In an effort to stem the outcry over the arrest of two black men at one of its stores, Starbucks will close 8,000 U.S. stores Tuesday afternoon for anti-bias training for its employees. 

On April 12, two black men went to a Philadelphia store and did not buy anything; instead, they told the store manager they were waiting for a friend to join them. They were asked to leave and an employee called police, which led to their arrest, prompting protests and accusations of racism. 

A video of the incident that was posted on social media became a major embarrassment for the coffee chain.

Soon after, Starbucks announced a policy change, welcoming anyone to sit in its cafes or use its restrooms, even if they don’t buy anything.

Previously, it was left to individual store managers to decide whether people could access Starbucks premises without making a purchase. 

“We are committed to creating a culture of warmth and belonging where everyone is welcome,” Starbucks said in a statement. 

The company has asked employees to follow established procedure when dealing with “disruptive behaviors,” and are still asked to call 911 in case of “immediate threat or danger” to customers or employees. 

The men who were arrested in April, settled with Starbucks earlier this month for an undisclosed sum and an offer of a free college education for each of them. 

They also reached a deal with the city of Philadelphia for a symbolic $1 each and a promise from city officials to set up a $200,000 program for young entrepreneurs.

 
…

Starbucks will close more than 8,000 stores nationwide Tuesday to conduct anti-bias training, the next of many steps the company is taking in an effort to restore its tarnished diversity-friendly image.

The coffee chain’s leaders reached out to bias training experts after the arrest of two black men at a Philadelphia Starbucks last month.

The plan has brought attention to the little-known world of “unconscious bias training” used by corporations, police departments and other organizations. It’s designed to get people to open up about implicit biases and stereotypes in encountering people of color, gender or other identities.

A video previewing the training says it will include recorded remarks from Starbucks executives as well as rapper and activist Common. From there, the company says, employees will “move into a real and honest exploration of bias.”

 
…

China told the World Trade Organization’s dispute settlement body on Monday that U.S. accusations that Beijing forced companies to hand over technology as a cost of doing business in China were groundless.

U.S. President Donald Trump has accused China of stealing American ideas and announced a plan for a $50 billion tariff penalty against Chinese goods.

Both sides launched legal complaints at the WTO over the issue earlier this year.

“There is no forced technology transfer in China,” Chinese Ambassador Zhang Xiangchen told the meeting, according to a copy of his remarks provided to Reuters.

“According to the U.S.’s view, China forces the U.S. companies to transfer technologies by imposing joint venture requirements, foreign equity limitations and administrative licensing procedures,” Zhang said.

“But the fact is, nothing in these regulatory measures requires technology transfer from foreign companies.”

Zhang said the U.S. argument involved a “presumption of guilt.” The U.S. Trade Representative believed U.S. firms in China faced an obligation to hand over technology, while failing to produce a single piece of evidence.

Some of its claims were “pure speculation,” he said, adding that the USTR saw Chinese M&A activity as a Chinese government conspiracy.

‘Diligence and entrepreneurship’

Technology transfer was a normal commercial activity that benefited the United States most of all, he said, while Chinese innovation was driven by “the diligence and entrepreneurship of the Chinese people, investment in education and research, and efforts to improve the protection of intellectual property.”

Legal experts say Washington needs WTO backing to implement its tariffs as far as they relate to WTO rules, while China has rejected the tariff plan wholesale and resorted to WTO action to stop it.

Under WTO rules, if disputes are not settled amicably after 60 days, the complainant can ask for a panel of experts to adjudicate, escalating the dispute and triggering a legal case that takes years to settle.

The United States, which launched its complaint on March 23, could have used the dispute meeting on Monday to take that step. China could do so at next month’s meeting.

But since the dispute erupted, U.S.-China trade policy has been the subject of high-level bilateral talks. Trump tweeted cryptically that “our trade deal with China is moving along nicely” but that it probably needed a “different structure.”

The United States put China’s technology transfer policies on the agenda of Monday’s meeting, without elaborating. A copy of the U.S. remarks was not immediately available.
…

New Zealand will slaughter more than 100,000 cows in an effort to eradicate a bacterial disease.

The government and agricultural leaders announced Monday that it will spend over $600 million over the next decade to rid the country of Mycoplasma bovis, which causes udder infections, pneumonia, arthritis and other illnesses. The bacteria is not a threat to humans, but can cause production delays on farms.

“This is a tough call,” said Prime Minister Jacinda Ardern. “But the alternative is to risk the spread of the disease across our national herd.”

Mycoplasma bovis has been detected on more than three dozen farms since it was first detected in New Zealand last year, leading to the slaughter of about 26,000 cattle. The country is the world’s largest exporter of milk and dairy products.

 
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New shops appear in New York City every day, but Phluid Project, which recently opened its doors on Broadway, is different. One of the first gender-fluid boutiques in the world, Phluid Project sells clothing for men, women and everyone in between. Both the clothes and the mannequins here are gender-neutral, and as an added selling point, its store owners say the prices are more than affordable. Elena Wolf visited the one-of-a-kind store, where no one feels out of place.
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Russian state gas giant Gazprom said Saturday it had signed a protocol with the Turkish government on a planned gas pipeline and agreed with Turkish firm Botas to end an arbitration dispute over the terms of gas supplies. 

The protocol concerned the land-based part of the transit leg of the TurkStream gas pipeline, which Gazprom said meant that work to implement it could now begin.

Turkey had delayed issuing a permit for the Russian company to start building the land-based parts of the pipeline, which, if completed, would allow Moscow to reduce its reliance on Ukraine as a transit route for its gas supplies to Europe.

A source said in February the permit problem might be related to talks between Gazprom and Botas about a possible discount for Russian gas.

Turkish President Tayyip Erdogan said earlier Saturday that Turkey and Russia had reached a retroactive agreement for a 10.25 percent discount on the natural gas Ankara buys from Moscow.

Gazprom said in the Saturday statement, without elaborating, that the dispute with Botas would be settled out of court.

 
…

Italy’s would-be coalition parties turned up the pressure on President Sergio Mattarella on Saturday to endorse their euroskeptic pick as economy minister, saying the only other option might be a new election.

Mattarella has held up formation of a government, which would end more than 80 days of political deadlock, over concern about the desire of the far-right League and anti-establishment 5-Star Movement to make economist Paolo Savona, 81, economy minister.

Savona has been a vocal critic of the euro and the European Union, but he has distinguished credentials, including in a former role as an industry minister.

Formally, Prime Minister-designate Giuseppe Conte presents his cabinet to the president, who must endorse it. Conte, a little-known law professor with no political experience, met the president on Friday without resolving the

deadlock.

“I hope no one has already decided ‘no,’ ” League leader Matteo Salvini shouted to supporters in northern Italy. “Either the government gets off the ground and starts working in the coming hours, or we might as well go back to elections.”

Later, 5-Star leader Luigi Di Maio said he expected there to be a decision on whether the president would back the government within 24 hours.

5-Star also defended Savona’s nomination. “It is a political choice. … Blocking a ministerial choice is beyond [the president’s] role,” Alessandro Di Battista, a top 5-Star politician, said.

Mattarella has not spoken publicly about Savona, but through his aides he has made it clear he does not want an anti-euro economy minister and that he would not accept the “diktat” of the parties.

Jittery markets

Savona’s criticism of the euro and German economic policy has further spooked markets already concerned about the future government’s willingness to rein in the massive debt, worth 1.3 times the country’s annual output.

The League and 5-Star have said Savona should not be judged on his opinions, but on his credentials. Savona has had high-level experience at the Bank of Italy, in government as industry minister in 1993-94, and with employers lobby Confindustria.

On his new Facebook page, Conte said he had received best wishes for his government in a phone call with French President Emmanuel Macron.

European Commissioner for Economic Affairs Pierre Moscovici was not hostile when asked about Savona in an interview with France’s Europe1 radio, saying he would work with whomever Italy named.

