Uber Technologies’ growth has slowed as a series of scandals has allowed the ride-hailing company’s chief U.S. competitor, Lyft, to grab more market share, digital research firm eMarketer said in a report on Monday.

The research firm has lowered its forecasts for Uber’s growth for the next several years. It projects 48 million U.S. adults will use Uber at least once this year, up 18 percent from last year but well off eMarketer’s earlier forecast of more than 51 million.

EMarketer based its analysis on data from Uber and Lyft, such as trip numbers and app downloads, as well as customer surveys from researchers at JP Morgan and other firms.

Series of scandals

The report quantifies the effect of a series of scandals at Uber last year, which included an internal probe of sexual harassment and workplace behavior; a U.S. Department of Justice investigation into whether Uber managers violated U.S. laws against bribery of foreign officials; a lawsuit by Alphabet alleging trade secrets theft that Uber settled for $245 million; and the departure of Uber’s chief executive officer, who was pushed out by investors concerned about the growing list of problems.

Uber did not respond to a request for comment.

Meanwhile, Lyft has grown quickly, adding more than 160 cities last year, benefiting from Uber’s tarnished image and as a later entry into markets where people are already familiar with ride-hailing services, eMarketer said. On Monday, Lyft said it has 35 percent of the national ride-hailing market, and in 16 U.S. markets its share exceeds 40 percent.

“Uber’s brand image took an even bigger hit than expected as it grappled with a series of scandals and PR disasters in 2017,” said Shelleen Shum, eMarketer’s forecasting director. “Lyft, which had been rapidly expanding its coverage, seized on the opportunity to brand itself as a more socially conscious alternative.”

Lowered forecast

The research firm said it has lowered its forecast for Uber’s growth every year through 2021, reflecting the company’s competitive disadvantage after last year’s problems. EMarketer’s previous projections pegged the number of Uber users in 2017 at about 44 million, but the actual number ended up being fewer than 41 million.

Even so, Uber remains the dominant U.S. ride-hailing company. At the end of this year it will have about 77 percent of the market, down from 90 percent in 2016, while Lyft will have 48 percent, up from nearly 29 percent, according to eMarketer.

EMarketer’s projections for 2022 show Uber with nearly 74 percent of customers and Lyft with 59 percent of ride-hailing customers. Some people use both services.

Lyft operates in roughly the same number of U.S. cities as Uber, as well as in Toronto. Uber operates across the globe, although it has retreated from Southeast Asia, Russia and China after losing billions of dollars competing with local rivals.
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U.S. President Donald Trump urged for a quick conclusion to a renegotiated North American Free Trade Agreement during a phone call Monday with Canadian Prime Minister Justin Trudeau. 

The White House said Trump “underscored the importance” of quickly reaching a deal, while Trudeau’s office said the two spoke of the “possibility of bringing the negotiations to a prompt conclusion.”

The talks have come under increased pressure to quickly produce a deal after U.S. House Speaker Paul Ryan said this week he would need to be notified of a new agreement by May 17 to give the current Congress a chance to pass it this year.

Canada, the United States and Mexico are renegotiating their 24-year-old free trade pact in a process triggered by the Trump administration. Trump has been highly critical of the 1994 deal, blaming it for the loss of millions of manufacturing jobs that hurt the U.S. economy.

He has repeatedly threatened to leave the pact if a satisfactory updated agreement is not reached.

U.S. Commerce Secretary Wilbur Ross said on Monday that none of the contentious issues the three countries have been discussing appear to have been resolved. Ross, who is not directly involved in the NAFTA talks, told reporters in Washington Monday that the big issues are still a “work in progress.”

Last week, the latest round of NAFTA talks ended in Washington without any major breakthroughs on how to renegotiate the deal. Those talks were the first to involve all three of the top officials in the negotiations — U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.
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President Donald Trump says he is looking for a way to let a Chinese technology firm “get back into business fast” after a U.S. trade ruling severely crippled the company.

“Too many jobs in China lost,” Trump tweeted Sunday, days after ZTE announced it had ceased “major operating activities.”

The U.S. had cut off exports of U.S.-made parts to ZTE — more than 25 percent of the components ZTE needs to build its wireless stations, optical fiber networks and smartphones.

The U.S. cutoff came after ZTE was, in the words of one expert, “caught red-handed” putting the U.S. technology into products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The U.S. fined ZTE $1.2 billion last year. But the U.S. said last month ZTE lied about punishing the employees believed to be involved in skirting the sanctions, paying them bonuses instead.

The Commerce Department cut off ZTE’s access to U.S. components until 2025, forcing it to shut down operations at its factory in Shenzhen.

Trump has often complained about China stealing U.S. jobs. But he tweeted he is working with Chinese President Xi Jinping to ease the economic fallout at ZTE and ordered the U.S. Commerce Department “to get it done!”

“The president’s tweet underscores the importance of a free, fair, balanced, and mutually beneficial economic trade and investment relationship between the United States and China,” White House Deputy Press Secretary Lindsay Walters said Sunday. “The administration is in contact with China on this issue, among others, in the bilateral relationship.”

Chinese Foreign Ministry spokesman Lu Kang told reporters Monday that China appreciates the U.S. position and that the two countries are discussing the issue.

The U.S. and China are due to hold their latest round of trade talks this week in Washington.

“China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries,” Trump said in another tweet. “But be cool, it will all work out!”

Douglas Jacobson, an attorney who represents suppliers who do business with ZTE, told VOA that Trump’s order to help ZTE is a stunning decision and one bound to make U.S. law enforcement officials unhappy by going over their heads.

“This has caught all of those in the exports and sanctions world certainly by surprise and with some degree of shock and awe,” Jacobson said. “This is unprecedented that the president of the United States would intervene in what really is a law enforcement case.”

But Jacobson said the ZTE matter is not a sign of a general thaw in trade tensions between the U.S. and China, including the recent tit-for-tat tariffs.

Jacobson said he believes Trump may be willing to make a concession on China in exchange for China’s help with North Korea.

Steve Herman, Ken Bredemeier, Ira Mellman and Kenneth Schwartz contributed to this report.

 
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There’s a push to level the playing field for women in India, where women account for 42 percent of university graduates but only 24 percent are hired as entry level professionals. Of these, 19 percent are likely to reach senior level management. To make matters worse, the number of women who leave the work force is also higher than men. As Ritul Joshi reports, a specially designed management course for women in New Delhi is teaching them to make their way in a male dominated work force.
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Senior officials from the United States, Canada and Mexico ended the latest round of talks on the North American Free Trade Agreement without any major breakthroughs on how to renegotiate the deal.

U.S. Trade Representative Robert Lighthizer said Friday after a week of talks in Washington that the United States will continue to work with its partners to update the 1994 trade pact. 

“The United States is ready to continue working with Mexico and Canada to achieve needed breakthroughs on these objectives,” he said.

The talks involved all three of the top officials in the NAFTA negotiations: Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.

The talks have come under increased pressure to produce a deal quickly after U.S. House Speaker Paul Ryan said this week he would need to be notified of a new agreement by May 17 to give the current Congress a chance to pass it this year.

