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U.S. President Donald Trump is threatening to impose tariffs on another $267 billion worth Chinese imports, which would cover virtually all the goods China imports to the United States.

The potential tariffs would come on top of punitive levies on $50 billion in Chinese goods already in place, as well as tariffs on another $200 billion worth of goods that Trump says “could take place very soon.”

He told reporters traveling with him to Fargo, North Dakota, on Friday that “behind that, there’s another $267 billion ready to go on short notice if I want.”

“That changes the equation,” he added.

Such a move would subject virtually all U.S. imports from China to new duties.

The president’s comments came one day after a public comment period ended on his proposal to add duties on $200 billion worth of Chinese imports. White House economic adviser Larry Kudlow said Friday that the Trump administration would evaluate the public comments before making any decisions on the new proposed tariffs.

The U.S. trade representative’s office received nearly 6,000 comments during seven days of public hearings on the proposal.

The Trump administration has argued that tariffs on Chinese goods will force China to trade on more favorable terms with the United States. It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has retaliated against the U.S. tariffs on $50 billion in Chinese imports with import taxes on an equal amount of U.S. goods. It has also threatened to retaliate against any new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
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Millions of people covered under the Affordable Care Act will see only modest premium increases next year, and some will get price cuts. That’s the conclusion from an exclusive analysis of the besieged but resilient program, which still sparks deep divisions heading into this year’s midterm elections.

The Associated Press and the consulting firm Avalere Health crunched available state data and found that “Obamacare’s” health insurance marketplaces seem to be stabilizing after two years of sharp premium hikes. And the exodus of insurers from the program has halted, even reversed somewhat, with more consumer choices for 2019.

The analysis found a 3.6 percent average increase in proposed or approved premiums across 47 states and Washington, D.C., for next year. This year the average increase nationally was about 30 percent. The average total premium for an individual covered under the health law is now close to $600 a month before subsidies.

For next year, premiums are expected either to drop or increase by less than 10 percent in 41 states with about 9 million customers. Eleven of those states are expected to see a drop in average premiums. In six other states, plus Washington, D.C., premiums are projected to rise between 10 percent and 18 percent.

Insurers also are starting to come back. Nineteen states will either see new insurers enter or current ones expand into more areas. There are no bare counties lacking a willing insurer.

Even so, Chris Sloan, an Avalere director, says, “This is still a market that’s unaffordable for many people who aren’t eligible for subsidies.”

Nearly nine in 10 ACA customers get government subsidies based on income, shielding most from premium increases. But people with higher incomes, who don’t qualify for financial aid, have dropped out in droves.

It’s too early to say if the ACA’s turnabout will be fleeting or a more permanent shift. Either way, next year’s numbers are at odds with the political rhetoric around the ACA, still heated even after President Donald Trump and congressional Republicans failed to repeal the law last year.

Trump regularly calls “Obamacare” a “disaster” and time again has declared it “dead.” The GOP tax-cut bill repealed the ACA requirement that Americans have health insurance or risk fines, effective next year. But other key elements remain, including subsidies and protection for people with pre-existing conditions. Democrats, meanwhile, accuse Trump of “sabotage,” driving up premiums and threatening coverage.

The moderating market trend “takes the issue away from Republican candidates” in the midterm elections, said Mark Hall, a health law and policy expert at Wake Forest University in North Carolina. “Part of the mess is now their fault, and the facts really don’t support the narrative that things are getting worse.”

Market stability also appears to undercut Democrats’ charge that Trump is undermining the program. But Democrats disagree, saying the ACA is in danger while Republicans control Washington, and that premiums would have been even lower but for the administration’s hostility.

“Voters won’t think that the Trump threat to the ACA has passed at all, unless Democrats get at least the House in 2018,” said Bill Carrick, a strategist for Sen. Dianne Feinstein, D-Calif., whose re-election ads emphasize her support for the health law.

As if seconding Democrats’ argument, the Trump administration has said it won’t defend the ACA’s protections for pre-existing conditions in a federal case in Texas that could go to the Supreme Court. A new Kaiser Family Foundation poll found that Americans regardless of partisan identification said those protections should remain the law of the land.

In solidly Republican Arkansas, Democratic state legislator and cancer survivor Clarke Tucker is using the ACA in his campaign to try to flip a U.S. House seat from red to blue. Tucker, 37, says part of what made him want to run is the House vote to repeal the ACA last year and images of Trump and GOP lawmakers celebrating at the White House.

Business analysts say the relatively good news for 2019 is partly the result of previous premium increases, which allowed insurers to return to profitability after losing hundreds of millions of dollars.

“They can price better, and they can manage this population better, which is why they can actually make some money,” said Deep Banerjee of Standard & Poor’s.

