If Mexico, the U.S. and Canada don’t renegotiate the North American Free Trade Agreement in two months, Washington might put the talks on the back burner until after a new Mexican president is elected or takes office, U.S. trade representative Robert Lighthizer said Monday.

 

He spoke after the seventh round of renegotiation talks wrapped up in Mexico City with little progress reported.

 

“The window is fairly short. It’s not like we can do this in my judgment, at the end of May and think we can get anything done,” Lighthizer said. “It’s not irrational to think you would have lower speed talks at some point, just to keep the talks going … and wait until after the elections,” referring to Mexico’s July 1 presidential election.

 

“The question is: ‘Til when? When do you start up — after the election, or do you start up after the new president is in place and has his own people in place,” Lighthizer said.

 

He said the latest talks produced agreement on only three of the 27 remaining NAFTA chapters, including health and sanitation, transparency and regulatory practices.

 

Lighthizer said progress had been slower than hoped, and noted it might be harder to get any deal through the U.S. Congress after November.

 

“There is some possibility that the Democrats will take over the Congress, and even if that doesn’t happen, they’ll be a different makeup of Congress for sure,” he said.

 

Since renegotiations began, agreement has been reached on only six of NAFTA’s 30 chapters, and big differences remain on issues like regional and U.S. content in autos, and dispute resolution panels.

 

The U.S. threw a new issue into the talks when President Donald Trump announced new duties on aluminum and steel imports — but then said Mexico and Canada would be exempted from the tariffs if NAFTA were successfully renegotiated.

 

Lighthizer denied that was a strong-arm tactic meant to exert additional pressure on Canada and Mexico.

 

“This is just a total coincidence,” he said regarding the timing of the new tariffs.

 

Nor was it a threat, Lighthizer said. “I certainly presented it as a positive thing … It’s my view that it’s an incentive to get a deal.”

 

Lighthizer said that “at this point our objective is still to have a trilateral agreement,” but noted that the Trump administration is “prepared to move on a bilateral basis” with either Canada or Mexico.
…

The head of the World Trade Organization told member states on Monday they must prevent “the fall of the first dominoes” in a trade war and warned of a real risk of triggering an escalation of global trade barriers and a deep recession.

World trade policy is in turmoil because of U.S. President Donald Trump’s announcement last week that he planned to put controversial tariffs on steel and aluminum, prompting threats of tit-for-tat actions and concerns for the trade system itself.

“We must make every effort to avoid the fall of the first dominoes. There is still time,” WTO Director General Roberto Azevedo told the heads of WTO delegations at a closed-door meeting in Geneva.

“In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe,” Azevedo said, according to a copy of his statement released by the WTO.

Azevedo is normally very conservative in remarks about WTO members’ trade policies, but he also plays a role as a guardian of the global trading rules, a bulwark against protectionism.

On Friday he broke his silence on Trump’s tariff plan, expressing concern and saying a trade war would be in nobody’s interest.

In his statement at Monday’s meeting, he did not name any one country but sounded a more urgent warning.

“Once we start down this path it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in a deep recession,” Azevedo said.

Trade officials said that many diplomats at the meeting voiced concern about protectionism, and 11, including the 28-state European Union, expressed very strong concerns about Trump’s announcement on Thursday specifically.

As well as the EU, Mexico, Japan, Australia, China, South Korea, Brazil, Norway, Canada, India and Venezuela all warned of the knock-on effect of Trump’s action and urged the United States to think again.

Trade officials said the U.S. representative at the meeting, originally called to discuss a recent ministerial conference in Argentina, spoke only about the original agenda without mentioning the furor over the U.S. tariff plan.
…

Isabel dos Santos, the former head of Angola’s state-owned Sonangol oil company, is denying her successor’s allegations that she engaged in questionable business dealings related to the firm.