Guajardo said Friday that revising the deal will take time. “We’re not going to sacrifice the quality of an agreement because of pressure of time. We’ll keep engaged,” he said.

Freeland echoed those comments. “The negotiations will take as long as it takes to get a good deal.”

She told reporters that there was a long “to-do” list to finish a renegotiation of NAFTA, but said the talks were making progress.

U.S. President Donald Trump again heaped criticism on NAFTA during a meeting with auto executives Friday at the White House. “NAFTA has been a horrible, horrible disaster for this country. And we’ll see if we can make it reasonable,” he said.

Trump has long criticized NAFTA, blaming it for the loss of millions of manufacturing jobs that hurt the U.S. economy.

The auto industry has featured prominently in the NAFTA talks, with one of the key sticking points being a U.S. demand to increase the U.S.-made components in vehicles that receive duty-free status in NAFTA.

Trump praised Fiat Chrysler chief Sergio Marchionne on Friday for plans to move production of its popular Dodge Ram truck back to the United States from Mexico.

“Right now, he’s my favorite man in the room,” Trump said.
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British Prime Minister Theresa May and U.S. President Donald Trump agreed in a phone call Friday that talks were needed to discuss how U.S sanctions on Iran would affect foreign companies operating in the country.

Trump’s decision to pull the United States out of the Iranian nuclear deal and revive U.S. economic sanctions has alarmed the leaders of Britain, France and Germany who remain committed to the deal and who have significant trade ties with Tehran.

“The prime minister raised the potential impact of U.S. sanctions on those firms which are currently conducting business in Iran,” her spokeswoman said. “They agreed for talks to take place between our teams.”

The spokeswoman said May had told Trump that Britain and its European partners remained “firmly committed” to ensuring the deal was upheld as the best way to prevent Iran from developing a nuclear weapon. Iran says its nuclear program is for peaceful purposes only.

The two leaders also condemned Iranian rocket attacks against Israeli forces earlier this week and strongly supported Israel’s right to defend itself.

“They agreed on the need for calm on all sides and on the importance of tackling Iran’s destabilizing activity in the region,” the spokeswoman said.
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Mexico will not be rushed into revamping the North American Free Trade Agreement (NAFTA) just to get a deal, Economy Minister Ildefonso Guajardo said on Friday ahead of trilateral talks with his U.S. and Canadian counterparts.

Guajardo said he would meet at 1 p.m. EDT (1700 GMT) with Canada’s Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, and that the three are closer to agreeing new rules for autos that are vital for a deal.

However, Guajardo, who is eager to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, said plenty of other issues were outstanding.

“I have to make very clear [that] the quality of the agreement and the balance of the agreement has to be maintained. So we are not going to sacrifice balance and quality for time,” he told reporters on the doorsteps of Lighthizer’s office.

“We believe there is a way to solve autos. I think we are trying to make a very good effort … We are looking at the whole set of items we have to solve. So it’s not autos, it’s everything else.”

Guajardo and Freeland have been meeting Lighthizer separately since the start of the week. Friday’s trilateral meeting will be the first held this week.

Drafting new rules of origin governing what percentage of a car needs to be built in the NAFTA region to avoid tariffs has been at the center of the talks to update the 1994 deal. It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States.

Officials and industry sources say the three sides have been gradually narrowing their differences on autos.

However, several other major issues are still unresolved, including U.S. demands for a five-year sunset clause that would allow NAFTA to expire, and elimination of settlement panels for trade disputes.

U.S. House Speaker Paul Ryan set a May 17 deadline to be notified of a new NAFTA to give the current Congress a chance of passing it. The United States will hold elections in November for a new Congress that will be seated early next year.

Mexico’s top trade official, however, said time was running short to meet such a deadline. Mexico will hold its presidential election on July 1.
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Burden or business opportunity? A new U.N.-backed study of refugees from the World Bank’s International Financial Corporation argues for the latter. The IFC researchers examined one of Africa’s oldest and largest refugee camps, Kakuma in northwest Kenya. What they found is a growing consumer base they say is ripe for more private investment in sectors like mobile banking and energy. The IFC took VOA’s Daniel Schearf on a tour of the camp. He has this report.
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A senior United Nations official says trade protectionism, rising private and corporate debt, and shortcomings in revenue raising are growing challenges to the economic outlook for the Asia Pacific.

Shamshad Akhtar, executive secretary of the UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP), noted the threats of trade wars undermining the region’s positive economic growth outlook.

The United States has pressed states, notably China, to reduce trade and current account deficits with the U.S., recently imposing tariffs on steel exports from several countries.

Akhtar said such trade protectionism represents “quite a big threat” along with nontariff barriers, which have been rising since the 2008 global financial crisis, such as cross border restrictions that further limit trade.

“If you look at the trends, there has been a post-2008 crisis, there has been an increase in nontariff barriers that face the Asia Pacific region as a whole. [The U.S. tariff increases] have been classified as a trade war eventually, if at all those [measures] are invoked there will be a counter reaction,” Akhtar said.

Trade war and growth

She said a trade war would directly impact the region’s economic growth, especially affecting small- and medium-sized enterprises in the Asia Pacific that have trading links to economies such as China, a key target of the U.S. tariffs.

“Yes, growth in itself would be impacted, and it’s happening at a time when we have just seen a recovery; both in terms of growth as well as trade,” Akhtar told VOA.

She said the trade conflicts represented a challenge to the long-standing multilateral rules set down under the World Trade Organization (WTO).

But economists with the Singapore/London based Capital Economics, say recent trade talks between the U.S. and China, and slowing global growth may have eased the threat of a trade war.

China trade surplus leveling

Capital Economics Senior China economist, Julian Evans-Pritchard, in a May commentary, said that while the trade surplus with the U.S. remains near an all-time high, there were “some signs” of it leveling off.

Evans-Pritchard said China’s export performance was also easing as global growth may have peaked.

“This will hopefully encourage [China] to adopt a pragmatic approach to trade negotiations in order to try to avoid the imposition of tariffs and an even sharper slowdown in export growth,” he said.

Outlook for 2018-2019

UNESCAP’s annual economic survey for the Asia Pacific, released this week, remained upbeat for the region’s economic growth at 5.5 percent in 2018 and 2019, with a “slight moderation” in China, offset by a recovery in India, with steady growth elsewhere in the region.

But Akhtar said there are still significant economic headwinds going forward, including infrastructure financing, estimated to be as much as $1.7 trillion.

To meet such demand, she said there is a need to reform taxation administration “in some of the Asia Pacific economies” through simplified tax regimes that could mobilize as much as $60 billion.

Mounting debt

The survey warned of “potential financial vulnerabilities” in regions of high private and corporate debt, particularly in China, South Korea, Malaysia and Thailand, in order to avoid a repeat of the Asian financial crisis of 1997-1998.

“It’s very clear to me we need to tackle the issue of private and corporate debt because from our previous experiences any overexposure in terms of whether the debt is private, corporate or household can induce a huge amount of domestic financial vulnerability,” Akhtar said.

Akhtar noted progress achieved in reducing poverty from almost 44 percent in 1990 to around 12 percent in early 2010.

But poverty levels remain “relatively high” in South and Southwest Asia. The Asia Pacific region still has some “400 million people living in poverty.”

