China is gearing up to retaliate in response to stiff U.S. tariffs on steel and aluminum as Chinese industry associations urge authorities to take “resolute measures.” Retaliation from Beijing could contribute to a possible trade war between the world’s two biggest economies, analysts said.

China’s Ministry of Commerce has pledged to “firmly defend its legitimate rights and interests” and called for an end to the measures as quickly as possible.

In a statement posted on the website of the China Iron and Steel Association, the group appealed to the government in Beijing “to take resolute measures against imports of some U.S. products, including stainless steel, galvanized sheet, seamless pipe, coal, agriculture products and electronic products.”

While the possibility of retaliating over steel and hitting agricultural imports and other sectors has been mentioned previously, it was the first time that coal has been drawn into the brewing spat.

China’s increased imports of coal over the past year have given the U.S. industry a needed boost.

The group also said U.S. President Donald Trump’s decision to impose 25 percent tariffs on steel would impact the global industry and be met with opposition from more countries. The U.S. has already taken other actions impacting Chinese exports of aluminum, solar panels and washing machines in recent months.

The Trump administration has asked China to reduce the trade deficit by $100 billion and threatened several actions to force Beijing to listen. In 2017, the trade gap between the two countries stood at $375 billion; but, there are early indications that the deficit might be much higher this year. In January, the monthly trade deficit with China surged 16.7 percent, to $36 billion, its highest level since September 2015.

Flashpoints

Chinese Foreign Minister Wang Yi acknowledged growing concerns about a trade war, while indicating that Beijing was working on possible retaliatory actions.

“I would like to say that history has taught us that trade wars are never the solution,” he said at a recent press conference on the sidelines of China’s annual political meetings. “It will only hurt both sides, and China will surely make a justified and necessary response.”

The minister advocated a “calm and constructive dialogue as equals” in order to find “a mutually beneficial and win-win solution.”

The stakes are high for both sides, but there are limits to the amount of damage they can inflict without hurting their own economies, analysts note.

China has already launched a probe into imports of U.S. sorghum, a grain used in animal feed and liquor.

There are two other flashpoints on the horizon — an upcoming report on whether China deserves blame for the large-scale theft of intellectual property rights, and a decision on the issue of dubbing Beijing as a currency manipulator.

“They will retaliate; they’ve already signaled following Trump’s steel tariffs [announcement] last week that they are going to take some measures. I think it is just a question of what they are going to decide to do,” Gareth Leather, a senior Asia economist with Capital Economics, told VOA while discussing the Chinese leadership’s plans going forward.

He said Beijing is clever and will likely target sectors of the economy in a manner that hurts the administration at a political level, he said.

Political acupuncture

“I think the key one [target] is going to be the U.S. agriculture sector. It’s obviously a politically key area for them,” Leather said. “So, they will look at certain sectors such as orange juice from Florida, for example. They will look at which senators are from there and see whether they are pro-free trade or not.”

Following the announcement, the communist party-backed Global Times said in an editorial that Beijing should show it will not be cowed.

“It [China] must retaliate against U.S. tariffs that forcibly interfere with Sino-U.S. trade and violate World Trade Organization rules. China must show it won’t be bullied,” the editorial said.

Beijing is expected to target soybeans, one of the most valuable U.S. exports to China. China has also used its purchase of Boeing aircraft as a bargaining chip in trade negotiations in the past and might now threaten to shift its preference to Airbus.

Leather said China is also closely studying the coming U.S. midterm elections to fine-tune its attack if that is necessary.

“I suspect what they’ll do is they’ll look at plants in certain swing states that may be suffering but have Republican congressmen up for elections and probably target those,” he said.

While the Trump administration’s measures go into effect in about two weeks, they alone will not have a major impact on the Chinese economy. For now, China’s response is likely to be quite symbolic, Leather said, and the Chinese are not likely to ratchet up the pressure too much.

“I think the risk is, however, that if the U.S. does press ahead on further protectionist measures, which do specifically target China, then, I think, China will have to respond in a much more aggressive way, and then obviously risks all end up getting a lot worse,” he said.

