Coincheck, a major cryptocurrency trading exchange in Tokyo, has been hacked into and has lost about $534 million worth of virtual money, national broadcaster NHK reported on Friday.

Coincheck posted on its website on Friday afternoon that it had suspended withdrawals of almost all cryptocurrencies.

The exchange has already reported the incident to the police and to Japan’s Financial Services Agency, NHK said.

In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin trades, filed for bankruptcy after losing some 850,000 bitcoins — then worth around half a billion U.S. dollars — and $28 million in cash from its bank accounts.
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The Chinese government recently claimed that 98 major state-run industries have turned in the best industrial and financial performance in 2017 compared to the past five years. These companies, which have assets totaling $9 trillion, produced a remarkable profit of $218 billion, an increase of 15.2 percent in profit in 2017, more than double the rate of national economic growth.

Industry experts are closely examining the report card because China’s state sector represents nearly 60 percent of the country’s industrial economy. It controls areas like natural resources, steel, energy, heavy machinery, telecommunication, defense and infrastructure sectors, where the private sector has little or no role.

The government’s claim has caused some surprise because state-owned-enterprises (SOEs) have been widely blamed for corruption and sloth, with many economists saying they are a drag on the national economy.

The New York-based Center on Foreign Relations reported this month that profits of Chinese SOEs plunged 33 percent between 2011 and 2016, while that of the country’s private-sector enterprises rose 18 percent in the same period. However, the government and state-owned banks continued funding the state sector, which drew 80 percent of industrial financing, it said.

Lagging behind private sector

Analysts said the SOEs managed to come up with a better balance sheet in 2017, with tremendous assistance from the government. But there was no real improvement in their management capabilities and market competitiveness.

“The improvement in profitability does not mean they are more efficient or more productive and they still aren’t as profitable as private companies,” said Scott Kennedy, deputy director at the Freeman Chair in China Studies at the Center for Strategic & International Studies.

One reason for the improved profits report may be the closure of dozens of coal mines and steel mills and hundreds of factories as part of an effort to overcome problems of overcapacity and chronically loss-making units. This came at a social cost as reduction in coal capacity by 27 million tons and in steel capacity by 5.95 million tons resulted in layoffs of millions of workers in mines and factories.

Another part of the improvement was achieved by sales and swaps of piled up debt at 20-30 percent of their original value, leading to massive losses for banks and financial agencies that gave the loans. Nearly $158 billion was infused into these companies, banks, stock and property markets and other sources in 2017.

Mergers also eliminated competition as two or more rival companies came together to form a stronger monopoly.

Monopoly creation

“Those survivors, they can enjoy the monopoly, that is why they can enjoy higher profit margins because of the monopolies,” CEIBS professor of finance and accounting Oliver Rui said, adding, “Usually they were competitors, now they have become one company.”

The State-owned Assets Supervision and Administration Commission, which manages the 98 enterprises owned by the central government, claimed a major success in reducing their debt burden. Its chief accountant, Shen Ying, told a recent news conference that central SOEs are confident and able to repay their debt and prevent systemic risks in 2018.

“There was no issue of bond default by central SOEs in 2017,” she said. “We will continue to push SOE reforms, in particular in their operational mechanism, methods of building a modern enterprise system, regulatory measures of State-owned assets and the cultivation of entrepreneurship in 2018.”

State owned banks were ordered to swap their unpaid loans into equity making them part owners of their customers, the SOEs. A part of the debt was converted into equity.

Jason Lee, an expert with the China Market Research Group said he expected the government to continue with the drive to reduce SOE debt by getting banks, stock and property markets to inject funds in 2018. “My estimation is that it won’t be double (compared to 2017) but probably around like 700 billion or 800 billion (Yuan), he said. An important issue is whether the government is merely rewriting the account books or state run companies are going through a major improvement in their functioning.

“Yes, that’s artificially solving the problem,” Rui said. “So, in the long run you need improve your performance through either by reducing the cost, or through enhanced efficiency or by increasing your pricing powers, you could sell your products at a higher price.”

New normal

Improvement in market prices of goods produced by the SOEs also played a key role in their improved balance sheets.

“Producer prices in China are growing and those products come mainly from SOEs and that’s the primary source for the turnaround in SOE performance, balance sheet performance,” Kennedy said.

Kennedy said the ruling Communist Party is not interested in allowing the bureaucracy-run SOEs to perform freely in terms of market dynamics.

The Communist “Party is increasing its supervision and management of SOEs. So I think, what you are seeing is a cyclical change in their financial position because of the price environment but not changes in the structural, systemic issues that make state owned enterprises less competitive and profitable than  the private sector,” Kennedy said.

The government has been publicly saying that it is focusing on the quality of life in terms of better performance in welfare areas like education, health and poverty alleviation and GDP numbers are not as important any more. But privately, it is pushing the industry to achieve higher growth because it cannot afford a major economic slowdown, analysts said. In this respect, the government is forced to rely on the state sector a lot more than the private sector.

“The private sector stopped investing because there are so many critical uncertainties. So, the SOE is the major driving force behind the GDP growth,” Rui said.
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The Trump administration is set to announce a raft of trade decisions over the next months, ranging from curbs on foreign imports of steel and aluminum to steps to clamp down on China’s alleged theft of intellectual property.

U.S. President Donald Trump has stressed his “America First” agenda in his first year in office and called for fairer, more reciprocal trade. He has blamed globalization for ravaging American manufacturing jobs as companies sought to reduce labor costs by relocating to Mexico and elsewhere.

Imported washing machines, solar panels

In its first major trade decision of the year, the administration slapped steep tariffs on imported washing machines and solar panels, boosting Whirlpool Corp. and dealing a setback to the renewable energy industry.

Monday’s decision imposed a 20 percent tariff on the first 1.2 million imported large residential washers in the first year, and a 50 percent tariff on machines above that number. The tariff declines to 16 percent and 40 percent respectively in the third year.

The move punishes Samsung Electronics, which recently began washer production in South Carolina, and LG Electronics, which is building a plant in Tennessee.

The U.S. Solar Energy Industries Association on Tuesday warned that Trump’s move to slap 30 percent tariffs on imported panels would kill tens of thousands of jobs, raise the cost of going solar and quash billions of dollars of investment.

South Korea could push back by launching a complaint through the Geneva-based World Trade Organization, but that is likely to take years. Seoul could also raise it during current negotiations with the United States on modifying the U.S.-South Korea free-trade agreement, known as KORUS.

Steel

The U.S. Commerce Department sent its recommendations on ways to curb foreign steel imports to the White House on January 11. The report followed Trump’s decision, made several months after he took office, to open a Section 232 investigation (from Section 232 of the Trade Expansion Act of 1962) into whether steel imports threaten U.S. national security.

Trump has 90 days to decide on any potential action. He has promised that any actions will protect steelworkers from imports. Curbing excess steel production in China, which now supplies half of the world’s steel, would be a key goal of any action. Broad tariffs could, however, also affect steelmakers in Europe, Japan, South Korea and Turkey.

It is unclear when the decision on steel imports will be announced.

Aluminum

The Commerce Department has sent Trump the results of its national security investigation into aluminum imports. That Section 232 probe could see broad import restrictions imposed on lightweight metal. The White House has been debating whether to order broad tariffs or quotas on steel and aluminum, pitting administration officials who favor aggressive restrictions against those who favor a more cautious approach to avoid a run-up in prices.

It is unclear when Trump will make his decision.

​Intellectual property

Trump and his trade advisers are currently considering penalizing China under Section 301 of the 1974 trade law for its alleged theft of American intellectual property.

The 301 investigation would allow Trump to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies.

Trump told Reuters in an interview on January 17 that he was considering imposing a big “fine” against China, but he did not elaborate on his answer.

U.S. businesses say they lose hundreds of billions of dollars in technology and millions of jobs to Chinese firms that have stolen ideas and software or forced them to turn over intellectual property as part of doing business in China.

A White House official told Reuters January 19 that Trump was particularly focused on the 301 investigation because it was “systemic” and covered a large swath of American businesses.

China could retaliate by weighing whether the actions are in line with WTO rules while ratcheting up pressure on U.S. businesses — for example, by buying from a European company such as Airbus instead of Boeing.
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Europe’s economy is on a roll — raising the question of exactly when the European Central Bank will end its extraordinary stimulus efforts. Bank President Mario Draghi will be at pains this week to leave that point open.

No changes in stimulus settings or interest rates are expected at Thursday’s meeting of the bank’s 25-member governing council, which sets monetary policy for the 19 countries that use the euro.

Draghi’s post-meeting news conference, however, will be closely scrutinized for any hints of a change in the timetable for withdrawing a key stimulus component — a massive bond-buying program — later this year.

Here is a fast guide.

Where’s inflation?

Stubbornly low inflation is why Draghi and his ECB colleagues want to keep the stimulus program running.