Another issue is growing income inequalities in key economies, with the most marked changes in China and Indonesia, and to a lesser extent in India and Bangladesh.

“Given that we have steep inequalities with countries, it basically means that people don’t have access to basic economic and social services,” which can also sustain poverty rates, she said.

Akhtar said in the medium term “potential economic growth” appeared on a downward trend in several countries because of aging populations and a need to boost investment in human resources, such as education.
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Mexico on Thursday indicated time was running out to see whether NAFTA nations could agree a new deal in the short term while Canada struck a upbeat tone, saying top-level talks this week had achieved a great deal.

Major differences remain between the three members of the North American Free Trade Agreement after more than eight months of largely slow-moving negotiations launched at the insistence of Washington, which wants major changes to the 1994 pact.

A source close to the talks said U.S. officials have told Canada and Mexico that May 17 or 18 is the deadline for a text that could be dealt with by the current U.S. Congress. A second source confirmed that those dates had been discussed.

Need solutions before elections

Mexico’s Economy Minister Ildefonso Guajardo said he expected to learn by the end of Friday whether a new deal was possible in the short term.

“I think we will be finding out through the day and tomorrow … if we really have what it takes to be able to land these things in the short run,” Guajardo told Reuters.

Top-level talks between the three members this week hit an obstacle as the United States and Mexico sought to settle differences over the key issue of automobiles.

U.S. Trade Representative Robert Lighthizer wants a quick agreement to avoid running into complications caused by a Mexican presidential election on July 1 and U.S. midterm Congressional elections in November.

‘Getting closer’

Canadian Foreign Minister Chrystia Freeland said the three nations had “made a lot of progress since Monday … we are definitely getting closer to the final objective.”

Freeland, speaking to reporters after meetings with senior U.S. legislators on Capitol Hill, sidestepped questions as to when an agreement might be reached.

Guajardo told Reuters that “we have suitcases for two weeks if necessary.”

U.S. President Donald Trump regularly threatens to walk away from NAFTA, underscoring uncertainty over the pact. Business executives complain that the lack of clarity is hitting investment.

Mexico has launched a counterproposal to U.S. demands to toughen automotive industry content rules and boost wages. U.S. President Donald Trump blames cheaper wages in Mexico for manufacturing job losses in the United States.

Many major issues remain

Many other major issues crucial to a deal are still unresolved, including U.S. demands for a five-year sunset clause, and elimination of settlement panels for trade disputes.

After meeting with Lighthizer on Thursday, Guajardo told reporters that the talks were not just covering autos.

“You cannot think that in a process of negotiations we’re going to solve one item without reviewing the overall balance of the agreement,” he said. “We’re going over all the items. It’s very important to stress that.”
…

Virginia Wallen is a wife, a mother of three, and a woodworker. She achieved what she has never imagined she would — turning her carpentry hobby into a business. The entrepreneur isn’t just succeeding in her new career, she’s tearing down stereotypes and building a new role model.

It happens for a reason

Wallen, who grew up helping out on her family’s farm, developed all the skills required by a professional woodworker early on.

“It wasn’t so much as a passion — growing up doing woodworking – as much as a requirement: help mend a fence or work on the farm or do things like that,” she recalls. “When given a choice in high school between home economics and woodshop class I picked woodshop and welding. But the passion happened a lot later when the HGTV [TV channel for home improvement] came out.”

Still, carpentry wasn’t her first career choice. Wallen worked for 11 years with an IT company.

“I was pretty certain that that was my career path for the rest of my life,” she says. “So when I got laid off I was devastated. I just never expected that I would ever be laid off. I was applying for jobs everywhere but because I’m so type A. I can’t sit around and do nothing. And, I was driving my husband crazy.”

New career

Inspired by her dogs, Penny and Chloe, Wallen returned to her hobby… and made a crate for them. Then, she posted the pictures on line.

“That week I had five people reached out to me asking if I would build them one,” she says. “I wasn’t expecting that feedback. But I took it as divine intervention, maybe I need to change. I told my husband I was going to start building dog kennels.”

That surprised her husband, Kevin Wallen, who works in IT and also enjoys carpentry as hobby.

“I thought she was crazy,” he admits. “But after the first one was well-received, it was great. It was like ‘OK, this is going to take off.’”

And it did. But that wouldn’t have been possible without her husband’s help.

“I took over Mr. Mom,” he explains. “I kind of stepped in and had to be more hands on with kids and more hands on with the school stuff and dinners and things like that because her work was focused on building the business. So it was a big change, but being married that’s what you got to do. You got to step up every now and then.”

Wallen is thankful for her husband’s support.

“Kevin can also help pick up that slack when I need it,” she says. “He can come down here when I need help building and he can help me do that. If I need help putting kids to bed because I’m here building until eleven o’clock at night, he can do that too.”

That gave Wallen the time she needed to build her brand, Ginny Bins. Her products are made of recycled wood and have a warm, vintage look. She markets them on-line.

On line at the right time

Around the same time Wallen started her business, psychologist Heather Abbott was in the process of starting a day care center, Little Oaks Montessori Academy. She went online searching for furniture.

“I didn’t want to get the standard, just ordered off the Internet pieces, I wanted something very customized that looked like it would go into a home,” she says. “I saw Ginny Bins, Virginia woodwork business. I liked it. I contacted her.

Abbott says Wallen understood what she wanted, from the whimsical to the practical.

“One of the things that I really was looking for is a book shelf that looks like a tree,” Abbott says. “She’s like, ‘you know I’ve never made anything like this, but I’m going to give it a shot.’ She did it and it happens to be one of the children’s favorite pieces in the school. She made boards with little clips. A table for the staff kitchen. The angle of the room was weird and she had to make it small enough to fit in. She did Dutch doors on all the classrooms so we wouldn’t have to shut the doors, we don’t have to close it all completely. ”

Abbott loves each of these items and the message of unlimited possibilities behind them. “It’s to teach our teachers, our students, our families that pass by, so they know that Virginia made those pieces and they can say this is a stereotype that we’re breaking.”

Woodworker Virginia Wallen doesn’t like stereotypes and believes it’s time for women to ignore them and just do what they want.

That’s what she’s doing. And that’s how she’s found her passion, woodworking- the work she has fun doing every day.

 
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Wall Street surged on Wednesday as surging oil prices boosted energy stocks following U.S. President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.

Gains were broad and volume was high, with all but the utilities and telecom sectors advancing as investors who had moved to the sidelines in recent days ahead of Trump’s decision returned to the market.

“It’s classic ‘buy on the terrible news,’ ” said Ian Winer, director of trading at Wedbush Securities in Los Angeles, referring to the wider market’s rally. “People had gotten way too nervous about this.”

Trump’s decision for the United States pull out of the international agreement aimed at preventing Iran from obtaining a nuclear weapon was good news for investors betting on a rise in oil prices. Crude hit its highest level in 3½ years as investors bet the U.S. withdrawal would increase risks of conflict in the Middle East and curtail global oil supplies.

The S&P energy index jumped 2.03 percent, bringing its gain this quarter to 12.6 percent, more than any other sector.

