YCLOAK

Puerto Rico’s governor submitted a revised fiscal plan overnight Thursday that estimates the U.S. Caribbean territory’s economy will shrink by 11 percent and its population drop by nearly 8 percent next year.

The proposal doesn’t set aside any money to pay creditors in the next five years as the island struggles to restructure a portion of its $73 billion public debt. The original plan had set aside $800 million a year for creditors, a fraction of the roughly $35 billion due in interest and payments over the next decade.

The five-year plan also assumes Puerto Rico will receive at least $35 billion in emergency federal funds for post-hurricane recovery and another $22 billion from private insurance companies.

Some analysts view that assumption as risky given that the U.S. Treasury Department and U.S. Federal Emergency Management Agency recently told Puerto Rico officials that they are temporarily withholding billions of dollars approved by Congress last year for post-hurricane recovery because they felt the island currently had sufficient funds.

A spokesman for Gerardo Portela, director of the island’s Fiscal Agency and Financial Advisory Authority, said he was not immediately available for comment.

The plan does not call for layoffs or new taxes. Instead, Gov. Ricardo Rossello once again called for labor and tax reforms and the privatization of the island’s power company to help generate revenue and promote economic development amid an 11-year recession. He noted that nearly half of the island’s 3.3 million inhabitants lived in poverty prior to the hurricane and that Puerto Rico still faces an 11 percent unemployment rate. Nearly half a million people have fled for the U.S. mainland in the past decade in search of jobs and a more affordable cost of living.

“We must work as a government to prevent this from happening, and that’s what we’re focused on,” he said.

Rossello said an original $350 million cut to the island’s 78 municipalities will not be immediately imposed as they struggle post-hurricane. Instead, he said they will receive more money than usual in upcoming years.

Rossello also called for reducing several taxes, including an 11.5 percent sales-and-use tax to 7 percent for prepared food. More than 30 percent of power customers remain in the dark more than four months after Hurricane Maria, forcing many to spend their dwindling savings on eating out.

A federal control board overseeing Puerto Rico’s finances has to approve of the plan, which it envisions doing by Feb. 23.

“The Oversight Board views implementing structural reforms and investing in critical infrastructure as key to restoring economic growth and increasing confidence of residents and businesses,” Natalie Jaresko, the board’s executive director, said in a statement Thursday. “Our focus in certifying the revised plans will be to ensure they reflect Puerto Rico’s post-hurricane realities.”

 
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A top economic adviser and trusted aid of Chinese leader Xi Jinping has promised that reforms are coming to China this year and adds that some could even “exceed expectations.”

Speaking at a forum on the Chinese Economy at the World Economic Forum, Liu He said China would take steps to open up the banking, finance and insurance sector as well as the manufacturing and service sector and other measures.

“Many of our foreign friends have asked, you’ve made so many promises, but when will they be carried out? I can responsibly say that we will carry out these promises one after the other, the sooner, the better,” Liu said.

China has long promised to open up its markets to the world, but the slow pace of reform in some sectors and a playing field that is tilted heavily in the favor of state owned enterprises and forces players to hand over technology in exchange for market access has increasingly been the focus of criticism from foreign firms in recent years.

It was unclear from his remarks how some of that might change, but analysts note that what Liu has to say is important. Late last year, he was elevated to a seat on the 25-member politburo of the Communist Party of China. He is also widely expected to become China’s next vice premier in March with a portfolio that focuses on the economy.

He said that as China marks 40 years of opening its markets up to the world, reform measures fitting to commemorate and celebrate that occasion would be unveiled.

“The best way to celebrate is by offering up new and even deeper reforms,” Liu said. “The central government is currently reviewing what those measures will be, and I can responsibly say that some of those measures could exceed the expectations of the international community.”

In his remarks, Liu He said China would focus on continuing to open up in four areas: finance, manufacturing and services, boosting intellectual property right protection and expanding imports.

For manufacturing, that would include shipping, rail transit and equipment manufacturing and reducing restrictions on foreign investment. On imports, Liu noted that last year China reduced tariffs on 187 products, cutting the average from 17.3 percent to 7.7 percent. He said such moves would continue.

In recent years, China has come under increasing criticism from the United States and other countries over its trade practices.

Automobile tariffs are one area of concern. Imported cars currently face a 25 percent tax coming into China, while Chinese automobiles that are shipped to the United States face a 2.5 percent tax.

In his speech Liu He repeated an earlier promise to gradually lower tariffs on imported automobiles, but gave no specifics on a possible timeline.

On the campaign trail, U.S President Donald Trump promised to put more pressure on China and as Beijing continues to delay on promised reforms, trade war clouds are looming.