In a 13-page typed statement released late Sunday, Dos Santos – Africa’s richest woman, with a net worth that Forbes business magazine estimates at $2.6 billion – denounced what she called “slanderous” and “defamatory campaigns” against her.

Last week, Sonangol chair Carlos Saturnino reported that an internal audit showed a transaction of $38 million to a company based in Dubai; it had been approved by dos Santos shortly after she was removed from her post in November after roughly 16 months.

Dos Santos defended the transaction as a “totally legitimate” payment for consultancy services. She said she was fulfilling her legal obligations until her replacement could be sworn in, according to Reuters news service.

On Friday, Angola’s public prosecutor’s office acknowledged it was looking into Saturnino’s accusations.

Dos Santos had been appointed chair of Sonangol’s board by her father, Jose Eduardo dos Santos, Angola’s president from 1979 until last September. She was dismissed by his successor, President Joao Lourenco, who vowed to clean up Angola’s corruption-tainted economy.

The younger dos Santos’ goal was to restructure Sonangol, Reuters reported last November. In 2016, she had fired Saturnino from his job as the oil company’s production and exploration leader.   

The 2014 nosedive in global oil prices rocked Angola, where, according to the World Bank, oil accounts for a third of gross domestic product and more than 95 percent of the country’s exports. As she was leaving office, dos Santos told Sonangol staffers she had rescued the “nearly bankrupt” company by cutting costs, Reuters said.   
…

Workers pried President Donald Trump’s name from signs outside his family company’s luxury hotel in Panama on Monday, as Trump’s executives were ousted from their management offices in a business dispute under orders from Panamanian officials. Trump’s security guards also left.

 

The end to a 12-day standoff over control of the property came early in the day when a Panamanian judicial official and police officers backed the hotel’s majority owner, Orestes Fintiklis, as he took possession of the offices. The Trump-affiliated management and security officials then left the 70-story, waterfront high-rise.

 

“This was purely a commercial dispute that just spun out of control,” said Fintiklis, a Miami-based private equity investor and head of the hotel owners’ association. “And today this dispute has been settled by the authorities and the judges of this country.”

 

The episode was a rare occasion when a foreign government has stood up against the operations of one of Trump’s family businesses, and it was unclear whether Trump might consider retaliating diplomatically. The Panamanian Embassy in Washington did not immediately respond to a request for comment. U.S. government officials referred questions to the Trump Organization, which did not respond to phone messages and emails requesting comment.

 

A Panamanian judicial official told The Associated Press a statement would come later in the day.

 

The Trump Hotel’s website had ceased offering direct bookings at the hotel by early Monday afternoon. “We apologize,” the site said. “There are no available rooms for your requested stay.”

 

The judicial intervention resolved the most contentious part of the dispute between Trump’s hotel business and Fintiklis, who sought to take physical control of the property on behalf of the hotel owners. Though the owners tried to fire Trump’s company last year, the Trump Organization had disputed the termination as legally invalid. As part of his fire sale purchase of 202 of the hotel’s 369 units, Fintiklis signed a February 2017 agreement not to challenge Trump’s management contract — a deal the Trump Organization considers binding.

 

Fintiklis quickly changed course after the deal closed in August, arguing that alleged mismanagement by Trump’s staff and the deterioration of the Trump brand rendered keeping the property in Trump hands impossible. In late December, Trump’s management team ran off a team of Marriott hotel executives visiting the property at Fintiklis’ invitation.

“Our investment has no future so long as the hotel is managed by an incompetent operator whose brand has been tarnished beyond repair,” Orestes wrote to his fellow hotel owners in a January email obtained by the AP.

 

The most recent and intense feuding began Feb. 22, when Fintiklis came to the property with termination notices for Trump’s management team. Trump hotel officials turned away Fintiklis and his entourage, refusing to let him check into any of his private equity fund’s 202 hotel rooms.

 

A legal complaint filed by Fintiklis said that, late that same evening, he and others in his party witnessed Trump’s management team destroying hotel documents, which Trump officials have denied.