Trade is not the only area that could be a factor going forward.

In a daily newsletter, Trivium China, a research group in Beijing, said news that Trump is expected to meet with North Korean leader Kim Jong Un soon [to discuss ending the North’s nuclear program] could have an impact as well.

“If Xi Jinping helps to facilitate that meeting, it might buy China some time; but, it would only be a temporary reprieve from Trump’s trade ire,” the newsletter noted.
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Young people around the United States are creating virtual businesses that produce simulated products, which are marketed and sold for virtual money. Thirteen hundred students recently showcased their ventures, ranging from telecom firms to gourmet food providers, in Pasadena, California.

At what looked like a corporate trade show, students from Miguel Contreras Business and Tourism School in Los Angeles solicited customers for their tour company. Teacher Darrell Iki helped the students launch Big City Tours, which exists only in the classroom and online. The company stages virtual tours to different parts of Los Angeles, highlighting the city’s ethnic heritage, fashion or high-end shopping. A related virtual company sells travel gear.

Students from Century High School in Santa Ana, California, sell a hypothetical translation device geared toward travelers. 

It all starts with a business plan, according to Iki, as students are named to executive positions and learn to “work together, having a common goal in a potentially successful business.”

The students quickly realized that business is complicated, according to the head of the nonprofit group that works with schools around the country to impart skills through simulations. Thirteen thousand students go through the program each year.

“They’re running meetings, they’re networking, they’re meeting with professionals, they’re working with mentors,” said Nick Chapman of Virtual Enterprises International. The students showcase their companies at competitions, like this one in California. Similar virtual business programs exist in schools in 40 countries.

One student entrepreneur said he now understands the pressure of running a company, in this case a food firm called Taste of the World. He has overseen human resources and digital media for the virtual firm at Century High School in California.

“You really need to be hands-on with your employees and make sure your guys have strong communication,” said Miguel Santin. “Otherwise, the company just won’t prosper.”

Taste of the World is a subscription service that, at least in theory, sends snacks to subscribers through the mail.

“You sign up for three months, six months, a year, and you receive a snack box with trinkets and information about that company every single month throughout your subscription time,” said teacher Alan Gerston.

No real money changes hands.

“You would pay within our virtual economy,” Gerston said, “using virtual money in a web-based simulated banking system. All the kids in the program have bank accounts, so when they buy something, we give them a receipt.”

There’s a lot to learn, noted teacher Stephen Jarvis of the Elizabeth Learning Center in Cudahy, California. “It isn’t just selling something. It’s all the things that go on behind the scenes — creating documents, figuring out if you’re making money or losing money,” he said.

The money isn’t real, but the skills are, said a student entrepreneur with the virtual company Big City Tours, who won a scholarship to college.

“I went to the interviews, and being in this company has helped me really prepare my presentation skills and be able to talk to other people,” said student Catalina Garcia, who will start college this fall and hopes to become a doctor. She says the skills she gained in a virtual company have helped her, whether or not she starts her own company or works in the corporate sector.
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U.S. employers went on a hiring binge in February, adding 313,000 jobs, the most in any month since July 2016, and drawing hundreds of thousands of people into the job market.

The Labor Department said wage gains, meanwhile, fell from January to 2.6 percent year-over-year. Strong hourly wage growth had spooked markets last month because it raised the specter of inflation. But January’s figure was revised one-tenth of a point lower to 2.8 percent.

The influx of new workers kept the unemployment rate unchanged at 4.1 percent.

The surge of job gains may reflect, in part, confidence among some businesses that the Trump administration’s tax cuts will accelerate growth. Consumers are also benefiting from higher after-tax income, which grew last month at the fastest pace in a year, aided by the tax cuts.

In the meantime, economists are calculating how the Trump administration’s decision Friday to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum might affect the job market. The Trade Partnership, a consulting firm, estimates that the tariffs will eliminate roughly 145,000 jobs.

Steel and aluminum producers would hire more people. But the gains would be more than offset, the firm calculates, by sharp losses among companies that use the metals, such as automakers, packaged food companies and those that make industrial machinery.