“Italians decide their own government,” Moscovici said. “Italy is and should remain a country at the heart of the eurozone. … What worries me is the debt, which must be contained.”

The prospect of Italy’s government going on a spending spree on promised tax cuts and welfare benefits roiled markets last week.

On Friday, the closely watched gap between the Italian and German 10-year bond yields, seen as a measure of political risk for the eurozone, was at its widest in four years at 215 basis points.

The chance that the new government will weaken public finances and roll back a 2011 pension reform prompted Moody’s to say — after markets had closed Friday — that it might downgrade the country’s sovereign debt rating.

Moody’s has a Baa2 long-term rating with a negative outlook on Italy. A downgrade to Baa3 would take the country’s debt to just one notch above junk.

Despite the recent surge, Italian yields are well below the peaks they reached during the eurozone crisis of 2011-12, thanks mainly to the shield provided by the European Central Bank’s bond-buying program.
…

Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

This week, the finance ministry published a draft bill on financial regulation that covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.

“We have a lot of predatory lending out here, which we want to regulate,” Geoffrey Mwau, director general of budget, fiscal and economic affairs at the treasury, told reporters Thursday.

Test case for lending

As it was for mobile cash, Kenya is something of a test case for the new lending platforms. Several of the companies involved, including U.S. fintech startups, have plans to expand in other frontier markets, meaning Kenya’s regulation will be closely watched.

From having had little or no access to credit, many Kenyans now find they can get loans in minutes.

George Ombelli, a salesman for a company importing bicycles who also owns a hair salon and cosmetics shop with his wife, has borrowed simultaneously from four providers over the past year.

He took small loans from two Silicon Valley-backed U.S. fintech firms, Branch and Tala, to see what rates he would get, as well as from a new mobile app launched by Barclays Kenya in March and a business loan from Kenya’s Equity Bank.

Citing a slowdown in his business because of elections-related political turmoil last year, Ombelli said he has fallen behind on some of his payments. He fears he will be reported to one of Kenya’s three credit bureaus, jeopardizing his chances of being able to borrow more to grow his business.

​‘Too many loans is a problem’

“I’ve realized having too many loans is a problem,” the 38-year-old father of three said in an interview in a coffee shop in Nairobi’s business district.

He is not alone. In the last three years, 2.7 million people out of a population of around 45 million have been negatively listed on Kenya’s Credit Reference Bureaux, according to a study by Microsave, which advises lenders on sustainable financial services.

For 400,000 of them, it was for an amount less than $2.

Global implications

Some of the fintech lenders are expanding into other African countries and into Latin America and Asia, saying their aim is to help some of the billions of people who lack bank accounts, assets or formal employment climb the economic ladder.

Tala says it has granted more than 6 million loans worth more than $300 million, mainly in Kenya, since it launched in Kenya in 2014. It is expanding its newer businesses in Mexico, Tanzania and the Philippines and is piloting in India.

Tala and Branch argue that their technology, which relies on an algorithm that builds a financial profile of customers, minimizes the risk of default. They say they strive to play a helpful role in planning for tighter regulation.

“We believe that credit bubbles and over-indebtedness will be a challenge over the next decade. (Credit Reference) Bureaus and regulation will be a big part of the solution,” said Erin Renzas, a Branch spokeswoman.

Branch says it expects to grant about 10 million loans worth a total of $250 million this year in Kenya and its other markets, Nigeria and Tanzania.

High interest rates

The current status of the sector, outside the direct remit of the central bank, allows providers, both banks and others, to skirt a government cap on interest of four points above the central bank’s benchmark interest rate, which now stands at 9.5 percent.

Market leader M-Shwari, Kenya’s first savings and loans product introduced by Safaricom and Commercial Bank of Africa in 2012, charges a “facilitation fee” of 7.5 percent on credit regardless of its duration.

On a loan with a month’s term, this equates to an annualized interest rate of 90 percent. The shortest loan repayment period is one week. A Safaricom spokesman referred Reuters to the CBA for comment. Calls to their switchboard and an email were not answered on Thursday.

Tala and Branch, number four and six in a ranking based on usage data by FSD Kenya, offer varying rates depending on the repayment period.

Their apps, downloaded by Reuters, each offered a month’s loan at 15 percent, equating to 180 percent over a year. Both companies say rates drop dramatically as people pay back successive loans.

Barclays Kenya launched an app in March offering 30-day loans with an interest rate of just less than 7 percent, still a hefty 84 percent annual equivalent rate. Reuters was unable to reach their spokespeople by telephone.

The new draft bill says digital lenders will be licensed by a new Financial Markets Conduct Authority and that lenders will be bound by any interest rate caps the Authority sets. But it is not clear if digital lenders are subject to such caps and the current government cap on banks’ interest rates is under review.

Introduced in 2016 to stop banks charging high interest rates, the cap has stifled traditional bank lending and the International Monetary Fund has conditioned Kenya’s continued access to balance of payments support on its removal.

But members of parliament say the public has had enough of high interest rates and the draft does not say the cap will be lifted. The finance ministry will come up with a final version of the bill in the next few weeks before sending it to parliament.
…

Italy’s prime minister-designate, Giuseppe Conte, a political novice and obscure law professor accused of padding his resume, put the finishing touches to his cabinet lineup Friday. And initial reaction from financial markets was far from approving.

Italian government bond prices slumped and the country’s ailing banks saw their stock prices hit an 11-month low. Italy’s outgoing economy minister, Pier Carlo Padoan, warned the incoming coalition government of the anti-establishment Five Star Movement (M5S) and far-right League not to underestimate the power of the markets.

“The most worrying aspect of the program, which this government is working on, is its underestimation of the consequences of certain choices,” Padoan told the Il Sole 24 Ore newspaper.

M5S and the League unveiled their government agreement a week ago, after more than 70 days of tortuous talks, following the country’s inconclusive parliamentary elections in March. The polls saw establishment parties trounced.

The coalition partners’ program includes massive tax cuts favoring the rich — a League demand — additional spending on welfare for the poor, and job-seekers and a roll-back of pension reforms that helped Italy weather the multi-year-long eurozone debt crisis which bankrupted Greece.

Investors — domestic and foreign — are expressing alarm about what the next few months may hold for an Italy governed by unlikely political partners. Fears include a public sector spending spree that will put Rome not only on a collision course with the European Union over budget rules. It also will weaken the already perilous state finances of Italy, the third largest economy in Europe and the second most indebted.

Some financial analysts say investors are becoming wary about European equities in general, fearing political and economic unpredictability in Italy could trigger contagion, prompting a new eurozone crisis. European markets were on track Friday to record collectively their first weekly decline since March — and investors last week withdrew the most money in nearly two years from western European funds.

“Investors should take caution as far as European equities go,” Boris Schlossberg, managing director of FX Strategy at BK Asset Management, told CNBC’s cable TV show Trading Nation this week.

Immigration

EU officials in Brussels and Italy’s half-a-million migrants are as anxious as investors. They are bracing for confrontations with the incoming populist government, whose two halves agree about very little, except when it comes to euro-skepticism and disapproval of migrants. M5S itself is split sharply between liberals and conservatives.

Earlier this week Italian President Sergio Mattarella approved Giuseppe Conte, aged 54, as the coalition’s nominee for prime minister — despite evidence that the academic had padded his resume with stints at New York University, Girton College, Cambridge and France’s prestigious Sorbonne. None of them had any record of his official attendance, although he was granted a visitor’s library card by NYU.

Conte also claimed in his resume to have founded a prominent Italian law practice, but was only an external contributor, according to the firm.

A figurehead?

Few here in Rome believe Conte, who was born in the southern region of Puglia, will be anything but a figurehead. The mutually antagonistic party leaders, M5S’ Luigi Di Maio and the League’s Matteo Salvini, weren’t prepared to give way to each other and let the other have the job — hence Conte’s nomination, which still has to be approved by parliament.