 

For more than a week, Trump’s hotel business staved off efforts by Fintiklis and his allies to gain control of the property, with rival security teams skirmishing over physical control of key infrastructure. That included the administrative offices and the hotel’s closed caption security system, which was housed in the condo association within the same building. Grainy footage of the encounter obtained by the AP shows Trump security officials shoving a representative of the condo owners’ association and a brawl in a stairwell between opposing security guards.

 

Initially invited by Trump’s managers, the Panamanian police repeatedly visited the hotel to keep the peace. At least one Trump security official was taken off the property in handcuffs, though a police source told the AP he was not arrested.

Trump officials denounced Fintiklis’ efforts to take control of the property as “thug-like, mob-style tactics” and pledged in a February statement they would not give in to “bullying and the use of force.” Until litigation and arbitration involving the property was concluded, Trump officials said, they had no intention of leaving.

 

While Trump staffed up with additional security — stationing guards at the hotel’s administrative offices for more than one week — the fight for physical control of the hotel ended quietly with the intervention by Panamanian authorities. Trump security officials exited the property on their own accord, leaving the hotel’s administrative office vacant.

 

The whereabouts of the Trump hotel management team could not be immediately determined, but Fintiklis declared the fight over.

 

“Today Panama has made us proud,” Fintiklis said, adding that he intended to apply for Panamanian citizenship. Though Fintiklis has generally declined to comment on the dispute, he appeared to gloat Monday. Sitting at the piano in the hotel’s lobby, surrounded by reporters and news cameras, he played “Accordeon,” a Greek song celebrating that country’s fight to overthrow a fascist regime.

 

Within two hours, a man using a hammer and a crowbar began stripping Trump signage from a stone plaque in front of the building.
…

U.S. President Donald Trump tweeted Monday that his planned steep tariffs on steel and aluminum imports would only be reversed if a “new and fair” trade deal with Canada and Mexico is reached.

The three countries are currently in negotiations regarding the North American Free Trade Agreement.

In addition to mentioning steel and aluminum tariffs, Trump further said that in a new deal Canada “must treat our farmers better” and Mexico has to do more to stop drugs from reaching the United States.

Canada is the largest U.S. trading partner and last year shipped $7.2 billion worth of aluminum and $4.3 billion of steel to the United States.

The tariffs would also hit other U.S. allies — Britain, Germany, South Korea, Turkey and Japan. But China, the world’s biggest steel producer, only sends 2 percent of its supply to the U.S. and would be less affected.

White House trade adviser Peter Navarro said Sunday that Trump is not planning to exempt any countries from the tariff hike.

Navarro told CNN that final details on Trump’s anticipated 25 percent tax on steel imports and a 10 percent tariff on aluminum should be completed by later in the week or early next week at the latest.

Trump’s new tariffs for the key metals have drawn wide condemnation from business-oriented Republican lawmakers in the U.S., as well as Canada and the European Union. But Navarro said the tariffs are needed to “protect our national security and economic security, broadly defined.”

He dismissed concerns from Defense Department officials who voiced support for targeted tariff increases aimed at specific countries but not increases on the imported metals from throughout the world.

Navarro called it “a slippery slope” to target only some countries with increased tariffs while exempting others. He said there would be a mechanism to exclude some businesses, on a case-by-case basis, from having to pay higher prices for the imported metals.

Navarro said the message to the world on U.S. trade practices is simple: “We’re not going to take it anymore. We don’t get good results,” Navarro said, adding that U.S. trade overseas is “not fair and reciprocal.”

In another news talk show appearance, Commerce Secretary Wilbur Ross told ABC News that Trump has talked with “a number of the world leaders” about his trade tariff plans.

British Prime Minister Theresa May’s office said that in a Sunday phone call with Trump she had “raised our deep concern at the president’s forthcoming announcement on steel and aluminum tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests.”