During 2017, the stock market, as measured by the S&P 500 index, surged 19 percent, partly on anticipation of corporate and individual tax cuts. Yet barely a month after the tax cuts became law, investors shifted their focus to the potential consequences: Faster growth that might intensify inflation and lead the Fed to accelerate its rate hikes.

Inflation

There have been some signs that price pressures are picking up. But overall, inflation remains in check. The inflation gauge that the Fed tends to monitor most closely shows an increase of just 1.7 percent from a year earlier, below the central bank’s 2 percent target level.

Most economists expect growth to pick up in the coming months and to accelerate inflation slightly by year’s end. They have forecast that the economy will expand at just a 2 percent annual rate in the January-March quarter before topping 3 percent in the next two quarters.

Spending

For now, consumers have pulled back somewhat on spending despite income gains, thereby setting the stage for potentially stronger spending gains in coming months. After-tax incomes in January — which include benefit payments from the government and business income as well as wages — climbed by the most in a year. They were boosted, in part, by the Trump administration’s tax cuts and company bonuses that were paid out in response to corporate tax cuts.

And manufacturers expanded at the fastest pace in nearly 14 years in February, according to a survey of purchasing managers.

The housing market, too, remains generally solid, with demand for homes strong in much of the country, though rising mortgage rates may begin to slow sales.
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Has President Donald Trump’s romance with the Goldman Sachs crowd gone cold?

Top economic adviser Gary Cohn is only the latest Goldman figure to head for the White House exits, suggesting the influence of the oh-so-establishment banking powerhouse has been overwhelmed by the more nationalistic voices in the West Wing.

Cohn, Goldman’s former president, announced his resignation this week after an unsuccessful effort to block Trump from imposing sweeping new tariffs on steel and aluminum imports.

Trump threw Cohn a laurel on the way out, saying, “He may be a globalist, but I still like him.”

But there was plenty of skepticism about Trump’s relationship with the big-name bank from the start.

“I think we all knew this was coming to an end someday,” said Barry Bennett, a former Trump campaign aide.

It’s not that Trump’s views have changed, Bennett added, but that “people gave up trying to change him.”

Cohn is the fourth high-profile Goldman alumni to leave the administration. He was preceded earlier this year by Dina Powell, former deputy national security adviser, who is returning to Goldman.

In August, onetime chief strategist Steve Bannon said farewell. And in July, after just 11 days as communications director, Anthony Scaramucci was out the door.

That leaves Treasury Secretary Steven Mnuchin as the last Goldman veteran holding a top administration job.

Of course, handing big jobs to Goldman alumni is an Oval Office tradition. The influential bank has produced Treasury secretaries, White House chiefs of staff and top economic advisers in both Republican and Democratic administrations. But Trump’s reliance on Goldman talent was a surprise to some, given his anti-Wall Street, drain-the-swamp campaign rhetoric.

On the campaign trail, Trump suggested Wall Street was getting “away with murder.” He argued that he would not be beholden to bankers, saying that Democrat Hillary Clinton’s ties to the industry meant that she’d never advance financial reform. And he promoted himself as a champion for the “forgotten men and women” left behind in a growing economy.

Trump also specifically attacked his opponents over their ties to Goldman, lambasting rival Ted Cruz because the senator’s wife worked for the bank. He slammed Clinton for taking big speaking fees from the firm.

“I know the guys at Goldman Sachs. They have total, total control over him,” Trump said of Cruz. “Just like they have total control over Hillary Clinton.”

But, for all that, Trump seemed to enjoy the prestige of hiring Goldman talent, says William Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World.

“I think Donald Trump wanted these Goldman people as a way to stroke his own ego. Don’t forget that Goldman never wanted to do business with Donald Trump,” Cohan said. “It was a way for [Trump] to say ‘Ha, ha, now I’ve got some of your best people working for me.”‘

Goldman CEO Lloyd Blankfein said in Vanity Fair last year that he found the hires “validating.” He added that as Trump was “looking for good people, it happens that a lot of them had Goldman Sachs affiliations. It makes me feel good that he sees in those people the same thing I see in those people.”