Repeal of the ACA’s requirement to carry insurance doesn’t seem to have had a major impact yet, but Banerjee said there’s “a cloud of uncertainty” around the Trump administration’s potential policy shifts. Yet some administration actions have also helped settle the markets, such as continuing a premium stabilization program.

April Box of Spokane Valley, Washington, lives in a state where premiums could rise substantially since insurers have proposed an 18 percent increase. In states expecting double-digit increases, the reasons reflect local market conditions. Proposed increases may ultimately get revised downward.

Box is self-employed as a personal advocate helping patients navigate the health care system. She has an ACA plan, but even with a subsidy her premiums are expensive and a high deductible means she’s essentially covered only for catastrophic illness.

“I’m choosing not to go to the doctor, and I’m saying to myself I’m not sick enough to go to the doctors,” Box said. “We need to figure out how to make it better and lower the price.”

Now in her 50s, Box was born with dislocated hips. She worries she could be uninsurable if insurers are allowed to go back to denying coverage for pre-existing conditions. She might need another hip surgery.

“It needs to be a level playing field for everybody,” said Box. “We need to have universal coverage – that is really the only answer.”

Tennessee is a prime example of the ACA’s flipped fortunes.

Last year, the state struggled to secure at least one insurer in every county. But approved rates for 2019 reflect an 11 percent average decrease. Two new insurers – Bright Health and Celtic_ have entered its marketplace, and two others – Cigna and Oscar – will expand into new counties.

Tennessee Republican Sen. Lamar Alexander called that a “welcome step,” but argued rates could have been even lower if congressional Democrats had supported a market stabilization bill. Democrats blame Republicans for the failure.

To calculate premium changes, Avalere and The Associated Press used proposed overall individual marketplace rate filings for 34 states and D.C., and final rates for 13 states that have already approved them. Data was not available for Massachusetts, Maryland and Alabama. The average rate change calculations include both on-exchange and off-exchange plans that comply with ACA requirements. The government isn’t expected to release final national figures until later this fall.

 
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Hiring picked up in August as U.S. employers added a strong 201,000 jobs, a sign of confidence that consumers and businesses will keep spending despite the Trump administration’s conflicts with U.S. trading partners.

The Labor Department said Friday the unemployment rate remained 3.9 percent, near an 18-year low. 

Americans’ paychecks grew at a faster pace in August. Average hourly wages rose last month and are now 2.9 percent higher than they were a year earlier, the fastest year-over-year gain in eight years. Still, after adjusting for inflation, pay has been flat for the past year.

The economy is expanding steadily, fueled by tax cuts, confident consumers, greater business investment in equipment and more government spending. Growth reached 4.2 percent at an annual rate in the April-June quarter, the fastest pace in four years.

Most analysts have forecast that the economy will expand at an annual pace of at least 3 percent in the current July-September quarter. For the full year, the economy is on track to grow 3 percent for the first time since 2005. 

Consumer confidence rose in August to its highest level in nearly 18 years. Most Americans feel that jobs are widely available and expect the economy to remain healthy in the coming months, according to the Conference Board’s consumer confidence survey.

The buoyant mood is lifting spending on everything from cars to restaurant meals to clothes. Consumers’ enthusiasm is even boosting such brick-and-mortar store chains as Target, Walmart and Best Buy, which have posted strong sales gains despite intensifying competition from online retailers.

In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers. A manufacturing index compiled by a trade group reached its highest point since 2004. Measures of new orders and production surged, and factories added jobs at a faster pace than in July.

Not all the economic news has been positive. Higher mortgage rates and years of rapid price increases are slowing the housing market. Sales of existing homes dropped in July for a fourth straight month.

And wages are still rising only modestly, even after more than nine years of economic expansion and an ultra-low unemployment rate.

Many economists also worry President Donald Trump will soon follow through on a threat to impose tariffs of up to 25 percent on $200 billion of imports from China. That would be in addition to $50 billion in duties already imposed. That move could shave as much as a quarter-point off growth over the next year, Mark Zandi, chief economist at Moody’s Analytics, has estimated. 

For now, there’s little sign that companies are worried enough about a trade war to slow hiring. Businesses are increasingly reluctant to even lay off workers, in part because it would be difficult to replace them at a time when qualified job applicants have become harder to find.

On Thursday, the government said the number of people seeking unemployment benefits — a proxy for layoffs — amounted to just 203,000 last week, the fewest total in 49 years.
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Trump administration officials and Canadian negotiators are resuming talks to try to keep Canada in a North American trade bloc with the United States and Mexico.

“We are looking forward to constructive conversations today,” Canadian Foreign Affairs Minister Chrystia Freeland told reporters as she entered a meeting with U.S. Trade Rep. Robert Lighthizer.

