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French President Emmanuel Macron’s economic policy is viewed as favoring the rich and must change to address inequalities, according to a memo written by three economists who worked on his campaign program, Le Monde newspaper said on Saturday.

The criticism is the latest sign of the trouble created by Macron’s economic reforms among the center-left supporters who propelled him to power last year.

In the confidential memo sent to Macron and plastered across Le Monde’s front page, the economists said his policy was failing to convince “even the most ardent supporters.”

“Many supporters of the then-candidate express their fear of a lurch to the right motivated by the temptation to steal the political space left vacant by a struggling conservative party,” the economists wrote.

Jean Pisani-Ferry, the Sciences Po Paris university professor who coordinated Macron’s economic program and is an influential voice in Franco-German academic circles, is one of the authors. He declined to comment when contacted by Reuters.

The other two, Philippe Martin, a former Macron adviser who heads France’s Council of Economic Analysis (CAE), and Philippe Aghion of the elite College de France, did not return Reuters’ requests for comment.

Macron, who campaigned on a promise to be “neither left nor right”, moved swiftly in his first year to loosen labor rules and slash a wealth tax, earning himself the nickname “president of the rich.”

The economists said there was a risk the French would find these measures unfair and think the government is deaf to the needs of the poorest in society.

“The president must talk about the issue of inequalities and not leave this debate to his opponents,” the economists wrote.

Among proposals to reduce inequalities, the economists suggested a rise in inheritance tax for the richest, scrapping tax credits on property investments, and cancelling Macron’s promise to abolish a housing tax for the wealthiest 20 percent.

Macron’s office confirmed it had received the note, but said it did not foretell government policy. Macron is currently in Canada with other Group of Seven

leaders, locked in a battle over trade tariffs with U.S. President Donald Trump.
…

Australia’s Commonwealth Bank has agreed to pay a $530 million fine for breaching anti-money laundering and counterterrorism financing laws. The scandal relates to more than 53,000 suspect transactions that the bank did not immediately report to authorities.

If approved by the Federal Court, this will be the largest civil penalty in Australian corporate history.

At the heart of the case were so-called smart cash machines that allowed customers to anonymously deposit and transfer money. Thousands of suspect transactions of more than $7,600 each were not referred to the authorities as required by law.

An investigation by the Australian Transaction Reports and Analysis Center (AUSTRAC), the federal financial intelligence agency, along with state and federal police found the machines were being used to launder the proceeds of crime. 

Australian Treasurer Scott Morrison says the bank must now rebuild its reputation.

“It is for them to rebuild that trust, it is for them to make these admissions, it is for them to incur these penalties and get on with the job of restoring trust in the conduct of the CBA and this, I think, is another important step toward doing that,” Morrison said.

The Commonwealth Bank said its actions were not deliberate but it understood “the seriousness of the mistakes” it had made. It had reportedly been anticipating a fine of about $285 million.

“For AUSTRAC, it is able to demonstrate that there has been serious failings by Commonwealth Bank (CBA), one of our major financial institutions,” said Ian Ramsey, a director at Melbourne University’s Center for Corporate Law. “I am sure what the bank did not want was a very lengthy trial where every day more evidence is brought before the court and then promptly reported in the media of systemic, serious failings by CBA.”

AUSTRAC said the penalty would send a strong message to Australia’s financial industry. Since February it has been investigated by a Royal Commission, Australia’s highest form of inquiry, which has unearthed widespread misconduct within the banking and financial services sector.
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Pope Francis has told the world’s oil executives that a transition to less-polluting energy sources “is a challenge of epochal proportions.”

On the last day of a two-day conference Saturday, the Roman Catholic leader urged the executives to provide electricity to the one billion people who are without it, but said that process must be done in a way that avoids “creating environmental imbalances resulting in deterioration and pollution gravely harmful to our human family, both now and in the future.”

Reuters reports the unprecedented conference was held behind closed doors at the Pontifical Academy of Sciences.

The news agency says the oil executives, investors and Vatican experts who attended the summit, believe, like the pope does, that science supports the notion that climate change is caused by human activity and that global warming must be curbed.

Pope Francis told the conference, “Our desire to ensure energy for all must not lead to the undesired effect of a spiral of extreme climate changes due to a catastrophic rise in global temperatures, harsher environments and increased levels of poverty.”

 
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Shoppers in the Afghan capital are going online for everything from fashion to furniture to avoid bomb attacks and sexual harassment, with dozens of startups doing a brisk trade where there were few on the ground two years ago.

Suicide bombings and other attacks in Kabul have killed and wounded hundreds of people this year, and security is expected to deteriorate ahead of elections planned for October. Sexual harassment on the street is widespread.

The new retailers, with names like AzadBazar.af, afom.af, JVBazar.com and zarinas.com, sell goods ranging from cosmetics, computers, kitchenware and furniture to cars, rugs and real estate. One website advertises foreign brands including Rolex, Adidas and Zara.

Harassment an issue

Student Asila Sulaimani described online shopping as a “good experience” in a country at war, with U.N. figures putting those younger than 25 at more than 60 percent of the population, the vast majority of them enthusiastic smartphone users.

“Who dares go out shopping these days?” she said.

“I am sure there are some people, but for me it has always been difficult. … Fears of an explosion, an attack and the most common thing, harassment, follow me like my shadow.”

Growing after 8 months

Tamim Rasa, 28, is the founder of Rasa Online, which he started with $30,000 eight months ago. He has since signed contracts with more than 60 stores and traders, with 80 percent of his customers women and cosmetics “a big part of business.”

The store has no physical presence in terms of stock, just an office of eight.

“We work as a connecting bridge between people and large stores and traders. A month ago, we were hardly managing to earn our expenses — we were making a loss — but now we are making a profit of 1,000 to 3,000 afghanis ($14 to $42) a day. It shows we are growing.”

He is now looking to expand to Herat province in the west, Kandahar in the south, Balkh in the north and Nangarhar, neighboring Pakistan, in the east.

Esmatullah, 27, owner of Afghan Mart, which he set up just more than a year ago, has a shop with 500,000 afghanis ($7,000) worth of goods.

“Big companies contact me to sell their imported goods. An average of 50 customers call me daily and we deliver,” he said, adding that he too is looking to expand into the provinces by the end of the year.

Diversionary tactics

The biggest challenge, he said, was security in a city where one bomb blast can be followed by a second in the same area.

Many people who have to go out take diversionary routes through narrow side alleys, sometimes through people’s homes and gardens, to avoid the threat and traffic of major roads and intersections.

“We have seen more bomb blasts in Kabul that delayed our delivery services,” Esmatullah said. “When that happens, we stop delivering in that direction or that part of the city.

“But the insecurity is one of the reasons that our business has found its way. And besides the insecurity, there is a bad culture of street harassment that unfortunately our women face in cities,” Esmatullah added.

Goods are delivered by motorcycle or public transport where possible and the deliverymen get paid up to 8,000 afghanis ($112) a month.

Began 2 years ago

Commerce Ministry spokesman Musafer Qoqandi described online shopping as “unique” for a country at war for more than four decades, with about 50 companies in business, most of them unlicensed.