Tariff plans

So far, Trump’s presidency has been good for Goldman and other major banks. Since taking office, Trump’s main legislative achievement was a $1.5 trillion tax cut applauded by Wall Street. Cohn and Mnuchin were deeply involved in that process and Cohn stayed in the administration to work on it, after he was upset by the president’s comments about the racial violence in Charlottesville last August.

But Wall Street has been appalled with Trump tariff plans, hastily announced last week without full details and prompting worries of a trade war that could undermine the benefits of the tax cut.

Cohn’s departure has raised concerns about who within the White House will seek to temper Trump’s nationalistic instincts.

Cohn was viewed as a moderating, pro-business voice in the West Wing. He accompanied Trump to an annual global financial meeting in Davos earlier this year and sought to reassure financial markets that the administration’s “America first” rhetoric does not mean “America alone.”

Blankfein weighed in on Twitter saying: “Gary Cohn deserves credit for serving his country in a first class way.  I’m sure I join many others who are disappointed to see him leave.”

Looking forward, it’s not clear if more Goldman veterans will come inside. Said Cohan: “I think Trump has played his Goldman card.”

Trump said Cohn might come back to the White House, but added: “I don’t know if I can put him in the same position though — he’s not quite as strong on those tariffs as we want him to be.”
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American trading partners are criticizing the Trump administration’s proposed tariffs on steel and aluminum imports into the United States. Many analysts say the situation could lead to a new trade war, which could hit developing countries as well as big economies. Henry Ridgwell reports.
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Despite opposition from many in his own party and warnings of retaliation by US trading partners abroad, President Donald Trump on Thursday rolled out tariffs on steel and aluminum imports, crossing off a major item on his trade agenda. The move came on the same day 11 countries signed the Trans-Pacific Partnership free trade deal, without the U.S., as VOA’s Bill Gallo reports.
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U.S. President Donald Trump’s announcement of new tariffs on steel and aluminum is eliciting strong reactions at home and around the world.

America’s neighbors breathed a sigh of relief at being granted an exemption from the tariffs. Foreign Affairs Minister Chrystia Freeland said despite the concession, Canada would continue to push back.

“In recent days, we have worked energetically with our American counterparts to secure an exemption for Canada from these tariffs,” she said. “This work continues and it will continue until the prospect of these duties is fully and permanently lifted.”

Canada is the largest supplier of steel and aluminum to the United States. Freeland ridiculed Trump’s national security justification for the measure, saying: “That Canada could pose any kind of security threat to the United States is inconceivable.”

​Allies combative

Other allies took an equally combative stance. 

“Protectionism, tariffs never really work,” British trade minister Liam Fox said Thursday. “We can deal multilaterally with the overproduction of steel, but this is the wrong way to go about it,” he said.

As did Canada, Fox said it was “doubly absurd” to target Britain with steel tariffs on national security grounds when it only provided the U.S. with 1 percent of its imports and made steel for the American military.

France said it “regrets” Trump’s decision. 

“There are only losers in a trade war. With our EU partners, we will assess consequences on our industries and agree (to an) appropriate response,” Economy Minister Bruno Le Maire tweeted Thursday.

Last week, Le Maire had warned that any such measures by the U.S. would be “unacceptable” and called for a “strong, coordinated, united response from the EU.”

​Negotiate exemptions

During the announcement of the tariffs, the White House said that countries concerned by the tariffs could try to negotiate possible exemptions.

“The EU is a close ally of the U.S. and we continue to think that the EU must be exempted from these measures,” said EU Commissioner for Trade, Cecilia Malmstrom.

“I will demand more clarity on this issue in the days to come,” she said.

 

WATCH: Economists Warn of Escalating Trade War Following US Steel Tariffs

Invitation to a trade war

Others also panned the tariffs as an invitation to a trade war. 

“If you put tariffs against your allies, one wonders who the enemies are,” said the president of the European Central Bank, Mario Draghi.