Last week, the United States and Mexico reached a preliminary agreement to replace the 24-year-old North American Free Trade Agreement. But those talks excluded Canada, the third NAFTA country.

Freeland flew to Washington last week for four days of negotiations to try to keep Canada within the regional trade bloc. The U.S. and Canada are sparring over issues including U.S. access to Canada’s protected dairy market and American plans to protect some drug companies from generic competition.

 
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An international money transfer company has launched an online service for East Africans to send and receive money more easily. Analysts say WorldRemit will lower the cost of transferring money and boost African trade and economies.

Africa has become a thriving market for money transfer companies as its telecommunication facilities improve and its economies grow.

WorldRemit, a British-based money transfer company, recently launched a new digital service in four East African countries. The company facilitates the transfer of at least $1.6 billion to Africa each year.

The co-founder and the head of WorldRemit, Ismail Ahmed, told VOA how money transfers in Africa have changed over the years.

“When we launched our services, 99 percent of remittances were cash both on the sending and receiving side. But today that is changing fast and in the next few years we think as much as 50 to 60 percent of international remittances would move from traditional physical cash, traditional remittances, to digital. And that’s why our services has grown very fast in the last few years,” he said.

Ahmed said that as transactions become digital, the cost of each transfer comes down, and tracking money becomes easier.

“It’s easier for businesses and individuals to move within countries but also across countries. It’s easier to fight financial crime because once the transaction becomes digital, there is an audit trail compared to cash where there is no audit trail,” he said.

Gerrishon Ikiara is an international economic affairs lecturer at the University of Nairobi. He said digital money transfers will boost trade within Africa — but notes that some countries still lack the necessary connections.

“Obviously, the main challenge is the level of infrastructure, because a country without the good infrastructure in terms of electricity and telecommunication infrastructure will make it a bit difficult,” said Ikiara.

The World Bank says $37.8 billion was sent to Africa through remittances in 2017. This year, the amount is expected to be $39 billion.
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First it was Argentina, quickly followed by Turkey. Now anxious investors and policy-makers are watching with alarm the plummeting currencies of several emerging-market economies, most of which have borrowed heavily in dollars.

The nosediving currencies are prompting fears of a repeat of the 1997 Asian financial crash or the “Tequila Effect” of Mexico’s 1994 financial crisis. Or is something even worse coming — a financial contagion to compare with 2008?

Argentina’s peso dropped 29 percent against the U.S. dollar in August, the worst performer among major emerging-market currencies. Turkey’s currency followed closely, with a 25 percent slide.South Africa’s rand saw an almost 10 percent drop. The Indonesian rupiah fell to its weakest level since the 1997 Asian financial crisis, while India’s currency slid into unprecedented territory against the dollar.

September has seen no major uplift in those currencies. The Turkish lira is down 40 percent to the U.S. dollar this year, sparking mounting alarm over the sustainability of the country’s sizable dollar-denominated debts held primarily by its banks and businesses rather than the government.

The foreign exchange markets are jittery with traders watching to see if more countries start joining the troubled list, which would indicate contagion is underway. African countries like Angola, Ghana, Ethiopia, and Mozambique could be vulnerable. And in a worst-case scenario even more developed economies like Chile, Poland and Hungary, which are also shouldering large foreign-currency debts above 50 percent of their GDPs, could be impacted, say some financial analysts.

Corporate debt in emerging and developing economies is significantly larger than it was before the 2008 global financial crisis.The bigger the debt, the harder the fall.

“The risk is increasing in those countries,” Bertrand Delgado, director of global markets for Societe Generale in New York, has warned.

There is general consensus why emerging markets are in turmoil. Three main developments are blamed:

1 – The impact on market sentiment from U.S. President Donald Trump’s tit-for-tat trade war with China and others

2 – Rising U.S. interest rate that has prompted global investors to exit emerging markets to chase yield in dollar investments

3 – The winding down of post-2008 quantitative easing by the U.S. Federal Reserve and the European Central Bank, which has reduced liquidity and the availability of cheap money for governments and businesses in emerging markets to borrow.

A global financial crash?

Marcus Ashworth of Bloomberg cautioned last week the emerging-markets sell-off looks contagious.

“The difficulties for emerging markets have entered a new phase.What were once clearly country-specific crises, well contained within their borders, are bleeding across the world,” he warned.

Ashworth, a columnist and a veteran of the banking industry, most recently as chief markets strategist at Haitong Securities in London, added, “One emerging country’s problems have become other emerging countries’ problems, and it’s hard to see how to break the cycle.”

