China that he says will offset the Trump administration’s efforts to punish Beijing.

In early July, the U.S. launched a first round of tariffs on $34 billion of Chinese goods. China’s tariffs on $34 billion of U.S. imports, including soybeans, also took effect at the same time. U.S. President Donald Trump last week vowed to impose tariffs on all $505 billion worth of Chinese imports. China has vowed to retaliate if the U.S. slaps more tariffs on Chinese goods in the coming months.

The U.S. and China are the world’s two biggest economies.

Made in China 2025

China’s tech ambition, unveiled in its “Made in China 2025” program, is believed to be at the core of its trade war with the U.S.

To avoid upsetting Washington, China has downplayed the initiative, which was first introduced in 2015 with the goal of comprehensively upgrading China’s high-tech industries at home. A recent official report, however, concluded that China is still far from being a global tech leader.

According to the South China Morning Post, China’s Ministry of Industry and Information Technology recently learned that 30 of the country’s largest conglomerates rely heavily on imported components used in industries that produce rockets, large aircraft and even automobiles.

Exaggerated tech prowess

“The Chinese leadership wants to have it both ways. They want to tell their domestic population that they are [tech] leaders and they want to tell the rest of the world that they are not because they are afraid that, if they are seen as really big technology leaders or close to leaders, other countries will more actively push back against its unfair trade practices,” ITIF’s Atkinson said.  

Chris Dong, director of China research at market intelligence firm IDC, called the tech gaps between the two economies “significant” in not only components, but also innovation competency, fundamental engineering and business-sector transformations. Dong says China focuses its IT spending on hardware and infrastructure buildouts while the U.S. spends mostly on software and service in transforming digital technology.  

“The prosperity of China’s Internet economy, fueled by vast consumer technology adoptions, abundant capitals, and government’s policy and financial support, should not mislead domestic perception away from the true fact that China has an overall growing but weak technology strength,” Dong said in an email to VOA.

Forced tech transfer to continue

The U.S. boycott, however, is unlikely to stop China from advancing technological developments, according to an industry insider.

“China for sure will continue its technology development regardless, if [the U.S.] has turned hostile. We still hope to seek cooperation, whether it is cooperation between China and the U.S. or Europe. Collaboration will lead to a win-win situation,” the insider said on condition of anonymity.

“China still keeps a certain level of R&D capacity. [The trade dispute] will only slow down its pace of catching up. The U.S. is unfriendly now. But Europe still looks friendly. China may turn to Europe for [coveted] tech transfer as long as Europe isn’t as hostile as the U.S.,” said Kuo-yuan Liang, president of Taiwan-based Yuanta-Polaris Research Institute.

The economist said he expects China to continue its forced technology transfer practices from foreign investors to Chinese operations, using its market access as an incentive to achieve its technological goal.

Recent statistics released by the Baker McKenzie and Rhodium Groups also supported the trend.

China’s pivot to Europe

The firms’ research found that the value of China’s merger and acquisition activities in Europe reached $22 billion in the first half of this year – nine times of that in North America during the same period.

Adam Dunnett, secretary-general of the European Union Chamber of Commerce in China, believed the sharp ratio has more to do with a decrease in capital flows to the U.S. than an increase into the EU.  

He added that investment intended to acquire technology isn’t problematic, but that what is at issue is the degree of state involvement and the true motivation behind certain investments.

“If these decisions are demonstrably driven by market forces, then Europe welcomes them; however, due to the lack of transparency of many Chinese investments, even perfectly legitimate capital flows are increasingly being scrutinized,” Dunnett wrote in an email to VOA.

He added that European businesses shared similar concerns with the U.S. about China’s “market-distorting actions” including forced tech transfer and infringements of intellectual property rights.

“China has …taken some action to improve the situation, but the overall actual impact has been very limited. Tensions will remain, and potentially worsen, until results are felt by international firms on the ground,” he concluded.

 
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“Heightened trade and geopolitical tensions” are putting global economic growth at risk, G-20 finance ministers said after two days of meetings in Buenos Aires on Sunday.

In their final communique, the Group of 20 ministers stressed the need to “step up dialogue and actions to mitigate risks and enhance confidence.”

The ministers, representing industrial and emerging-market nations, described the overall world economic growth as “robust,” but expressed concerns over what they call the increased risks of the “short and medium term.”

They did not mention the United States by name in their closing statement. But some decried President Donald Trump’s tough trade rhetoric and tariffs on Chinese and European imports.

European Union finance chief Pierre Moscovici urged the U.S. to act like allies, not foes. French finance minister Bruno Le Marie accused Trump of creating a “survival of the fittest” trade mentality and called on Washington to “de-escalate.”

Trump has imposed tariffs on imports of European steel (25 percent) and aluminum (10 percent) while also slapping billions of dollars in tariffs on Chinese goods and threatening more.

He has also accused China and the EU of keeping their interests rates and currencies low, damaging the U.S. dollar on the world market.

 
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Prime Minister Theresa May’s plans to leave the European Union are overwhelmingly opposed by the British public and more than a third of voters would support a new right-wing political party committed to quitting the bloc, according to a new poll.

May’s political vulnerability was exposed by the survey which found voters would prefer Boris Johnson, who quit as her foreign minister two weeks ago, to negotiate with the EU and lead the Conservative Party into the next election.

Only 16 percent of voters say May is handling the Brexit negotiations well, compared with 34 percent who say that Johnson would do a better job, according to the poll conducted by YouGov for The Sunday Times newspaper.