Chinese Foreign Minister Wang Yi warned, “Choosing a trade war is a mistaken prescription. The outcome will only be harmful. China would have to make a justified and necessary response.”

Brazil also said it planned such negotiations. 

“We will work to exclude Brazil from this measure,” acting Trade Minister Marcos Jorge told Reuters. Brazil is the United States’ No. 2 steel supplier.

​Mixed reactions on Capitol Hill

Many of the reactions around Washington were mixed.

“There are unquestionably bad trade practices by nations like China, but the better approach is targeted enforcement of those bad practices. Our economy and our national security are strengthened by fostering free trade with our allies,” House Speaker Paul Ryan said.

Senator Jeff Flake, R-Arizona, who is not planning to seek re-election, said he will “immediately” draft legislation that attempts to block the tariffs.

“These so-called ‘flexible tariffs’ are a marriage of two lethal poisons to economic growth: protectionism and uncertainty,” Flake said in a statement. “Trade wars are not won, they are only lost.”

But Democratic Senator Joe Manchin of West Virgina said he was “excited” by the idea of tariffs.

“I’m encouraged, I really am, and I think it gives us a chance to basically reboot, get jobs back to West Virginia, back to America,” he said.
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U.S. President Donald Trump on Thursday signed companion proclamations slapping 25 percent tariffs on steel coming into the country and 10 percent tariffs on imported aluminum.

The across-the-board taxes are to go into effect in 15 days.

Amid fears that his action would ignite a trade war, Trump declared the dumping of steel and aluminum in the United States as “an assault on our country,” suggesting foreign producers relocate their facilities to America.

“If you don’t want to pay tax, bring your plant to the USA,” he said.

 

WATCH: As TPP Eliminates Tariffs, Trump Moves to Implement New Ones

Trump was flanked in the Roosevelt Room by workers from those metals industries, some with hard hats in hand, as he signed the documents. Vice President Mike Pence, Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer, and Trade and Industrial Policy Director Peter Navarro were also among those in the room.

After an outcry from lawmakers, some industry executives and foreign governments, Canada and Mexico are being given specific exemptions from the tariffs for an indefinite period while negotiations continue on the North American Free Trade Agreement (NAFTA).

“We’re giving Canada and Mexico sufficient time to address these issues at the request of the governments, but it’s not open-ended,” said a senior U.S. administration official. “The focus is on the broader security relationship, where we can address ensuring national security and eliminate any impairment whatsoever.”

Other countries which are considered allies of the United States — such as Australia — will also be given “satisfactory alternative means to address the threat” the Trump administration perceives to American steel and aluminum manufacturers, the official said.

“This is not a softening of our position in any way whatsoever,” insisted the administration official in a call with reporters that was conducted on the condition of not being named.

‘Freest-trading nation’

Opponents of Trump’s action see it as undermining the rules-based global trading system and using national security disguised as protectionism that will encourage other countries to resort to the same premise to protect their domestic markets.

The White House official rejected that argument Thursday, contending that the United States “is the freest-trading nation in the world” and arguing that the rules-based trading system, under the 23-year-old World Trade Organization with 164 member states, “is not working very well for the American people.”

Trump signed the proclamations just hours after 11 other countries formalized a revised agreement in Chile that reduces tariffs and cuts trade barriers among the member countries.

Known as the Comprehensive and Progressive Agreement (CPTPP), it replaces the Trans-Pacific Partnership (TPP) from which Trump withdrew the United States.

The countries joining in the TPP successor are Australia, Brunei, Canada, Chile, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam.

Trump boasted last week that trade wars “are good and easy to win” after his surprise announcement to levy the tariffs on the two metals.

“It’s a promise made, a promise kept,” the senior administration official said Thursday. “Nobody … should express any kind of surprise.”

National security argument

The Trump administration said that retaining a domestic steel and aluminum manufacturing capacity is a matter of national security to build everything from tanks to rockets, as well as critical infrastructure such as water treatment plants.