Earlier this week, he announced heavy tariffs on solar panels and washing machines — a strike at China’s economy that some analysts argue is just the beginning.

Trump will speak on Friday at the meetings in Davos and here in China his appearance at the gathering is being used as a way of contrasting what some argue is a sharp difference in world views between the two countries.

A state-run Xinhua news agency commentary entitled “Shared Future or America First” argued that business leaders and policy makers at the meeting were facing a choice between a “Xi style collaborative approach” or Donald Trump’s “self-centered America First policy.”

The theme of this year’s meeting in Davos is “Creating a Shared Future in a Fractured World.” Xinhua said that with Britain’s Brexit and Trump’s America First policy “the bandwagon of globalization and integration has been put into reverse.”

The communist party-backed Global Times echoed similar sentiment in a piece entitled “ Community with shared future has broader appeal.” In that article, the paper said Trump’s “America First” policy “actually brings out the charm of the Chinese proposal of a community with shared future.” Adding that, “however hard it will be to build such a community, this will garner more support than becoming a selfish power.”

The idea of a community with a shared future was put forward by China last year, when Chinese President Xi Jinping became the first head of state to attend the forum.

When he speaks on Friday, President Trump will be the first U.S. leader to speak at the meeting since former president Bill Clinton.

 
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U.S. Treasury Secretary Steven Mnuchin says the U.S is “not concerned” about the value of the dollar in the short-term.

At a press briefing at the World Economic Forum on Thursday, Mnuchin said the short-term value of the dollar is dependent on many factors in what is a very liquid market.

In the longer-term, he said, the U.S. currency’s value will be determined by the underlying strength of the U.S. economy.

On Wednesday, Mnuchin sparked a big dollar sell-off when he said the recent fall in the value of the dollar was “good” for trade. The euro, for example, spiked to a three-year high.

Mnuchin insisted Thursday that his comment on the dollar was “balanced and consistent.”
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Donald Trump arrived at the World Economic Forum in the Swiss mountain resort of Davos on Thursday, the first serving U.S. president to attend since Bill Clinton in 2000.

Analysts say many delegates are braced for a clash of competing visions for the global economy.

Trump is expected to push his agenda of “America First,” which has seen the United States put tariffs on some imports and demand the restructuring of global trade deals. Other global powers, including Europe, China and Japan, are urging a renewed commitment to global free trade.

Organizers hope the summit will help reconcile the rival visions.

“We strongly believe in dialogue and I think the fact that the president of the U.S. is here also opens up for a discussion about more equitable globalization,” said Borge Brende, president of the World Economic Forum.

 

WATCH: Davos Elite Braced For Trump’s ‘America First’ Agenda

Speech Friday

But it is Trump’s attitude toward globalization, and by extension free trade, that is generating a tangible tension ahead of his speech that will close the summit Friday.

The president signed an order Tuesday imposing steep import tariffs on washing machines and solar panels, repeating his assertion that the current trade system is bad for America.

“These executive actions uphold the principle of fair trade and demonstrate to the world that the United States will not be taken advantage of anymore,” Trump told reporters at the White House.

​Modi sets the stage

India’s Prime Minister Narendra Modi gave the opening address to the forum. His message contrasted sharply with what will likely be Trump’s.

“Forces of protectionism are raising their heads against globalization. Their intention is not only to avoid globalization themselves but also want to reverse its natural flow,” Modi told delegates Tuesday.

His sentiments were shared by many other leaders at Davos, including America’s European allies and big economies like China and Japan.

Trump’s agenda?

So how will Trump’s “America First” agenda be received?

“It’s almost setting the agenda for a confrontation of some form,” said Inderjeet Parmar, professor of international politics at City University London.

“So, I think there’s going to be some anxiety, because there is a sort of changing character of the international system, or at least changing character of America’s engagement with it. And that’s having a knock-on effect on other states, which are beginning increasingly to see that it’s going to be a bit more competitive in the international order,” Parmar said.

On the campaign trail in 2016, Trump warned against the “false song of globalism.” Trump is to arrive in the spiritual heart of that globalism Thursday, with a message many fellow guests may not want to hear.
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The Trump administration is set to announce a raft of trade decisions over the next months, ranging from curbs on foreign imports of steel and aluminum to steps to clamp down on China’s alleged theft of intellectual property.

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

Imported washing machines, solar panels

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

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

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

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

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

Steel

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

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

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

Aluminum

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

It is unclear when Trump will make his decision.

​Intellectual property

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

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

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

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

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

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

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

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

Here is a fast guide.

Where’s inflation?