U.S. Commerce Secretary Ross said the total value of the impending U.S. tariffs amounts to about $9 billion a year, a fraction of 1 percent of the annual $18.6 trillion U.S. economy, the world’s largest.

“So, the notion that it would destroy a lot of jobs, raise prices, disrupt things, is wrong,” Ross said.

Ross dismissed European Union threats of imposing retaliatory tariffs on such prominent American products as Harley Davidson motorcycles, bourbon and Levi’s jeans as unimportant and a “rounding error.”

In response on Saturday, Trump threatened European automakers with a tax on imports if the European Union retaliates against the U.S.

Ross called the possible European levies a “pretty trivial amount of retaliatory tariffs, adding up to some $3 billion of goods. In our size economy, that’s a tiny, tiny fraction of 1 percent. So, while it might affect an individual producer for a little while, overall, it’s not going to be much more than a rounding error.”

Trump weighed in Saturday on his rationale for the tariff hikes with a pair of Twitter comments.

 

“The United States has an $800 Billion Dollar Yearly Trade Deficit because of our ‘very stupid’ trade deals and policies,” he said. “Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!

“If the EU wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.,” he added. “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

In 2017, the U.S. imported $151 billion more in goods from Europe than it exported to EU countries.
…

China’s top economic official set a robust growth target Monday and promised more market opening and cuts in a bloated steel industry that has inflamed trade tensions with Washington and Europe.

The growth target of “around 6.5 percent” announced by Premier Li Keqiang to China’s ceremonial legislature, little-changed from last year, would be among the world’s strongest if achieved. The premier also promised progress on developing electric cars and other technology and better regulation of China’s scandal-plagued financial industries.

The meeting of the National People’s Congress is overshadowed by constitutional changes that would allow President Xi Jinping to stay in power indefinitely, but businesspeople and economists also are looking for signs Xi is speeding up reform. That follows complaints Beijing did too little while Xi focused on amassing power since becoming Communist Party leader in 2012.

“We will be bolder in reform and opening up,” said Li in a nationally televised speech to nearly 3,000 delegates to the ceremonial legislature in the Great Hall of the People.

Possible developments this week include the elevation of Xi’s top economic adviser, Liu He, who has told foreign businesspeople he supports free markets, to a post overseeing reform.

“The top priority over the past five years was power consolidation,” said economist Larry Hu of Macquarie Capital in a report. “Now the power consolidation is close to completed. It remains to be seen how policy priority would change for the next five years.”

The growth target officially is a basis for planning instead of a promise about how the economy will perform, but allowing activity to dip below that level could erode public confidence and make investors skittish.

The economy grew by 6.9 percent last year but that was supported by a boom in bank lending and real estate sales that regulators are trying to curb due to concern about rising debt. Analysts have questioned whether Beijing can hit this year’s target without stimulus from bank lending and government spending, which would set back reforms aimed at nurturing self-sustaining growth and curbing debt.

Li promised Beijing would open its economy wider to foreign investors by “completely opening up” manufacturing and expanding access to other industries, but gave no details.

Foreign business groups complain previous industry-opening pledges have been diluted by conditions such as ownership limits or requirements to hand over technology that make them unappealing.

At the same time, Li tempered the market-friendly promises by affirming plans to build up state-owned enterprises that dominate most Chinese industries including energy, telecoms and finance.

“Our SOEs should, through reform and innovation, become front-runners in pursuing high-quality development,” he said.

The premier promised “substantive progress” in a multi-year campaign to reduce production capacity in steel, coal and other industries in which supply exceeds demand. The United States and the European Union complain that surplus of Chinese steel and aluminum flooding into global markets depresses prices and threatens jobs.

This year’s targets include eliminating 30 million tons of production capacity in the politically sensitive steel industry, Li said. It was unclear how that might affect China’s annual output of about 800 million tons.

Li also promised to improve oversight of scandal-plagued Chinese financial industries and to control surging corporate debt that prompted rating agencies to cut Beijing’s credit rating last year.