Other analysts dispute that contagion is underway, saying each of the troubled states have their own idiosyncratic problems and country-specific challenges, although they acknowledge the turmoil could mount with the U.S. Federal Reserve expected to raise interest rates several times this year.

In a note to investors, DBS, a Singapore-based international financial services group, warned the currencies of Argentina and Turkey “have been struggling with rising U.S. rates since the start of the year, due to deficits in their fiscal and current account balances.

“Heightened trade tensions threatening to erupt into a full-blown trade war could prompt, DBS said, disorderly capital outflows leading to “financial instability, especially in countries that have high external debt levels.”

Britain’s The Economist magazine argues the weakness in emerging-market currencies “is not fundamentally contagious” and the fallout can be contained.Western lenders including banks will be impacted, it said, as emerging-market borrowers struggle to repay dollar and other foreign-currency debts now worth more in terms of their own currencies. “But it would not threaten their [Western lenders’] solvency,” it said.

Optimists say for all the wider currency woes and the economic weakness of Argentina and Turkey, many major emerging-market countries are doing well.

India’s GDP was growing at an 8 percent rate ending June. Mexico’s peso is steady and it appears to have concluded trade negotiations with the Trump White House, which markets are viewing favorably.

The optimists say the global scare is being fanned by screaming, doom-laden headlines, pointing out that in 2013, when the U.S. Federal Reserve started to cease Quantitative Easing, Brazil, India, Indonesia, Turkey and South Africa all suffered from currency depreciation, but they soon regained their footing.

The biggest emerging-market risk, though, is that rattled global investors could be so alarmed by currency turmoils that they ignore economic fundamentals and stampede away from emerging-market countries, compounding currency falls, triggering indirect contagion, and adding to debt burdens.
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A tiny Alaska Native village has experienced a boom in tourism in recent years as polar bears spend more time on land than on diminishing Arctic sea ice.

More than 2,000 people visited the northern Alaska village of Kaktovik on the Beaufort Sea last year to see polar bears in the wild, Alaska’s Energy Desk reported Monday. 

The far north community is located on north shore of Barter Island on the Beaufort Sea coast in an area where rapid global warming has sped up the movement of sea ice, the primary habitat of polar bears. As ice has receded to deep water beyond the continental shelf, more bears are remaining on land to look for food. 

The village had fewer than 50 visitors annually before 2011, said Jennifer Reed of the Arctic National Wildlife Refuge.

“Today we’re talking about hundreds and hundreds of visitors, many from around the world, each year,” Reed said. 

Polar bears have always been a common sight on sea ice near Kaktovik, but residents started noticing a change in the mid-1990s. More bears seemed to stay on land, and researchers began taking note of more female bears making dens in the snow on land instead of on the ice.

U.S. Fish and Wildlife Service biologists began hearing reports of increasing numbers of polar bears in the area in the early 2000s, Reed said. As more attention was given to the plight of polar bears about a decade ago, more tourists stated heading to Kaktovik.

Bears stranded

Most tourists visit in the fall, when bears are forced toward land because sea ice is the farthest away from the shore. Some bears become stranded near Kaktovik until the sea freezes again in October or November.

The fall is also when residents of Kaktovik kill three bowhead whales. Bruce Inglangasak, an Inupiaq subsistence hunter who offers wildlife viewing tours, said residents were unsure how tourists would react to whaling. 

“The community was scared about, you know, activists that were going to try to get us to shut down the whaling — subsistence whaling,” Inglangasak said. “But that’s not true.”

Inglangasak said he’s been offering polar bear tours since 2003 or 2004. Most of his clients are from China and Europe, as well as from the Lower 48 U.S. states, and arrive in Katovik on charter planes from Anchorage and Fairbanks. 

Many tourists stay several days in the village, which has two small hotels, Inglangasak said.
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If you already subscribe to digital services like Netflix to binge on TV shows and Spotify to groove to an endless mix of music, the auto industry might have a deal for you: Subscribe to your next car as well.

Make that cars, plural. Some of these packages — which charge a monthly fee for the bundled use of a car, insurance and maintenance — let you trade in your vehicle on a regular basis, sometimes almost as readily as you can skip to a new tune on Spotify.

These still-developing car subscription programs are gaining traction among motorists who don’t want to be locked into the hassles of car ownership or even multiyear leasing commitments. All they want is a vehicle available whenever they want or need it.

“It feels like Christmas morning every time they bring me a new car,” said Steve Barnes, a video producer who subscribes to a high-end vehicle subscription program offered through Clutch Technologies, a startup operating in the Atlanta area.

Although they’re still in their infancy, car subscriptions are hooking more motorists as both long-established automakers and startups roll out plans.

How it works

Ford, a 115-year-old automaker with a network of more than 3,000 dealers, expanded into car subscriptions about 16 months ago through Canvas, a subsidiary in San Francisco.