“The culture of online stores only started two years ago in Kabul and right now more than 20 online stores have a license to trade — there are many more that have yet to get their license and we encourage them to come forward,” he said.

“Around the world, online stores are dealing with billions of dollars annually. It is time for us to join this convoy. … It is hope-giving when we see the growing number of such stores in Afghanistan,” Qoqandi added.

Student Roya Shakeb agreed.

“I needed some books for my exams. I searched shops and libraries without success, then I came across online stores. The book was on my doorstep the next day. Unbelievable.”
…

North Korean leader Kim Jong Un has been signaling his desire to open up the reclusive state’s economy, ushering in what some analysts believe could be a “reform and opening up era” similar to what happened in China four decades ago. But how far North Korea is willing to go and what concrete measures it is willing to or could take remain unclear, especially with sanctions still firmly in place.

Next week’s Singapore summit between Kim and U.S. President Donald Trump is expected to shed light on what steps Pyongyang is prepared to take toward denuclearization and that, in turn, could pave the way for a possible boom in economic activity after sanctions are removed.

Though many hurdles and much uncertainty remain, the glimmer of opportunity for business options in North Korea is an improvement, said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics.

“Given how hermetically closed North Korea has been for decades, any uncertainty about the future and any potential opening up is actually an improvement on the status quo for foreign businesses,” Kirkegaard said in an emailed response to VOA.

​Mission accomplished

In a key address in late April, Kim declared that North Korea had completed the development of its nuclear arsenal and would no longer carry out nuclear or missile tests. In the speech, he also proclaimed that the “new strategic line” for the ruling “Workers’ Party” would be developing the economy.

That shift toward focusing more on improving the people’s livelihood has been a key driver behind the North’s about face in recent months, analysts note. And its stated shift of priorities from nuclear weapons to economic development presents an opportunity for more fundamental changes.

Lu Chao, a North Korea expert at the Liaoning Academy of Social Sciences, said that if sanctions are loosened, areas likely to see a boom in investment are ones with fewer hurdles such as travel and tourism.

Infrastructure is likely to be another key area of focus, he said, with the majority of initial foreign investment expected to come from China and South Korea. 

“Currently, power and transportation are two areas that are in urgent need of transformation [in North Korea] from an economic perspective. In the near future, developments are likely to focus on this area,” Lu said.

​Neighbors first

Analysts said that China and South Korea are likely to benefit the most in the beginning from any opening up of the economy. Few see the United States playing a significant role inititally, let alone taking up a significant portion of North Korea’s trade.

China currently is North Korea’s biggest trading partner and investor, but analysts see Seoul also playing a key role. 

South Korea’s economy is massive by comparison to its northern neighbor. The total value of goods and services produced and sold in South Korea in 2016 was $1.34 trillion. North Korea’s gross domestic product, or GDP, for that same year was estimated to be just under $30 billion.

South Korea’s vast resources could provide crucial investment support to North Korea. But to get investors into the country, Pyongyang will not only need to make policy adjustments, but pass legislation that provides guarantees for investors as well, said Jia Qingguo, a political science professor at Peking University. 

“When companies look to invest, they are not just pursuing a vision, but more than that they are looking to grow profits,” Jia said. “And if there is no way to make profits, why would they go in the first place?”

​Adapting to change

Analysts said that as North Korea looks to transform its centrally planned economy, it will adopt some measures from China and other countries, but will never admit that it is doing so.

“North Korea won’t adopt a China, Vietnam or Cuba model,” Lu said. “In the beginning, [North Korea] is likely to create development zones where special economic policies can be put into place.”

Lu said that such zones would have some similarities to those in China, but would be completely cut off from the broader economy and public — fenced in by barbed war.

Starting in 2013, Kim Jong Un began stepping up efforts to open more than a dozen special economic zones, but international sanctions have seriously slowed the development of those projects, analysts said.

North Korea has cautiously approached such changes in the past and that is not likely to change going forward. Jia Qingguo said Kim will need to do more than create a narrative to explain why the country is shifting its focus toward economic development.

“As he tries to open up North Korea’s economy, he will also need to pay attention to political stability and make adjustments to the country’s system [of governance],”Jia said. “Whether he can do that or not is uncertain.”

VOA’s Saibal Dasgupta and Joyce Huang contributed to this report.
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China’s trade surplus with the United States rose to $24.58 billion in May, from $22.15 billion in April, according to Chinese customs data published Friday.

China’s export growth in May was 12.6 percent, slightly down from 12.9 percent in April, but well above the 10 percent that economists polled by the Reuters news agency had predicted.

Chinese imports also increased year over year in May, rising 26 percent.

For the first five months of the year, China’s trade surplus with U.S. was $104.85 billion.

Both countries have threatened to hike tariffs on goods worth up to $150 billion each, as President Donald Trump has demanded Beijing open its economy further and address the U.S. large trade deficit with China.

Earlier this week, China warned the U.S. that any trade and business agreements between the two countries “will not take effect” if Trump’s threatened tariff hike and other measures on Chinese goods are implemented.

The warning came after U.S. Commerce Secretary Wilbur Ross and Chinese Deputy Prime Minister Liu He ended two days of talks in Beijing aimed at settling the simmering trade dispute, in which Beijing pledged to narrow its trade surplus.

The White House renewed a threat last week to raise duties on $50 billion of Chinese technology-related goods over that dispute.
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Just less than $6 billion worth of U.S. waste was sent to China last year to be converted into packaging and products, and then shipped back to the United States and other markets. Scrap recyclers had taken advantage of low shipping costs for empty containers returning to China after the ships had unloaded their goods on the U.S. West Coast.

Today, that flow of trash is just a trickle, the result of a Chinese ban that went into effect Jan. 1 on many types of foreign garbage, from mixed papers to waste textiles.

The result of the ban is seen at a recycling facility in Anaheim, California, owned by Republic Services, a national company headquartered in Phoenix, Arizona. The parking lot of the materials recovery facility (MRF) is brimming with 2,400 bales of mixed paper that once would have been bound for China.

The surplus is a result of an unprecedented 12-day backlog, said James Castro, the facility’s general manager.

And it’s not clear where it’s all going.

China has banned imports of mixed paper, as well as low-grade plastics, certain metals and other types of waste. In April, it expanded the ban, to go into effect later this year, to include more metals and chemical waste. A ban on additional kinds of scrap, including waste timber, is being targeted for the end of 2019.

WATCH: China Trash Ban Creates Crisis for US Recyclers

Less-contaminated scrap

It has also imposed stricter contamination standards on the scrap it does accept, allowing only 0.5 percent contaminants, down for most materials from 1.5 percent.

That has slowed the sorting process, said Richard Coupland, Republic’s vice president of municipal sales.

Further complicating matters, the ban has led to a huge reduction in worldwide prices on recyclable goods, such as mixed paper.

One year ago, bales of unsorted paper, like those now stacked in the parking lot, would have been worth $100 a ton. Today, each ton is worth “less than $5, or negative in some markets,” including shipping costs, Coupland said. He added that much of the industry’s backlog may end up in landfills.