The bank’s mission is to keep inflation consistently close to but below 2 percent. Usually that means fighting inflation, but in the case of this economic recovery, prices have been unusually slow to respond to a pickup in demand for goods. Annual inflation was just 1.4 percent in December. Excluding oil and food, it was even lower, at 0.9 percent. Meanwhile, the economy is expected to have grown 2.4 percent in 2017; unemployment has fallen from over 12 percent to 8.7 percent.

ECB officials say that eventually growth will lead to higher wages as unemployment falls and labor becomes scarcer. But inflation has taken its time to show up.

Stimulus settings

So Draghi has been urging patience. The bank lowered its bond purchases to 30 billion euros ($37 billion) a month at the start of the year, from 60 billion euros, and has said they will run at least through September — and longer if necessary. The purchases, started in March 2015, pump newly printed money into the economy, which should raise inflation and make credit easier to get.

Much of the speculation in markets has centered on whether the purchases will stop in September, or be continued, perhaps at a lower level. Draghi and the governing council majority have so far resisted stimulus skeptics on the board, such as Germany’s Jens Weidmann, who say it’s time to head for the exit from stimulus.

Promises, promises

A key point to watch is the wording the bank uses to manage expectations of its future actions. Right now, the bank has included wording in its policy statement that it could increase the bond purchases if necessary. Dropping that phrase would be a first step to prepare markets for an end to the stimulus. This week’s meeting might be too early for that tweak, but the wording is being watched in the markets.

The bank has also promised it won’t raise interest rates — its benchmark rate is currently zero — until well after the end of the bond purchases. That puts a first rate increase well into 2019.  

Why you should care

The withdrawal of the stimulus by the ECB and other central banks such as the U.S. Federal Reserve will have wide-ranging effects on the finances of ordinary people.

Higher interest rates will mean more return on savings accounts and an easier time funding private and public pension plans. They could also mean trouble for “zombie companies” that might not have any profits if they had to pay higher rates to borrow. Such bankruptcies would be painful in the short term, but would free investment for more profitable uses.

More interest earnings on conservative holdings such as bonds and time deposits would make riskier assets — like stocks — relatively less attractive, and ease the pressure on investors and savers to rummage for returns in riskier holdings.

Down, euro, down

Market reaction is a key concern for Draghi, particularly when it comes to the euro’s exchange rate. The euro has risen in the past several weeks, to around $1.22, in part because markets are anticipating an end to the stimulus. Monetary stimulus can weaken a currency, so investors are bidding the euro up on speculation that the stimulus might come to an earlier end due to the strong economy.

A stronger euro, however, can hurt Europe’s many exporters and further weaken inflation.

Here’s the take from analyst Florian Hense at Berenberg Bank: “The ECB should and will likely stop asset purchases after September: Recent hawkish comments, including the minutes of the last meeting, point in that direction.

“However, in order to not trigger a further appreciation of the euro, the ECB will likely change its communication only cautiously and gradually — and not in January already.”
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President Donald Trump on Tuesday signed into law a steep tariff on imported solar panels, a move billed as a way to protect American jobs but which the solar industry said would lead to tens of thousands of layoffs.

The following are some questions and answers about the decision:

What impact will the decision have on the solar industry?

Trump has said the tariff will lead to more U.S. manufacturing jobs, by preventing foreign goods that are cheap and often subsidized from undercutting domestic products. He also expects foreign solar panel producers to start manufacturing in the United States.

“You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” Trump said as he signed the order.

The main solar industry trade group, the Solar Energy Industries Association, has a different view: It predicts the tariff will put 23,000 people out of work in the panel installation business this year by raising product costs and thus reducing demand.

Research firm Wood Mackenzie estimated that over the next five years the tariffs would reduce U.S. solar installation growth by 10 to 15 percent. The United States is the world’s fourth-largest solar market after China, Japan and Germany.

Research firm CFRA analyst Angelo Zino said he expected any added manufacturing jobs would be “minimal” given the 18 months to two years it takes to build and ramp up a new production facility and the industry’s shift toward automation.

Who wanted the tariff?

The main beneficiaries of the tariff include U.S.-based solar manufacturers Suniva and SolarWorld.

Suniva filed for bankruptcy in April, days before it filed the petition for trade relief. The Georgia-based company argued it could not compete with the cheap imports that have caused panel prices to fall more than 30 percent since 2016. It was later joined in the petition by SolarWorld. They asked the Trump administration for the equivalent of a 50 percent tariff.

Suniva is majority-owned by Hong Kong-based Shunfeng International Clean Energy, and SolarWorld is the U.S. arm of Germany’s SolarWorld AG.

Suniva called the tariffs “necessary,” while SolarWorld said it was “hopeful they will be enough.”

Most other U.S. solar companies, including SunPower, which manufactures panels in Asia, and residential installer SunRun Inc. were opposed to the trade barrier — as were offshore manufacturers such as China’s JinkoSolar, which will be among the biggest losers.

Solar manufacturer and developer First Solar supported the tariffs, and is likely to be among the biggest beneficiaries. First Solar makes panels using cadmium telluride that are excluded from the trade case. The company has seen an increase in demand for its unique technology.

Will the tariff lead to a trade war?

China branded the move an “overreaction” that would harm the global trade environment.

“The U.S.’s decision … is an abuse of trade remedy measures, and China expresses strong dissatisfaction regarding this,” said Wang Hejun, the head of the commerce ministry’s Trade Remedy and Investigation Bureau. “China will work with other WTO [World Trade Organization] members to resolutely defend its legitimate interests in response to the erroneous U.S. decision.”

Trump dismissed worries of trade retaliation.

“There won’t be a trade war. It’ll only be stock increases for companies that are in our country,” he said.

How does the tariff fit into Trump’s energy policy?

If the tariff cools growth in the U.S. solar industry, it could help Trump’s effort to support the coal industry — which competes with renewable energy technologies for a share of the nation’s power generation market.

Trump campaigned on a promise to revive the ailing coal mining sector and boost U.S. production of other fossil fuels as a way to create jobs and bolster American influence overseas.

He has also downplayed the threat from global warming — an issue that led past administrations to throw their support behind emissions-free solar and wind energy development — rolling back climate change regulations and pulling the United States from a global pact to combat it.
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U.S., Canadian and Mexican officials opened a key round of negotiations to modernize NAFTA on Tuesday as President Donald Trump, who has regularly threatened to quit the trade pact, said the talks were going “pretty well.”

Trump, vowing to undo what he portrays as disastrous trade deals, has in recent days expressed different views of the North American Free Trade Agreement, stoking investor worries that one of the world’s largest trading blocs may be disrupted.

With time running out to address U.S. demands for major changes to the 1994 deal, officials met in a Montreal hotel for the sixth and penultimate round of talks, which are to conclude by the end of March to avoid a clash with Mexico’s elections.

“We have come to Montreal with a lot of new ideas, a lot of creative strategies to try to bridge some of the gaps in the negotiations,” Canadian chief negotiator Steve Verheul told reporters, adding that he had “high hopes” of progress.

Trump offers positive comment

Insiders say the Canadian and Mexican governments are prepared to be flexible on a U.S. demand that the amount of North American content in autos be boosted to qualify for duty-free status in NAFTA.

But Ottawa and Mexico City strongly oppose the proposal that autos produced on the continent should have 50 percent U.S. content. Differences also remain over how to address the U.S. push for changes to various dispute resolution mechanisms.

Trump, who has blamed NAFTA for the loss of U.S. jobs, told White House reporters on Tuesday the talks were going “pretty well.”

The Mexican peso immediately pared losses on his comments.

Mexico’s chief negotiator Ken Smith said he hoped progress could be made on less contentious areas such as telecommunications, anti-corruption and sanitary and phytosanitary measures.

Canada unsure about US

Many Canadian officials, however, are downbeat about the talks amid uncertainty over whether Washington really wants to negotiate.

“If you’re unsure where the other side wants to go it is really difficult to know what would please them unless you capitulate, and that’s not going to happen,” one person briefed on Ottawa’s negotiating stance said on condition of anonymity.

With NAFTA’s future up in the air, Canada is taking steps to diversify its trade. Canada currently sends 75 percent of its goods exports to the United States.

Canada joins TPP

Earlier on Tuesday, Canada and 10 other nations agreed to sign a reworked Trans-Pacific Partnership trade pact. The United States pulled out of an earlier version of that deal.

Paul Ashworth, chief North America economist at Canada Economics, said the TPP deal might give Canada “a slightly stronger hand to play in the current NAFTA negotiations.”

Canadian Prime Minister Justin Trudeau is currently attending the World Economic Forum meeting in Switzerland to drum up investment. Next month he will spend five days in India, which Canada sees as potentially a bigger trading partner.
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President Donald Trump’s move Tuesday to tax imported solar cells and washing machines is meant to make good on his vow to reverse decades of U.S. support for free trade and to protect American jobs from foreign competition.

But the tariffs — already denounced by China, Germany and Mexico — are likely to heighten tensions between the United States and its trade partners, slow the U.S. solar-installation business and raise prices for American consumers. And even touchier trade cases lie ahead, involving China’s overproduction of steel and aluminum and its theft of trade secrets, with consequences for American industry and workers.