Canvas offers a variety of used, once-leased Ford and Lincoln models as subscriptions that cost anywhere from $379 per month (for a Ford Fiesta subcompact) to $1,125 per month (for a Lincoln Navigator luxury SUV).

Those plans, however, impose driving limits of 500 miles a month. Subscribers can pay extra for higher limits — $35 per month for an additional 350 miles, for instance, or $100 per month for unlimited travel. Unused miles in any given month can be rolled over to the next one. If Canvas customers exceed the monthly mileage limits under their plan, they are charged an additional 15 cents per mile for a Ford car and slightly more for a Lincoln vehicle.

So far, Canvas has limited subscriptions to the San Francisco and Los Angeles area. In its first 16 months in California, thousands of subscribers have signed up for its subscription service while collectively driving about 8.5 million miles, according to the company.

“People are generally changing the way they are working, they are changing the way they are living and they are generally changing the way they are consuming things,” Canvas CEO Ned Ryan said. “Subscriptions are going to be a very large and growing share of how people consume automobiles.”

About a third of Canvas customers decided to subscribe to cars after moving or some other major event that left them reluctant to make a bigger commitment to leasing or owning, Ryan said. Others just like the simplicity and convenience offered by a car subscription, he said.

Temporary arrangement

Liz Dreskin of San Rafael, California, signed up for Canvas earlier this year to help her college-age kids get around at home during their summer break. Both are under the company’s 21-year-old age limit, so Dreskin got a vehicle for herself while allowing her children to drive the BMW she already owned.

After starting off with a sports utility vehicle from Canvas, she decided to pay $99 to switch to a 2015 Mustang. Although she plans to suspend her $500 monthly subscription at the end of September, she intends to start it up again when her kids return for the holidays. She’s also recommending the service to a friend whose current car is breaking down.

“I could totally see myself doing this in the future so I don’t have to deal with car insurance and car payments,” said Dreskin, 52.

Luxury automakers such as BMW, Mercedes-Benz, Porsche and General Motors’ Cadillac brand also are offering subscription programs, but those are primarily catering to affluent drivers who want to try out a variety of expensive vehicles.

Barnes, the video producer, signed up with Clutch in 2016 for access to luxury vehicles. The divorced father will get a sports utility vehicle when he has custody of his daughters or a Tesla sports car or something else fun to drive when he’s headed out on the town with his current wife.

He pays about $1,400 per month for his Clutch subscription, substantially more than the roughly $900 per month he used to pay for a lease on a Tahoe and his insurance policy. But he says he can’t imagine ever owning or leasing a car again now that he’s driven dozens of different vehicles that he estimates would have cost him more than $1 million to own.

“I am definitely a ‘tech head’ who had always fantasized about being able to get whatever car you want,” Barnes said. 
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U.S. manufacturing activity accelerated to more than a 14-year high in August, boosted by a surge in new orders, but increasing bottlenecks in the supply chain because of a robust economy and import tariffs could restrain further growth.

The Institute for Supply Management (ISM) survey was at odds with another survey published on Tuesday that suggested a peak in manufacturing and pointed to a slowdown in the months ahead against the backdrop of a strong dollar. Recent surveys have also signaled a cooling in regional factory activity.

“The surge in the ISM manufacturing index is difficult to square with other evidence, which indicate that growth in the factory sector has started to slow,” said Michael Pearce, a senior U.S. economist at Capital Economics in New York.

“With export orders now waning as a result of the dollar’s rapid appreciation over the past few months, we still think that growth in the factory sector will slow in the coming quarters.”

The ISM said its index of national factory activity jumped to 61.3 last month, the best reading since May 2004, from 58.1 in July. A reading above 50 indicates growth in manufacturing, which accounts for about 12 percent of the U.S. economy.

The ISM described demand as remaining “robust,” but cautioned that “the nation’s employment resources and supply chains continue to struggle.”

According to the ISM, survey respondents were “again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will

impact company revenue and current manufacturing locations.”

President Donald Trump’s “America First” trade policy has led to an escalating trade war with China and tit-for-tat import tariffs with other trading partners, including the European Union, Canada and Mexico.

Trump has defended the duties on steel and aluminum imports and a range of Chinese goods as necessary to protect American industries from what he says is unfair foreign competition.

Economists have warned that the tariffs could disrupt supply chains, undercut business investment and slow the economy’s momentum. The economy grew at a 4.2 percent annualized rate in the second quarter, almost double the 2.2 percent in the January-March period.

The dollar rose against a basket of currencies, while prices of U.S. Treasuries fell. Stocks on Wall Street were trading lower.