The Economist magazine suggested he might end up as the fictional valet Truffaldino, a character in an 18th century Italian comedy entitled “Servant of Two Masters.” Whether he will be able to bridge disagreements between Di Maio and Salvini is unclear — and a testimony to that, say analysts, is the party leaders’ decision to set up a “conciliation committee” to adjudicate disputes.

“Nobody knows what will happen, because this is a government without precedent and the two parties are virtually incompatible,” said Sergio Fabbrini, director of the LUISS School of Government in Rome.

Economy

The parties were locked in dispute Friday with no agreement about who should occupy the key position of economy minister. The League has been pushing for 82-year-old economist Paolo Savona, a former industry minister who wants Italy to drop the euro as its currency, which he describes as “a German cage.” Savona opposed Italy signing in 1992 the Maastricht Treaty, a key document that started the process of closer EU political integration.

Even if the League fails in its bid to secure the economic portfolio for Savona, there are plenty of likely policy clashes ahead between the EU and Western Europe’s first all-populist government, despite the fact the League is no longer demanding Italy drop Europe’s single currency and M5S is no longer pushing for a referendum on Italy’s future EU membership.

Both party leaders now talk about reforming the EU from within.

Trouble ahead

Nonetheless, flashpoints are on the near horizon. Salvini, a hardline migrant opponent, is likely to become interior minister and will oversee the coalition’s agreed to anti-immigration plans, many of which are in violation of EU law. They include truncating asylum procedures, the forcible detention of irregular migrants and the repatriation of half-million migrants, most from sub-Saharan Africa, to their countries of origin.

Next month, EU leaders are due to extend the European bloc’s sanctions on Russia, but Italy’s coalition partners are opposed, viewing Moscow as a partner, rather than foe. Both M5S and the League want the sanctions lifted that were imposed on Russia for its 2014 annexation of Crimea.

Some analysts predict the new government’s slim majority — only seven in the Senate — as well as fiscal realities, will constrain the revolutionary fervor of Italy’s populists. But others envision instability and unpredictability in the weeks and months ahead.

On Friday, the European Commission’s vice-president for the euro, Valdis Dombrovskis, issued a stark warning to Italy: “Our message from the European Commission is very clear: that it is important Italy continues to stick with responsible fiscal and macro-economic policies.”
…

Military veterans who were discharged for relatively minor offenses say they often can’t get jobs, and they hope a recent warning to employers by the state of Connecticut will change that.

The state’s human rights commission told employers last month they could be breaking the law if they discriminate against veterans with some types of less-than-honorable discharges. Blanket policies against hiring such veterans could be discriminatory, the commission said, because the military has issued them disproportionately to black, Latino, gay and disabled veterans.

At least one other state, Illinois, already prohibits hiring discrimination based on a veteran’s discharge status, advocates say, but Connecticut appears to be the first to base its decision on what it deems discrimination by the military. Regardless of the state’s reasons, veterans say, the attention there could at least educate employers.

“You may as well be a felon when you’re looking for a job,” said Iraq War veteran Kristofer Goldsmith. Goldsmith said the Army gave him a general discharge in 2007 because he attempted suicide.

An honorable discharge is the only type that entails full benefits. A dishonorable discharge is given after a court-martial for serious offenses, which can include felonies. Other types of discharges in between — known by veterans as “bad paper” — are issued administratively, with no court case, and can stem from behavior including talking back, tardiness, drug use or fighting.

The commission says its guidance focused on that middle class of discharges.

Sometimes such discharges are given to veterans whose violations stemmed from post-traumatic stress disorder, like Goldsmith’s, or brain injuries. Many private employers may not be aware of those extenuating circumstances or understand the differences between discharges, critics say.

And they either won’t hire bad-paper veterans or won’t give them preferences an honorably discharged veteran would get, the Veterans Legal Services Clinic at Yale Law School told the Connecticut commission.

The clinic, acting on behalf of the Connecticut chapter of the Iraq and Afghanistan Veterans of America, showed the commission job postings that require applicants who have served in the military to have been honorably discharged.

It also cited a 2017 report by the advocacy organization Protect Our Defenders that found black service members were more likely to be disciplined than white members. And the commission’s guidance to employers notes thousands of service members have been discharged for their sexual orientation.

Employers might require an honorable discharge as an easy way to narrow the pool and get strong applicants, said Amanda Ljubicic, vice president of the Chamber of Commerce of Eastern Connecticut.

“At face value it seems like a simple, logical cutoff to make as an employer,” she said. “Certainly this new policy forces employers to think about it differently and to think about the complexities.”

The Vietnam Veterans of America asked for a presidential pardon for bad-paper veterans. President Barack Obama didn’t respond as he was leaving office, nor did President Donald Trump as he was entering, said John Rowan, the organization’s president. He was unsure whether activists would ask Trump again.

PTSD

More than 13,000 service members received a type of discharge for misconduct, known as other than honorable, between 2011 and 2015, despite being diagnosed with PTSD, a traumatic brain injury or another condition associated with misconduct, the U.S. Government Accountability Office found.

The Department of Veterans Affairs, under an order from Congress, expanded emergency mental health coverage to those veterans for the first time last year.

Passing new laws to address the effects of bad paper is probably not the best solution, said U.S. Sen. Chris Murphy, a Connecticut Democrat who pushed for the changes; rather, he said, the military should stop issuing bad-paper discharges to injured veterans.

Goldsmith, 32, said he developed PTSD after his first deployment to Iraq. He was set to leave the military and go to college when the Army extended his active-duty service and ordered him back in 2007. Goldsmith said he attempted suicide shortly before he was due to deploy.

Because of his general discharge, Goldsmith lost his GI Bill benefits. He didn’t know how he’d find a job. If he didn’t mention his military service, he would have a four-year gap on his resume. But if he did, he would have to disclose medical information to explain why he left.

A friend eventually hired him to work at a photo-booth company, and Goldsmith began contacting members of Congress to press for health care for veterans with bad paper.

“Things like addressing employment discrimination on the national level are so far from possible,” he said, “I don’t think any of us in the advocacy community has put enough pressure on Congress to handle it.”
…

Here are the highest-paid CEOs for 2017, as calculated by The Associated Press and Equilar, an executive data firm.

The AP’s compensation study covered 339 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their respective companies, which filed proxy statements between January 1 and April 30.

Compensation often includes stock and option grants that the CEO may not receive for years unless certain performance measures are met. For some companies, big raises occur when CEOs get a stock grant in one year as part of a multi-year grant.

1. Hock Tan

Broadcom

$103.2 million

Change from last year: Up 318 percent

1. Leslie Moonves

CBS

$68.4 million

Change: flat

1. W. Nicholas Howley

TransDigm

$61 million

Change: Up 223 percent

(Howley left the CEO position last month.)

1. Jeffrey Bewkes

Time Warner

$49 million

Change: Up 50 percent

1. Stephen Kaufer

TripAdvisor

$43.2 million

Change: Up 3,400 percent

(Kaufer’s 2017 compensation excludes $4.8 million in incremental fair value relating to the modification of awards granted in 2013.)

1. David Zaslav

Discovery Communications

$42.2 million

Change: Up 14 percent

1. Robert Iger

Walt Disney

$36.3 million

Change: Down 11 percent

1. Stephen Wynn

Wynn Resorts

$34.5 million

Change: Up 23 percent

(Wynn left the CEO position in February.)

1. Brenton Saunders

Allergan

$32.8 million

Change: Up 693 percent

1. Brian Roberts

Comcast

$32.5 million

Change: Down 1 percent
…

U.S. President Donald Trump signed into law Thursday a measure that eases rules imposed on banks in the aftermath of the 2008 financial crisis and the Great Recession.

The law relaxes regulations and oversight on banks with assets below $250 billion, leaving a handful of the largest U.S. banks that must still comply with the stringent rules and oversight.