“My administration is committed to defending American companies, and they’ve been very badly hurt from harmful import surges that threaten the livelihood of their workers,” Trump said as he signed the tariffs. “The United States will not be taken advantage of anymore.”

Trump had campaigned on the argument that foreign nations had long outmaneuvered the United States at the negotiating table and had unfairly subsidized their own industries at the expense of American jobs. He pledged to return manufacturing jobs to America by killing or renegotiating trade deals and cracking down on such countries as China and Mexico that sell more to the United States than they buy from it. 

Almost as soon as he took office, Trump abandoned an Asia-Pacific trade pact negotiated by the Obama administration. And Trump’s trade team is engaged in a contentious effort to rewrite the 24-year-old North American Free Trade Agreement with Canada and Mexico.

Immediate tariffs

But until Tuesday, the administration had not imposed major tariffs on imported goods. It is now slapping an immediate tariff of 30 percent on most imported solar modules; the rate will gradually phase out in four years. For large residential washing machines, tariffs will start at up to 50 percent and phase out after three years. 

The White House is dusting off a trade weapon not used since President George W. Bush imposed tariffs on imported steel in 2002. The Trade Act of 1974 allows a president to temporarily impose tariffs or other trade barriers on imports that are deemed to damage U.S. industries.

The solar case emerged from a complaint by two U.S.-based companies that manufactured solar cells, the building blocks of solar panels: Suniva Inc., the Georgia-based subsidiary of a Chinese firm, which declared bankruptcy in April; and SolarWorld Americas, the U.S. subsidiary of a German company. 

Hurt by imported solar cells, modules

The two companies argued that they had been crushed by an influx of cheap imported solar cells and modules, mostly produced by Chinese companies. China’s share of global solar-cell production shot up from 7 percent in 2005 to nearly 70 percent last year. As prices plunged, nearly 30 U.S. plants closed over the past five years.

In 2012, the Commerce Department imposed duties on Chinese solar-cell imports after ruling that Beijing had unfairly subsidized its producers. Chinese companies avoided the duties, the United States says, by moving production to Taiwan and eventually to Malaysia, Singapore, Germany and South Korea.

Though U.S. solar-cell manufacturers have suffered from cheaper imports, U.S. companies that install solar panels have been booming, thanks to the tumbling prices. Installations have jumped tenfold since 2010. In 2016, solar became the top source of new U.S. electricity-generating capacity. But solar installation companies may now have to eliminate jobs.

Abigail Ross Hopper, president of the Solar Energy Industries Association, predicts that the tariffs will wipe out 23,000 jobs and mean that 1.2 million homes won’t be outfitted with solar power.

“They’re significant numbers if you think about employment, and they’re certainly significant numbers if you think about investment,” she says.

Joseph Osha, an energy analyst with JMP Securities, says he doubts the new tariffs will raise solar prices enough to revive U.S. manufacturing. And he thinks China may not bother to retaliate with trade sanctions of their own.

“This is not enough to allow any manufacturing to take root in the U.S.,” Osha says. “So I think (the Chinese) looked at it and said, ‘Whatever.’’’

Whirlpool complaint

The washing-machine case dates back to a 2011 complaint by Whirlpool, which charged that South Korean competitors LG and Samsung were dumping low-priced machines in the U.S. market. To avoid duties imposed by the Commerce Department, the companies shifted production, first to China and then to Thailand and Vietnam.

Sen. Sherrod Brown, D-Ohio, hailed the new tariffs.

 “This is welcome news for the thousands of Whirlpool workers in Clyde, Ohio, whose jobs have been threatened by a surge of cheap washers,” he said. “These tariffs will help level the playing field, and show anyone who tries to cheat our trade laws that they won’t get away with it.”

But critics warned that the tariffs will drive up washing-machine prices.

“Tariffs are taxes on families,” said U.S. Sen. Ben Sasse, R-Nebraska. “Moms and dads shopping on a budget for a new washing machine will pay for this — not big companies.”

Tired of the wrangling, the South Korean companies announced plans last year to build plants in the United States — Samsung in Newberry, South Carolina, and LG is Clarksville, Tennessee.

Dan Ikenson, director of the libertarian Cato Institute’s Center for Trade Policy, says the solar and washing-machine tariffs by themselves are unlikely to ignite a broader trade war because similar cases have been handled through the World Trade Organization, which rules on trade disputes.

Aluminium, steel next?

Ikenson is more worried about several other trade cases the Trump administration is pursuing. The Trump administration is expected to announce results in coming weeks of its investigation into whether Beijing improperly pressures foreign companies to hand over their technology. Beijing has warned that it will “resolutely safeguard” its interests if Washington acts. 

The U.S. also is weighing whether to slap tariffs on aluminium and steel imports by arguing that they pose a threat to national security. If the United States taxes imports on national security grounds, other countries could do the same, Ikenson says. The WTO wouldn’t intervene, he says, because it tends to let countries determine their own national security interests. 

Protectionism is already rising around the world, notes Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. “The fact that Trump offers an open door for any industry that wants protection from imports fuels this process … What we can expect is not exactly a trade war, but lots of trade skirmishes.”
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The Senate on Tuesday approved President Donald Trump’s selection of Jerome Powell to be the next chairman of the Federal Reserve beginning next month.

Senators voted 84-13 to confirm Powell to lead the nation’s central bank, a post that is considered the most powerful economic position in government.

Powell will succeed Janet Yellen, the first woman to lead the Fed, when her term ends Feb. 3. Trump decided against offering Yellen a second four-year term as chair despite widespread praise for her performance since succeeding Ben Bernanke.

Powell, 64, has served for five-and-a-half years on the Fed’s board. A lawyer and investment manager by training, he will be the first Fed leader in 40 years without an advanced degree in economics. Many expect him to follow Yellen’s cautious approach to interest rates.

Powell, viewed as a centrist, enjoyed support from Republicans and Democrats.

The 13 senators who voted against Powell’s nomination included four Republicans, eight Democrats and Sen. Bernie Sanders, an independent who votes with the Democrats. The vote total was initially announced as 85-12. But Sen. Dianne Feinstein, D-California, received permission to change her vote to no after the initial count had been announced.

One of the dissenters, Sen. Elizabeth Warren, D-Mass., said she was concerned that Powell “will roll back critical rules that help guard against another financial crisis.”

But Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, praised Powell’s tenure on the Fed board.

“His track record over the past six years shows he is a thoughtful policymaker,” Brown said.

During the presidential race, Trump was critical of the role the Fed played in implementing the Dodd-Frank Act, the 2010 law that tightened banking regulations after the 2008 financial crisis. Trump and many Republicans in Congress contended that the stricter regulations were too burdensome for financial institutions and were a key reason why economic growth since the Great Recession ended in 2009 had been lackluster.

Powell has signaled that he favors ways to make bank regulations less onerous, especially for smaller community banks.

Trump will be able to essentially remake the Fed’s board during his first two years in office. He has already filled the key post of vice chairman for regulation with Randal Quarles. The president has also nominated Marvin Goodfriend, a conservative economist, for another vacancy on the board.

In addition, he can fill three more vacancies on the seven-member board, including the key spot of Fed vice chairman, which has been vacant since Stanley Fischer left in October.

All told, the vacancies will have given Trump the ability to fill six of the seven board positions with his own choices. Lael Brainard will remain the lone board member not to have been chosen by Trump.

Powell, known as a collegial consensus-builder, could help serve as a steadying force for the U.S. economy as well as a unifying figure among the central bank’s policymakers. As a Fed governor, Powell has never dissented from a central bank decision.

Educated at Princeton University with a law degree from Georgetown, Powell, known as Jay, spent many years in investment management — at Dillon Read and then at the Carlyle Group. His work there made him one of the wealthiest figures to serve on the Fed board: His most recent financial disclosure form places his wealth at between $19.7 million and $55 million. And based on how government disclosures are drafted, his wealth may actually be closer to $100 million.
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A trade group representing U.S. auto parts makers on Monday urged the Trump administration to adopt NAFTA automotive rules that cover research, engineering, design and software development work as part of North American regional value content goals.

The proposal from the Motor and Equipment Manufacturers Association (MEMA) was sent to U.S. Trade Representative Robert Lighthizer as a sixth round of negotiations to revise the North American Free Trade Agreement began in Montreal.

U.S. demands for sweeping changes to automotive content rules are among the most contentious issues in the NAFTA talks, including a requirement that half the value of all North American vehicles come from the United States and a far higher content requirement of 85 percent from North America.

Canada and Mexico have said the U.S. targets are unworkable, but have not responded with counter-proposals.

They are expected to do so at the Montreal talks ending Jan 29. Lack of progress in bridging the gap on autos could jeopardize the negotiations and increase the chances that President Donald Trump follows through on his threat to seek a U.S. withdrawal from NAFTA.

The U.S. auto industry, including MEMA and trade groups representing Detroit and foreign-brand automakers, have largely sided with Canada and Mexico in arguing that the U.S. proposals would hurt the industry’s competitiveness.

The MEMA letter to Lighthizer makes no mention of the proposed U.S. and regional content targets, and focuses instead on recommendations that its members believe will help retain and grow automotive jobs in the United States.