Last month, regulators seized control of one of China’s biggest insurers, privately owned Anbang Insurance Group, amid concern about whether its debt burden was manageable. Authorities announced its founder and chairman would be prosecuted on charges of improper fundraising.

On Monday, the premier tried to defuse worries rising debt could trigger a banking crisis or drag on economic growth by repeating assurances that Beijing is “completely capable of forestalling systemic risks.”

In a sign Beijing might accept slower growth, Li cut the government’s budget deficit target to 2.6 percent of gross domestic product from last year’s 3 percent, which would reduce the stimulus from public spending.

“The government’s bottom line for economic growth is likely to be 6.3 percent,” said Tom Rafferty of the Economist Intelligence Unit in a report. He said that was the minimum required to meet Beijing’s goal of doubling economic output from its 2010 level by 2020.

The proposal to remove term limits for president from China’s constitution has prompted concern a slide toward one-man rule will erode efforts to make economic regulation more stable and predictable.

Officials say China needs continuity as Beijing carries out long-range changes including making state industry more competitive and productive and developing profitable high-tech industry.

Li, the premier, made no mention of the constitutional change or the controversy surrounding it but promised progress on an array of politically challenging goals including the restructuring or bankruptcy of “zombie enterprises,” or money-losing but politically favored companies that are kept afloat by loans from government banks.

The premier said Beijing will speed up state-led development in an array of technology fields including artificial intelligence, integrated circuits, mobile communications, aircraft engines and electric cars.

“We will develop intelligent industries,” said Li.
…

Washington is bracing for the start of a possible trade war between the United States and its closest allies and biggest commercial partners and a radical departure from America’s trading posture of the last seven decades. VOA’s Michael Bowman reports, the Trump administration is not backing down from last week’s announcement of looming tariffs on foreign-made steel and aluminum, with further details expected in coming days
…

China has added its voice to a growing chorus of concern about the rising threat of a trade war and tariffs that U.S. President Donald Trump is expected to impose on steel and aluminum imports later this week.

 

A top Chinese diplomat says that while Beijing does not want a trade war with Washington, it will defend its interests if necessary.

 

Speaking at a press conference ahead of China’s annual legislative meetings, Vice Foreign Minister Zhang Yesui also gave assurances that the rise of world’s second largest economy and a rise in military spending was no cause for alarm.

 

“China does not want a trade war with the Untied States, but we will absolutely not sit idly by and watch as China’s interests are damaged,” Zhang said.

 

Tit for tat

Last week, the U.S. president announced plans to slap tariffs of 25 percent on steel and 10 percent on aluminum imports.

 

China is a key country Washington is aiming to target with the tariffs, but the decision also has sparked a global backlash with leaders of other affected nations such as Canada and Europe, which are warning they, too, are prepared to take countermeasures.

 

Analysts have said that if President Trump follows through on his pledges to get tough with China on trade, Beijing could respond by targeting the airline and agricultural sectors, even focusing on communities in the United States where support for the president was strong during the 2016 election.

 

Zhang, who also is serving as the rotating spokesperson of the National People’s Congress (NPC) said the best way to improve trade is to open up markets further and expanding the “pie of cooperation.”

 

“If policies are made on the basis of mistaken judgments or assumptions, it will damage bilateral relations and bring about consequences that neither country wants to see,” Zhang said.

 

Rising concerns about a trade war are likely to be a hot topic during the annual political meetings. China’s Premier Li Keqiang will deliver a government work report on Monday to the NPC during its opening session. That speech may highlight Beijing’s concerns as it forecasts the government outlook for the economy in 2018.

 

Moderate increase

The report also will provide details about another closely watched item, China’s military spending.

 

Zhang said China will see a moderate increase in its military budget this year, but argued that was to make up for a shortfall from previous years, upgrade equipment, and improve training and living conditions at the grassroots level for troops, among other reasons.