To the north in the city of Azusa, Waste Management’s MRF is also dealing with tightened standards for the workers and sorting machines that use magnets, optical sensors and other means to separate the waste. Executives say they are tweaking a costly system that was designed to meet China’s insatiable craving for scrap.

Asia-based journalist Adam Minter, author of the book Junkyard Planet: Travels in the Billion-Dollar Trash Trade, sums up the dilemma facing these companies.

“Recycling is about manufacturing,” Minter said, “and if somebody doesn’t want to use those raw materials, then putting stuff in your recycling bin is doing nothing more than playing with your garbage.”

He says China’s trash ban is spurred partly by a desire to clean up the environment, but even more by nationalism and a desire for political control.

“When you see China pushing against the recycling industry,” Minter said, “it’s really pushing against private industry and in favor of state-owned enterprises, and that is very much in line with the way that Chinese economic policy has been going for the last five years.”

​‘Shockwaves around the world’

Some environmentalists have welcomed the trash ban.

Greenpeace East Asia plastic campaigner Liu Hua said it will send “shockwaves around the world” and force countries to confront their attitudes toward waste, especially environmental contaminants like plastics.

China expert Joshua Goldstein of the University of Southern California said the ban will have social repercussions in China.

Goldstein has studied the informal sector of 3-5 million small-scale recyclers, entrepreneurs whom he says are “picking through (trash) and making their lives slightly better every day through the money that they made.”

“It had environmental repercussions,” he said, “but it also raised 3 to 5 million households out of poverty.”

Goldstein said China faces hurdles to create an operation as efficient.

Companies are also searching for new markets. More recyclable scrap from the United States will now go to India, Vietnam, Malaysia, Thailand or Indonesia, but industry experts say shipping costs are high and demand in those countries is limited.

As commodity prices drop, there is hope for increased use for scrap such as mixed paper in the United States.

​Cleaning up waste

Brent Bell, vice president of recycling operations for Waste Management, said his company is also cleaning up its waste to meet the higher standards that China and other countries are demanding.

“I think as an industry, we’re all at fault to some degree,” Bell said, noting the company is working to educate consumers about better recycling. “Something we all missed as an industry,” he added. “Whether we’re shipping material to China, to India, or even to Louisiana, our customers all want to make sure the material is as clean as possible.”

Republic’s Coupland said the waste and recycling industry needs to work with local communities to find a new business model to replace one that has become unsustainable. It could mean, he said, an increase in the rate that consumers pay for hauling away their trash.

China may yet make adjustments to its policies, USC’s Goldstein added.

Paper fiber is hard to replace, he notes, and China may loosen its bans to bring in the raw materials that its manufacturers require.

“What parts of this reform, this ban, are going to be long term and what parts are going to be short term is still quite unclear,” Goldstein said. But he noted that the economics of the recycling industry are changing.
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Ukraine’s parliament has voted to establish an anti-corruption court in an effort to meet the criteria to receive $17.5 billion from the International Monetary Fund.

Before the IMF releases the funds needed to shore up Ukraine’s struggling economy, it will have make sure the court’s laws are IMF compliant. The West has repeatedly called on Ukraine to reform it political system and establish an independent body to fight corruption.

“What we’ll be looking to see is that it ensures the establishment of an independent and trustworthy anti-corruption court that meets the expectation of the Ukrainian people,” IMF spokesman Gerry Rice said at a briefing Thursday.

President Petrol Poroshenko said the court was in line with Western recommendations and Ukrainian law.  

Last year Poroshenko rejected the need for an anti-corruption court, saying such institutions are needed in “Kenya, Uganda, Malaysia and Croatia” but not in Western Europe or the United States.

While the approval of the court was seen as a positive, Ukraine also likely dismayed the West by firing Finance Minister Oleksandr Danylyuk, a respected reform advocate.

Danylyuk’s ouster came after he took on Prime Minister Volodymyr Groysman, accusing him of stalling reforms of the state tax service that are needed to combat corruption.

Before the parliament voted on his ouster, Danylyuk addressed the lawmakers, telling them he had been accused of “defending the interests of international organizations.”

But, “I am defending the interests of Ukrainians,” he said.
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The Trump administration said Thursday it would spend $4 million on construction projects in the Arctic National Wildlife Refuge in preparation for oil drilling in the nation’s biggest wildlife park.

In an announcement that touted planned improvements to U.S. Fish and Wildlife Service visitor facilities, the Department of the Interior said it has approved spending on projects for “Oil Exploration Readiness” in the coastal plain of the Arctic refuge.

The Trump administration is pushing for an oil lease sale in the refuge as early as next year. The tax-overhaul bill passed by the U.S. Congress last December includes a provision mandating two oil lease sales, each offering at least 400,000 acres (161,874.26 hectares), within seven years.

True wilderness refuge

The 19-million-acre (7.7 million-hectare) Arctic refuge, the largest in the U.S. national wildlife refuge system, contains some of the wildest territory in North America. There are no roads, established trails or buildings within the refuge border, and no cell phone service, according to the Fish and Wildlife Service.

“This is a true wilderness refuge,” the Arctic refuge website advises.

Political and business leaders in oil-dependent Alaska have tried for decades to pry open the refuge’s coastal plain, which is believed to hold potential for billions of barrels of oil.

But the plain, between the mountains of the Brooks Range and the Arctic Ocean, is prized for its importance to caribou, polar bears and other wildlife. Oil development there had been banned until Alaska Senator Lisa Murkowski led a move to insert a pro-drilling provision into the 2017 tax bill signed by President Donald Trump.

Some Alaskans opposed

In Alaska, the development plan is largely embraced, but not universally so. Drilling opponents gathered outside of last week’s Anchorage and Fairbanks hearings about the proposed lease sales to protest the plan.

Interior spokeswoman Heather Swift, in an email, said the $4 million “will be used to support six projects designed to improve and construct existing outbuildings, facilities and research operations.”

That work will include improvements to facilities outside the refuge, in the Inupiat village of Kaktovik and at Galbraith Lake along the Trans-Alaska Pipeline corridor, she said in the email.

Large appropriation

The $4 million appropriation for Arctic refuge projects is one of the largest single items in a total of $50 million in planned DOI construction spending.

“The president is a builder, he loves to build and he loves our public lands, so it is a natural fit that the Trump administration is dedicating so much attention to rebuilding our aging Fish and Wildlife Service infrastructure,” Secretary Ryan Zinke said in a statement Thursday.

A partnership of three companies is seeking to do seismic surveys in the refuge starting this winter. That plan, from SAExploration and two Alaska Native corporations, was panned by the U.S. Fish and Wildlife Service, the Washington Post reported last month.

There has been no decision on that application, Swift said Thursday. “It was a draft application. The department does not make decisions based upon early drafts,” she said by email.
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Multinational oil companies bought significant stakes in three Brazilian pre-salt oil fields auctioned Thursday, a show of confidence in the future of the energy sector despite a recent strike by truckers over rising fuel prices that brought Latin America’s largest nation to a halt.