“The rise in oil is helping energy sector, which is expected to be a pretty big growth sector. A lot of analysts are expecting strong earnings as oil rebounds, and that hasn’t really played out so much early this year,” said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago.

The Dow Jones industrial average rose 0.75 percent to end at 24,542.54 points, while the S&P 500 gained 0.97 percent to 2,697.79. The Nasdaq Composite added 1 percent to finish the session at 7,339.91.

Volatility Index down

The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, closed down 1.29 points at 13.42, its lowest close since January  26.

Worries lingered that rising oil prices would perk up inflation. The U.S. 10-year Treasury yield rose to a two-week high and above the key 3 percent level on expectations of higher interest rates.

With March quarter reports mostly wrapped up, S&P 500 earnings per share appear to have surged by 25.9 percent, helped by deep corporate tax cuts introduced this year, according to Thomson Reuters I/B/E/S.

In stock trading, Google-owner Alphabet Inc. rose 2.87 percent, providing more lift than any other stock to the S&P 500. It was followed by Facebook Inc., which rose 2.09 percent.

Walmart Inc. fell 3.13 percent after the retailer took a majority stake in Indian e-commerce firm Flipkart for about $16 billion.

Walt Disney dipped 1.79 percent despite reporting a quarterly profit above Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 168 new highs and 52 new lows.

Volume on U.S. exchanges was 7.1 billion shares, compared with the 6.6 billion-share average over the last 20 trading days.
…

 A New York hedge fund founder was arrested Wednesday on charges that he exaggerated his company’s performance by over $200 million to impress and preserve investors.

Anilesh Ahuja, 49, of Manhattan, was charged with conspiracy, securities fraud and wire fraud.

Federal officials said that the founder, chief executive officer and chief investment officer of the investment firm Premium Point Investments LP had carried out a fraud from 2014 through 2016 that was designed to make investors believe that the firm’s hedge funds were doing much better than they were. Between 2008 and 2016, the firm managed billions of dollars in assets, exceeding $5 billion at one time at its peak, authorities said.

Amin Majidi, 52, of Armonk, New York, a former Premium Point portfolio manager, and Jeremy Shor, 46, of Manhattan, a former trader at the firm, also were charged. A lawyer for Ahuja did not immediately comment. A lawyer for Majidi declined comment. An attorney for Shor did not immediately return a message.

“By allegedly cooking the books, Ahuja and his co-defendants made the fund appear more attractive to would-be investors and dissuaded current investors from withdrawing their investments,” said Audrey Strauss, a federal prosecutor.

William F. Sweeney Jr., head of the New York FBI office, said in a release that the defendants’ “alleged practice of intentionally misleading investors and mismarking securities held in the funds they managed allowed them to charge higher fees and hold captive money that would have likely been withdrawn had their clients been aware of the hedge fund’s actual value.”

According to an indictment, Ahuja started his firm in 2008 and launched the company’s flagship mortgage credit fund a year later. After the firm began overstating the net asset value of its funds by more than $200 million at times, it was able to charge investors higher management and performance fees and could forestall redemptions, authorities said.

Prosecutors also announced Wednesday that the firm’s former chief risk officer and a former salesman at a broker-dealer have pleaded guilty to charges and are cooperating.

The Securities and Exchange Commission also filed civil charges against Ahuja, Majidi and Shor.

“Investors rely on their investment advisers to fairly and accurately value securities, and that is especially true when the securities trade in opaque markets,” said Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit.  “As we allege, Premium Point masked its true performance, which denied investors the opportunity to make informed investment decisions.”
…

Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill the gap, an OPEC source familiar with the kingdom’s oil thinking said.

U.S. President Donald Trump on Tuesday abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. The original agreement had lifted sanctions in exchange for Tehran limiting its nuclear program.

Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq.

During the last round of sanctions, Iran’s oil supplies fell by around 1 million barrels per day (bpd), but the country re-emerged as a major oil exporter, especially to refiners in Asia, after sanctions were lifted in January 2016.

“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said Wednesday.

“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”

Riyadh is working closely with the United Arab Emirates (UAE), which holds OPEC’s presidency in 2018 and non-OPEC producer Russia for “coordination and market consultations,” the OPEC source said.

He said any action would be taken in coordination with all OPEC and non-OPEC partners, if needed.

OPEC’s oil supply-cutting deal with non-OPEC producers such as Russia has helped to clear a global oil supply glut and boost prices. The agreement is due to expire at the end of 2018.

OPEC officials from Saudi Arabia, the UAE and Russia along with few other producers in the pact are due to meet in Saudi Arabia on May 22-23 as part of a monthly meeting for the Joint Technical Committee which monitors the oil market.

Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is concerned about any negative impact from the potential oil supply shortage for oil-consuming countries, the OPEC source said.

But Saudi Arabia has enough oil production capacity — currently at 12 million barrels per day (bpd) — to maintain oil market stability, the OPEC source also said.

Iran produces about 3.8 million bpd. Since the Iran nuclear deal went into effect, its exports have risen to about 2.5 million bpd, from less than 1 million bpd. A majority goes to Asia, with Europe receiving about 600,000 bpd.

Analysts now expect Iran’s supplies to fall by between 200,000 bpd and 1 million bpd, depending on how many other countries fall in line with Washington.

Trump and oil prices

Expectations that new U.S. sanctions could hit Iranian crude exports and feed tensions in the Middle East had pushed oil prices higher in the past few weeks.

Brent crude was trading about $77 at a 3-1/2 year high on Wednesday, raising concerns that prices were going too high too fast.

Trump accused OPEC last month of “artificially” boosting oil prices in a message on Twitter, the first time he has mentioned OPEC on social media.

His tweet was seen by OPEC sources as the U.S. president’s way to appease a domestic audience unhappy about a rise in gasoline prices.

A key U.S. ally, Saudi Arabia welcomed Trump’s decision to withdraw from the nuclear agreement with Iran and to reimpose economic sanctions.

Riyadh also said it would work with OPEC and non-OPEC to lessen the impact of oil shortages in a clear indication that the country has been coordinating with Washington ahead of time, sources familiar with the matter said.

“You need to work with your partners in dealing with any potential effect on supply,” the OPEC source said.

“But it should be done in a collective coordinated way and that can only happen when you start to be able to assess what would be the impact.”

OPEC and non-OPEC meet next in June and they are widely expected to keep supply curbs in place until the end of 2018.

But a drop in Iranian exports due to U.S. sanctions, plus supply disruptions in other OPEC members, such as Venezuela, could reduce supply more than planned, leading to a potential price spike.

But the OPEC source said a rise in prices due to the market’s worries about supply should not be the parameter for OPEC to adjust output.

The OPEC source said any decision in June to raise output “should be driven by a potential physical shortage or reduction in production from any oil supply source not only Iran.”

“You only handle [output] when you have a semi-clear idea of what would be the potential impact. It is too early now to do that,” the source said.

He also said Saudi Arabia does not expect any physical impact on the oil market from the U.S. Iran sanctions until the third or fourth quarter of this year.

OPEC’s objective is still to reduce global oil inventories to an acceptable level, and any adjustment in production targets should be done in a coordinated way, the OPEC source said.