“This kind of action will maintain a workforce of skilled workers,” according to the administration official, adding, “the national security rationale is unassailable.”

The country’s “aluminum and steel industries are severely under threat, being weakened or, in the case of aluminum, being driven to extinction,” said the official.

The White House also is rebutting arguments the tariffs will lead to higher prices for American consumers and layoffs of workers in factories that will have to use higher-priced steel and aluminum.

Such reports are “hair-on-fire rhetoric” emanating from “lobbyists, politicians and swamp creatures,” the U.S. official said.

According to the White House, the tariffs will add up to 2 cents to a six-pack of soda or beer and increase the cost of a $330-million Boeing 777 jetliner by a mere $25,000.

The tariffs, according to the White House official, will see steel and aluminum makers restarting factories, significantly increasing production and hiring hundreds of workers.

China issue

As far as China, it is “not a significant exporter to the U.S. at this time,” according to the official. “The China problem is simply a massive, massive overcapacity that China has built up in both aluminum and steel.”

In planned U.S. discussions with Canada, Mexico and all other countries that produce steel, “we need to address global excess capacity,” the official said. “This is going to be a key part of one of the long-term objectives that the president has.”

Trump said trade discussions are ongoing with Beijing, but “I don’t know that anything’s going to come of that.”

At the end of the event, a reporter asked Trump about steel trans-shipments from China. He replied, “We’re going to stop the trans-shipping,” but then quickly added that if any such shipments are to continue, “it’ll cost a lot more money.”

Democratic Senator Sherrod Brown, from the Midwestern state of Ohio, told VOA, “China has continued to cheat by subsidizing land and energy and water and capital, and they will continue if we don’t draw a line.”

Trump should “have focused more on China and less on Canada and our trading partners that have played more fair,” Brown added.

Republican Senator John Cornyn of Texas told VOA he believes Trump has heard the voices who expressed concern about imposing the tariffs, but “the president’s got some pretty fixed ideas about trade, and obviously he ran on those and, I think, feels obligated to follow through on his campaign promises.”

Republican Senator Jeff Flake of Arizona said he is introducing a law to nullify the tariffs.

The chairman of the Senate’s finance committee, Republican Orrin Hatch of Utah, also criticized the presidential action, but expressed hope of working with the Trump administration to “mitigate the damage.”

House Speaker Paul Ryan, a Republican from Wisconsin, says he fears “unintended consequences” from the tariffs — namely, retaliation by targeted countries.

Peggy Chang at the White House and Mark Bowman on Capitol Hill contributed to this report.
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Europe’s top monetary official criticized U.S. President Donald Trump’s proposal to put tariffs on steel and aluminum imports as a “dangerous” unilateral move.

Mario Draghi, the president of the European Central Bank, said that the “immediate spillover of the trade measures … is not going to be big.” But he said such disputes should be worked out among trade partners, not decided by measures initiated from one side.

“Whatever convictions one has about trade … we are convinced that disputes should be discussed and resolved in a multilateral framework, and that unilateral decisions are dangerous.”

Trump is expected to announce by the end of this week tariffs of 25 percent on steel and 10 percent on aluminum. Trump has long singled out China for being unfair in trade practices, but experts say the tariffs would hurt U.S. allies Canada and the European Union far more.

Draghi warned that unilateral moves like these tariffs could trigger retaliation — which the EU and China, among other, have already threatened.

The most important fallout, Draghi said, would be if tariffs raised fears about the economy. They could depress confidence among consumers and businesses, he said, which could weaken both growth and inflation.

Draghi also alluded to the kind of financial deregulation the U.S. is pursuing as a risk to the global economy. The U.S. Senate is considering a bill that would remove some of the banking safeguards imposed in the wake of the 2008 financial crisis and the collapse of investment bank Lehman Brothers. The bill is sponsored by Republican Sen. Mike Crapo of Idaho but has attracted several Democratic sponsors as well.

Draghi didn’t mention the bill specifically but said that the global financial crisis had been preceded by “systematic disruption of financial regulation in the major jurisdictions.” He said that while European regulators are not looking to ease back checks on the financial sector “massive deregulation in one market is going to affect the whole world.”