The auction, which included several multinationals among the 16 companies bidding, was closely watched to gauge market reaction to the trucking shutdown, which raised questions about the ability of state oil giant Petrobras to set prices without government interference. 

In addition, Petrobras CEO Pedro Parente stepped down last week, saying his presence would be a distraction as the company looked to the future.

Those developments did not appear to present problems for companies that agreed to pay $798 million to explore three of four fields being auctioned. There were no bids on the fourth. 

Shell buys 40 percent

In the first, Shell bought 40 percent while Chevron and Petrobras each bought 30 percent. In the second, BP Energy bought 30 percent, Statoil 25 percent and Petrobras 45 percent. In the third, Statoil and ExxonMobil bought 28 percent each, while Petrobras got 30 percent and Petrogal 14 percent. Petrobras will be the operator in all three.

“This round was extremely successful, getting the attention of large companies,” said Decio Oddone, director of the National Petroleum Agency, which regulates the oil and gas sector in Brazil. “We continue the process of attracting investment for the country.”

Last year, for the first time the government gave private companies the chance to operate pre-salt fields alone.  It was part of President Michel Temer’s plan to increase foreign investment and give Petrobras more independence to set fuel prices.

Government gives in

However, Petrobras’ future is in doubt on the heels of the truckers’ multiday strike that led to widespread shortages in supermarkets and hospitals and the shuttering of thousands of schools. 

The strike ended when the government agreed to subsidize the price of diesel for 60 days and meet several other demands. 

While Temer and Cabinet ministers repeatedly insisted Petrobras would not be messed with, the markets were suspect. During the strike, the company’s stock plunged more than 20 percent on fears that in the future the government would intervene to set prices, a common practice before Temer took power in 2016.

Atlantic reserves

The pre-salt reserves auctioned lie offshore in the Atlantic. They are more than 1 mile (1.6 kilometers) below the ocean’s surface and under a further 2.5 miles (4 kilometers) underneath soil and corrosive salt. 

Eduardo Costa Pinto, an economics professor at the Federal University of Rio de Janeiro, said doubts about Petrobras’ future were likely outweighed by a combination of rising world oil prices and increasingly cheaper costs of pre-salt drilling.

“The overall risk for investors is minimal,” said Pinto.
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More than 14 percent of $140 billion in annual U.S. farm exports have been or are likely to be hit by retaliatory tariffs in trade disputes with countries

such as China and Mexico, a top U.S. trade negotiator said Thursday.

Mexico imposed tariffs on American products including steel, pork and bourbon Tuesday, striking back against import duties on steel and aluminum imposed by U.S. President Donald Trump.

The duties raised trade tensions and further complicated efforts to renegotiate the trillion-dollar North American Free Trade Agreement between Canada, the United States and Mexico.

Trump blames the 1994 pact for U.S. manufacturing job losses to lower-cost Mexico.

Mexico is the largest export market for U.S. pork, the product likely being targeted for retaliatory tariffs more than any other commodity, said Gregg Doud, the chief agricultural negotiator for the office of the U.S. trade representative.

“We’ve got to get this NAFTA thing sorted out,” he told a room full hog farmers at an agricultural event in Iowa.

China has also imposed tariffs on U.S. pork and other products. It was the second-largest destination for U.S. pork by volume last year.

Trump has threatened tariffs on up to $150 billion worth of Chinese exports as part of a different dispute over Chinese intellectual property protections.

Separately, Trump has withdrawn from the multilateral Trans-Pacific Partnership promoted by Japan, the top destination for U.S. chilled and frozen beef. Europe is expected to become a bigger competitor to U.S. meat in Japan unless Washington strikes a new deal with Tokyo.

“I am very concerned about the situation with Japan,” Doud said.

A bright spot for U.S. pork is an agreement that allows U.S. pork exporters to ship meat to Argentina for the first time in 26 years, Doud said.

“These things now that we have to fix are very, very difficult,” he said. “This is going to get a little more difficult here in the short term.”

Ty Rosburg, who transports hogs for a living in Iowa and heard Doud speak, said he worried trade disputes could hurt the farmers who are his customers. Still, he said he believed U.S. officials were attempting to improve trade.

“I guess at some point you have to trust they’re working for the greater good and hope that we don’t get bit too bad,” he said.
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U.S. President Donald Trump said on Thursday after White House talks with Japanese Prime Minister Shinzo Abe that the two leaders were working together to improve trading relations and that Abe promised new Japanese investment in the United States.

At a joint news conference, Trump said Abe told him Japan was buying “billions and billions of dollars of additional products of all kinds – military jets, airliners from Boeing, lots of farm products.”

“We’re working hard to reduce our trade imbalance which is very substantial, remove barriers to U.S. exports and to achieve a fair and mutually beneficial economic partnership,” Trump said.

Japan, a key American ally, is among a number of countries hit by metal tariffs Trump has imposed this year. The Trump administration has also threatened levies on imports of Japanese cars.

Trump has made clear he prefers a bilateral deal to reduce the U.S. trade deficit with Japan, while Abe’s government says multilateral agreements would be best.

“The United States seeks a bilateral deal with Japan that is based on the principle of fairness and reciprocity,” Trump said on Thursday.

Abe said he had a detailed and candid exchange of views with Trump and the discussions focused on North Korea.

Trump said his administration encouraged Japanese investment in new plants in the United States.

“The prime minister told me that will happen,” he said. “We want new auto plants going into Michigan and Pennsylvania and Ohio.”
…

South Sudan said Thursday it had agreed with its northern neighbor Sudan to repair oil infrastructure facilities destroyed by conflict within three months to boost production in Africa’s youngest country.

Michael Makuei Lueth, South Sudan’s information minister, told Reuters that officials agreed with their visiting Sudanese counterparts to “evaluate and assess the damage” to South Sudan’s oilfields in the Heglig area in the country’s north.

“There is an agreement between the two oil ministries of the two countries. They agreed to cooperate and work together in order to repair [the damage],” he said.

South Sudan depends virtually entirely on oil sales for its revenue but production has declined since war broke out in the country in 2013.

The oil is shipped to international markets via a pipeline through Sudan.

Fighting was triggered by a political disagreement between President Salva Kiir and his former deputy Riek Machar, and a regionally brokered peace pact failed to end the war after violations by both parties.

Officials from the two countries “agreed that within the period of three months they will repair all the oil blocks and resume oil production in the region,” he said referring to the infrastructure in the oil blocks.

The war has uprooted a quarter of South Sudan’s population of 12 million, ruined the country’s agriculture and battered the economy.

A joint force would also be established by both countries to protect the oilfields from attacks by rebel forces in South Sudan and Sudan.
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The U.S. and China have reached a deal to lift sanctions against the giant Chinese ZTE telecommunications company that hobbled the firm when the United States banned the sale of American-made components it needed for its consumer products, U.S. Commerce Secretary Wilbur Ross said Thursday.

Ross told CNBC the accord will force ZTE, which employs nearly 75,000 workers, to pay a $1 billion fine for violating the U.S. ban on trade with North Korea and Iran, put another $400 million in escrow, and within 30 days replace its entire management and board.