​Impact of tariffs

The ISM’s new-orders sub-index increased to a reading of 65.1 last month from 60.2 in July. A measure of export orders, however, fell in August, most likely reflecting the dollar’s more than 5.0 percent rise this year against the currencies of the United States’ main trade partners.

The survey’s supplier deliveries index jumped to a reading of 64.5 last month, highlighting the rising bottlenecks in the supply chain, from 62.1 in July. It hit a 14-year high of 68.2 in June. Economists said the strong economy, marked by a labor market that is near or at full employment, as well as the import duties were behind the delays in deliveries.

“Bottlenecks in production will support inflation, but the constraints have yet to become overly binding,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

Factories reported hiring more workers last month, with production increasing sharply. That bodes well for August’s employment report, which is scheduled to be released Friday.

Manufacturing payrolls have increased solidly this year.

In the computer and electronic products industry, manufacturers said most suppliers were “waiting to re-evaluate potential price increases until September.”

Machinery manufacturers said while raw material costs appeared to be “leveling off,” and most suppliers “are willing and able to suppress cost increases,” the impact of tariffs remained a concern.

In a separate survey Tuesday, data firm Markit said its U.S. Manufacturing Purchasing Managers’ Index fell to a nine-month low of 54.7 in August from a reading of 55.3 in July.

Manufacturers reported a decline in new orders, with exports the main source of weakness. 

Markit said some of the slowdown in factory activity reflected widespread shortages of inputs, hauliers and labor, leading to a further buildup of backlogs of work.

It said tariffs were exacerbating supply shortages and also driving prices higher. Almost two-thirds of companies surveyed reporting higher input prices explicitly blamed tariffs for the increased costs, Markit said.

“When we look across the recent survey data, it appears that activity has cooled somewhat lately, but remains at a solid level,” said Daniel Silver, an economist at J.P. Morgan in New York.

A third report from the Commerce Department showed construction spending barely rose in July as increases in homebuilding and investment in public projects were overshadowed by a sharp drop in private nonresidential outlays.
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Turkey saw the inflation rate rise to nearly 18 percent in August, a 15-year high fueled by a collapse in the Turkish lira, which fell more than 20 percent over the past few weeks.

The rising inflation and a falling currency are stoking fears Turkey is on the verge of financial and economic crisis.

“It’s the beginning of the slippery slope. It’s going to get worse unless there is a miraculous improvement in the exchange rate,” political analyst Atilla Yesilada of Global Source Partners said. “We’ve reached the stage where there is nothing to anchor price expectations. People simply can’t gauge what prices or wages or costs will be next month.”

“It’s a very dismal set of numbers. The likelihood is headline inflation will reach 20 percent in (the) coming months,” economist Inan Demir of Nomura Securities said. “This is clearly a set of numbers that warrant a monetary response from inflation targeting the central bank.”

The Turkish Central Bank, in a statement on its website, vowed to act, promising to use all tools at its disposal and reshape its monetary policy stance at a Sept. 13 meeting where they will discuss interest rates.

The lira recouped much of its initial heavy losses following the release of the latest inflation figures.

“This (the central bank statement) is seen as a signal for a rate hike in that meeting,” Demir said. “Even though the wording of the statement is very uncertain, the expectation of tightening are curbing lira weakness after bad inflation numbers.”

International criticism

International investors sharply criticized the central bank for failing to aggressively raise interest rates to rein in inflation and defend the currency. Turkish President Recep Tayyip Erdogan’s influence is widely seen as responsible for the failure of the bank to act. Erdogan has repeatedly voiced opposition to raising interest rates.

“There will be a massive sell-off to the point of panic if they don’t raise rates,” Yesilada said. “This time, they have no option, even if they meant something else (in their statement), as everyone interpreted it as rates will be hiked. But there are two questions: by how much, and will it help at all?” he added.

Investors and analyst claim the central bank needs to raise rates by at least 4 percent, while some suggest a 10 percent raise is needed to avoid further drops in the currency, which analysts warned would open the lira to further pressure.

“In such a scenario, Turkish residents would want to hold more FX (foreign exchange) rather than Turkish lira … to protect their savings. That is a big risk to the currency,” Demir said.

Already, 40 percent of individual accounts in banks are in foreign currency.

However, an aggressive increase in rates may not be enough to rein in inflation or defend the lira, analysts warned.

“The concerns are on multiple fronts,” Demir said. 

“What Turkish policy needs to do is straightforward,” he added. “They need to hike rates, tighten fiscal policy (cut government spending) and ease tensions with the United States, removing the threat of further sanctions by releasing (American) pastor (Andrew) Brunson.

“There is a way out of this, but it’s not obvious that the policymakers will take that way,” Demir said.