“We think it lines up very well with the president’s initiatives and his stated goals for NAFTA and other free trade agreements,” Ann Wilson, MEMA’s senior vice president of government affairs, told Reuters. “What we have been trying to do is find other ways of getting to the president’s objectives without getting to a 50 percent domestic requirement.”

Counting the well-paid engineering, design, research and software development as part of a vehicle’s value content would provide an incentive for companies to retain jobs doing this work now largely done in the United States.

The proposal also urges the Trump administration to preserve “tariff-shifting” for automotive parts as a means to retain the higher value-added work being done on sophisticated automotive electronics and other systems.

Currently, companies that import components and materials into North America and convert them into automotive parts can “shift,” or apply, NAFTA tariff-free benefits to such inputs.

For example, off-the-shelf electronics parts from Asia such as lidar and radar units, cameras, sensors and circuit boards currently gain this benefit as they are assembled into vehicle crash avoidance systems. Steel tubing converted to fuel injectors also can gain such benefits.

But the current USTR autos proposal would require that virtually all components be subject to a “tracing list” to verify their North American origin so they can count toward regional value targets.

The tracing list would be expanded to steel, glass, plastic resins and other materials, under the proposal.

Industry executives have argued that these requirements are likely to push auto and parts companies to source more products outside the region and simply pay the low 2.5 percent U.S. tariffs on many parts.

MEMA also urged Lighthizer to negotiate an agreement that provides incentives to U.S. companies to train and expand the U.S. workforce, as parts companies struggle to fill open positions amid rising retirements. The group also urged that aftermarket parts be subject to the same NAFTA rules as original equipment parts.
…

China invited Latin American and Caribbean countries to join its “One Belt, One Road” initiative on Monday, as part of an agreement to deepen economic and political cooperation in a region where U.S. influence is historically strong.

Chinese Foreign Minister Wang Yi said the region was a natural fit for the initiative, which China has leveraged to deepen economic and financial cooperation with developing nations.

“China will always stay committed to the path of peaceful development and the win-win strategy of opening up and stands ready to share development dividends with all countries,” Wang said at a meeting between China and 33 members of the Community of Latin American and Caribbean States (CELAC).

Representatives from China and CELAC signed a broad agreement to expand ties in the second time China has met with CELAC – a bloc formed in Venezuela in 2011 that does not include the United States or Canada.

Though it had few specific details, the agreement is part of an evolving and more aggressive Chinese foreign policy in Latin America as the United States, under President Donald Trump, has taken a more protectionist stance.

The “One Belt, One Road” initiative, proposed in 2013 by Chinese President Xi Jinping, promotes expanding links between Asia, Africa and Europe, with billions of dollars in infrastructure investment.

Wang emphasized projects to improve connectivity between land and sea, and cited the need to jointly build “logistic, electricity and information pathways.”

The so-called Santiago declaration, signed by China and CELAC delegates, also calls for bolstering trade and taking action on climate change.

Chile Foreign Minister Heraldo Munoz, who has criticized Trump in the past, said the agreement marked an “historic” new era of dialogue between the region and China.

“China said something that is very important, that it wants to be our must trustworthy partner in Latin America and the Caribbean and we greatly value that,” said Munoz. “This meeting represents a categoric repudiation of protectionism and unilateralism.”

China has sought a bigger role overseas since Trump was elected, presenting its Regional Comprehensive Economic Partnership trade agreement as an alternative to the Trans-Pacific Partnership, which the United States has abandoned.

The country is already testing U.S. dominance in Latin America, offering the region $250 billion in investment over the next decade. It is the top trading partner of many countries in the region, including Brazil, Chile and Argentina.

Still, Wang played down the idea of a race for influence.

“It has nothing to do with geopolitical competition. It follows the principle of achieving shared growth through discussion and collaboration,” Wang said in his remarks. “It is nothing like a zero sum game.”

In recent years, Chinese companies have moved away from merely buying Latin American raw materials and are diversifying into sectors such as auto manufacturing, e-commerce and even

technology businesses such as car-hailing services.

“Our relations with China are very broad, this (CELAC) is one more pathway for Brazil to work with China. Together we identified more areas of cooperation,” said Brazil’s Vice Foreign Minister Marcos Galvao.
…

Australia has filed a formal complaint with the World Trade Organization that accuses Canada of placing “discriminatory” rules on the sales of imported wine.

Canada is Australia’s fourth-biggest wine market. Officials in Canberra say rules in Canada unfairly discriminate against overseas wine.

An official protest has been lodged with the World Trade Organization (WTO) against regulations in the Canadian province of British Columbia, where wine produced locally can be sold in grocery stores but imports must be sold in a “store within a store” with a separate cash register.

Canberra’s objection also targets policies in other provinces, including Ontario, Quebec and Nova Scotia, as well as federal practices in Canada, which could breach a WTO agreement. They mean higher prices for foreign wines, as well as other barriers to sale, according to the Australian complaint.

“Australia is seeing its market share and that market erode. That concerns me, it concerns wine exporters,” said Australian trade minister Steve Ciobo. “Potentially this could cost Australian jobs, so I want to make sure we are on the front foot about protecting Australia’s interests.”

Australia’s complaint to the WTO is similar to one made by the United States, which has accused Canada of placing unfair limits on the sale of imported wine.

In October, the U.S. said British Columbia was favoring local vineyards by giving their wine an exclusive retail outlet in grocery store shelves and cutting out U.S. competition.

A spokesman for Canada’s international trade minister said the federal government works to ensure its liquor policies “are consistent with our international trade commitments”.

Under WTO rules, Canada has 60 days to settle the dispute with Australia.

After that, Canberra could ask the WTO to adjudicate, which could result in Canada being forced to change its laws or risk trade sanctions.

 
…

Iran’s supreme leader has ordered the Revolutionary Guard to loosen its hold on the economy, the country’s defense minister says, raising the possibility that the paramilitary organization might privatize some of its vast holdings.

The comments this weekend by Defense Minister Gen. Amir Hatami appear to be a trial balloon to test the reaction of the idea, long pushed by Iran’s President Hassan Rouhani, a relative moderate. Protests over the country’s poor economy last month escalated into demonstrations directly challenging the government.

But whether the Guard would agree remains unclear, as the organization is estimated to hold around a third of the country’s entire economy.

Hatami, the first non-Guard-affiliated military officer to be made defense minister in nearly 25 years, made the comments in an interview published Saturday by the state-run IRAN newspaper. He said Supreme Leader Ayatollah Ali Khamenei ordered both the country’s regular military and the Guard to get out of businesses not directly affiliated to their work.

“Our success depends on market conditions,” the newspaper quoted Hatami as saying.

He did not name the companies that would be privatized. The Guard did not immediately acknowledge the supreme leader’s orders in their own publications, nor did Khamenei’s office.

The Guard formed out of Iran’s 1979 Islamic Revolution as a force meant to protect its political system, which is overseen by Shiite clerics. It operated parallel to the country’s regular armed forces, growing in prominence and power during the country’s long and ruinous war with Iraq in the 1980s. It runs Iran’s ballistic missile program, as well its own intelligence operations and expeditionary force.

In the aftermath of the 1980s war, authorities allowed the Guard to expand into private enterprise.

Today, it runs a massive construction company called Khatam al-Anbia, with 135,000 employees handling civil development, the oil industry and defense issues. Guard firms build roads, man ports, run telecommunication networks and even conduct laser eye surgery.

The exact scope of all its business holdings remains unclear, though analysts say they are sizeable. The Washington-based Foundation for Defense of Democracies, which long has been critical of Iran and the nuclear deal it struck with world powers, suggests the Guard controls “between 20 and 40 percent of the economy” of Iran through significant influence in at least 229 companies.

In his comments, Hatami specifically mentioned Khatam al-Anbia, but didn’t say whether that too would be considered by the supreme leader as necessary to privatize. The Guard and its supporters have criticized other business deals attempting to cut into their piece of the economy since the nuclear deal.
…

Saudi Arabia’s energy minister urged global oil producing nations on Sunday to extend their cooperation beyond 2018, but said this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months.

It was the first time that Saudi Arabia had publicly raised the possibility of a new form of coordination among oil producers after 2018. Their agreement on supply cuts, originally launched last January, is set to expire in December this year.

Cooperation ‘here to stay’

Khalid al-Falih, speaking to reporters ahead of a meeting later in the day of the joint ministerial committee, which oversees implementation of the cuts, said extending cooperation would convince the world that coordination among producers was “here to stay.”

“We shouldn’t limit our efforts to 2018, we need to be talking about a longer framework of cooperation,“ Falih said. ”I am talking about extending the framework that we started, which is the declaration of cooperation, beyond 2018.

“This doesn’t necessarily mean sticking barrel by barrel to the same limits or cuts, or production targets country by country that we signed up to in 2016, but assuring stakeholders, investors, consumers and the global community that this is something that is here to stay. And we are going to work together.”