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

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

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

Stimulus settings

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

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

Promises, promises

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

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

Why you should care

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

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

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

Down, euro, down

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

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

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

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

The following are some questions and answers about the decision:

What impact will the decision have on the solar industry?

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

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

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

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

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

Who wanted the tariff?

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

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

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

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

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

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

Will the tariff lead to a trade war?

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

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

Trump dismissed worries of trade retaliation.

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

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

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

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

He has also downplayed the threat from global warming — an issue that led past administrations to throw their support behind emissions-free solar and wind energy development — rolling back climate change regulations and pulling the United States from a global pact to combat it.
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Lebanon must cut Iran-backed Hezbollah from the financial sector, a U.S. official on combating illicit finance said Tuesday, two weeks after Washington began a new push to disrupt the militant group’s global financing routes.

On a two-day visit to Lebanon, the U.S. Treasury’s Assistant Secretary for Terrorist Financing Marshall Billingslea “urged Lebanon to take every possible measure to ensure [Hezbollah] is not part of the financial sector.”

Billingslea also “stressed the importance of countering Iranian malign activity in Lebanon,” a statement from the United States embassy in Lebanon said.

The Iran-backed, Shiite Hezbollah is classified as a terrorist group by Washington, but sits in Lebanon’s delicate national unity government.

U.S. officials say Hezbollah is funded not just by Iran but by global networks of people, businesses and money laundering operations.

The U.S. Hezbollah International Financing Prevention Acts of 2015 and 2017 aimed to sever the group’s funding routes and a number of people linked to Hezbollah are on sanctions lists.

The United States has had to balance its targeting of Hezbollah funding routes with the need to maintain Lebanon’s stability. Lebanese banking and political authorities have lobbied Washington to make sure its anti-Hezbollah measures do not destroy the banking system underpinning the economy.

In his meetings with President Michel Aoun, Prime Minister Saad al-Hariri and other banking and political figures, Billingslea said the U.S. government was committed to work with Lebanon to protect its financial system and support a “strong, stable and prosperous Lebanon.”

Billingslea also said Washington would help Lebanon protect its financial system from Islamic State and other militants.

Two weeks ago, the Trump administration set up a team to reinvigorate U.S. investigations into Hezbollah-linked drug trafficking.

Hezbollah leader Sayyed Hassan Nasrallah last week denied any involvement in drug trafficking and said Hezbollah had a very clear religious and moral stance which forbids drugs and drug trading.
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U.S., Canadian and Mexican officials opened a key round of negotiations to modernize NAFTA on Tuesday as President Donald Trump, who has regularly threatened to quit the trade pact, said the talks were going “pretty well.”

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

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

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

Trump offers positive comment

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

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

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

The Mexican peso immediately pared losses on his comments.

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

Canada unsure about US

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

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

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

Canada joins TPP

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

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

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

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

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

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

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

Immediate tariffs

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

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

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

Hurt by imported solar cells, modules

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

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

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

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

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

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

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

Whirlpool complaint

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

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

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

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

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

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

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

Aluminium, steel next?

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

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

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

 

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

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Educated at Princeton University with a law degree from Georgetown, Powell, known as Jay, spent many years in investment management — at Dillon Read and then at the Carlyle Group. His work there made him one of the wealthiest figures to serve on the Fed board: His most recent financial disclosure form places his wealth at between $19.7 million and $55 million. And based on how government disclosures are drafted, his wealth may actually be closer to $100 million.
…

Eleven countries aiming to forge an Asia-Pacific trade pact after the United States pulled out of an earlier version will sign an agreement in Chile in March, Japan’s economy minister said on Tuesday, in a big win for Tokyo.

Trade officials had been meeting in Tokyo to resolve rifts including Canada’s insistence on protections for its cultural industries such as movies, TV and music.

An agreement is a win for Japanese Prime Minister Shinzo Abe’s government, which has been lobbying hard to save the pact, originally called the Trans-Pacific Partnership.

In one of his first acts as U.S. president in January 2017, Donald Trump pulled the United States out of the original 12-nation treaty.

Abe has painted the deal as a spur to growth and reform in Japan and a symbol of commitment to free and multilateral trade at a time when Trump stresses “America First” policies.

Speaking at the World Economic Forum in Davos, Switzerland, Canada’s Prime Minister Justin Trudeau called the agreement the “right deal.”

Canada’s trade minister said in a statement it included an improved arrangement on autos with Japan and the suspension of intellectual property provisions that had been a concern.

The timing of the deal is significant for Canada, which is trying to diversify its exports. U.S., Canadian and Mexican negotiators opened a key week-long round of talks to modernize NAFTA on Tuesday.