Trump said at the signing ceremony the rules and oversight, enacted by the 2010 Dodd-Frank financial reform law, were “crushing small banks.” Trump lauded the signing as a victory in his administration’s efforts to eliminate regulations to promote economic growth.

Although Trump signed the bill into law, much of Dodd-Frank remains intact. Trump signed the Republican-led measure that was passed by Congress after receiving the support of some Democrats.

Dodd-Frank was signed into law by President Barack Obama in response to a crisis that resulted in the loss of 8 million jobs, 2.5 million home foreclosures and the shuttering of 2.5 million businesses, according to Northwestern University’s Institute for Policy Research.

A federal report prepared by the Financial Crisis Inquiry Commission concluded economic weaknesses that created the potential for the crisis were “years in the making.” But the report said “it was the collapse of the housing bubble — fueled by low interest rates, easy and available credit, scant regulation and toxic mortgages — that was the spark that ignited a string of events, which led to the full-blown crisis in the fall of 2008.”
…

Even though the United States is one of the richest and most technologically advanced countries in the world, about 45 million Americans live below the poverty line. In Buffalo, New York, a once-prosperous city that has fallen on hard-times, one-third of its residents live in poverty. As Olga Loginova reports, the city offers an example of what happens when a once-powerful industrial sector declines and well-paying jobs become scarce.
…

Germany’s struggling Deutsche Bank is slashing thousands of jobs as it reshapes its stocks trading operation and refocuses its global investment banking business on its European base.

The bank said Thursday it would cut its workforce from 97,000 to “well below” 90,000 and that the reductions were underway.

It said headcount in the stocks trading business, mostly based in New York and London, would be reduced by about 25 percent. Those cuts will cost the bank about 800 million euros ($935 million) this year.

Deutsche Bank has struggled with high costs and troubles with regulators. The bank replaced its CEO in April after three years of annual losses and lagging progress in streamlining its operations.

New CEO Christian Sewing has said the bank would refocus on its European and German customer base and cut back on costlier and riskier operations where it doesn’t hold a leading position. Sewing said the bank was committed to its international investment banking operations but must “concentrate on what we truly do well.” The new strategy means stepping back from several decades of global expansion in which the bank sought to compete with Wall Street rivals such as Goldman Sachs or JPMorgan Chase.

Sewing replaced John Cryan in April with a mandate to accelerate the bank’s wrenching restructuring. It has suffered billions in losses from fines and penalties related to past misconduct. But progress in cutting costs has remained elusive. Sewing on Thursday affirmed the bank’s goal to hold costs to 23 billion euros this year and 22 billion next year.

The announcement came hours before Board Chairman Paul Achleitner had to face disgruntled investors at the bank’s annual shareholder meeting. The bank’s share price has sagged and it paid only a small dividend of 11 euro cents per share last year.

Addressing an audience of several thousands in Frankfurt, Achleitner said Cryan had “set the ball rolling for fundamental change” but later displayed “shortcomings in decision-making and implementation.”

“Dear shareholders, you are right to expect the bank and its management to hit the targets it has set itself,” he said. “If there are signs those targets are in jeopardy… then we on the supervisory board have to act swiftly and decisively.”

The bank’s troubles and the turmoil surrounding Cryan’s departure have put pressure on Achleitner as well. Cryan was forced to publicly push back against a media report that Achleitner was looking for a replacement, then left to twist in the wind for days before being shown the door. Achleitner brought Cryan to the bank in 2015 and thus in principle shares responsibility for the bank’s strategy and performance since then.
…

Amazon, Starbucks, Vulcan and other companies have pledged a total of more than $350,000 toward an effort to repeal Seattle’s newly passed tax on large employers intended to combat homelessness.

Just days after the Seattle City Council approved the levy, the No Tax On Jobs campaign, a coalition of businesses, announced it would gather signatures to put a referendum on the November ballot to repeal it. 

Amazon, Starbucks, Vulcan, Kroger and Albertsons each promised $25,000 to the effort last week, according to a report filed by the campaign. The Washington Food Industry Association pledged $30,000. 

Referendum backers will have to gather 17,632 signatures of registered Seattle voters by June 14 to get the measure on the ballot.

The so-called head tax will charge businesses making at least $20 million in gross revenues about $275 per full-time worker each year. The tax would begin in 2019 and raise about $48 million a year to build affordable housing and provide emergency homeless services.

Opponents say the Seattle measure is a tax on jobs and questioned whether city officials are spending current resources effectively. 

Worker and church groups and others praised the tax as a step toward building badly needed affordable housing in an affluent city where the income gap continues to widen and lower-income workers are being priced out.

The clash over who should pay to solve the city housing crisis that’s exacerbated by Seattle’s rapid economic growth featured weeks of tense exchanges, raucous meetings and a threat by Amazon, the city’s largest employer, to stop construction planning on a 17-story building near its hometown headquarters.

Amazon has resumed planning the downtown building, but the company remains “apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here,” said Drew Herdener, Amazon’s vice president for global corporate and operations communications. 

Four council members initially pitched an annual tax of $500 per full-time employee before a compromise proposal lowered the tax rate after they could not muster six votes needed to override a potential veto by Mayor Jenny Durkan. 

The mayor signed the head tax on May 16, saying “we must make urgent progress on our affordability and homelessness crisis.”

Seattle’s action came as cities around San Francisco consider business taxes to help offset issues created by the growth of tech companies. 
…

Starbucks Corp. on Wednesday revealed details of the employee anti-bias training program that will take place behind closed doors at 8,000 U.S. company-owned cafes on the afternoon of May 29.

Starbucks announced plans to shutter stores and corporate offices to train 175,000 employees after the controversial April 12 arrests of two black men, who were detained for hours after the manager of a Philadelphia Starbucks called police because they had not made purchases and refused to leave.

The arrests of Donte Robinson and Rashon Nelson, who were waiting to meet a friend, sparked protests and calls for a boycott of the coffee chain known for its diverse workforce and liberal stances on issues such as gay marriage.

Starbucks said the first training on May 29 “will serve as a step in a long-term journey to make Starbucks even more welcoming and safe for all.”

It will include videos featuring Starbucks executives such as Chief Executive Kevin Johnson, Executive Chairman and co-founder Howard Schultz, board member Mellody Hobson, hip hop artist Common, store managers and experts from the Perception Institute. Employees also will view a film called “You’re Welcome” by Stanley Nelson and participate in discussion and problem-solving sessions on identifying and avoiding bias in every day situations.

Starbucks said the long-term program is being designed and developed with input from researchers, social scientists, employees and other advisers.

Those partners include consultancy SY Partners — which worked with Starbucks to reinvent itself after a business crisis spawned by the “Great Recession”; the Perception Institute; Sherrilyn Ifill, president of the NAACP Legal Defense Fund; Bryan Stevenson, executive director of the Equal Justice Initiative; and Heather McGhee, president of public policy group Demos.

Since the Philadelphia incident, Starbucks has said it will allow people to sit in its cafes and use its restrooms without making a purchase. It also said it has outlined procedures for dealing with customers who are disruptive, using tobacco, drugs or alcohol or sleeping in its cafes. 
…

U.S. President Donald Trump said on Wednesday “a different structure” is needed in trade negotiations with China, but he did not provide further details on the kind of change he seeks.

“Our trade deal with China is moving along nicely,” Trump said in his Twitter post Wednesday morning, “but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion.”

The stock market reacted negatively after Trump cast doubt on trade negotiations with China but ultimately trimmed its losses, ending the day in the positive territory and gained 52.40 points, or 0.21 percent.  

Trump said on Tuesday he was neither pleased nor satisfied with how the recent trade talks with China went, but added, “They’re a start.” 

After two days of trade talks between the two countries in Washington last week, China agreed to “substantially reduce” the $375 billion annual trade surplus it has over the U.S. by buying more American goods, but there was no mention of any specific import and export targets in the statement agreed to by the two countries.