Zhang did not say how much of a percentage increase China might see this year in its defense spending, but he stressed that the country’s military does not threaten anyone.

 

Analysts tell VOA that spending could grow by about 10 percent, but they note that the real figure is perhaps much larger.

 

“China’s defense budget takes up a smaller share of its gross domestic product [GDP] and national fiscal expenditure than other major world countries. Its military spending per capita is also lower than other major countries,” he said.

 

Last year, China disclosed that it spent nearly $165 billion on its military about one-fourth of what the United States plans to spend on defense this year.

 

China model

Despite assurances, China’s broader strategic intentions are still something that Washington and other countries in the region watch closely.

 

Under Xi Jinping’s leadership, China has begun assuming a bigger role on the global stage and has launched several initiatives of its own, including a massive trillion-dollar trade and infrastructure project called the “Belt and Road” initiative.

During this year’s annual meetings, China’s communist party aims to solidify its self-proclaimed position as the only political organization qualified to rule the country, with the passage of 21 constitutional amendments.

 

One key amendment in the package is a proposal to scrap restrictions regarding the number of terms the president can serve in office. The proposal paves the way for Xi to become China’s president indefinitely, although state media denies Xi will be granted tenure for life.

When asked, Zhang did not respond to the question of whether the changes would give Xi lifelong tenure. He only said that the amendments would help unify the country’s leadership under Xi as China’s “core leader.”

 

The proposal, along with China’s growing ambitions to showcase what it calls the China model or “China Solution” has led to concerns that Beijing’s communist leaders will seek to spread their model of rule.

 

Zhang said that each country has its own development path and model, and Beijing will not import models from other countries, nor will it export its own.

 

“We will not ask other countries to copy China’s practices, but of course if some countries are interested in learning China’s experiences and practices, we are ready and willing to share our experiences with them,” Zhang said.

 

Zhang added that China will not impose anything on others and has no intention of overthrowing the existing international order or trying to start again.

 
…

The EU will soon unveil a plan for taxing major internet companies like Amazon and Facebook by imposing a levy of two to six percent on revenues in every country where they operate, French finance minister Bruno Le Maire said Sunday.

“The range will be from two to six percent; but closer to two than to six,” Le Maire told the Journal du Dimanche newspaper.

The European Commission has said it will present by end March an overhaul of its tax rules, which currently allow US digital economy giants to report their income from across the bloc in any member state.

That leads them to pick low-tax nations like Ireland, the Netherlands or Luxembourg, depriving other nations of their share of the revenue even though they may account for more of a company’s earnings.

“The heads of these companies know themselves that this system can’t continue,” Le Maire said.

Critics say the tax-avoidance strategies used by the tech titans known as GAFA — Google, Amazon, Facebook and Apple — deprive EU governments of billions of euros while giving them an unfair advantage over smaller rivals. 

The Organisation for Economic Cooperation and Development says such strategies cost governments around the world as much as $240 billion (195 billion euros) a year in lost revenue, according to a 2015 estimate.

Asked if the proposed rate might be criticised as too low, Le Maire said: “I would rather have a law that can be implemented quickly instead of drawn-out negotiations.”

American tech giants appear to believe the European tax revamp is in the cards, with several already announcing pledges to pay more in each country where they operate as governments step up their fiscal demands.

Amazon said last month that it had settled a major tax claim in France and that it would start declaring all its earnings in the country.
…

President Donald Trump threatened on Saturday to impose a tax on European cars if the European Union chooses to retaliate against his plans to place tariffs on imported steel and aluminum.

In a tweet Saturday morning, Trump said the U.S. had an “$800 Billion Dollar Yearly” trade imbalance because of “very stupid” trade deals and policies. He warned that if the EU increased “tariffs and barriers” against American-made products, “we will simply add a Tax on their Cars.”