Ross said going forward, the deal imposes the “most strict” compliance on ZTE. He said the penalties should serve as a very strong deterrent for “other potential bad actors” to force compliance with U.S. trade restrictions.

“If they do violate it again, in addition to the billion dollars they are paying us up front, we had them put $400 million in escrow,” he said. “The total deal is $1.4 billion. That money will be forfeited if they violate anything … and we still retain the power to shut them down again.”

ZTE must hire a new compliance team selected by the U.S. Commerce Department for a 10-year term.

“We are literally embedding a compliance department of our choosing into the company to monitor it going forward,” Ross said. “They will pay for those people, but the people will report to the new chairman.”

“This is a pretty strict settlement,” he added. “The strictest and largest settlement fine that has ever been brought by the Commerce Department against any violator of export controls.”

The commerce secretary said he did not think the settlement of the ZTE dispute would have any impact on ongoing contentious trade and tariff talks between the U.S. and China, the world’s two biggest economies.

Washington and Beijing have threatened each other with massive new tariffs on up to $150 billion of exports from the two countries, the fallout from the U.S. demand that China buy more American goods to sharply cut last year’s $375 billion Chinese trade surplus with the U.S.

The ZTE agreement was reached after weeks of talks between U.S. and Chinese officials. The dispute stemmed from a U.S. decision to block sales of American-made components ZTE needs to manufacture its products for seven years, until 2025. The agreement calls for a 10-year suspended ban that can be activated if ZTE commits new trade violations.

Most of the world first heard of the dispute over ZTE nearly a month ago following a tweet by U.S. President Donald Trump.

Some U.S. lawmakers, both Republicans and Democrats, balked at Trump’s effort to reach an accord on ZTE, saying that firm was a threat to U.S. national security through intelligence gathering on its devices. But Trump ignored the complaints, pushing Ross to settle the dispute.
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President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters.

That’s more than double the about $1 billion in new spending plans announced by firms building or expanding U.S. solar panel factories to take advantage of the tax on imports.

The tariff’s bifurcated impact on the solar industry underscores how protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition. 

Trump announced the tariff in January over protests from most of the solar industry that the move would chill one of America’s fastest-growing sectors.

​Utility-scale projects

Solar developers completed utility-scale installations costing a total of $6.8 billion last year, according to the Solar Energy Industries Association. Those investments were driven by U.S. tax incentives and the falling costs of imported panels, mostly from China, which together made solar power competitive with natural gas and coal.

The U.S. solar industry employs more than 250,000 people, about three times more than the coal industry, with about 40 percent of those people in installation and 20 percent in manufacturing, according to the U.S. Energy Information Administration.

“Solar was really on the cusp of being able to completely take off,” said Zoe Hanes, chief executive of Charlotte, North Carolina solar developer Pine Gate Renewables.

Companies with domestic panel factories are divided on the policy. Solar giant SunPower Corp opposes the tariff that will help its U.S. panel factories because it will also hurt its domestic installation and development business, along with its overseas manufacturing operations.

“There could be substantially more employment without a tariff,” said Chief Executive Tom Werner.

​Lost profits, jobs

The 30 percent tariff is scheduled to last four years, decreasing by 5 percent per year during that time. Solar developers say the levy will initially raise the cost of major installations by 10 percent.

Leading utility-scale developer Cypress Creek Renewables LLC said it had been forced to cancel or freeze $1.5 billion in projects, mostly in the Carolinas, Texas and Colorado, because the tariff raised costs beyond the level where it could compete, spokesman Jeff McKay said.

That amounted to about 150 projects at various stages of development that would have employed 3,000 or more workers during installation, he said. The projects accounted for a fifth of the company’s overall pipeline.

Developer Southern Current has made similar decisions on about $1 billion of projects, mainly in South Carolina, said Bret Sowers, the company’s vice president of development and strategy.

“Either you make the decision to default or you bite the bullet and you make less money,” Sowers said.

Neither Cypress Creek nor Southern Current would disclose exactly which projects they intend to cancel. They said those details could help their competitors and make it harder to pursue those projects if they become financially viable later.

Both are among a group of solar developers that have asked trade officials to exclude panels used in their utility-scale projects from the tariffs. The office of the U.S. Trade Representative said it is still evaluating the requests.

Other companies are having similar problems.

Stockpiling panels

For some developers, the tariff has meant abandoning nascent markets in the American heartland that last year posted the strongest growth in installations. That growth was concentrated in states where voters supported Trump in the 2016 presidential election.

South Bend, Indiana-based developer Inovateus Solar LLC, for example, had decided three years ago to focus on emerging Midwest solar markets such as Indiana and Michigan. But the tariff sparked a shift to Massachusetts, where state renewable energy incentives make it more profitable, Chairman T.J. Kanczuzewski said.

Some firms saw the tariff coming and stockpiled panels before Trump’s announcement. For example, 174 Power Global, the development arm of Korea’s Hanwha warehoused 190 megawatts of solar panels at the end of last year for a Texas project that broke ground in January.

The company is paying more for panels for two Nevada projects that start operating this year and next, but is moving forward on construction, according to Larry Greene, who heads the firm’s development in the U.S. West.

‘A lot of robots’

Trump’s tariff has boosted the domestic manufacturing sector as intended, which over time could significantly raise U.S. panel production and reduce prices.

Panel manufacturers First Solar and JinkoSolar , for example, have announced plans to spend $800 million on projects to increase panel construction in the United States since the tariff, creating about 700 new jobs in Ohio and Florida. Last week, Korea’s Hanwha Q CELLS joined them, saying it will open a solar module factory in Georgia next year, though it did not detail job creation.

SunPower Corp, meanwhile, purchased U.S. manufacturer SolarWorld’s Oregon factory after the tariff was announced, saving that facility’s 280 jobs. The company said it plans to hire more people at the plant to expand operations, without specifying how many.

But SunPower has also said it must cut up to 250 jobs in other parts of its organization because of the tariffs.

Jobs in panel manufacturing are also limited because of increasing automation, industry experts said.

Heliene, a Canadian company in the process of opening a U.S. facility capable of producing 150 megawatts worth of panels per year, said it will employ between 130 and 140 workers in Minnesota.

“The factories are highly automated,” said Martin Pochtaruk, president of Heliene. “You don’t employ too many humans. There are a lot of robots.
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Britain, France and Germany have joined forces to urge the United States to exempt European companies from any sanctions the U.S. will slap on Iran after pulling out of an international nuclear agreement.

In a letter dated Monday to U.S. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, ministers from the three European countries said they “strongly regret” President Donald Trump’s decision last month to withdraw from the Iran deal. Trump has said sanctions will be imposed on any company doing business with Tehran.

The three European countries were also signatories of the 2015 deal, which was meant to stop Iran from developing nuclear weapons in exchange for the lifting of economic sanctions.