Falih said the global economy had strengthened while supply cuts, of which Saudi Arabia has shouldered by far the largest burden, had shrunk oil inventories around the world. As a result, the oil market will return to balance in 2018, he said.

$70 a barrel oil

Falih and energy ministers from the United Arab Emirates and Oman noted that the rise of the Brent oil price to three-year highs around $70 a barrel in recent weeks could cause an increase in supply of shale oil from the United States.

But both Falih and UAE minister Suhail al-Mazroui said they did not think the rise in prices would hurt global demand for oil.

Kuwait’s oil minister Bakheet al-Rashidi said any discussion among producers on the future of the agreement on supply cuts would not occur Sunday, but was expected to happen at a meeting in June. OPEC and other producers led by Russia are next scheduled to meet to discuss oil policy in June.
…

Robots, artificial intelligence and machine learning technologies were all on display at the National Retail Federation (NRF) 2018 trade show. The event showcased the ways retailers are keeping pace with shoppers’ round-the-clock spending. Tina Trinh reports.
…

Wall Street roared upward Wednesday, with investor enthusiasm sending all three major stock indices to record finishes, and the Dow to its first close above 26,000 points.

The blue-chip Dow gained 1.3 percent to close at 26,115.65 — just eight trading sessions after breaking the 25,000 mark — with strong showings from Boeing, IBM and Intel. 

The broader S&P 500 added 0.9 percent to close at 2,802.56, while the tech-heavy Nasdaq gained a full percentage point to settle at 7,298.28.

With just 11 trading days so far in 2018, Wednesday’s session marked the seventh time this year all three major indices closed at all-time highs.

Maris Ogg of Tower Bridge Associates told AFP the sustained rally was boosted by a “confluence of good news,” including strong company earnings, slashed corporate tax rates, higher worker compensation and new investment.

“This is a boost for productivity” and gave market players greater confidence, she said.

IBM gained 2.9 percent after analysts upgraded their price target for the company’s stock, and chipmaker Intel rose a similar amount, while aviation giant Boeing jumped 4.7 percent after announcing a joint venture to make aircraft seats.

Buoyant markets were comforted in midafternoon as a Federal Reserve survey portrayed the national economy growing at a “modest to moderate” pace.

Persistent cold weather in the United States helped oil prices shrug off weakness early in the weak, helping oil stocks nudge markets higher.

Exxon Mobil rose 1.2 percent, and ConocoPhillips increased 1.7 percent, while Royal Dutch Shell and Chevron each rose 0.3 percent.

The jubilant performance came despite continued pain at General Electric, which sank 4.7 percent as investors worked to evaluate component businesses within the company ahead of a possible breakup.

Goldman Sachs fell 1.8 percent after reporting a steep quarterly drop in trading income.
…

Financial crime fighters at the U.S. Treasury are “aggressively” pursuing virtual currency platforms that lack strong internal safeguards against money laundering, a top official told a Senate panel on Wednesday.

With more criminals using the emerging asset class to store and transmit their ill-gotten gains, Treasury’s Financial Crimes Enforcement Network (FinCEN) will pursue malfeasant virtual currency platforms even if they are located overseas, Sigal Mandelker, the U.S. Treasury Department’s undersecretary for terrorism and financial crimes, told the Senate Banking Committee.

U.S.-based platforms for bitcoin and other virtual currencies are required to comply with antimoney laundering (AML) rules including filing suspicious activity reports, with around 100 such platforms registered with FinCEN. But many other countries have no such requirements.

“The real vulnerability that we all have to address is that while we have regulatory authorities in place here in the United States and we do enforce those… we need other countries to do the same,” Mandelker told the committee’s hearing on U.S. antimoney laundering laws.

Mandelker said the U.S. government would also encourage other countries to introduce stricter regulation of virtual currencies, which law enforcement officials say are attractive to criminals making illegal transactions because they can be used anonymously.

In July, the Treasury moved to shut down the website of Russia’s BTC-e exchange, one of the world’s largest bitcoin platforms, and ordered it to pay a $110 million fine for allegedly facilitating transactions involving ransomware, computer hacking, and drug trafficking, among other crimes.

A U.S. jury also indicted a Russian man in July in connection with the alleged crimes perpetrated by the platform.

Regulators and governments around the world are still debating how to address risks posed by cryptocurrencies. In recent weeks, South Korea, Japan and China have all made noises about a regulatory crackdown while officials in France vowed to investigate the emerging asset class.

Senators on Wednesday expressed concerns over the risks posed by cryptocurrencies to the global financial system with Democratic Senator Mark Warner saying the U.S. had “a lot of work to do” to get a grip on the issue.

U.S. markets regulators said this month they plan to take more aggressive enforcement action against exchanges that may be defrauding investors or allowing market manipulation.

The price of bitcoin slumped to $10,000 on Wednesday, halving in value from its peak price of almost $20,000 hit just in December, with investors gripped by fears regulators could clamp down on the volatile currency.
…

Apple is planning to build another corporate campus and hire 20,000 workers during the next five years as part of a $350 billion commitment to the U.S. economy.

The pledge announced Wednesday is an offshoot from the sweeping overhaul of the U.S. tax code championed by President Donald Trump and approved by Congress last month.

Besides dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash being held overseas.

Apple plans to take advantage of that provision to bring back more than $250 billion in offshore cash, generating a tax bill of roughly $38 billion.

The Cupertino, California, company says it will announce the location of a second campus devoted to customer support later this year.

 
…

In a modest apartment near a Caracas slum, nutrition professor Nancy Silva and four aids spread rich, dark Venezuelan cocoa on a stone counter to make chocolate bars to be sold in local shops that cater to the crisis-hit country’s dwindling elite.

Like some 20 recently launched Venezuelan businesses, Silva uses the country’s aromatic cocoa to make gourmet bars of the kind that can fetch more than $10 each in upscale shops in Paris or Tokyo.

The oil-rich but recession-devastated nation’s Byzantine bureaucracy makes large-scale exports nearly impossible for small businesses.

As a result, most of her bars are sold locally for less than one U.S. dollar – well out of reach of millions of Venezuelans who earn less than that in a week, but reasonably priced for the well-heeled of an increasingly two-tiered economy.

But entrepreneurs who have launched new Venezuelan chocolatiers in recent years say producing gourmet bars allows them to make a living amid the collapse of a socialist economic system – and dream of exports as a golden opportunity down the road.

“Our real oil is cocoa,” said Silva, owner of the chocolatier Kirikire that in 2014 won an award from the prestigious Salon du Chocolat fair in Paris. “In Europe, they’re snatching up these bars.”

Silva faces constant operational challenges due to hyperinflation and Soviet-style product shortages. But these are offset by steady access to high-quality aromatic cocoa from a cocoa farm in eastern Venezuela owned by her family.

Her bars are sold in high-end Caracas grocery stores, delis and liquor stores, where everything from staple products to luxury goods are amply available to the well-heeled – in contrast to the long lines and bare shelves of most shops.

Silva is now focused on getting her chocolate to France, where she once sold a single kilo of her chocolate for the equivalent of 80 euros ($96), which is today the equivalent of five years of minimum wage salary in Venezuela.

Standing in her way are a range of permits such as customs authorizations and sanitary inspections that take months in Venezuela’s notoriously inefficient bureaucracy.

The Information Ministry did not respond to a request for comment.

Venezuela was the world’s leading cocoa producer at the end of the 18th century when it was still a Spanish colony, according to Jose Franceschi, who has written books about cocoa and whose great-grandfather founded the Venezuela’s gourmet Franceschi chocolate brand.

But the cocoa trade was overshadowed by the rise of the oil industry in the early 20th century. Critics say it was further weakened by state takeovers under late President Hugo Chavez, who boosted state involvement in the economy as part of promises to create a society of equals.

But since the crash of oil markets, Venezuela has become a sharply divided society where oil engineers and public hospital doctors rarely make as much as $50 a month while a small group citizens with access to even modest amounts of hard currency can afford fine dining and gourmet products.

Bean to Bar

Output of 16,000 tons per year is less than 1 percent of the global total, and less than 10 percent of the production of regional heavyweights Brazil and Ecuador.

Many gourmet bars made in the United States now prominently advertise the use of Venezuelan cocoa but generally mix in other less-desirable cocoas. Bars made in Venezuela, in contrast, are made with 100 percent local cocoa.

This gives the new Venezuelan chocolatiers a leg up as they tap into the global ‘bean-to-bar’ movement, in which chocolate makers oversee the entire process of turning cocoa fruit into sellable treats.

On the second floor of an old mansion in Caracas, economist and chef Giovanni Conversi has been making specialty chocolate for two years under the name Mantuano.

Sprinkled with sea salt or aromatic fruits from the Amazon, the chocolate bars are a hit in London, Miami and Panama City in specialty chocolate stores or shops that specialize in Latin American food.

He and four assistants produce 9,000 bars a month in Caracas. He has opened a factory in Argentina that buys cocoa from small-scale producers like Yoffre Echarri, who two decades ago inherited his grandfather’s plantation in the beach town of Caruao.