Presently, the U.S. imposes a 2.5 percent tariff on European-built cars and Europe imposes a 10 percent tariff on U.S.-built cars.

Earlier this week, Trump announced that he plans sometime in the coming week to impose tariffs of 25 percent on steel and 10 percent on aluminum imports. He said the tariffs would be in effect for a long period of time.

Trump’s tweet Saturday appeared to be in response to European Commission President Jean-Claude Juncker’s warning that the EU could respond by taxing quintessentially American-made products, such as bourbon whiskey, blue jeans and Harley-Davidson motorcycles.

Juncker told German media Friday that he does not like the words “trade war.” “But I can’t see how this isn’t part of warlike behavior,” he said.

Trump had tweeted earlier in the day: “Trade wars are good, and easy to win.”

Trump’s announcement, made during a meeting with steel and aluminum industry executives at the White House, led a sharp drop in the U.S. markets and sparked concerns of a trade war Friday.

China, Canada respond

Later Friday, China warned about the “huge impact” on global trading if Trump proceeds with his tariff plans.

Wang Hejun, head of China’s commerce ministry’s trade remedy and investigation bureau, said in a statement the tariffs would “seriously damage multilateral trade mechanisms represented by the World Trade Organization and will surely have huge impact on normal international trade order.” 

The Chinese official added, “If the final measures of the United States hurt Chinese interests, China will work with other affected countries in taking measures to safeguard its own rights and interests.”

China ranks 11th among the countries that export steel to the U.S. 

Canada is the United States’ biggest foreign source of both materials.

Canadian Prime Minister Justin Trudeau said Friday that Trump’s tariff plans were “absolutely unacceptable.” He said he is prepared to “defend Canadian industry” and warned the tariffs would also hurt U.S. consumers and businesses by driving up prices.

The director of the World Trade Organization, Roberto Azevedo, responded coolly, saying, “A trade war is in no one’s interests.” 

Trump spent Friday defending his threat to impose the tariffs, saying potential trade conflicts can be beneficial to the United States.

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump wrote in a post on the social media site Twitter. “Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big. It’s easy!” 

A Japanese government official told VOA that Tokyo “has explained several times to the U.S. government our concerns,” but declined to comment further on any ongoing discussions with Washington.

“While we are aware of the president’s statement, we understand that the official decision has not been made yet,” the Japanese official said. “If the U.S. is going to implement any measures, we expect the measures be WTO-rules consistent.” 

China on Friday expressed “grave concern” about the matter. 

Trump said Thursday the tariffs of 25 percent on steel and 10 percent on aluminum imports will be in effect for a long period of time. He said the measure will be signed “sometime next week.” 

In 2017, Canada, Brazil, South Korea and Mexico accounted for nearly half of all U.S. steel imports. That year, Chinese steel accounted for less than 2 percent of overall U.S. imports.
…

The tiny Marshall Islands is creating its own digital currency in order to raise some hard cash to pay bills and boost the economy.

The Pacific island nation said it became the first country in the world to recognize a cryptocurrency as its legal tender when it passed a law this week to create the digital “Sovereign,” or SOV. In the nation of 60,000, the cryptocurrency will have equal status with the U.S. dollar as a form of payment.

Venezuela last month became the first country to launch its own cryptocurrency when it launched the virtual Petro, backed by crude oil reserves. The Marshall Islands said the SOV will be different because it will be recognized in law as legal tender, effectively backed by the government.

​Israeli partners

The Marshall Islands is partnering with Israeli company Neema to launch the SOV. It plans to sell some of the currency to international investors and spend the proceeds.

The Marshall Islands says the SOV will require users to identify themselves, thus avoiding the anonymity that has kept bitcoin and other cryptocurrencies from gaining support from governments.

“This is a historic moment for our people, finally issuing and using our own currency, alongside the USD (U.S. dollar),” said President Hilda Heine in a statement. “It is another step of manifesting our national liberty.”