“This way you do not disrupt a mechanism that we have worked hard to put together and to sustain just to address a short-term issue,” the source said.
…

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.
…

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

“This is good for farmers, refiners and America,” Cruz said in a statement.

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.
…

With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.

At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States.

Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.

It can take a month or longer for soybean shipments to travel from the U.S. to China. Any soybeans en route to China now could be hit by the tariff by the time they arrive.

“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”

China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.

But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.

There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for President Donald Trump in 2016.

Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.

Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.

Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.

“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.

Data from the U.S. government data show that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.

Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.

Some analysts argue that the shifts aren’t yet particularly significant. China buys most of its soybeans from the United States in the late summer and fall, and then switches to South American sources, mainly Brazil and Argentina, in the spring. So the current market activity doesn’t necessarily reflect the pattern that would occur during the main buying season.

“These numbers we’re talking about are pretty minor,” said John Baize, an economist for the U.S. Soybean Export Council.

The U.S. ships about 35 million metric tons of soybeans to China a year, Baize said. China usually imports about 100 million tons a year and can’t import enough from other countries, he said, to abandon the United States as a source.

“Where’s China going to buy its beans?” Baize asked.

That may be true in the short run. But Basse suggests that Brazil has enough land that could be used for soybean cultivation that it could soon mostly replace the United States as a supplier to China.

And if the Chinese market were to be closed to U.S. farmers, they might be able to sell some portion of their soybeans to other markets. Baize said that huge multinational companies, such as Cargill and ADM, might, for example, sell more U.S. soybeans to Europe, where they wouldn’t face any tariffs, though this likely wouldn’t make up for the loss of the Chinese market.

At the same time, China is looking more to its own farmers. Since China announced its potential tariffs on U.S. soy in April, the government has encouraged farmers to cultivate more soybeans. Beginning this month, Chinese farmers say, Beijing reduced corn subsidies and raised annual soybean subsidies from 2550 yuan ($400) per hectare to 3000 yuan ($470) or more per hectare in major soybean-producing provinces in northeast China.

An adjustment had already been planned to help draw down China’s substantial corn stockpiles, so the change wasn’t necessarily aimed at U.S. soy growers, analysts say.

But the subsidy adjustment did come with political undertones. Officials in major soybean-producing provinces were describing the promotion of local soybeans as “the most important political task in agricultural production at present.” Heilongjiang in northeast China announced a pilot project to plant soybeans on over 100,000 new hectares, with an extra 2,250 yuan ($353) subsidy per hectare.

The moves are prompting farmers like Liu Cong to focus more on growing soy. Liu says he used most of his land to grow corn last year but this year is planting more soybeans.

“This is encouraging for farmers,” he said in a phone interview. “We’re more motivated.”

Zhang Xiaoping, China director for the U.S. Soybean Export Council, says that Chinese buyers have been canceling soybean purchases of last year’s U.S. soybean harvest because of the threat of tariffs.

“The buyers literally stopped buying from the U.S.,” Zhang said. “Exporters cannot find any buyers in China.”
…

Trade negotiations between China and the United States continue early next week in Washington D.C., but analysts say after the first round, the differences between the two sides are huge. Some believe the differences are so fundamental and big that an escalation of tariffs is unavoidable.

According to a widely circulated copy of Washington’s demands, President Donald Trump’s delegation not only asked Beijing to cut its trade deficit with the United States by $200 billion by 2020, but to also sharply lower tariffs and government subsidies of advanced technologies.

Beijing wants the United States to no longer oppose granting China market economy status at the World Trade Organization, amend an export ban against Chinese tech company ZTE Corp and open American government procurement to Chinese technology and services among other demands.

View to escalation

Scott Kennedy, a China scholar at the Washington-based Center for Strategic and International Studies, said the first round made it clear just how far apart the U.S. and China are in their views of what’s fair, what they want and expect the other side to do.

“I think we’re still headed toward escalation with both sides adopting tariffs in the next few weeks, but at least now we know what the fight is about,” Kennedy said. “It’s about whether or not China should be a market economy, or what you know whether it should be able to maintain its state capitalist system without any constraints.”

China joined the WTO in December of 2001 as a non-market economy and after 15 years it was expected the granting of the status as a market economy would naturally follow — along with its opening up.

But that is not what has happened, and the United States and European Union have refused to grant China market economy status.

Beijing insists it should be regarded as a market economy regardless of whether other countries believe it fits the definition. Under Xi Jinping, the Communist Party has moved to assert greater control over business and the economy.

Competition vs. compensation

It has also become increasingly clear that China’s definition of reform and that of the West are strikingly different.

In an interview with VOA earlier this year, William Zarit, chairman of the American Chamber of Commerce, said that while many used to assume China would continue to carry out Western style economic reforms initiated in the early 2000s, that is no longer the case.

“In the last four or five years, we’ve seen that reform has taken a different direction, that the Chinese economy is on a different trajectory and that is more support for state-owned enterprises,” Zarit said. “And when I hear reforms now, it is more about making state-owned enterprises more efficient and not necessarily competitive in a fully market-based economy.”

But Song Hong, an economist with the Chinese Academy of Social Sciences, argues that China has fulfilled its WTO obligations and it is the United States and European Union that have broken their promises to grant the country market economy status.

He said Washington’s demands to slash the trade deficit by $100 billion a year does not make economic sense. He also said the demand for China to lower tariffs and put the two countries on equal footing is impossible.

“The market in China is of course not as open as the U.S. market because China remains a developing country, which is no match to the U.S.,” Song Hong said. “The per capita income level in China around $10,000 vs. the U.S.’s some $50,000. How can both countries be equal?”

Talks as clock ticks

Some Chinese state media reports have tried to sound upbeat about the meetings focusing on the two sides agreed to keep talking, despite their differences.

On Monday, the White House announced a Chinese delegation led by Liu He, China’s vice premier and a top aide to Chinese leader Xi Jinping, will visit the United States early next week.

At the same time, however, the clock is ticking on U.S. threats to implement up to $150 billion in tariffs on Chinese goods. A day after Liu arrives in Washington, there will be a public hearing to discuss tariffs and the Trump administration’s investigation into China’s trade policies and practices.

If no agreement is reached by May 23, Washington would be well within its right to go ahead with the tariffs, analysts note. To which, China has promised to promptly reply.

Kennedy said that while the United States has used unilateral penalties in the past, this time around the chances of escalation are a lot higher.

“Not only are the disagreements deeply fundamental, China is much more powerful and ambitious than it used to be. And so it’s not likely to cave easily,” he said.

Brian Kopczynski contributed to this report.

 
…

The Trump administration is unveiling a multibillion-dollar roster of proposed spending cuts but is leaving this year’s $1.3 trillion catchall spending bill alone.

The cuts wouldn’t have much impact, however, since they come from leftover funding from previous years that wouldn’t be spent anyway.

The White House said it is sending the so-called rescissions package to lawmakers Tuesday. Administration officials, who required anonymity because they weren’t authorized to speak publicly on the matter, said the package proposes killing $15 billion in unused funds. A senior official said about $7 billion would come from the Children’s Health Insurance Program, or CHIP, which provides health care to kids from low-income families, though that official stressed the cuts won’t have a practical impact on the popular program.