He opens the fruit to remove the beans and the accompanying sweet white pulp, which has a strong aroma of tropical fruit and then ferments the mixture in plastic bags buried underground.

That process retains more aroma than the traditional method of fermenting in wooden boxes.

He sells the beans to Venezuelan chocolatiers for less than $1 per kilo, about half the international price.

“Clients can’t get enough. Those who three months ago were asking for five kilos now call for 50,” said Echarri.

Many small chocolatiers only manage to get products to foreign markets by carrying them in suitcases on commercial flights, though well-established brands such as El Rey have formal export operations to the United States and Europe.

In Japan, El Rey is represented by the food division Japanese trading house Mitsubishi. Mitsubishi did not immediately respond to a request for comment.

Still, some 1,700 people have recently studied artisanal chocolate at the Simon Bolivar University.

“Everyone wants to give it a shot,” said Rosa Spinosa, the head of the program created two years ago.

($1 = 0.8363 euros)
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El Salvador is discussing a deal with Qatar under which Salvadoran migrants facing the loss of their right to stay in the United States could live and work temporarily in the Middle Eastern country, the government of the Central American nation said on Tuesday.

Last week, U.S. President Donald Trump’s administration said that as of September 2019, it would eliminate the temporary protected status, or TPS, that allows some 200,000 Salvadorans to live in the United States without fear of deportation.

Presidential communications chief Eugenio Chicas said El Salvador was in talks to see how Salvadorans could be employed in Qatar, a wealthy country of some 2.6 million people that is scheduled to host the soccer World Cup in 2022.

“The kingdom of Qatar … has held out the possibility of an agreement with El Salvador whereby Salvadoran workers could be brought across in phases (to Qatar),” Chicas told reporters.

After an unspecified period, the Salvadorans would return home, Chicas added, without saying how many workers the program could encompass.

El Salvador’s foreign minister, Hugo Martinez, is in Qatar until Friday and said in a statement that Salvadorans could work in engineering, aircraft maintenance, construction and agriculture.

Martinez also noted that Qatar had offered to provide health services to the Central American country, which is struggling with a weak economy and gang violence.
…

Car dealerships in Mexico City have kicked off the new year offering “clearance sales” and free insurance as 2017 models collect dust on their lots, a reminder that consumer nerves over high interest rates could slow the economy ahead of elections.

The first drop in auto sales in eight years is the most visible sign that the great Mexican shopper, the heart and soul of Latin America’s second-largest economy, is feeling the pinch of inflation at a 16½-year high and a battered peso.

A government decision to scrap fuel subsidies last year has made running a car more expensive, while the central bank’s battle with inflation has put car loans out of reach for many.

“If I’m going to buy a new car and then not be able to fill it up with gasoline, then it’s better to sit tight,” said Jaime Asrael, as he window-shopped outside a Chevrolet dealership in the central Guerrero neighborhood of the capital.

Beyond cars, consumer confidence is slipping more broadly. The consumer confidence index declined to 88.4 in December from 88.8 the previous month, the statistics agency said last week.

​Ruling party in trouble

This has worried government officials who are trying to persuade voters to re-elect the ruling Institutional Revolutionary Party (PRI) in July. Experts doubt increased public spending in the campaign will be enough to boost confidence much in Mexico, where private consumption accounts for a whopping two-thirds of gross domestic product.

Leftist opposition candidate Andres Manuel Lopez Obrador has enjoyed a double-digit poll lead over his ruling-party rival in recent surveys.

“It certainly helps his case. The fact that we’ve seen this jump in inflation squeezing real incomes, that all [goes] into the mix,” said Neil Shearing, chief emerging markets economist at Capital Economics.

A blow such as an eventual collapse of talks to renegotiate the North American Free Trade Agreement could make more consumers snap their wallets shut.

“I wouldn’t be surprised if we see a more significant deceleration of private consumption” considering inflation’s impact on wages, tighter credit conditions, and NAFTA and election concerns, said Goldman Sachs economist Alberto Ramos.

“Instead of going on vacation for two weeks, they go one week. Instead of buying the automobile this year, they wait a little bit to see how things go. … That is serious in the sense that private consumption has been so far the main engine of growth,” said Ramos.

Domestic car sales in 2017 fell 4.6 percent from a year earlier, according to data from the Mexican Auto Industry Association. It was the first drop in annual auto sales since the global financial crisis of 2008-09.

​Inflation blamed

“Inflation is what hit us the most. And most people want to buy with credit, and financial institutions and banks weren’t able to cover the market,” said Jose Luis Salas, general manager at Grupo Surman, which runs 13 General Motors dealerships in the country.

“That’s what caused the drop in new car sales,” he added. 

Wider retail sales slowed to growth of 7.7 percent through November, not far above the 2017 inflation rate of 6.77 percent and below the average growth of some 10 percent the prior two years.

For years, stable prices compensated for Mexico’s sluggish economic growth, so accelerating inflation has caused outrage.

Sporadic looting broke out this month after reports that gasoline and food prices were about to be hiked, and angry posts filled social media, echoing unrest last year after the government liberalized fuel prices.

The central bank in November revised downward its 2017 economic growth forecast, blaming the NAFTA talks, the impact of storms and two major earthquakes in September, and a drop in domestic oil production to the lowest in more than 20 years.

It forecast economic growth of 1.8 percent to 2.3 percent in 2017 and 2 to 3 percent in 2018.

The bank, which in December hiked its key rate to a consumption-sapping, nearly nine-year high of 7.25 percent, said it expected a “nascent deceleration” in consumer spending. It is widely expected to raise rates again in February, according to bets in the interest rate swap market.
…

Ford’s plan to double its electrified vehicle spending is part of an investment tsunami in batteries and electric cars by global automakers that now totals $90 billion and is still growing, a Reuters analysis shows.

That money is pouring in to a tiny sector that amounts to less than 1 percent of the 90 million vehicles sold each year and where Elon Musk’s Tesla, with sales of only three models totaling just over 100,000 vehicles in 2017, was a dominant player.

With the world’s top automakers poised to introduce dozens of new battery electric and hybrid gasoline-electric models over the next five years — many of them in China — executives continue to ask: Who will buy all those vehicles?

“We’re all in,” Ford Motor Executive Chairman Bill Ford Jr. said of the company’s $11 billion investment, announced on Sunday at the North American International Auto Show in Detroit. “The only question is, will the customers be there with us?”

“Tesla faces real competition,” said Mike Jackson, chief executive of AutoNation Inc, the largest U.S. auto retailing chain. By 2030, Jackson said he expects electric vehicles could account for 15-20 percent of New vehicle sales in the United States.

Investments in electrified vehicles announced to date include at least $19 billion by automakers in the United States, $21 billion in China and $52 billion in Germany.

But U.S. and German auto executives said in interviews on the sidelines of the Detroit auto show that the bulk of those investments are earmarked for China, where the government has enacted escalating electric-vehicle quotas starting in 2019. 

Mainstream automakers also are reacting in part to pressure from regulators in Europe and California to slash carbon emissions from fossil fuels. They are under pressure as well from Tesla’s success in creating electric sedans and SUVs that inspire would-be owners to flood the company with orders.

While Tesla is the most prominent electric car maker, “soon it will be everybody and his brother,” Daimler AG Chief Executive Dieter Zetsche told reporters on Monday at the Detroit show.

Daimler has said it will spend at least $11.7 billion to introduce 10 pure electric and 40 hybrid models, and that it intends to electrify its full range of vehicles, from minicompact commuters to heavy-duty trucks.

“We will see whether demand will drive our (electric vehicle) sales or whether we will all be trying to catch the last customer out there,” Zetsche said. “Ultimately, the customer will decide.”

For now, Nissan’s 7-year-old Leaf remains the world’s top-selling electric vehicle and the company’s sole battery-only car — an offering soon to be swamped by new rivals bringing tougher competition that could add pressure to pricing.

“Everybody will find out that if you push you will have a lot of bad news on residual values,” Nissan Chief Performance Officer Jose Munoz told Reuters.

Jim Lentz, chief executive of Toyota’s North American operations, said it took Toyota 18 years for sales of hybrid vehicles to reach 3 percent share of the total market. And hybrids are less costly, do not require new charging infrastructure and are not burdened by the range limits of battery electric vehicles, he said.

“What’s it going to take to get to 4 to 5 percent” share for electric cars, Lentz said. “It’s going to be longer.”

The largest single investment is coming from Volkswagen AG , which plans to spend $40 billion by 2030 to build electrified versions of its 300-plus global models.

In the United States, General Motors has outlined plans to introduce 20 new battery and fuel cell electric vehicles by 2023, most of them built on a new dedicated, modular platform that will be introduced in 2021.

GM Chief Executive Mary Barra has not said how much the automaker will spend on electric vehicles. Much of the investment will be made in China, where GM’s Cadillac brand will help spearhead the company’s more aggressive move into electric vehicles, according to Cadillac President Johan de Nysschen.

In an interview on Monday at the Detroit show, de Nysschen said Cadillac would “play a central role” in GM’s electric vehicle strategy in China, and will introduce an unspecified number of models based on GM’s future electric-vehicle platform.