The Marshall Islands is closely aligned with the U.S. under a Compact of Free Association and uses the dollar as its currency. Under the compact, the U.S. provides the Marshall Islands with about $70 million each year in assistance. The U.S. runs a military base on Kwajalein Atoll.

Lawmakers passed the cryptocurrency measure Monday following five days of heated debate. It’s unclear when the nation will issue the currency.

Leaders hope the SOV will one day be used by residents for everything from paying taxes to buying groceries.

Initial offering: 24 million

The law states that the Marshall Islands will issue 24 million SOVs in what it calls an Initial Currency Offering. Half of those will go to the government and half to Neema.

The Marshall Islands intends to initially sell 6 million SOVs to international investors. It says it will use the money to help pay the budget, invest in projects to mitigate the effects of global warming, and support those people still affected by U.S. nuclear testing.

The country also intends to hand out 2.4 million SOVs to residents.

Neema Chief Executive Barak Ben-Ezer said the SOV marked a new era for cryptocurrency.

“SOV is about getting rid of the excuses” for not shifting to digital assets, he said in a statement. He said it solved a huge problem with cryptocurrencies, which haven’t previously been recognized as “real” money by banks, regulators and the U.S. Internal Revenue Service.

Some lawmakers expressed concern about the large amount of the new currency that would go to the Israeli company, while others argued the country had urgent needs and the cash would help.

Jehan Chu, the Hong Kong-based co-founder of blockchain platform Kenetic, said he thought it was an amazing move by the Marshall Islands and was the way of the future.

“Physical currency is going by the wayside as an antiquated, obsolete form of transacting,” he said.

But Chu added that he didn’t think the currency would hold much appeal for international investors or be particularly valuable outside the Marshall Islands.

And many people in the Marshall Islands and beyond remain skeptical of cryptocurrencies.

Bank of England Governor Mark Carney this week said a global speculative mania had encouraged a proliferation of the currencies, and that they needed to be held to the same standards as the rest of the financial system.

“The prices of many cryptocurrencies have exhibited the classic hallmarks of bubbles … reliant in part on finding the greater fool,” Carney said in a speech to the Scottish Economics conference in Edinburgh.
…

In agitating for a trade war, President Donald Trump may have forgotten William Tecumseh Sherman’s adage that “war is hell.”

The Civil War general’s observation can be apt for trade wars, which may create conditions for a shooting war.

A look at Trump’s spoiling-for-a-fight tweet Friday:

TRUMP: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”

THE FACTS: History suggests that trade wars are not easy.

The president’s argument, in essence, is that high tariffs will force other countries to relent quickly on what he sees as unfair trading practices, and that will wipe out the trade gap and create factory jobs. That’s his motivation for announcing that the U.S. will impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports.

The record shows that tariffs, while they may help certain domestic manufacturers, can come at a broad cost. They can raise prices for consumers and businesses because companies pass on at least some of the higher costs of imported materials to their customers. Winning and losing isn’t as simple a matter as tracking the trade gap.

The State Department’s office of the historian looked at tariffs passed in the 1920s and 1930s to protect farms and other industries that were losing their markets in Europe as the continent recovered from World War I. The U.S. duties hurt Europe and made it harder for those countries to repay their war debts, while exposing farmers and consumers in the U.S. to higher prices. European nations responded by raising their tariffs and the volume of world trade predictably slowed by 1934.

The State Department says the tariffs exacerbated the global effects of the Great Depression while doing nothing to foster political or economic cooperation among countries. This was a diplomatic way of saying that the economic struggles helped embolden extremist politics and geopolitical rivalries before World War II.

Nor have past protectionist measures saved the steel industry, as Trump says his tariffs would.

The United States first became a net importer of steel in 1959, when steelworkers staged a 116-day strike, according to research by Michael O. Moore, a George Washington University economist. After that, U.S. administrations imposed protectionist policies, only to see global competitors adapt and the U.S. share of global steel production decline.
…