In their letter, made public on Wednesday, the ministers said that “as close allies we expect that the extraterritorial effects of U.S. secondary sanctions will not be enforced on EU entities and individuals, and the United States will thus respect our political decision and the good faith of economic operators within EU legal territory.”

The ministers, which included British Foreign Minister Boris Johnson, French Finance Minister Bruno Le Maire and his German counterpart Olaf Scholz, said they want the U.S. to “grant exemptions” for EU companies that have been doing business with Iran since the deal came into force in 2016. They also said Iran should not be cut out of the SWIFT system for international money transfers.

Many companies from Europe and the U.S. have been steadily building up their investments in Iran in the past few years in the wake of the nuclear deal, particularly in the fields of pharmaceuticals, banking and oil.

France’s Le Maire tweeted Wednesday that EU “businesses must be able to pursue their activities.”

 
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Arms control experts estimate that the dismantlement of North Korea’s nuclear program could take a decade to complete, and cost $20 billion, if a nuclear agreement is reached between U.S. President Donald Trump and North Korean leader Kim Jong Un when they meet in Singapore on June 12.

“The hard work has not yet begun, and it is gong to take sustained energy on the part of the United States, South Korea, Japan, China and North Korea. It’s going to be a multiyear long process,” said Daryl Kimball, the executive director of the Arms Control Association in Washington.

President Trump has said he expects a “very positive result” from the North Korea nuclear summit, but he also said it will likely be the beginning of a process to resolve differences over the extent of the North’s denuclearization, and the specifics regarding what sanctions relief, economic aid and security guarantees would be offered in return.

U.S. Defense Secretary Jim Mattis said on Sunday that North Korea would only receive sanctions relief after it takes “verifiable and irreversible steps to denuclearization.”

This position aligns closer to the Kim government’s stance that denuclearization measures and concessions be matched action for action. And it backs away from demands made by some in the president’s national security team that Pyongyang quickly and unilaterally dismantle all its weapons of mass destruction before any concessions would be offered.

Nuclear costs

North Korea is estimated to have 20 to 80 nuclear warheads, both known and covert nuclear research and processing sites, and thousands of ballistic missiles that can be launched from mobile vehicles, and submarine based launchers have been tested in recent years.

With such an extensive nuclear arsenal it could cost $20 billion to achieve the U.S. goal of complete, irreversible, and verifiable nuclear dismantlement (CVID), according to a recent study conducted by Kwon Hyuk-chul, a Kookmin University professor of security strategy.

Kwon based his assessment in part on past nuclear deals with North Korea and Ukraine’s experience in dismantling its nuclear arsenal after the fall of the Soviet Union in the 1990s. 

“In the process of the nuclear dismantlement of Ukraine, all of the strategic nuclear warheads that Ukraine possessed were transferred to Russia and were dismantled there. In doing so, the United States provided large-scale containers and technical support to assist with safe dismantling,” said Kwon.

The Kookmin University study estimates it would costs $5 billion to dismantle the North’s nuclear arsenal and supporting facilities. Another $5 billion, Kwon said, would be needed to fulfill a U.S. pledge, made as part of a 1994 nuclear agreement with North Korea, to build two light water reactors to generate electrical power.

Another $10 billion in economic aid would be needed both as incentives to convince the leadership to give up its nuclear deterrent and to help transition the over 3,000 to 10,000 nuclear workers into peacetime professions.

President Trump recently said he does not expect the U.S. to provide any government aid but could offer American private investment if North Korea gives up its nuclear weapons. Instead he said the Kim government should look to South Korea and China for any direct economic assistance.

Denuclearization roadmap

A recent Stanford University report estimates it would take over 10 years to permanently dismantle the North’s nuclear program.

Stanford nuclear scientist Siegfried Hecker, who visited North Korea in the past to assess the country’s plutonium program, Robert Carlin, a former CIA Korea analyst, and researcher Elliot Serbin, conducted the detailed study of the North’s nuclear program.

The researchers listed specific categories that must be verified by outside inspectors including; nuclear fissile material of plutonium, tritium for fusion Hydrogen bombs, enriched uranium, nuclear reactors, centrifuge facilities, long and medium and short range missiles, test engines, and space launch vehicles.

The authors proposed a three-phase denuclearization process that would halt or limit further activity in the first year, roll back or dismantle over five years, and permanently eliminate North Korea’s nuclear capabilities in 10 years.

Lee Yoon-jee in Seoul contributed to this report.
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Mexico put tariffs on American products ranging from steel to pork and bourbon on Tuesday, retaliating against import duties on metals imposed by

President Donald Trump and taking aim at Republican strongholds ahead of U.S. congressional elections in November.

Mexico’s response further raises trade tensions between the two countries and adds a new complication to efforts to renegotiate the NAFTA trade deal between Canada, the United States and Mexico.

American pork producers, for whom Mexico is the largest export market, were dismayed by the move.

Trump last week rattled some of the closest U.S. allies by removing an exemption to tariffs on imported steel and aluminum that his administration had granted to Mexico, Canada and the European Union.

Meanwhile, Trump economic advisor Larry Kudlow revived the possibility on Tuesday that the president will seek to replace the trillion dollar North American Trade Agreement (NAFTA) with bilateral deals with Canada and Mexico, something both countries say they oppose.

Following news of the new Mexican tariffs, which take effect immediately, the peso tumbled to its weakest level since February 2017, making it one of the worst performers among major currencies.

Mexico’s retaliatory list, published in the government’s official gazette, included a 20 percent tariff on U.S. pork legs and shoulders, apples and potatoes and 20 to 25 percent duties on types of cheeses and bourbon.

A net importer of U.S. steel, Mexico is also putting 25 percent duties on a range of U.S. steel products.

Mexico’s trade negotiators designed the list, in part, to include products exported by top Republican leaders’ states, including Indiana where Vice President Mike Pence was formerly governor, according to a trade source familiar with the matter.

Bourbon-producing Kentucky is the home state of Senate Majority Leader Mitch McConnell, a Republican.

The new tariffs could also have political implications in some hotly contested races as the Republicans seek to maintain control of both chambers in Congress in November’s election, illustrating the potential perils of Trump’s aggressive efforts to set right what he sees as unfair trade balances with allies and rivals.

Midwestern worries

Iowa, where one incumbent Republican representative, Rod Blum, is seen as vulnerable, is an example of a place where Trump’s party could be hurt. The state is the top pork producing state in the United States and Mexico is its main export market by volume.

“We need trade and one of the things we’re concerned about is long-term implications that these trade issues will have on our partnerships with Mexico and Canada and other markets,” said Iowa Secretary of Agriculture Mike Naig, a Republican.

“Our customers around the world start going to other parts of the world for their supplies, that is a serious problem,” he said.

Chicago Mercantile Exchange hog futures at one point fell more than 2 percent following the Mexico pork tariff announcement.

“It certainly casts a negative pall over the market,” said CME livestock futures trader Dan Norcini.

The president of the U.S. National Pork Producers Council, Jim Heimerl, said Mexico accounted for nearly 25 percent of all pork shipments last year, adding that “a 20 percent tariff eliminates our ability to compete effectively in Mexico.”