Some of those Cadillacs could be assembled in China, de Nysschen said.

Chinese automakers, including local partners of Ford, VW and GM, all have publicized aggressive investment plans.

Not every multinational automaker is moving so aggressively into electric vehicles.

In Detroit on Monday, Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne said it did not make sense to announce a specific number of new electric vehicles — and he said the company was not under pressure, but working to meet emissions requirements. 

“We do not have a gun to our head,” Marchionne said. He said EVs will likely become mandatory in Europe because of emissions rules.
…

Mobile apps that help women in the Indian countryside and tiny villages in Japan to open their homes to visitors from across the world are generating incomes, revitalizing remote communities and helping to curb migration to cities.

A women’s organization in the western Indian state of Gujarat has tied up with Airbnb, the short-term home rental service, to train rural women to be hosts and list their homes on its site.

A year in, the number of women earning from home sharing has doubled, according to the Self Employed Women’s Association (SEWA), which has about 2 million members, mostly in villages.

“At first, we weren’t sure how the women would fare and if people would respond to homestays in these areas,” said Reema Nanavaty, a director at SEWA.

“But once they began getting guests, the women invested in upgrading their homes and started using Google Translate to communicate with guests. It has become a significant source of income for them,” she told the Thomson Reuters Foundation.

Guests to the colorful homes are treated to home-cooked Gujarati food, and can participate in kite flying and garba dancing with sticks in traditional costume, she said.

The partnership will extend to 14 more states, aiming to boost incomes of women in rural areas and help boost tourism in otherwise neglected areas, she said.

Cheap smartphones are also aiding those looking for work, with job matching sites helping even illiterate job seekers from rural Cambodia to India find employers without middlemen who may dupe them.

Airbnb also has partnerships in South Korea, Japan and Taiwan for rural tourism.

In Japan, the Yoshino Cedar House, a collaboration with Tokyo-based architect Go Hasegawa and the local community, came about as a response to shrinking rural populations in the rapidly ageing country.

It was inspired by a host whose listing helped rejuvenate her village, said Airbnb co-founder Joe Gebbia.

Hundreds of villages and towns “will disappear in the next decade if we do not find ways to create regenerative and adaptive systems”, he said via e-mail.

The Cedar House is run by a cooperative of about two dozen community members who take turns at being the host.

Most of the proceeds remain in the community, with a percentage of profits reinvested in local projects, Gebbia said.

“If we can get community-driven empowerment right in Japan, we can find ways of adapting this to other countries,” he said.

In India, the 50 rural homes listed on Airbnb are drawing guests from the United States and Europe, Nanavaty said.

“Some of the villages were not even on Google Maps. For the women, it is a new way to make money, be independent,” she said.
…

The next phase in data collection is right under your feet.

Online clicks give retailers valuable insight into consumer behavior, but what can they learn from footsteps? It’s a question Milwaukee-based startup Scanalytics is helping businesses explore with floor sensors that track people’s movements.

The sensors can also be used in office buildings to reduce energy costs and in nursing homes to determine when someone falls. But retailers make up the majority of Scanalytics’ customers, highlighting one of several efforts brick-and-mortar stores are undertaking to better understand consumer habits and catch up with e-commerce giant Amazon.

Physical stores have been at a disadvantage because they “don’t have that granular level of understanding as to where users are entering, what they’re doing, what shelves are not doing well, which aisles are not being visited,” said Brian Sathianathan, co-founder of Iterate.ai, a small Denver-based company that helps businesses find and test technologies from startups worldwide.

But it’s become easier for stores to track customers in recent years. With Wi-Fi — among the earliest available options — businesses can follow people when they connect to a store’s internet. One drawback is that not everyone logs on so the sample size is smaller. Another is that it’s not possible to tell whether someone is inches or feet away from a product.

Sunglass Hut and fragrance maker Jo Malone use laser and motion sensors to tell when a product is picked up but not bought, and make recommendations for similar items on an interactive display. Companies such as Toronto-based Vendlytics and San Francisco-based Prism use artificial intelligence with video cameras to analyze body motions. That can allow stores to deliver customized coupons to shoppers in real time on a digital shelf or on their cellphones, said Jon Nordmark, CEO of Iterate.ai.

With Scanalytics, Nordmark said, “to have [the sensors] be super useful for someone like a retailer, they may need to power other types of things,” like sending coupons to customers.

Using the data

Scanalytics co-founder and CEO Joe Scanlin said that’s what his floor sensors are designed to do. For instance, the sensors read a customer’s unique foot compressions to track that person’s path to a digital display and how long the person stands in front of it before walking away, he said. Based on data collected over time, the floor sensors can tell a retailer the best time to offer a coupon or change the display before the customer loses interest.   

“Something that in the moment will increase their propensity to purchase a product,” said Scanlin, 29, who started developing the paper-thin sensors that are 2-square feet (0.19-sq. meters) as a student at the University of Wisconsin-Whitewater in 2012. He employs about 20 people.

Wisconsin-based bicycle retailer Wheel and Sprocket uses Scanalytics’ sensors — which can be tucked under utility mats — to count the number of customers entering each of its eight stores to help schedule staff.

“That’s our biggest variable expense,” said co-owner Noel Kegel. “That sort of makes or breaks our profitability.”

Privacy and surveillance

Kegel wants to eventually have sensors in more areas throughout his stores to measure where customers spend most of their time and what products are popular, but he said it’s too expensive right now.

The cost of having the sensors ranges from $20 to $1,000 per month, depending on square footage and add-on applications to analyze data or interact with digital signs, Scanlin said. He said he’s working with 150 customers in the U.S. and other countries and estimates that about 60 percent are retailers.  

The emergence of tracking technologies is bound to raise concerns about privacy and surveillance. But Scanlin noted his sensors don’t collect personally identifying information.

Jeffrey Lenon, 47, who was recently shopping at the Shops of Grand Avenue mall in Milwaukee, said he wasn’t bothered by the idea of stores tracking foot traffic and buying habits.

“If that’s helping the retailer as far as tracking what sells and what no, I think it’s a good idea,” Lenon said.

These technologies have not become ubiquitous in the U.S. yet, but it’s only a matter of time, said Ghose Anindya, a business professor at New York University’s Stern School of Business.

“In a couple of years this kind of conversation will be like part and parcel of everyday life. But I don’t think we’re there yet,” he said.
…

Crude oil prices reached a 30-month high this week. But the government agency that analyzes and disseminates energy information says the rally may have run its course. The Energy Information Administration predicts U.S. crude prices will stabilize to about 55 dollars a barrel for West Texas Crude and 60 dollars a barrel for Brent Crude, with slightly higher prices for both in 2019. One energy expert disagrees and says oil prices are on their way up. Mil Arcega explains.
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Following an outcry over a significant disparity in pay between co-stars, Mark Wahlberg agreed Saturday to donate the $1.5 million he earned for reshoots for All the Money in the World to the sexual misconduct defense initiative Time’s Up.

Wahlberg said he’ll donate the money in the name of his co-star, Michelle Williams, who reportedly made less than $1,000 on the reshoots.

“I 100% support the fight for fair pay,” Wahlberg said in a statement.

Williams issued a statement Saturday, saying: “Today isn’t about me. My fellow actresses stood by me and stood up for me, my activist friends taught me to use my voice, and the most powerful men in charge, they listened and they acted.”

She noted that “it takes equal effort and sacrifice” to make a film.

“Today is one of the most indelible days of my life because of Mark Wahlberg, WME (William Morris Endeavor) and a community of women and men who share in this accomplishment.”

The announcement Saturday came after directors and stars, including Jessica Chastain and Judd Apatow, shared their shock at reports of the huge pay disparity for the Ridley Scott film. The 10 days of reshoots were necessary after Kevin Spacey was replaced by Christopher Plummer when accusations of sexual misconduct surfaced against Spacey. USA Today reported Williams was paid less than $1,000 for the 10 days.

Both Williams and Plummer were nominated for Golden Globes for their performances.

Talent agency William Morris Endeavor, which represents both Williams and Wahlberg, said it will donate an additional $500,000 to Time’s Up. The agency said in a statement that wage disparity conversations should continue and “we are committed to being part of the solution.”
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Tunisia plans to increase aid for poor families by $70.3 million, after nearly a week of protests over austerity measures, an official said Saturday.

“This will concern about 250,000 families,” Mohamed Trabelsi, minister of social affairs, said. “It will help the poor and middle class.”

President Beji Caid Essebsi was also scheduled to visit the poor district of Ettadhamen in the capital, Tunis, which was hit by protests.

Essebsi was set to give a speech and open a cultural center, Reuters reported. It was to be the president’s first visit to the district.

Several hundred protesters took to the streets Saturday in Sidi Bouzid, where a 2011 uprising began, touching off the Arab Spring protests. And on Friday, protesters in cities and towns across the country waved yellow cards — a warning sign to the government — and brandished loaves of bread, a symbol of the day-to-day struggle to afford basic goods.

Anger has been growing since the government introduced price hikes earlier this month, which came atop already soaring inflation.