On Capitol Hill, concerns appear to be mounting on Trump’s approach to trade talks with China. 

Republican Senator John Cornyn of Texas cautioned Wednesday that the United States needs to remain “steely-eyed” and make sure “China isn’t playing us for fools.” 

Democratic Senator Debbie Stabenow of Michigan warned, “It’s important we not only talk tough about China, but actually be tough with China.”

“I am really concerned about the president’s hemming and hawing over the last few days when it comes to China. I’m worried that President Xi [Jinping] is crafting a much better deal than President Trump,” Senate Minority Leader Chuck Schumer of New York said Tuesday.  

On trade with China, Schumer added that he is “closer to the president’s view” than he was to the views of former Presidents Barack Obama or George W. Bush.  

Republican Senator Marco Rubio of Florida, chairman of the Congressional-Executive Commission on China and a longtime critic of China, said Wednesday that the U.S. needs a “structural rebalance” of trade with China, not a “dollar rebalance.” 

In a Twitter post, Rubio said he has urged Trump to “follow his initial instincts on China,” and he also asked Trump to “listen to those who understand that a short-term trade deal that sounds good but poses long-term danger is a bad deal.”  

According to U.S. media reports, infighting between free-trade advocates and protectionists within Trump’s trade team has led to contradicting policy pronouncements and public statements on trade negotiations with China.

For example, U.S. Treasury Secretary Steven Mnuchin said the United States would hold off on imposing tariffs on China. But U.S. Trade Representative Robert Lighthizer said hours later the tariffs were still on the table. Earlier this month, White House trade adviser Peter Navarro, known for his protectionist views, reportedly feuded with Mnuchin on his approach to trade talks during their trip to Beijing.

The recent rounds of trade talks are aimed at avoiding a full-blown trade war between the United States and China.

In April, Trump imposed tariffs on $50 billion worth of Chinese goods, and the Chinese retaliated with tariffs of their own. Trump announced he had instructed the U.S. trade representative to consider whether tariffs on another $100 billion worth of Chinese goods would be appropriate following China’s announcement.

Michael Bowman contributed to this report.
…

Households are feeling more stable, small businesses are making money and many expect to expand and hire in the coming year, signs of continued optimism in two key parts of the economy, the Federal Reserve reported Tuesday in a pair of annual surveys.

Among more than 8,000 small businesses and more than 12,000 households covered in separate surveys late last year by the Fed and its 12 regional banks, the message was similar: economic conditions have been getting better and the expectation is for the good times to continue.

“We see a decided uptick” in the economic and credit conditions faced by small businesses, said one Fed official involved in the small business survey. “We are seeing improved business confidence and improved business performance,” with profitability and access to finance increasing in 2017, more than 70 percent of firms expecting revenue growth next year, and 48 percent expecting to add employees.

Among households, 74 percent of U.S. adults said they were financially comfortable or at least okay in 2017, four percentage points higher than in 2016 and 10 percentage points higher than the first survey year of 2013. Improvement was strongest in lower income households. The percentage of households that reported they were struggling financially fell to 7 percent from 9 percent last year.

The results from the surveys show that improvements in household and business conditions that took root under President Obama continued through the first year of the Trump administration.

Both findings are potentially significant for the economy’s future performance. Businesses with fewer than 500 employees generate perhaps 60 percent of new jobs, the New York Fed estimated in material released with the small business survey, and many report plans to expand in 2018.

Consumer spending, meanwhile, accounts for the bulk of U.S. gross domestic product, and strong household income growth in recent years has buoyed the economy overall.

“The mass of the consumer sector is in pretty good shape and that should continue,” Nathan Sheets, chief economist at PGIM Fixed Income said in an interview.

However, based on answers to a series of questions, about 2-in-5 adults faced what the Fed judged to be a “high likelihood of material hardship,” such as an inability to afford sufficient food, medical treatment, housing or utilities. About 4 in 10 said they could not meet an unexpected expense of $400 without carrying a credit card balance or borrowing from a friend.

Among the smallest firms, those with less than $100,000 in revenue, about 74 percent had trouble paying their bills, and a majority of those were either averse to borrowing or worried they would be turned down and so did not apply for credit.

But in overall the results for positive, said Fed officials.

Among firms that did apply for loans, for example, 46 percent received all they requested, compared to 40 percent last year. Nearly 60 percent wanted to use the money to expand. 
…

The Trump administration is preparing to publish on Thursday long-delayed proposed rule changes for the export of U.S. firearms, a State Department official said on Tuesday.

The rule changes would move the oversight of commercial firearm exports from the U.S. Department of State to the Department of Commerce.

The action is part of a broader Trump administration overhaul of weapons export policy that was announced in April.

Domestic gun sales drop

Timing for the formal publication of the rule change and the opening of the public comment period was unveiled by Mike Miller the acting secretary for the Directorate of Defense Trade Controls, the State Department’s body that currently oversees the bulk of commercial firearms transfers and other foreign military sales.

He was speaking at the Forum on the Arms Trade’s annual conference at the Stimson Center, a Washington think tank.

Reuters first reported on the proposed rule changes in September as the Trump administration was preparing to make it easier for American gun makers to sell small arms, including assault rifles and ammunition, to foreign buyers.

Domestic gun sales have fallen significantly after soaring under President Barack Obama, when gun enthusiasts stockpiled weapons and ammunition out of fear that the government would tighten gun laws.

A move by the Trump administration to make it simpler to sell small arms abroad may generate business for gun makers American Outdoor Brands and Sturm, Ruger & Company in an industry experiencing a deep sales slump since the election of President Donald Trump.

Remington recovers from bankruptcy

Remington, America’s oldest gun maker, filed for bankruptcy protection in March, weeks after a shooting at a high school in Parkland, Florida, killed 17 people and triggered intensified campaigns for gun control by activists. Remington emerged from bankruptcy last week.

The expected relaxing of rules could increase foreign gun sales by as much as 20 percent, the National Sports Shooting Foundation has estimated. As well as the industry’s big players, it may also help small gunsmiths and specialists who are currently required to pay an annual federal fee to export relatively minor amounts of products.
…

U.S. President Donald Trump said Tuesday “there is no deal” yet to lift the seven-year ban on the sale of American-made components to the giant Chinese telecommunications company ZTE, but that there might be a settlement as part of ongoing trade talks between the world’s two biggest economies.

Trump told reporters at the White House that he could envision a $1.3 billion fine against ZTE for violating the U.S. ban on trading with Iran and North Korea, the replacement of ZTE’s management and board of directors and imposition of “very, very strict security” to prevent the theft of U.S. intellectual and national security secrets.

“We caught them doing bad things,” he said.

Trump said Chinese President Xi Jinping asked him to look into the fate of ZTE after the firm said it had to shut its production because the U.S. banned sale of American-made components ZTE uses to manufacture an array of technology products until 2025. Trump said he also heard protests from the U.S. companies selling goods to ZTE.

Trump declared he was “not satisfied” with the state of U.S.-China trade talks after last week’s negotiations in Washington. China agreed to “substantially reduce” the $375 billion annual trade surplus it has over the U.S. by buying more American goods, but there was no mention of any specific import and export targets in the statement agreed to by the two countries.

U.S. Commerce Secretary Wilbur Ross is headed to China next week for further trade talks.

Trump commented on the ZTE case as U.S. news accounts quoted officials as saying a deal was near.

His suggestion of a $1.3 billion fine was slightly more than the $1.2 billion penalty the U.S. imposed last year on ZTE after uncovering its trade ban violations.

On Sunday, White House economic adviser Larry Kudlow said, “Do not expect ZTE to get off scot-free. Ain’t going to happen.”

Congressional opposition

But some U.S. lawmakers voiced opposition to settling the case.