These uncertainties overshadowed a monetary policy announcement by the ECB, in which it hinted it is closer to withdrawing a key economic stimulus program.

The bank left unchanged its key interest rates as well as the size of its bond-buying stimulus program after its latest policy meeting. But in its statement it omitted an earlier promise that it could increase its bond-purchase stimulus in size or duration if the economic outlook worsens.

Draghi downplayed the step, saying it was a “backward-looking measure” that no longer fit today’s circumstances. Economic growth in the eurozone hit a strong annual rate of 2.7 percent in the fourth quarter, making the prospect of added stimulus remote.

The bank has said it will continue buying 30 billion euros ($37 million) in bonds per month through September and longer if needed — but has given no precise end date.

The eventual end of the stimulus will have wide-ranging effects. It could cause the euro to rise in value against other currencies, potentially hurting exporters, and it could bring higher returns on savings as well as stiffer borrowing costs for indebted governments in the 19-country eurozone. It should make it easier for people and companies to fund pension savings. But it could make richly valued stock markets less attractive relative to more conservative holdings.

The euro was volatile after the ECB’s statement, first jumping and then falling back to $1.2333 by end of day.

The stimulus program pushes newly printed money into the economy. That in theory should lower borrowing rates and raise inflation and growth. But while growth has bounced back, inflation has been slow to respond. It remains at 1.2 percent, stubbornly below the bank’s goal of just under 2 percent, the level considered best for the economy.

The bond purchases were started March 2015 to help the eurozone bounce back from troubles over government and bank debt in several member countries including Greece, Ireland, Portugal, Cyprus, Spain and Italy. The economy is now doing better, but the bank has moved cautiously in ending its crisis measures for fear of roiling recently volatile financial markets.
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Several Eastern European states have ramped up their opposition to a new gas pipeline linking Russia with Germany. The Nord Stream 2 project will bring Russian gas directly to Western Europe, but critics say it will increase dependence on Russia and enrich its state-owned energy firms at a time when Moscow stands accused of endangering European security. Henry Ridgwell reports from London.
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The Trump administration is asking China for a $1 billion reduction in the U.S.-China trade deficit. The request comes amid intense international debate over U.S. President Donald Trump’s proposed tariffs on imported steel and aluminum. VOA’s Jesusemen Oni has more.
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President Donald Trump is presenting a skewed picture of the decline of manufacturing in making his case for import penalties that could spark a trade war.

A look at his latest statement on the subject as he prepares to impose heavy tariffs on foreign steel and aluminum:

TRUMP: “From Bush 1 to present, our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars. Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again!” — tweet Wednesday.

THE FACTS: Trump persistently miscasts the trade balance, citing the U.S. deficit in goods and ignoring the U.S. surplus in services. The actual trade deficit last year was $566 billion.

As for manufacturing, Trump leaves out what is widely regarded as the main reason for the decline in factory jobs: automation and other efficiencies. Trade is certainly a factor as well.

He’s in the ballpark when referring to how many factory jobs have been lost since January 1989, when George H.W. Bush became president. The number he cites as 6 million is actually 5.5 million, according to the Labor Department.

What he doesn’t say, though, is that despite the loss of those 5.5 million factory jobs, the U.S. economy overall has added a net total of about 40.6 million jobs in that time. Incomes from those jobs have paid for the imported goods that have added to U.S. trade deficits.

Historical context

He also does not offer a larger historical context. The U.S. lost 1.6 million manufacturing jobs in the decade before Bush, a pace of decline only slightly lower than that during the 30-year period cited by Trump.

Factory jobs dropped during the severe downturns of the early 1980s, stayed fairly stable until about 2000, then dropped sharply. Economists are divided about why.

The big drop after 2000 roughly coincides with China’s entry into the World Trade Organization in December 2001, which meant U.S. manufacturers increasingly competed with China and gained an incentive to move factories there. Some economists put the most blame on technology.