With a little more than eight months to go before Britain is due to leave the EU on March 29, 2019, May’s government, parliament, the public and businesses remain deeply divided over what form Brexit should take.

May’s plans to keep a close trading relationship with the EU on goods thrust her government into crisis this month and there is speculation she could face a leadership challenge after two of her most senior ministers, including Johnson, resigned in protest.

Only one in 10 voters would pick the government’s proposed Brexit plans if there were a second referendum, according to the poll. Almost half think it would be bad for Britain.

The new Brexit minister Dominic Raab said on Sunday the prime minister was still trying to persuade members of the cabinet that her strategy was the best way forward.

Raab also warned that Britain could refuse to pay a 39 billion pound ($51 billion) divorce bill to the EU if it does not get a trade deal – a threat used before by ministers.

No deal Brexit

Speaking to the BBC, Raab refused to deny reports the government is planning to stockpile food or use a section of motorway in England as a lorry park to deal with increased border checks if Britain leaves the EU without a deal.

Asked about a story in The Sun newspaper that the government was planning to stockpile processed food, Raab initially replied “no” and then added: “That kind of selective snippet that makes it into the media, to the extent that the public pay attention to it, I think is unhelpful.”

The possibility of leaving without a trade deal has increased with May facing rebellions from different factions in her party. She only narrowly won a series of votes on Brexit in parliament last week.

The Sunday Times poll found voters are increasingly polarized, with growing numbers of people alienated from the two main political parties.

Thirty-eight percent of people would vote for a new right-wing party that is committed to Brexit, while almost a quarter would support an explicitly far-right anti-immigrant, anti-Islam party, the poll found.

Brexit campaigner Nigel Farage and U.S. President Donald Trump’s former adviser Steve Bannon are in discussions about forming a new right-wing movement, according to The Sunday Times.

Half of voters would support remaining in the EU if there were a second referendum, the poll found, a level of support found in other surveys this year.

YouGov spoke to 1,668 adults in Britain on July 19 and 20, according to The Sunday Times, which did not provide other details about how the poll was conducted.
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German industry groups warned Sunday, ahead of a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, that tariffs the United States has recently imposed or threatened risk harming the U.S. itself.

The U.S. imposed tariffs on EU steel and aluminum June 1, and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting Wednesday.

Dieter Kempf, head of Germany’s BDI industry association, told the Welt am Sonntag newspaper it was wise for the European Union and United States to continue their discussions.

German auto industry

“The tariffs under the guise of national security should be abolished,” Kempf said, adding that Juncker needed to make clear to Trump that the United States would harm itself with tariffs on cars and car parts.

He added that the German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported to other countries from the U.S. 

“Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Lowered expectations

EU officials have sought to lower expectations about what Juncker can achieve and downplayed suggestions that he will arrive in Washington with a novel plan to restore good relations.

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag he welcomed Juncker’s attempt to persuade the U.S. government not to impose tariffs on cars.

“All arguments in favor of such tariffs are … ultimately far-fetched,” he said.

The German economy had for decades counted on there being open markets and a reliable global trading system, Schweitzer said, but he added of the current situation: “Every day German companies feel the transatlantic rift getting wider.”
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Iran’s Supreme Leader Ayatollah Ali Khamenei on Saturday backed President Hassan Rouhani’s suggestion that Iran may block Gulf oil exports if its own exports are stopped and said negotiations with the United States would be an “obvious mistake.”

Rouhani’s apparent threat earlier this month to disrupt oil shipments from neighboring countries came in reaction to looming U.S. sanctions and efforts by Washington to force all countries to stop buying Iranian oil.

“(Khamenei) said remarks by the president … that ‘if Iran’s oil is not exported, no regional country’s oil will be exported,’ were important remarks that reflect the policy and the approach of (Iran’s) system,” Khamenei’s official website said.

Iranian officials have in the past threatened to block the Strait of Hormuz, a major oil shipping route, in retaliation for any hostile U.S. action.

Khamenei used a speech to foreign ministry officials on Saturday to reject any renewed talks with the United States after President Donald Trump’s decision to withdraw from a 2015 international deal over Iran’s nuclear program.

“The word and even the signature of the Americans cannot be relied upon, so negotiations with America are of no avail,” Khamenei said.

It would be an “obvious mistake” to negotiate with the United States as Washington was unreliable, Khamenei added, according to his website.

The endorsement by Khamenei, who has the last word on all major issues of state, is likely to discourage any open opposition to Rouhani’s apparent threat.

Khamenei also voiced support for continued talks with Iran’s European partners in the nuclear deal which are preparing a package of economic measures to offset the U.S. pullout from the

accord.

“Negotiations with the Europeans should not be stopped, but we should not be just waiting for the European package, but instead we should follow up on necessary activities inside the country [against U.S. sanctions],” Khamenei said.

France said earlier this month that it was unlikely European powers would be able to put together an economic package for Iran that would salvage its nuclear deal before November.

Iran’s oil exports could fall by as much as two-thirds by the end of the year because of new U.S. sanctions, putting oil markets under huge strain amid supply outages elsewhere in the world.

Washington initially planned to totally shut Iran out of global oil markets after Trump abandoned the deal that limited Iran’s nuclear ambitions, demanding all other countries to stop buying its crude by November.

But it has since somewhat eased its stance, saying that it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.

 
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