U.S. Sen. Marco Rubio, who lost the 2016 Republican presidential nomination to Trump, contended that Washington had “surrendered” to Beijing. The Florida lawmaker said he would try to block it.

“Making changes to their board and a fine won’t stop them from spying and stealing from us. But this is too important to be over. We will begin working on veto-proof congressional action,” Rubio said on Twitter.

Senate Democratic Leader Charles Schumer said, “The proposed solution is like a wet noodle,” contending ZTE’s technology devices threaten to steal U.S. national security secrets.

Rescuing ZTE

Trump last week called for rescuing ZTE “to get back into business, fast.” He said “too many jobs in China” were being lost after the U.S. banned the sales of American-made components to ZTE. The U.S. leader said, “Commerce Department has been instructed to get it done!”

While some U.S. officials said the penalties against ZTE — the fine and the ban on sale of U.S. components until 2025 — were a law enforcement action, Trump linked the issue to ongoing trade and tariff disputes with China. The two countries over the weekend called off the threat of imposing higher tariffs on billions of dollars of each other’s exports while their negotiations continue.

Meanwhile, China announced Tuesday that on July 1 it will cut tariffs on most imported cars from 25 percent to 15 percent, still well above the 2.5 percent levy the U.S. imposes on cars imported from overseas.

The announcement by China’s finance ministry follows a pledge by Xi last month to lower the import duties and to ease foreign ownership restrictions for the Chinese auto industry.

Trump repeatedly has mentioned the 25 percent automobile tariff as a key trade barrier between the two countries.

On Monday, Trump said new trade between China and the U.S. will especially benefit U.S. farmers.

“Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce,” he said on Twitter.
…

Glancing constantly at his rear view mirror, truck driver “El Flaco” journeys the highways of Mexico haunted by the memory of when he was kidnapped with his security detail by bandits disguised as police officers two years ago.

Back then, El Flaco, who spoke on condition of anonymity for fear of reprisals, was beaten, blindfolded and taken to a house near Mexico City where his captors threatened to kill him. Three days later he managed to escape and flee.

Today he travels with a machete and a satellite tracking device in his cab that can pinpoint him in emergencies.

Truckers covering Mexico’s vast territory often move in convoys to reduce the risk of robberies, which in 2017 almost doubled to nearly 3,000. Some drive with armed escorts traveling alongside them. Others remove the logos from their trucks.

Companies like brewer Grupo Modelo, a unit of AB InBev, and the Mexican subsidiary of South Korea’s LG Electronics have stepped up efforts to protect their drivers, deploying sophisticated geo-location technology and increasing communication with authorities.

The problem is part of a wider Latin American scourge of highway robbery that acts as a further drag on a region long held back by sub-par infrastructure.

“Roads are getting more and more dangerous, you try not to stop,” the 50-year-old El Flaco said, as he drove in the central state of Puebla, the epicenter of highway freight theft.

“Since I was kidnapped, I’ve gotten into the habit of looking in the mirror, checking car number plates, looking at who’s gone past me,” he added. “I look at everything.”

On the most dangerous roads, like those connecting Mexico City with major ports on the Gulf of Mexico and the Pacific, it is almost certain that one in every two truckers will be held up, a study by U.S.-based security firm Sensitech showed.

While no official data on losses exist, insurers paid out almost $100 million in 2016 to crime-hit cargo operators, up 4.5 percent on 2015, Mexican insurance association AMIS says.

The true sum is likely far higher: only one in three loads is insured due to the cost, according to industry estimates.

More than 80 percent of goods are transported by road and rail in Mexico, and the thefts are hurting competitiveness at a time the country is seeking to diversify trade and tap new sources of business.

Fuels, food and beverages, building materials, chemicals, electronic goods, auto parts and clothing are all top targets, Sensitech said.

Competition squeeze

Upon taking office in December 2012, President Enrique Pena Nieto promised to get a grip on gang violence and lawlessness.

But after some initial progress, the situation deteriorated and murders hit their highest level on record last year.

Highway robberies of trucks fell through 2014. But they almost doubled in 2015 to 985, hit 1,587 in 2016 and reached 2,944 last year.

The government has responded by stepping up police patrols in affected areas and lengthening prison sentences for freight robbery to 15 years. But robberies are still rising and most are not even reported due to the arduous bureaucratic process involved, Sensitech says.

“It’s hurting productivity and competitiveness,” said Leonardo Gomez, who heads a transportation national industry body.

Some drivers are armoring cabs in trucks made by companies like U.S. firm Kenworth, an expensive move that still only covers a tiny fraction of the almost 11 million trucks crisscrossing Latin America’s second-largest economy.

Last year, 53 trucks were armored against high-caliber weapons, up 40 percent from 2016, according to the Mexican Association of Automotive Armorers.

Attacks are not confined to roads. Some 1,752 robberies were recorded on railways last year, official data show. Criminals have also become more sophisticated.

They are turning to high-caliber weapons and employ devices to block Global Positioning Systems (GPS) to prevent trucks communicating their whereabouts, experts say.

Previously, companies that suffered robberies were generally able to recover their vehicles. Not any more.

“It’s not just the goods they want, it’s the trucks too,” said Carlos Jimenez of Mexican insurance association AMIS.
…

U.S. President Donald Trump says American farmers will be big beneficiaries of more trade with China.

“Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce,” Trump said Monday on Twitter.

In another comment, he said China “has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products – would be one of the best things to happen to our farmers in many years!”

The U.S. leader said one result of talks with China last week in Washington is barriers to U.S.-Chinese trade and tariffs on each country’s exports will “come down for (the) first time.”

President Trump’s tweets come a day after U.S. Treasury Secretary Steven Mnuchin announced the two nations have agreed to back away from imposing tough new tariffs on each other’s exports, after reaching a deal Saturday for Beijing to buy more American goods to “substantially reduce” the huge trade deficit with the United States.

Mnuchin told Fox News the world’s two biggest economic powers “made very meaningful progress and we agreed on a framework” to resolve trade issues. “So right now we have agreed to put the tariffs on hold while we try to execute the framework,” he said.

China’s state-run news agency Xinhua quoted Vice Premier Liu He, who led Chinese negotiators in trade talks in Washington this past week, as saying, “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other.”

China’s state-run news agency Xinhua quoted Vice Premier Liu He, who led Chinese negotiators in trade talks in Washington, as saying, “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other.”

Explainer: What is a Trade War?

Negotiations to continue

Liu said the agreement was a “necessity;” but, he added, “At the same time, it must be realized that unfreezing the ice cannot be done in a day; solving the structural problems of the economic and trade relations between the two countries will take time.”

Trump had threatened to impose new tariffs on $150 billion worth of Chinese imports and Beijing had responded that it would do the same on American goods.

Mnuchin and White House economic adviser Larry Kudlow said U.S. Commerce Secretary Wilbur Ross would soon go to Beijing to negotiate on how China might buy more American goods to reduce the huge U.S. trade deficit with Beijing, which last year totaled $375 billion. The United States has signaled it wants to trim the deficit by $200 billion annually, but no figure was mentioned in the agreement reached over the weekend.

Philip Levy, senior fellow on the global economy at the Chicago Council on Global Affairs, tells VOA that while the U.S. and China have for now avoided a tariff war, the outcome of the trade talks remains unclear.

“I think the Trump administration will crow about the fact that they arranged for some additional sales. That really wasn’t the issue. It may have been in their minds, but in terms of what is in the national interest, it wasn’t,” he said.

Levy says the result is a managed trade solution that still does not answer the fundamental question of how a state-dominated economy the size of giant China fits into the global system. 

But Kudlow said there has been a lot of progress.

“You can see where we’re going next. As tariffs come down, the barriers come down, there will be more American exports,” he told ABC television, saying any agreement reached will be “good for American exports and good for Chinese growth.”