US trade tariffs 

Last month’s imposition of trade tariffs by U.S. President Donald Trump over the ongoing detention of Brunson was the trigger for the latest rout in the Turkish currency. Brunson is on trial on terrorism charges, a case dismissed by Washington as politically motivated.

Ignoring U.S. pressure, Turkey’s top appeals court judge, Rustu Cirit, on Monday supported Erdogan’s refusal to release Brunson, saying the pastor’s release is a matter only for the courts.

“To use brute force to reverse this fact, which is a basic principle of contemporary democracies and law of nations, would mean weakening human rights, rather than strengthening them,” Cirit said.

Trump is warning of further sanctions against Turkey if Brunson is not released. American regulatory authorities are considering reportedly a multibillion-dollar fine against Turkish state-controlled Halkbank for violations of Iranian sanctions.

Analysts warn the financial implications of an escalation of U.S.-Turkish tensions will continue to undermine confidence in the lira. However, Erdogan continues to take a robust stance against Washington, insisting the Turkish economy remains strong.

“The list of concerns is long, definitely, but the chief concern I have right now is the policymakers. They need to accept first that there is a significant problem that needs to be addressed,” Demir said. “But we heard this morning from finance minister (Berat) Albayrak that short-term fluctuations in inflation are normal. ”

Turkey already seems set to face a severe recession. Similar depreciations of the currency in past decades was accompanied by a double-digit contraction of the economy. 

Analysts warn the stress on the economy will only grow.

“Each day, Ankara lingers or prevaricates the likelihood of a disaster event increases. Right now, the threat is very low, it’s manageable. But as winter approaches, the likelihood increases exponentially,” Yesilada said.
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Yemen’s government says it is giving civil servants and pensioners pay raises, after protests against the country’s woeful economy nearly paralyzed a major port city Sunday.

Officials have not said when the raises would take effect or how much they will be.

Demonstrations against the economy in the port of Aden continued Monday. Many shops were closed, and some people burned tires in the streets.

Some of the marchers demanded to be paid in dollars, accusing senior officials of taking their salaries in the U.S.-based currency while paying the rank-and-file in the increasingly weak Yemeni rial.

The rial has lost more than half its value against the dollar since Iranian-backed Houthi rebels seized the capital of Sanaa in 2014, sending the Western-recognized government into exile in Saudi Arabia.

It has since returned to set up shop in Aden.

Airstrikes

Meanwhile, the Houthis are demanding a war crimes investigation against the Saudi-led coalition after an airstrike last month that killed 40 children.

In an appeal Monday to the International Criminal Court, the Houthis asked the court to look into its “humanitarian conscience.”

A coalition missile struck a market in a Yemeni town near the Saudi border last month, killing 51 people. Among the dead were 40 children on a school bus coming back from a summer camp outing.

The coalition called the airstrike a “mistake.” It promised to hold those behind the attack legally responsible and to compensate the victims.

But the Houithis accuse the Saudis of being both the “judge and the jury” and “making light” of the civilian deaths.

U.N. human rights officials have said they believe both sides in Yemen may be responsible for war crimes.

The Saudi-led airstrikes have compounded the misery in Yemen, which is not only one of the world’s poorest nations, but is also on the edge of famine.

The U.N. has said about 80 percent of Yemeni civilians lack enough food and medical care.

The coalition airstrikes have obliterated entire neighborhoods, including hospitals and schools.
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It’s coal people like miner Steve Knotts, 62, who make West Virginia Trump Country.

So it was no surprise that President Donald Trump picked the state to announce his plan rolling back Obama-era pollution controls on coal-fired power plants.

Trump left one thing out of his remarks, though: northern West Virginia coal country will be ground zero for increased deaths and illnesses from the rollback on regulation of harmful emission from the nation’s coal power plants.

An analysis done by his own Environmental Protection Agency concludes that the plan would lead to a greater number of people here dying prematurely, and suffering health problems that they otherwise would not have, than elsewhere in the country, when compared to health impacts of the Obama plan.

Knotts, a coal miner for 35 years, isn’t fazed when he hears that warning, a couple of days after Trump’s West Virginia rally. He says the last thing people in coal country want is the government slapping down more controls on coal — and the air here in the remote West Virginia mountains seems fine to him.

People here have had it with other people telling us what we need. We know what we need. We need a job,” Knotts said at lunch hour at a Circle K in a tiny town between two coal mines, and 9 miles down the road from a coal power plant, the Grant Town plant.

The sky around Grant Town is bright blue. The mountains are a dazzling green. Paw Paw Creek gurgles past the town.

Clean-air controls since the 1980s largely turned off the columns of black soot that used to rise from coal smokestacks. The regulations slashed the national death rates from coal-fired power plants substantially.