Ball State University’s Center for Business and Economic Research, for instance, found in a 2015 study that trade accounted for just 13 percent of factory job losses, with technology devouring most of the rest.
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U.S. President Donald Trump is expected to sign tariffs on steel and aluminum imports as early as Thursday, with some trading partners receiving temporary exemptions.

White House officials said Mexico and Canada would get a 30-day exception that could be extended.

On Twitter Thursday, Trump said “We have to protect and build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military,” 

Reuters quoted a senior U.S. official saying the measures would take place about two weeks after Trump signs the proclamation.

Lawmakers urge caution

Meanwhile Wednesday, a number of members of the House of Representatives sent a letter to the president, urging him to minimize negative consequences if he goes through with the tariff plan.

The letter said “tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer,” and “any tariffs that are imposed should be designed to address specific distortions caused by unfair trade practices in a targeted way while minimizing negative consequences in American businesses and consumers.”

The lawmakers went on to recommend that Trump exclude fairly traded products and products that do not pose a national security threat; announce a process for U.S. companies to petition for duty-free access to imports unavailable from U.S. sources; and allow exemptions for existing contracts for steel and aluminum purchases. They also recommended doing a short-term review of the effects of the tariffs on the economy to decide whether or not the approach is working.

The tariffs are expected to impose a duty of 25 percent on steel and 10 percent on aluminum imports that Trump says undermine U.S. industry with their low prices.

The comment that Canada and Mexico may be spared in the tariffs plan resulted in key stock indexes and the U.S. dollar paring losses in afternoon trading.

The Dow Jones industrial average, after falling more than 300 points during the session, closed off 83 points, a drop of one-third of 1 percent.

Market players say the Tuesday sell-off was sparked by the previous day’s announcement that the president’s chief economic adviser, Gary Cohn, was resigning. The former Goldman Sachs investment bank president had opposed the sweeping tariffs for foreign steel and aluminum.

‘Easy to win’

Trump boasted last week that trade wars “are good and easy to win” after his surprise announcement of the tariffs.

That has prompted widespread criticism from his Republican colleagues in Congress and America’s allies.

The president, according to staffers, acted on recommendations made by Commerce Secretary Wilbur Ross, formerly a billionaire investor, and Peter Navarro, an economist who is director of the White House National Trade Council.

Ross said the planned steel and aluminum tariffs were “thought through. We’re not looking for a trade war.”

The tariffs proposal has also won support from economic nationalists in the United States and some Democratic lawmakers in manufacturing states whose fortunes could be boosted by the tariffs protecting their metal industries.

‘Easy to lose’

The chief of the International Monetary Fund, Christine Lagarde, on Wednesday in a European radio interview, warned of a global trade war, predicting the U.S. tariffs could lead to “a drop in growth, a drop in trade, and it will be fearsome.”

Warning that there would be no victors in such a trade war, Lagarde urged “the sides to reach agreements, hold negotiations, consultations.”

European Council President Donald Tusk echoed Lagarde’s stance saying, “The truth is quite the opposite: Trade wars are bad and easy to lose. For this reason, I strongly believe that now is the time for politicians on both sides of the Atlantic to act responsibly.”

The European Commission, the executive arm of the 28-nation European Union, detailed retaliatory tariffs it plans to impose on prominent U.S. products if Trump carries out his plan to impose the metal tariffs, taxing Harley-Davidson motorcycles, bourbon, blue jeans, cranberries, orange juice and peanut butter.

Moody’s Investors Service said the planned tariffs “raise the risk of a deterioration in global trade relations.”

Trump said on Twitter that since former President George H.W. Bush was in the White House 30 years ago, “our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars.”

“Bad Policies & Leadership. Must WIN again!” Trump also said on Twitter.

Trump claimed the United States last year had a trade deficit of “almost 800 Billion Dollars,” significantly overstating the actual figure of $566 billion, which still was the biggest U.S. trade deficit in nine years.

A new report Wednesday said the U.S. trade deficit in January — the amount its imports exceeded its exports — reached $56.6 billion, the highest monthly total since October 2008.
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