ZTE

One contentious point of conflict between the U.S. and China is the fate of ZTE, the giant technology Chinese company that has bought American-made components to build its consumer electronic devices.

The U.S. fined ZTE $1.2 billion last year for violating American bans on trade with Iran and North Korea. ZTE, however, said recently it was shutting down its manufacturing operations because it could no longer buy the American parts after the U.S. imposed a seven-year ban on the sale of the components.

Trump, at the behest of Chinese President Xi Jinping, a week ago “instructed” Commerce Secretary Ross to intervene to save the company and prevent the loss of Chinese jobs.

Even so, Kudlow said, “Do not expect ZTE to get off scot free. Ain’t going to happen.”

Ira Mellman and Kenneth Schwartz contributed to this article.
…

China’s state media are playing up what it says is a trade war truce and de-escalation in tensions after negotiators from Washington and Beijing agreed to hold off on tariffs and “substantially reduce” the U.S. trade deficit. However, economists and business leaders argue that there is more to managing the relationship than balancing imports and exports.

State media in China are focusing heavily on the argument that Beijing did not give any ground and adopting their own take on the deficit question — focusing instead the country’s pledge to boost imports from the United States.

An editorial in the China Daily entitled “Sino-US agreement benefits both countries and the world” said that: “For China, ‘significantly increasing’ imports of U.S. goods and services, such as agricultural and energy products, will help meet its development needs and the desires of Chinese consumers.”

The editorial added that, “despite all the pressure, China didn’t “fold” as U.S. President Donald Trump observed. Instead, it stood firm and expressed its willingness to talk.”

An editorial in the party-backed Global Times said that while many may have noted what the joint statement said about reducing the U.S. deficit, that does not mean that the U.S. has won the trade talks. Instead, the piece said it was more a matter of learning to right an imbalance in the two countries’ trade systems.

The editorial called the now averted trade war a “historic period of difficult adjustment,” adding that “as one of the largest trade surplus countries in the world, China has learned from this dispute with the US.”

On news commentary boards, online response to agreement was mixed. Some argued the agreement was a sign that China had won. One commentator said: “America is just a paper tiger, there’s no need to be afraid.” Another: “Washington is weak in the knees.”

Many were pleased to see the two countries cooperating, agreeing that the decision was a “win-win.”

Others were not as certain. “Be careful, Trump will go back on his word,” wrote one person.

Despite state media’s rosy outlook about the agreement and confidence China had won online, huge differences between the two economies remain.

Lu Suiqi, an associate professor in economics at Peking University noted the agreement is just an incremental one and follow through will be key.

He said the focus on talks instead of brinkmanship was a positive development but not a guarantee of smooth sailing ahead.

“If any party fails to make good on its implementation, there may be renewed differences. And if these differences are hard to resolve, there’s still the possibility of putting the trade war back on,” Liu said.

Explainer: What is a Trade War?

Philip Levy, senior fellow on the global economy at the Chicago Council on Global Affairs told VOA the deal is not the worst outcome we could have had, it’s sort of the mediocre outcome many feared.

“This looks like they’re opting for some sort of managed trade solution that I don’t thing is good for either country, but it is better than a tariff war,” Levy said.

Much of what the statement said about longstanding trade differences was vague at best, some analysts note.

The joint statement said both sides agreed to encourage two-way investment and committed to creating a business environment for fair competition.

Since China joined the World Trade Organization in 2001, it has been promising and pledging to open up and many are growing tired of the talk. Over the past few years, a shift backwards toward a more central state-led economy has become more prominent.

And even as Chinese President Xi Jinping pledges to open up China’s economy further, he is asserting the party and state’s control and dominance over everything — including business.

Foreign companies’ frustration with rules in China that force the handover of sensitive technology and concerns about intellectual property persist. There is also concern about government subsidies in cutting edge industries and support for state-owned enterprises.

“There are fundamental questions about how a state dominated economy of that size fits into the global trading system. And I don’t think we’ve answered those questions,” said Levy.

Speaking at a gathering of former officials and business leaders in Beijing last week, Jeremie Waterman, the president of the China Center at the U.S. Chamber of Commerce, said that for businesses, market access is a bigger concern than trade imbalances.

“The focus of U.S Chamber of Commerce and our members really is on resolving the systemic issues, not on near term efforts to address the trade deficit,” Waterman said.

He added that focusing on opening markets and not closing them is best because it would address longstanding concerns about access in China. It could also help with the deficit.

Joyce Huang and Ira Mellman contributed to this report.
…

Washington is digesting China’s stated intention to purchase more American goods and reduce the trade imbalance between the two countries. VOA’s Michael Bowman reports, last week’s talks between U.S. and Chinese negotiators did not yield specific commitments from Beijing in dollar figures, sparking criticism from some lawmakers in Washington.
…

South Korea’s fourth-largest conglomerate, LG Group, said its Chairman Koo Bon-moo did Sunday.

Koo, 73, had been struggling with an illness for a year, LG Group said in a statement.

“Becoming the third chairman of LG at the age of 50 in 1995, Koo established key three businesses — electronics, chemicals and telecommunications — led a global company LG, and contributed to driving (South Korea’s) industrial competitiveness and national economic development,” LG said.

A group official said Koo had been unwell for a year and had undergone surgery. The official declined to be named because of the sensitivity of the matter.

Before its chairman’s death, LG Group had established a holding company in order to streamline ownership structure and begin the process of succession.

Heir apparent Koo Kwang-mo is from the fourth generation of LG Group’s controlling family. He owns 6 percent of LG Corp and works as a senior official at LG Electronics Inc.

The senior Koo’s funeral will be private at the request of the family, the company said.
…

The United States and China agreed to take measures to reduce the U.S. trade deficit in goods by having China purchase more American goods, particularly agriculture and energy products, according to a joint statement the two nations released Saturday.

“There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China,” the joint statement said.

“To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services. This will help support growth and employment in the United States.”

The statement concluded joint talks Thursday and Friday between the two countries, which included several U.S. Cabinet secretaries and China’s State Council Vice Premier Liu He.

President Donald Trump made reducing the U.S. trade deficit with China a key campaign promise.

The statement said that China would “advance relevant amendments to its laws and regulations” to allow for more American imports, including changes to patent laws.
…

India and the European Union have given the World Trade Organization lists of the U.S. products that could incur high tariffs in retaliation for U.S. President Donald Trump’s global tariffs on steel and aluminum, WTO filings showed Friday.

The EU said Trump’s steel tariffs could cost $1.5 billion and aluminum tariffs a further $100 million, and listed rice, cranberries, bourbon, corn, peanut butter, and steel products among the U.S. goods that it might target for retaliation.

India said it was facing additional U.S. tariffs of $31 million on aluminum and $134 million on steel, and listed U.S. exports of soya oil, palmolein and cashew nuts among its potential targets for retaliatory tariffs.

One trade official described the lists of retaliatory tariffs as “loading a gun,” making it plain to U.S. exporters that pain might be on the way.

India said its tariffs would come into effect by June 21, unless and until the United States removed its tariffs.

The EU said some retaliation could be applied from June 20.

Trump’s tariffs, 25 percent on steel and 10 percent on aluminum, came into force in March to strong opposition as many see the measures as unjustified and populist.

There were also objections that the tariffs would have little impact on China, widely seen to be the cause of oversupply in the market.

Trump justified the tariffs by claiming they were for U.S. national security, in a bid to protect them from any legal challenge at the WTO, causing further controversy.

Rather than challenging the U.S. tariffs directly, the EU and India, like China, South Korea and Russia, told the United States that they regarded Trump’s tariffs as “safeguards” under the WTO rules, which means U.S. trading partners are entitled to compensation for loss of trade.

The United States disagrees.
…

China has dropped an anti-dumping investigation and given long awaited approval for the sale of Toshiba’s memory chip business, in gestures that could suggest a thaw between Beijing and the U.S. as trade talks resumed in Washington.