WATCH: Protests Erupt Again in Tunisia, Cradle of 2011 Arab Spring

Since Monday, security forces have been deployed in Tunis and across the country. Several hundred people have been arrested, including opposition politicians, while dozens have been injured in clashes with police. A 55-year-old man died earlier this week, though the circumstances of his death remained unclear.

The scenes of protest are reminiscent of January 2011, when demonstrations swept across the country, eventually toppling dictator Zine al-Abedine Ben Ali before spreading across the region.

“Why did we do the revolution? For jobs, for freedom and for dignity. We obtained freedom, sure — but we’re going hungry,” unemployed protester Walid Bejaoui said Friday.

One of the main protest organizations is using the Arabic social media hashtag “Fesh Nestannew?” or “What Are We Waiting For?” The group is urging a return to the spirit of the 2011 revolt.

“We believe a dialogue is still possible and reforms are still possible. The yellow card is to say, ‘Attention: Today we have the same demands that we have been having for years. It’s time to tackle the real problems, the economic crisis, the high cost of living,’ ” said Henda Chennaoui, a Fesh Nestannew protester.

The government enacted a new law this month raising taxes to try to cut the deficit, a move largely driven by Tunisia’s obligations to its international creditors, said analyst Max Gallien of the London School of Economics.

“I think that this government feels that its ability to make its own economic policy or its ability to roll back these austerity reforms is very much limited by the demands of international financial institutions,” he said, “primarily the IMF,” or International Monetary Fund.

The government has condemned the violence but pledged to listen to the protesters.

“No matter what the government undertakes, its top priority — even during tough decisions — is improving the economic and social conditions of the people,” Prime Minister Youssef Chahed told reporters Thursday.

So could the region witness a repeat of 2011, with the protests gaining momentum?

“We’re looking at a different region now. But at the same time, there are similarities: the issue of austerity, of socioeconomic nationalization, of corruption and predation by elites,” analyst Gallien said.

The Tunisian government’s task is to address those deep-rooted problems before the protests spin out of control.
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Deadly traffic accidents are more than just individual tragedies. They’re a drag on economic growth in developing countries, according to a new World Bank report.

The study is among the first to show that investing in road safety in low- and middle-income countries would raise national incomes.

Ninety percent of the world’s annual 1.25 million traffic deaths happen in the developing world. The World Health Organization says traffic accidents are the leading cause of death worldwide for people between 15 to 29 years old. That includes crashes that kill pedestrians, bicyclists and motorcyclists.

But the issue does not get much official attention, according to World Bank transportation expert Dipan Bose.

“There is not a lot of political will in many low and middle income countries to take definitive actions to reduce road deaths and injuries,” he said.

Bose co-authored a study focused on five countries: China, India, Thailand, the Philippines and Tanzania. The authors used economic models to estimate what each country’s overall economy would gain over a 24-year period by cutting traffic deaths in half.

“The results were quite startling,” he said.

Thailand would see a 22 percent boost to national income. The country’s high rates of both economic growth and traffic accidents meant it had the most to gain.  

Tanzania would gain seven percent. The other countries fell in between.

These kinds of economic gains are “something which no national government can ignore,” Bose said. The report “gives the economic story of why it is important to take strong actions on road safety.”

Enforcing speed limits, helmet and seat belt laws and cutting down on drunk driving are “low-hanging fruit” to reduce traffic injuries, the report says.

Not only drivers at fault

But drivers are only partly responsible for traffic deaths, according to a separate report co-authored by the World Bank and the World Resources Institute. City planners and government officials are responsible for building safety into the transportation system.

“If the system’s not safe – if people don’t have the opportunity to cross the road safely, or drive in a safe vehicle – then a small error can result in a fatality,” said report co-author Anna Bray Sharpin at the World Resources Institute. “And that should not be the case.”

For example, she said, “many cities have applied highway design guidelines even to their city streets.” Wide, multi-lane boulevards are designed for “maximum traffic flow and speed,” but not for cyclists or pedestrians.

“People tend to take risks to try and cross the road,” she said. “And that comes back to this issue of whether this is a personal responsibility, or a co-responsibility between governments and planners and people using the road.”

The report offers guidance for incorporating safety into road design. Public transit, walking and biking lower the number of cars on the road and the number of accidents. Installing sidewalks, raised crosswalks and protected cycle lanes helps keep these road users out of harm’s way. On rural roads, median barriers can reduce head-on collisions.

Bray Sharpin notes that many developing countries are currently planning major road infrastructure projects.

“There’s a window of opportunity now to integrate safety into their planning,” she said. It’s much cheaper than trying to retrofit it later. Plus, once these roads are built, they’ll be around for decades.

If they don’t build in safety now, she added, they will be “locked into their dangerous infrastructure for the very long term.”
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For Illinois farmer Garry Niemeyer, it’s a slow time of year, spent indoors fixing equipment, not outdoors tending his fields, which now lie empty.

All of his corn and soybeans were harvested in what has turned out to be a good year.

“This is the largest amount of corn we’ve had ever,” he said.

And this bounty is not limited to Niemeyer’s farm. It can be seen throughout the United States.

“We’re talking 14½ billion bushels of corn,” Niemeyer told VOA. “That’s a lot of production.”

WATCH: Awash in Corn, Soybeans, US Farmers Focus on Trade Deals

Piles of corn, soybeans

That production is easy to see at nearby elevators, where large piles of corn under white plastic wrap extend into the sky. There is more corn and soybeans than existing storage facilities can hold.

“You can drive by just about any elevator out here in the country and see some pretty large piles of corn that are covered outside of the bins,” said Mark Gebhards, executive director of Governmental Affairs and Commodities for the Illinois Farm Bureau. “That is a direct result of a lot of carry-over from last year; i.e., we need to move this and create market demand to get the product moving.”

The U.S. Department of Agriculture reports record harvests of corn and soybeans in the United States in 2017, with stocks overflowing at elevators and storage bins across the country.

In Illinois, Gebhards notes that up to half of the state’s corn supply, and even more soybeans, will eventually reach foreign shores.

“Usually we say every other row of beans is going into the export market,” Gebhards said.

But Niemeyer wants even more of his crop to find a market overseas.

“We have overproduced for our domestic market,” he told VOA. “Our profits will lie in the amount of exports we are able to secure in the future.”

​The NAFTA question

Which is why the Illinois farmer is looking for some indication from U.S. President Donald Trump on the current efforts to renegotiate the North American Free Trade Agreement, or NAFTA.

“NAFTA is huge,” Niemeyer said. “NAFTA consumes $43 billion worth of our crops and livestock and other things we exported out of this country in 2016.”

Niemeyer is pleased with Trump’s efforts to roll back environmental regulations and institute tax reform. But there was little hint of NAFTA’s fate during Trump’s Jan. 8 speech to the American Farm Bureau Federation Convention in Nashville, Tennessee.

“If anything was maybe left as an area of concern, it’s still what’s going to happen to that trade agreement,” said Gebhards, who warns the U.S. withdrawing from NAFTA could impact prices.

“On the livestock side, it’s estimated you would see $18 per hog or $71 per cow if we were to withdraw. It’s estimated that we would see potentially a $0.30 per bushel decrease in the corn price and $0.15 on the soybean side.”

Prices are a factor growers like Niemeyer maintain a close watch on.

“(The) price of corn is about $3.30 a bushel, so $3 corn, it’s hard to make anything work, even with a large yield,” which, Niemeyer said, is why many farmers are holding on to what they have.

“Everybody’s sitting still, that’s the reason you aren’t seeing much corn move right today because the price has done absolutely nothing,” he said.

Niemeyer wants a final NAFTA agreement soon, so negotiators can focus on new trade agreements that could help create more demand, improve prices and ultimately move the supply that has piled up in the U.S.

Gebhards said the world is watching the negotiations for clues on how reliable the U.S. is as a trading partner under Trump.

“It’s a short term issue for us not to lose ground as we try to renegotiate NAFTA,” Gebhards said. “But I think the long term is what kind of a signal do you send as a reliable trading partner to the rest of the world that if you enter into this agreement with the United States you know that you will be able to get that product that you’ve agreed to buy.”

Trump has recently suggested a deadline extension for modernizing NAFTA, which means the uncertainty for farmers like Niemeyer could extend into March or April, when he is preparing to put a new crop in the ground.
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The United States Department of Agriculture reports record harvests of corn and soybeans in the United States in 2017, with stocks overflowing at elevators and storage bins across the country. But as VOA’s Kane Farabaugh reports, record yields don’t necessarily translate into stronger bottom lines for farmers, who increasingly depend on international trade to move their product and improve their prices.
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Protesters took to the streets in towns and cities across Tunisia for a fourth day Friday, as anger grows over price hikes introduced by the government. Demonstrations in 2011 in Tunisia grew into the revolution that overthrew the government and triggered a wave of uprisings across the Arab world. Seven years on, the dictatorship may have gone but, as Henry Ridgwell reports, lingering social and economic problems are driving the anger, raising the prospect that the unrest could spread.
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