“This is devastating to my family and pork producing families across the United States,” said Heimerl, a pork producer from Johnstown, Ohio.

In Minnesota, about 14 percent of the state’s $7.1 billion of annual agricultural exports goes to Mexico, one of the state’s top export markets, said Matthew Wohlman, Minnesota Department of Agriculture deputy commissioner.

The Mexican tariffs will hit its pork, dairy and potato exports, Minnesota state officials said.

U.S. Senator Mark Warner, a Democrat from Virginia, called the new tariffs a “gut punch” to farmers in his state, who he said exported more than $68 million in pork to Mexico last year.

“The President’s trade war is going to cost Virginia ag jobs,” he wrote in a tweet.

America first

Mexico announced its response to Trump’s move last week but it did not provide details of tariff levels or a full list of products at the time.

The United States and Mexico do $600 billion in annual trade and about 16 percent of U.S. goods exports go to its southern neighbor. However, the Mexican economy relies more on trade than does the U.S. economy, with about 80 percent of its exports sold to America.

The trade fights with Mexico and Canada are part of the Trump administration’s “America First” economic agenda, which has also put Washington on a collision course with China over trade.

Washington and Beijing have threatened tit-for-tat tariffs on goods worth up to $150 billion each, as Trump has pushed Beijing to open its economy further and address the United States’ large trade deficit with China.

The United States imposed tariffs of 25 percent on imported steel and 10 percent on aluminum in March, citing national security grounds. Last week Washington said it was ending a two-month exemption it had granted to imports from Canada, Mexico and the European Union.

The dispute with Mexico over tariffs makes it more difficult to conclude talks on renegotiating NAFTA between the three countries, discussions that began last year because Trump said the deal needed to be reworked to better serve the United States. Canada has also strongly objected to the metals tariffs.

The U.S. side has linked lifting its tariffs to a successful outcome of the NAFTA negotiations.

Separately, Mexico took steps on Tuesday to make it more attractive for other countries to send it pork by opening a tariff-free quota for some pork imports. Economy Minister Ildefonso Guajardo said his country would now “surely” look to Europe for pork products, used in many traditional dishes in Mexico.
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U.S. President Donald Trump is “seriously contemplating” trying to reach separate trade deals with Canada and Mexico instead of reshaping the more than two-decade-old North American Free Trade Agreement with both neighbors, a White House economic adviser said Tuesday.

Trump economic adviser Larry Kudlow told Fox News, “He prefers bilateral negotiations, and he is looking at two much different countries.”

The U.S., Canada and Mexico have for months engaged in talks to revise NAFTA, which has been in force since 1994. But Kudlow said separate deals “might be able to happen more rapidly.”

However, Kudlow said Trump does not plan to withdraw from the three-nation agreement.

“He is seriously contemplating a shift in the NAFTA negotiations … [and] he asked me to convey this,” Kudlow said. The adviser said Trump “believed bilateral is always better. He hates large treaties.”

Trump has long assailed multinational trade deals and within days of assuming power last year, withdrew the U.S. from the Trans-Pacific Partnership with 11 other Pacific rim nations.

On Monday, he said on Twitter, “The U.S. has made such bad trade deals over so many years that we can only WIN!”

He declared, “China already charges a tax of 16% on soybeans. Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!”

Trump contended, “Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly. By the time I finish trade talks, that will change. Big trade barriers against U.S. farmers, and other businesses, will finally be broken. Massive trade deficits no longer!”

The NAFTA talks have stalled on U.S. demands to increase American components in duty-free NAFTA autos, as well as its argument that any new agreement end after five years.

Kudlow said he told top Canadian officials Monday about Trump’s hope for bilateral trade talks and is awaiting for reaction from Ottawa.

“The important thought is he may be moving quickly towards these bilateral discussions instead of as a whole,” Kudlow said.

Trump’s trade talks with China, Mexico, Canada and the European Union have proved contentious. The U.S. leader last week drew the ire of Canada, Mexico and the EU by imposing tariffs on their aluminum and steel exports.

Canadian Prime Minister Justin Trudeau called the tariffs “insulting and unacceptable.” In a weekend television interview, Kudlow called the U.S.-Canada trade dispute a “family quarrel.”

 
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Starbucks Corp, the world’s biggest coffee chain, said on Monday Executive Chairman Howard Schultz is stepping down, effective June 26.

Schultz, who has been with Starbucks for nearly four decades, is credited with turning the company into a popular household name and growing it from 11 stores to more than 28,000 in 77 countries.

Last year, Schultz stepped down as chief executive officer to become executive chairman, handing the top job to Kevin Johnson.

Most recently, he was involved in steering the company through an anti-bias training program that was kickstarted after a Philadelphia cafe manager’s call to police resulted in the arrests of two black men who were waiting for a friend.

Starbucks’ board named Myron Ullman, who was previously chairman and CEO of struggling retailer J.C. Penney Co, as its new chair and Mellody Hobson vice chair effective upon Schultz’s retirement.

Schultz will also resign from Starbucks’ board and will be named chairman emeritus, the company said in a statement.
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Institutional investors with $26 trillion in assets under management called on Group of Seven leaders on Monday to phase out the use of coal in power generation to help limit climate change, despite strong opposition from Washington.

Government plans to cut greenhouse gas emissions were too weak to limit warming as agreed by world leaders at a Paris summit in 2015, they wrote. U.S. President Donald Trump announced a year ago that he was pulling out of the pact.

“The global shift to clean energy is under way, but much more needs to be done by governments,” the group of 288 investors wrote in a statement before the G7 summit in Canada on June 8-9.

Signatories included Allianz Global Investors, Aviva Investors, DWS, HSBC Global Asset Management, Nomura Asset Management, Australian Super, HESTA and some major U.S. pension funds including CalPERS, it said.

As part of action to slow climate change, the investors called on governments to “phase out thermal coal power worldwide by set deadlines,” to phase out fossil fuel subsidies and to “put a meaningful price on carbon.”

The investors also urged governments to strengthen national plans for cutting greenhouse gas emissions by 2020 and to ensure that companies improve climate-related financial reporting.

Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGC), said it was the first time that such a broad group of investors had called for a phase-out of thermal coal, used in power generation.

“There is a lot more momentum in the investor community” to put pressure on governments, she told Reuters. The IIGC was among backers of the statement, delivered to G7 governments and to the United Nations.

G7 nations Canada, Britain, France and Italy are members of a “Powering Past Coal” alliance of almost 30 nations set up last year and which seeks to halt use of coal power by 2030. Japan, Germany and the United States are not members.

The investors wrote that countries and companies that implement the Paris climate agreement “will see significant economic benefits and attract increased investment.” U.S. gross domestic product was $18.6 trillion in 2016, World Bank data show.

Trump doubts scientific findings that heatwaves, downpours and rising sea levels are linked to man-made greenhouse gas emissions and wants to bolster the U.S. fossil fuel industry.

Worldwide, coal is now used to generate almost 40 percent of electricity.
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British civil servants have warned of shortages of food, fuel and medicines within weeks if the U.K. leaves the European Union without a trade deal, a newspaper reported Sunday.