The administration is trying to use its authority to prod Congress to “rescind” spending approved years ago, but even if the package is approved it would only have a tiny impact on the government’s budget deficit, which is on track to total more than $800 billion this year. Some of the cuts wouldn’t affect the deficit at all since budget scorekeepers don’t give credit for rescinded money that they don’t think would have ever been spent.

For instance, more than $4 billion in cuts to a loan program designed to boost fuel-efficient, advanced-technology vehicles wouldn’t result in fewer loans since the loans are no longer being made. And $107 million worth of watershed restoration money from the 2013 Superstorm Sandy aid bill is going unused because local governments aren’t stepping up with matching funds. Another $252 million is left over from the 2015 fight against Ebola, which has been declared over.

Still, the cuts, if enacted by Congress, would take spending authority off the table so it couldn’t be tapped by lawmakers for other uses in the future. The catchall spending bill, for instance, contained $7 billion in cuts to CHIP that were used elsewhere to boost other programs.

“This is money that was never going to be spent,” a senior administration official said on a press call ahead of Tuesday’s submission. “The only thing it would be used for is offsets down the line.”

Democrats have supported such cuts in the past, eager to grab easy budget savings to finance new spending. But some Democrats howled over the White House proposal anyway.

“Let’s be honest about what this is: President Trump and Republicans in Congress are looking to tear apart the bipartisan Children’s Health Insurance Program (CHIP), hurting middle-class families and low-income children,” said Senate Minority Leader Chuck Schumer, D-N.Y.

Pressure from party conservatives to increase cuts in a tentative $11 billion proposal contributed to a delay from Monday’s original release date.

The White House and tea party lawmakers upset by the budget-busting “omnibus” bill have rallied around the plan, aiming to show that Republicans are taking on out-of-control spending. The administration says it will propose cuts to the omnibus measure later in the year.

The spending cuts are also a priority for House Majority Leader Kevin McCarthy, R-Calif., who likens them to “giving the bloated federal budget a much-needed spring cleaning.” But while the package may pass the House it faces a more difficult path — and potential procedural roadblocks — in the Senate.

McCarthy wants to succeed soon-to-retire House Speaker Paul Ryan, R-Wis., and some of his allies view the project as a way to improve his standing with fractious GOP conservatives who blocked his path to the speakership in 2015.

The proposal has already had a tortured path even before its unveiling. More pragmatic Republicans, including the senior ranks of the powerful House and Senate Appropriations committees, rebelled against the measure. They argued that it would be breaking a bipartisan budget pact just weeks after it was negotiated. In response, White House budget director Mick Mulvaney cleansed the measure of cuts to the huge omnibus bill.

Last month, Mulvaney told lawmakers the plan could have totaled $25 billion or so. Now he says he’s planning to submit several different packages of spending cuts — and it’s likely they’ll get more conservative with each new proposal.

Either way, the idea faces a challenging path in Congress — particularly the Senate, where a 51-49 GOP majority leaves little room for error even though budget rules permit rescissions measures to advance free of the threat of Democratic filibusters. But the cuts to the popular children’s health insurance program probably could still be filibustered because they are so-called mandatory programs rather than annual appropriations.
…

Australia’s government is expected to release annual spending plans on Tuesday with a focus on winning votes at elections due within a year. Cheaper craft beer plus personal tax cuts compensated by strengthening company tax revenue have been flagged as well as more investment on roads and rail to stimulate economic growth.

Some media have reported that the government might better its timetable for returning the budget to surplus by the 2020-21 fiscal year by balancing the books 12 months earlier.

New budget starts July 1

Treasurer Scott Morrison, who will reveal to the Parliament later Tuesday his economic blueprint for the year starting July 1, said the government would live within its means.

“The plan for a stronger economy that I will be announcing tonight is about improving the opportunities for all Australians to live in a stronger economy,” Morrison told reporters outside Parliament House.

“It’s a plan to lower taxes and reducing the pressure on households. It’s a plan to back business to create more jobs. … It’s a plan to guarantee the essential services that Australians rely on every day,” he added.

The budget is Morrison’s third since he became treasurer and the last before the next election.

Universal health care

The government recently announced it had abandoned plans announced a year ago to increase the levy that Australians pay for their universal health care system from 2 percent of their income to 2.5 percent to pay for a newly established disability insurance program.

The Senate had refused to endorse the increase, and Morrison said it was no longer needed because the government’s bottom line had improved in the past year through more tax revenue.

Global credit ratings agency Fitch Ratings last week said scrapping the levy increase while committing to fully funding the insurance program “poses a challenge” for the forecast surplus in 2020-21.

The government recently announced it would correct an anomaly that charged craft beer brewers a higher tax rate on alcohol produced than mass beer producers because the craft brewers typically use smaller kegs.

“Why should their business be held back because of tax systems that are out of date?” Morrison asked about the unfair treatment of small breweries that are being set up by the hundreds around Australia.

The government has also flagged modest tax cuts to low and middle income earners.

Rescue plan for reef

The government has already announced AU$500 million ($376 million) for a Great Barrier Reef rescue plan that includes programs to reduce fertilizer runoff from farming, reducing numbers of the destructive crown-of-thorns starfish and to fund research into coral bleaching.

Environmentalists argue that the funding won’t tackle the main threat to the reef, global warming. They have urged the government to take greater action to reduce Australia’s greenhouse gas emissions.

Prime Minister Malcolm Turnbull has said he will call an election early next year. But he could be tempted to call an early election if the budget is well received and his conservative coalition’s standing in opinion polls improves. The government consistently trails the center-left opposition Labor Party in polling.
…

Nestle is paying more than $7 billion to handle global retail sales of Starbucks’s coffee and tea outside of its coffee shops.

The deal comes with a huge price tag for Nestle, but it could pay off big for the Swiss company. Its Nescafe and Nespresso don’t carry anywhere near the heft in America that Starbucks brand does, with its $2 billion in annual sales.

The deal gives Nestle the rights to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea. It will also be able to put the Starbucks brand on Nestle single-serve capsules. The agreement excludes bottled drinks like ice coffees and Frappuccinos that are sold in and outside of Starbucks stores.

Nestle had hinted last year that it was looking at focusing on higher-growth areas like pet care, coffee and infant nutrition. In January it announced it was selling its U.S. candy business to Italy’s Ferrero for approximately $2.8 billion.

With the strength of the Starbucks brand, (equals) Nestle will be able to better compete against JAB Holdings, an investment holding company that has gobbled up businesses and brands associated with Peet’s Coffee & Tea, Caribou Coffee Co., Stumptown Coffee and Krispy Kreme Doughnuts.

Nestle announced Monday that Starbucks Corp. will receive $7.15 billion in an up-front cash payment. Approximately 500 Starbucks employees will join Nestle, and operations will continue to be located in Seattle.

The deal is subject to regulatory approval and is expected to close by the end of the year.

 
…

A small band of Belgian monks are planning to start producing their own beer again, more than 200 years after invading French troops stopped all brewing at the abbey.

The men from Grimbergen Abbey started making beer in 1128, but stopped in 1797 when the French took over the site and sold off the equipment.