The Commerce Ministry said Friday ended the probe into imported U.S. sorghum because it’s not in the public interest. A day earlier, Beijing cleared the way for a group led by U.S. private equity firm Bain Capital to buy Toshiba Corp.’s computer memory chip business.

The moves signaled Beijing’s willingness to make a deal with Washington amid talks between senior U.S. and Chinese officials aimed at averting a trade war between the world’s two biggest economies, analysts say.

“I think China is willing to make concessions,” said Wang Tao, chief China economist at UBS. “The Chinese stance has been very clear, that China wants to mute any trade dispute. But of course it doesn’t mean China would heed to all the demands the U.S. would place.”

A White House official said China had offered to work to cut the trade deficit with the U.S. by $200 billion, while stressing that the details remained unclear. But China’s Foreign Ministry denied it.

“It’s untrue,” said spokesman Lu Kang. “The relevant discussion is still underway, and it is constructive.”

The Commerce Ministry said it was ending the anti-dumping probe and a parallel anti-subsidy investigation because they would have raised costs for consumers.

The U.S. is China’s biggest supplier of sorghum, accounting for more than 90 percent of total imports. China’s investigation, launched in February, had come as a warning shot to American farmers, many of whom support the Trump administration yet depend heavily on trade. They feared they would lose their largest export market for the crop, which is used primarily for animal feed and liquor.

The Commerce Ministry said that, “Anti-dumping and countervailing measures against imported sorghum originating in the United States would affect the cost of living of a majority of consumers and would not be in the public interest,” according to a notice posted on its website.

It said it had received many reports that the investigation would result in higher costs for the livestock industry, adding that many domestic pig farmers were facing hardship because of declining pork prices.

China’s U.S. sorghum imports surged from 317,000 metric tons in 2013 to 4.76 million tons last year while prices fell by about a third in the same period.

The ministry said any deposits for the preliminary anti-dumping tariffs of 178.6 percent, which took effect on April 18, would be returned in full.

The announcement came after President Donald Trump met at the White House with Chinese Vice Premier Liu He, the leader of China’s delegation for talks with a U.S. team headed by Treasury Secretary Steven Mnuchin.

Trump had told reporters earlier that he had doubts about the potential for an agreement. He also raised fresh uncertainty about resolving a case involving Chinese tech company ZTE, which was hit with a crippling seven-year ban on buying from U.S. suppliers, forcing it to halt major operations. Trump said the company “did very bad things” to the U.S. economy and would be a “small component of the overall deal.”

Song Lifang, an economics professor and trade expert at Renmin University, said haggling is currently underway.

“It’s time for both to present their demands, but it’s also a time to exhibit their bargaining chips,” said Song, adding that approval for the Toshiba deal, worth $18 billion, was “an apparent sign of thaw” amid a U.S. investigation into Chinese trade practices requiring U.S. companies to turn over their technology in exchange for access to China’s market.

The Trump administration has proposed tariffs on up to $150 billion in Chinese products to punish Beijing while China has responded by targeting $50 billion in U.S. imports. Neither country has yet imposed tariffs.
…

The European Commission is proposing that EU governments make direct money transfers to Iran’s central bank to avoid U.S. penalties, an EU official said, in what would be the most forthright challenge to Washington’s newly reimposed sanctions.

The step, which would seek to bypass the U.S. financial system, would allow European companies to repay Iran for oil exports and repatriate Iranian funds in Europe, a senior EU official said, although the details were still to be worked out.

The European Union, once Iran’s biggest oil importer, is determined to save the nuclear accord, that U.S. President Donald Trump abandoned on May 8, by keeping money flowing to Tehran as long as the Islamic Republic complies with the 2015 deal to prevent it from developing an atomic weapon.

“Commission President Jean-Claude Juncker has proposed this to member states. We now need to work out how we can facilitate oil payments and repatriate Iranian funds in the European Union to Iran’s central bank,” said the EU official, who is directly involved in the discussions.

The U.S. Treasury announced on Tuesday more sanctions on officials of the Iranian central bank, including Governor Valiollah Seif,. But the EU official said the bloc believes that does not sanction the central bank itself.

European Energy Commissioner Miguel Arias Canete will discuss the idea with Iranian officials in Tehran during his trip this weekend, the EU official said. Then it will be up to EU governments to take a final decision.

EU leaders in Sofia this week committed to uphold Europe’s side of the 2015 nuclear deal, which offers sanctions relief in return for Tehran shutting down its capacity, under strict surveillance by the U.N. nuclear watchdog, to stockpile enriched uranium for a possible atomic bomb.

Sanctions-blocking law

Other measures included renewing a sanctions-blocking measure to protect European businesses in Iran.

The Commission said in a statement it had “launched the formal process to activate the Blocking Statute by updating the list of U.S. sanctions on Iran falling within its scope,” referring to an EU regulation from 1996.

The EU’s blocking statute bans any EU company from complying with U.S. sanctions and does not recognize any court rulings that enforce American penalties. It was developed when the United States tried to penalize foreign companies trading with Cuba in the 1990s, but has never been formally implemented.

EU officials say they are revamping the blocking statute to protect EU companies against U.S. Iran-related sanctions, after the expiry of 90- and 180-day wind-down periods that allow companies to quit the country and avoid fines.

A second EU official said the EU sanctions-blocking regulation would come into force on August 5, a day before U.S.

sanctions take effect, unless the European Parliament and EU governments formally rejected it.

“This has a strong signaling value, it can be very useful to companies but it is ultimately a business decision for each company to make [on whether to continue to invest in Iran],” the official said.

Once Iran’s top trading partner, the EU has sought to pour billions of euros into the Islamic Republic since the bloc, along with the United Nations and United States, lifted blanket economic sanctions in 2016 that had hurt the Iranian economy.

Iran’s exports of mainly fuel and other energy products to the EU in 2016 jumped 344 percent to 5.5 billion euros ($6.58 billion) compared with the previous year.

EU investment in Iran, mainly from Germany, France and Italy, has jumped to more than 20 billion euros since 2016, in projects ranging from aerospace to energy.

Other measures proposed by the Commission, the EU executive, include urging EU governments to start the legal process of allowing the European Investment Bank to lend to EU projects in Iran.

Under that plan, the bank could guarantee such projects through the EU’s common budget, picking up part of the bill should they fail or collapse. The measure aims to encourage companies to invest.
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Switzerland’s government has requested a report into the risks and opportunities of launching its own cryptocurrency, a so-called “e-franc” that would use technology similar to privately launched coins like bitcoin but have backing of the state.

The lower house of the Swiss parliament must now decide whether to back the Federal Council’s request for a study into the subject, which has been discussed in Sweden.

Cryptocurrencies have drawn scrutiny from lawmakers and international governing bodies coming to grips with the technology’s rapid ascent. The coins use encryption and a blockchain transaction database designed to enable anonymous transactions that do not require centralized processing.

Other countries interested

Several countries have begun evaluating the viability of introducing their own state-backed digital currency, with Sweden’s Riksbank saying an e-crown might help counteract issues arising from declining cash use and help make payment systems more robust.

But existing digital currencies such as bitcoin have been hampered by extreme volatility, high-profile hacks and doubts about long-term viability. Venezuela has issued a state-backed coin, but major developed economies have so far steered clear.

The Bank of International Settlement in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies.

Swiss bank cautious

In Switzerland, if the proposal is approved, a study will be produced by the Swiss finance ministry. No timing has been given on when it would be published should the go-ahead be given.

Swiss lawmaker Cedric Wermuth, vice president of the Social Democratic Party, called for the study. In its response Thursday, the Swiss government, or Federal Council, backed the proposal to look into it, although it said there were hurdles.

“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc,” it said. “It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”

The Swiss National Bank has so far been cautious on the issue. Private-sector digital currencies were better and less risky than any version that might be offered by a central bank, SNB governor Andrea Maechler said last month.
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