The Sunday Times said government officials have modeled three potential scenarios for a “no deal” Brexit: mild, severe and “Armageddon.”

It said under the “severe” scenario, the English Channel ferry port of Dover would “collapse on day one” and supermarkets and hospitals would soon run short of supplies.

Britain wants to strike a deal on future trade relations with the EU before it officially leaves the bloc on March 29, 2019, but officials are also drawing up plans for negotiations ending without an agreement.

The U.K.’s Department for Exiting the European Union rejected the downbeat scenario, saying it was drawing up no-deal plans but was confident “none of this would come to pass.”

Britain and the EU are aiming to strike an overall Brexit agreement by October, so parliaments in other EU nations have time to ratify it before Britain leaves the bloc.

But British Prime Minister Theresa May’s Conservative government is split between ministers who favor a clean-break “hard Brexit,” that would leave Britain freer to strike new trade deals around the world, and those who want to keep the country closely aligned to the EU, Britain’s biggest trading partner.

 EU leaders are frustrated with what they see as a lack of firm proposals from the U.K. over how to resolve major issues around customs arrangements and the status of the border between Northern Ireland and the Republic of Ireland. That will be the U.K.’s only land border with the EU after Britain leaves the bloc.

Irish Deputy Prime Minister Simon Coveney said Saturday that the U.K. must produce “written proposals” for the border within two weeks, ahead of a June 28-29 EU summit.

 British Home Secretary Sajid Javid said Sunday that the British government would have “a good set of proposals” to submit to the bloc at its June meeting.

 
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China has warned that any agreements with Washington in their talks on settling a sprawling trade dispute “will not take effect” if threatened U.S. sanctions including tariff hikes go ahead.

The statement Sunday came shortly after delegations led by U.S. Commerce Secretary Wilbur Ross and China’s top economic official, Vice Premier Liu He, held another round of talks on China’s pledge to narrow its trade surplus with the United States by purchasing more American goods. 

The Chinese statement said the two sides made “positive and concrete progress,” but neither side released details.

The statement said, “If the United States introduces trade sanctions including increasing tariffs, all the economic and trade achievements negotiated by the two parties will not take effect.”

Ross said U.S. and Chinese officials have discussed specific American export items Beijing might buy as part of its pledge to narrow its trade surplus with the United States.

The two sides began a new round of talks in Beijing this weekend aimed at settling a simmering trade dispute.

Ross gave no details at the start of his meeting Sunday with Liu, China’s top economic official. But Chinese envoys promised after the last high-level meeting in Washington in mid-May to buy more American farm goods and energy products.

President Donald Trump is pressing Beijing to narrow its politically volatile surplus in trade in goods with the United States, which reached a record $375.2 billion last year. He’s threatening to hike duties on up to $150 billion of Chinese imports.

“Our meetings so far have been friendly and frank, and covered some useful topics about specific export items,” Ross said.

Ross was accompanied by agricultural, treasury and trade officials. Liu’s delegation included China’s central bank governor and commerce minister.

There was no indication whether the talks also would take up American complaints that Beijing steals or pressures foreign companies regarding their technology. The White House renewed a threat this week to hike duties on $50 billion of Chinese technology-related goods over that dispute.

Private sector analysts say that while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor.

Ross had a working dinner Saturday evening with Liu, also at the same guesthouse in Beijing.

China has promised to “significantly increase” purchases of farm goods, energy and other products and services. Still, Beijing resisted pressure to commit to a specific target of narrowing its annual surplus with the United States by $200 billion.
…

Britain will not sign a trade agreement with the United States that is not in the country’s best interests, Trade Minister Liam Fox said Saturday after European Union officials filed a complaint with the World Trade Organization over stiff U.S. tariffs on steel and aluminum imports.

“If we can’t come to an agreement that we believe is in the interests of the United Kingdom, then we wouldn’t be signing any trade agreement,” Fox said Saturday in an interview with BBC radio.

Fox’s comments came one day after European Union officials submitted a formal complaint to the WTO, the first in a series of retaliatory actions, including possible tariffs, against the U.S. Fox said the tariffs are “illegal” and that British Prime Minister Theresa May would raise the issue at the Group of Seven meeting next week in Canada.

Trans-Atlantic and North American trade tensions escalated when the U.S. imposed on Friday a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico. The U.S. also negotiated quotas or volume limits on other countries, such as South Korea, Argentina, Australia and Brazil, instead of tariffs.

In a separate dispute, China is prepared to target billions of dollars in U.S. products, many of which come from America’s agricultural heartland, where Trump enjoys strong voter support.

Commerce Secretary Wilbur Ross arrived in Beijing Saturday in an attempt to avert an all-out trade war between the world’s two largest economies. On China’s target list are U.S. soybean farmers, who export about 60-percent of their soybeans to China.

A dairy farmer who also grows soybeans in the midwestern state of Nebraska, Ben Steffen, is angry about the U.S. tariffs “because it hits me in my pocketbook from multiple angles.”

California farmer Jeff Colombini, who grows walnuts, cherries and apples, is concerned about the financial damage a trade war could bring.

“With these tariffs, its going to make the product[s] too expensive for the consumers in Mexico and in Canada and in the EU,” he said. “I have 200 employees, and they depend on the success of this operation for their jobs and to feed and clothe their families.”

The imposition of the tariffs is also not popular with some members of Congress, including those from Trump’s own party, whose states are dependent on exports.

“Imposing steel and aluminum tariffs on our most important trading partners is the wrong approach and represents an abuse of authority intended only for national security purposes,” said Bob Corker of Tennessee, who is the chairman of the Senate Foreign Relations Committee.

“You don’t treat allies the same way you treat opponents,” Republican Senator Ben Sasse of Nebraska said on Twitter. “Blanket protectionism is a big part of why we had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’”

Tennessee has three major auto assembly plants. Nebraska is a significant exporter of cattle, corn, soybeans and hogs.

Mexico said, in response, it will penalize U.S. imports, including pork bellies, apples, grapes, cheeses and flat steel.

“There’s a reason why” the countries are carefully selecting which American products to target in response, said William Reinsch, senior adviser at the Center for Strategic and International Studies.

“Most of bourbon is made in Kentucky, which is the state of the Senate majority leader. Harley Davidsons are made in Wisconsin, which is the state of the speaker of the House,” Reinsch told VOA News. “Usually when other countries retaliate, and the Chinese have done something similar, is they’re good at maximizing political pain by picking out products that are made in places where people are politically important.”

“Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” said Republican Orrin Hatch, who chairs the Senate’s finance committee and is a longtime advocate of breaking down trade barriers.

Expected higher prices for U.S. consumers on some products is only one side of the equation, said Ross, who noted that steel and aluminum makers in the U.S. are adding employment and opening facilities as a result of the U.S. government action.

“You can create a few jobs, however, you’re going to lose more in the process,” as consuming industries will be placed at a disadvantage of paying more for raw materials compared to their foreign competitors, Simon Lester, trade policy analyst at the libertarian Cato Institute, told VOA News.

 
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