These days pollutants rise from smoke stacks as gases, before solidifying into fine particles — still invisible — small enough to pass through lungs and into bloodstreams.

An EPA analysis says those pollutants would increase under Trump’s plan, when compared to what would happen under the Obama plan. And that, it says, would lead to thousands more heart attacks, asthma problems and other illnesses that would not have occurred.

Nationally, the EPA says, 350 to 1,500 more people would die each year under Trump’s plan. But it’s northern two-thirds of West Virginia and the neighboring part of Pennsylvania that would be hit hardest, by far, according to Trump’s EPA.

Trump’s rollback would kill an extra 1.4 to 2.4 people a year for every 100,000 people in those hardest-hit areas, compared to under the Obama plan, according to the EPA analysis. For West Virginia’s 1.8 million people, that would be equal to at least a couple dozen additional deaths a year.

Trump’s acting EPA administrator, Andrew Wheeler, a former coal lobbyist whose grandfather worked in the coal camps of West Virginia, headed to coal states this week and last to promote Trump’s rollback. The federal government’s retreat on regulating pollution from coal power plants was “good news,” Wheeler told crowds there.

In Washington, EPA spokesman Michael Abboud said Trump’s plan still would result in “dramatic reductions” in emissions, deaths and illness compared to the status quo, instead of to the Obama plan. Obama’s Clean Power Plan targeted climate-changing carbon dioxide, but since coal is the largest source of carbon dioxide from fossil fuels, the Obama plan would have curbed other harmful emissions from the coal-fired power plants as well.

About 160 miles to the south of Grant Town, near the state capital of Charleston, shop owner Doris Keller figures that if Trump thinks something’s for the best, that’s good enough for her.

“I just know this. I like Donald Trump and I think that he’s doing the right thing,” said Keller, who turned out to support Trump Aug. 21 when he promoted his rollback proposal. She lives five miles from the 2,900-megawatt John Amos coal-fired power plant.

“I think he has the best interests of the regular common people at the forefront,” Keller says.

Trump’s Affordable Clean Energy program would dismantle President Barack Obama’s 2015 Clean Power Plan, which has been caught up in court battles without yet being implemented.

The Obama plan targeted climate-changing emissions from power plants, especially coal. It would have increased federal regulation of emissions from the nation’s electrical grid and broadly promoted natural gas, solar power and other cleaner energy.

Trump’s plan would cede much of the federal oversight of existing coal-fired power plants and drop official promotion of cleaner energy. Individual states largely would decide how much to regulate coal power plants in their borders. The plan is open for public review, ahead of any final White House decision.

“I’m getting rid of some of these ridiculous rules and regulations, which are killing our companies … and our jobs,” Trump said at the rally.

There was no mention of the “small increases” in harmful emissions that would result, compared to the Obama plan, or the health risks.

EPA charts put numbers on just how many more people would die each year because of those increased coal emissions.

Abboud and spokeswoman Ashley Bourke of the National Mining Association, which supports Trump’s proposed regulatory rollback on coal emissions, said other federal programs already regulate harmful emissions from coal power plants. Bourke also argued that the health studies the EPA used in its death projections date as far back as the 1970s, when coal plants burned dirtier.

In response, Conrad Schneider of the environmental nonprofit Clean Air Task Force said the EPA’s mortality estimates had taken into account existing regulation of plant emissions.Additionally, health studies used by the EPA looked at specific levels of exposure to pollutants and their impact on human health, so remain constant over time, said Schneider, whose group analyzes the EPA projections.

With competition from natural gas and other cleaner energy helping to kill off more than a third of coal jobs over the last decade, political leaders in coal states are in no position to be the ones charged with enforcing public-health protections on surviving coal-fired power plants, said Vivian Stockman of the Ohio Valley Environmental Coalition.

“Our state is beholden to coal. Our politicians are beholden to coal,” Stockman said outside Trump’s West Virginia rally, where she was protesting. “Meanwhile, our people are being poisoned.”

And when it comes to coal power plants and harm, Schneider said, “when you’re at Grant Town, you’re at Ground Zero.”

Retired coal miner Jim Haley, living 4 miles from the town’s coal-fired power plant, has trouble telling from the smokestack when the plant is even operating.

“They’ve got steam coming out of the chimneys. That’s all they have coming out of it,” Haley said.

Parked near the Grant Town post office, where another resident was rolling down the quiet main street on a tractor, James Perkins listened to word of the EPA’s health warnings. He cast a look into the rear-view mirror into the backseat of his pickup truck, at his 3-year-old grandson, sitting in the back.

“They need to make that safe,” said Perkins, a health-care worker who had opted not to follow his father into the coal mines. “People got little kids.”

 
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