After that, some of the world’s biggest drink brands filled the gap – Heineken unit Alken-Maes makes brown and blond lagers with the Grimbergen brand in Belgium. Carlsberg sells them abroad, paying royalties to the abbey.

Now the monks have drawn up plans for their own micro-brewery to produce their own beers to sell alongside the other Grimbergen drinks on the market.

“We want to build a micro-brewery, on a small scale and linked with tradition, on the site where the brewery stood before the French Revolution,” said Sub-prior Karel Stautemas.

“What exactly the beer will be, we don’t yet know, but the tastes of before and now have changed. This will be a beer of the 21st century.”

The operation will be much smaller than the ones run by Belgium’s trappist abbeys, such as Chimay or Westmalle, he added. Other abbeys such as Leffe have also allowed their names to be used in products made by large brewers.

The abbey, which is home to about 20 monks, still needs to complete a feasibility study and secure approvals and licenses, but hopes the new Grimbergen will be flowing by 2020, Stautemas said.

Alken-Maes and Carlsberg supported the project, he added.
…

Afghanistan’s poverty rate has worsened sharply over the past five years as the economy has stalled and the Taliban insurgency has spread, with more than half the population living on less than a dollar a day, a survey published on Monday showed.

The Afghanistan Living Conditions Survey (ALCS), a joint study by the European Union and Afghanistan’s Central Statistics Organization, showed the national poverty rate rising to 55 percent in 2016-17 from 38 percent in 2011-12.

“The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation,” Shubham Chaudhuri, World Bank director for Afghanistan, said in a commentary about the survey.

The report underlines the problems facing the Western-backed government in Kabul which needs economic growth to help replace foreign aid and to provide jobs for its fast-growing population.

As international forces have withdrawn and the billions of dollars in foreign aid that once poured in have dried up, Afghanistan’s battered agricultural economy has struggled.

More than a decade and a half after a U.S.-led campaign toppled the Taliban in 2001, the poverty line was defined as an income of 70 afghanis, or about one U.S. dollar, per person a day.

The ALCS report comes at a time when 20 of Afghanistan’s 34 provinces are suffering from serious drought and international aid agencies are seeking millions of dollars to help them.

Food insecurity has risen from 30.1 percent to 44.6 percent in five years, meaning many more people are forced to sell their land, take their children out of school to work or depend on food aid, the survey found.

Chaudhuri said the survey was the first estimate of the economic situation since Afghan forces took over security responsibilities in 2014 from international troops.

“In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable,” he said on the World Bank blog site.

The survey found that 50 percent of the population is younger than 15.

This month, President Ashraf Ghani’s government said it had listed job creation among its priorities and aimed at creating 2.1 million jobs within three years.

However, according to the IMF, the economy is set to grow at 2.5-3 percent in 2017-18, too slowly to stop unemployment from rising.

The needs to produce some 400,000 new jobs a year to keep pace with population growth and tens of thousands of qualified people struggle to find work in cities, and farmers were unable to earn a sustainable livelihood due to the drought.

Officials at the European Union said the ALCS report was based on data collected from 21,000 households over 12 months.
…

An innovative consumer awareness campaign will be launched this summer in several cities in the United States. The campaign is aimed at preventing the waste of food that costs the world billions of dollars and has severe consequences on global food security and the environment. Verónica Balderas Iglesias spoke with experts.
…

The U.S. and China ended the second day of high level talks Friday aimed at avoiding a possible trade war.

The U.S. delegation, headed by Treasury Secretary Steven Mnuchin, will brief President Donald Trump Saturday and “seek his decision on next steps,” the White House said in a statement, adding that the administration had “consensus” for “immediate attention” to change the U.S.-China trade and investment relationship.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” Trump said in a Twitter post late Friday.

“Both sides recognize there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by Xinhua state news agency.

An editorial Saturday by China’s ruling Communist Party newspaper, the People’s Daily, however, said that “in the face of the U.S.’s fierce offensive of protectionism, China resolutely defends its national interest,” adding that Beijing “will never trade away its core interests and rejects the U.S.’s demand for an exorbitant price.”

The announcement followed comments by Mnuchin earlier in the day that the two sides were having “very good conversations.”

Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted U.S. goods.
…

President Trump reveled in the 3.9 percent U.S. unemployment rate Friday, following the release of figures by the Bureau of Labor Statistics. But some say that these numbers don’t tell the whole story. From Washington, VOA’s Jill Craig has more.
…

The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said Friday.

The lengthy list of demands was presented to Beijing before the start of talks Thursday and Friday between top-level Trump administration officials and their Chinese counterparts to try to avert a damaging trade war between the world’s two largest economies.

A White House statement did not mention specific demands, but said the U.S. delegation “held frank discussions with Chinese officials on rebalancing the United States-China bilateral economic relationship, improving China’s protection of intellectual property, and identifying policies that unfairly enforce technology transfers.”

The statement gave no indication that U.S. President Donald Trump would back off on his threat to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.

​Trump, delegation to meet Saturday

The delegation was returning to Washington to brief Trump and “seek his decision on next steps,” the White House said, adding that the administration had “consensus” for “immediate attention” to change the U.S-China trade and investment relationship.

Trump said he would meet with the delegation Saturday.

China’s state-run Xinhua news agency described the talks as “constructive, candid and efficient” but with disagreements that remain “relatively big.”

Tariff threats have roiled stock markets in recent weeks, but the inconclusive outcome of the Beijing talks did little to stop a rally in U.S. shares prompted by jobs data that eased fears of faster Federal Reserve rate hikes. Stocks in Shanghai ended 0.5 percent lower while they fell 1.3 percent in Hong Kong.

Trump told reporters in Washington that he was determined to bring fairness to U.S.-China trade.

“We will be doing something one way or the other with respect to what’s happening in China,” Trump said. He added that he had “great respect” for China’s President Xi Jinping. “That’s why we’re being so nice, because we have a great relationship.”

​Intellectual property

China during the meetings asked that the United States ease crushing sanctions on Chinese telecom equipment maker ZTE Corp, people with knowledge of the matter said.

Washington’s demand for a $200 billion cut from China’s U.S. goods trade surplus doubles Trump’s previous request for a $100 billion cut. China had a record U.S. goods trade surplus of $375 billion in 2017.

Trump has also demanded “reciprocity” between U.S. and Chinese tariffs, frequently complaining about China’s 25 percent car tariff while the U.S. equivalent is 2.5 percent.

The U.S. team, led by U.S. Treasury Secretary Steven Mnuchin, demanded that China lower tariffs to levels no higher than those imposed by the United States, two people familiar with the demands said. The delegation also asked China to halt subsidies for advanced technology linked to its “Made in China 2025,” the sources said.

At the heart of the dispute are U.S. allegations that Chinese joint venture requirements and other policies force American companies to turn over their intellectual property, costing them billions of dollars annually and giving China’s state enterprises an edge in the race to develop new industries crucial to future growth.

China denies such coercion. Its 2025 industrial plan seeks to upgrade China’s manufacturing sector to more advanced products, including information technology, semiconductors and aircraft.

“I think the U.S. is asking for the impossible. Reducing the deficit by $200 billion by 2020 is quite an unrealistic demand, but it may also be a negotiation tactic to start high first,” said Tommy Xie, economist at OCBC Bank in Singapore.

Beijing offers

China offered to increase U.S. imports and lower tariffs on some goods, including cars, according to the sources.

But Beijing asked the United States to treat Chinese investment equally under national security reviews, refrain from new restrictions on investments and halt a proposal to impose 25 percent tariffs under its “Section 301” intellectual property probe.

China also offered to reconsider anti-dumping duties on U.S. sorghum, according to a proposal it submitted.

Xinhua said there had been exchanges of opinion on intellectual property protections, expanding U.S. exports and bilateral services trade. It gave no indication of what actions might be taken but said the two sides committed to resolve their trade disputes through dialogue.

U.S. negotiators agreed to bring up the ZTE sanctions with Trump after new representations from the Chinese side, Xinhua said. ZTE was hit last month with a seven-year ban on American companies’ selling components and software to it after the U.S. Commerce Department found ZTE failed to comply with an agreement to settle breached U.S. sanctions on Iran.

“My impression was that (the talks) didn’t go well given the rhetoric,” said Kevin Lai, senior economist at Daiwa Capital markets in Hong Kong. “I think the divide is still very big.”
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U.S. employers stepped up hiring modestly in April, and the unemployment rate fell to 3.9 percent, evidence of the economy’s resilience amid the recent stock market chaos and anxieties about a possible trade war.

Job growth amounted to a decent 164,000 last month, up from an upwardly revised 135,000 in March. The unemployment rate fell after having held at 4.1 percent for the prior six months largely because fewer people were searching for jobs.

The overall unemployment rate is now the lowest since December 2000. The rate for African-Americans — 6.6 percent — is the lowest on record since 1972.

Many employers say it’s difficult to find qualified workers. But they have yet to significantly bump up pay in most industries. Average hourly earnings rose 2.6 percent from a year ago.

The pace of hiring has yet to be disrupted by dramatic global market swings, a recent pickup in inflation and the risk that the tariffs being pushed by President Donald Trump could provoke a trade war.

Much of the economy’s strength, for the moment, comes from the healthy job market. The increase in people earning paychecks has bolstered demand for housing, even though fewer properties are being listed for sale. Consumer confidence has improved over the past year. And more people are shopping, with retail sales having picked up in March after three monthly declines.

Workers in the private sector during the first three months of 2018 enjoyed their sharpest average income growth in 11 years, the Labor Department said last week in a separate report on compensation. That pay growth suggests that some of the momentum from the slow but steady recovery from the 2008 financial crisis is spreading to more people after it had disproportionately benefited the nation’s wealthiest areas and highest earners.

The monthly jobs reports have shown pay raises inching up. At the same time, employers have become less and less likely to shed workers. The four-week moving average for people applying for first-time unemployment benefits has reached its lowest level since 1973.

The trend reflects a decline in mass layoffs. Many companies expect the economy to keep expanding, especially after a dose of stimulus from tax cuts signed into law by Trump that have also increased the federal budget deficit.

Inflation has shown signs of accelerating slightly, eroding some of the potential wage growth. Consumer prices rose at a year-over-year pace of 2.4 percent in March, the sharpest annual increase in 12 months. The Federal Reserve has an annual inflation target of 2 percent, and investors expect the Fed to raise rates at least twice more this year, after an earlier rate hike in March, to keep inflation from climbing too far above that target.

The home market, a critical component of the U.S. economy, has been a beneficiary of the steady job growth. The National Association of Realtors said that homes sold at a solid annual pace of 5.6 million in March, even though the number of houses for sale has plunged. As a result, average home prices are rising at more than twice the pace of wages.
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Venezuela said on Thursday it would take over the country’s leading private bank, Banesco, for 90 days and announced the arrest of 11 top executives for “attacks” against the country’s rapidly depreciating bolivar currency.

The detentions came on the heels of last month’s shock arrests of two Venezuelan executives working in the country for U.S. oil company Chevron Corp.

Oil-rich Venezuela is suffering from hyperinflation and a steady collapse of the bolivar currency, which President Nicolas Maduro has attributed to an “economic war,” but critics blame on incompetence and failed socialist policies.

Maduro’s foes say he is cracking down on the business sector to try to shore up support and halt price increases ahead of a controversial May 20 presidential election, which key opposition parties have boycotted as a sham.

Chief Prosecutor Tarek Saab announced the arrests in a televised press conference, but did not provide evidence of wrongdoing or take any questions.

“We have determined the [executives’] presumed responsibility for a series of irregularities, for aiding and concealing attacks against the Venezuelan currency with the aim of demolishing the Venezuelan currency,” said Saab, a former ruling party governor.

State television late on Thursday broadcast a statement announcing the temporary takeover of Banesco, which the government said was designed to ensure the bank continues operating.

The government also said it would be appointing a board of directors led by the country’s vice finance minister, Yomana Koteich.

Banesco’s president, Juan Carlos Escotet, who lives in Spain, earlier blasted the arrests as “disproportionate” and said he was flying to Venezuela to try to free the 11 executives, who include Chief Executive Oscar Doval.

“In the next few hours, I’m taking a plane for Venezuela. We’re going to knock on every door so that this problem is cleared up and they are freed as they deserve to be,” Escotet, who was born in Venezuela to Spanish parents and holds both nationalities, said in a video posted on Twitter.

Escotet has been a frequent target of criticism by ruling party heavyweight Diosdado Cabello, who recently announced that the government was buying Banesco. Escotet denied any sale.

Escotet temporarily excused himself from his role as chairman of Galicia-based bank ABANCA, the bank said in a statement to Spain’s stock market regulator on Thursday.

‘More crisis and misery’

Venezuela’s opposition said the arrests were another sign of Maduro’s turn to authoritarianism.

“The irresponsible government … continues to deny its responsibility in the destruction of our bolivar. Now they’re attacking Banesco. [This] … will only spawn more crisis and misery,” tweeted opposition lawmaker Carlos Valero.

Venezuela maintains exchange controls under which the government is meant to provide hard currency at a steadily weakening official rate, currently 69,000 bolivars per dollar.

But the dollar is fetching around 800,000 bolivars in unofficial trade, which government officials have for years harshly criticized but broadly tolerated.

Hyperinflation has turned once-powerful banks into warehouses of unwanted and mostly useless cash worth a total of only $40 million, according to a recent Reuters analysis of regulatory data.
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A federal grand jury in Detroit has indicted former Volkswagen CEO Martin Winterkorn with conspiracy and wire fraud in the car builder’s scheme to rig diesel emissions tests.

“If you try to deceive the United States, then you will pay a heavy price,” Attorney General Jeff Sessions said Thursday. “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.”

Winterkorn is alleged to have conspired with other top Volkswagen bosses to defraud the U.S. government and consumers with false claims that the company was complying with the Clean Air Act.

Volkswagen already admitted it installed devices on diesel models designed to turn on pollution control devices during emissions tests and turn them off when the car is driven on actual highways.

Volkswagen was fined $2.5 billion and ordered to recall the affected cars.

Winkerton is the ninth Volkswagen executive or employee to be charged. However, he currently lives in Germany, which has no extradition treaty with the United States, and is unlikely ever to see the inside of the U.S. courtroom.
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