Japanese Economy Minister Toshimitsu Motegi said the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or TPP-11, would be an “engine to overcome protectionism” emerging in parts of the world.

He added Japan would explain the importance of the deal to Washington in hopes of persuading it to join.

Ministers from the 11 countries, including Japan, Australia and Canada, agreed in November on core elements to move ahead without the United States, but demands by countries including Canada for measures to ensure the deal protects jobs blocked a final agreement.

“This outcome reaffirms the CPTPP countries’ collective commitment towards greater trade liberalization and regional integration,” Singapore’s Ministry of Trade and Industry said in a statement.

Australian Prime Minister Malcolm Turnbull said last week the new agreement would leave a door open for eventual U.S. participation.

Canada, which wanted protection of its cultural industries, and Vietnam, which has worried about labor protection rules, will exchange separate side letters with other members on those topics at the time of the signing, Motegi said.
…

China and South Korea are protesting U.S. President Donald Trump’s decision to impose steep tariffs on washing machines and solar panels, a move that is fueling concerns in Asia that more U.S. protectionist measures are forthcoming.

Trump said Tuesday that the U.S. was also considering raising tariffs on steel and aluminum.

“We’re looking at it; we’re looking at a lot of things,” he told reporters.

South Korean Trade Minister Kim Hyun-chong called the tariffs “excessive” and said they violate World Trade Organization rules. Kim said South Korea planned to file a petition against the U.S. at the WTO.

The tariffs significantly impact South Korea’s Samsung Electronics and LG Electronics, which have captured about one quarter of the U.S. washing machine market that is dominated by American companies Whirlpool and General Electric.

Samsung said the tariffs are “a tax on every consumer who wants to buy a washing machine.”

China, the U.S.’ largest trade partner and the world’s biggest solar panel manufacturer, said the tariffs are an “overreaction” that would hurt the global trade environment.

Beijing’s Commerce Ministry said it would collaborate with other WTO members to “resolutely defend its legitimate interests,” without offering specifics.

Trump has frequently criticized China for engaging in what he believes are unfair trade practices that have led to the elimination of U.S. jobs.

“After a year’s preparation, Trump is ready to take action to address the huge trade deficit with China and get even,” said Zhang Yi, chief economist with the Beijing-based Capital Securities.

Washington will impose tariffs of up to 50 percent on large washing machines over a three-year period and up to 30 percent on solar panels over four years.

They were imposed after the U.S. International Trade Commission found that the imported products were “a substantial cause of serious injury to domestic manufacturers.”
…

A trade group representing U.S. auto parts makers on Monday urged the Trump administration to adopt NAFTA automotive rules that cover research, engineering, design and software development work as part of North American regional value content goals.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

technology businesses such as car-hailing services.

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

The EU’s justice commissioner is working on a proposal that could oblige member states such as Poland, which has clashed with Brussels over reforms to its courts, to pass tests on the independence of their judicial systems before receiving funding.

Vera Jourova said there was agreement within the executive European Commission to work on ideas to encourage strong judiciaries in planning for the new budget from 2021.

“One way could be to insist that independent justice systems are necessary for effective control of the use of EU funds,” she said. “I would like to propose that link.”

Seven-year budget plan

A Commission spokesman said on Monday the work by Jourova was part of broader preparations for a new, seven-year EU budget plan, due to be published in May, and was in line with policy outlines the EU executive has put forward since last year.

The remarks by Jourova, the Commission’s Czech member, come as the EU executive is challenging Poland, a major recipient of Union funds, to amend judicial reforms which Brussels says will hurt democracy and its oversight of EU trading rules.

Facing the prospect of filling a hole left in the budget by Britain’s exit from the EU, and irritated by Poland and other governments in the ex-communist east on a range of issues, some wealthy Western governments have pushed for a clearer link between getting subsidies and abiding by EU standards.

Warning for Poland

The German commissioner in charge of the budget, Guenther Oettinger, warned Poland this month that it could lose some of its 7 billion euros annual funding if it fails to heed Brussels’ complaints about undermining the rule of law.

More broadly, Jourova is also hoping for a review of EU policy on judicial standards in the second half of this year. EU officials say that might, for example, include regular reviews of the performance of national justice systems, along the lines of existing biennial reviews of government economic policies, which are meant to promote “convergence” toward EU-wide goals.

‘Cohesion’ policy

As a former national official handling the regional funding that is a key part of EU efforts to bring poor regions closer to the prosperity of others, Jourova stressed that she saw any new rules applying to all EU funding for all states, not just to so-called “cohesion” policy. She also said it should not be seen as a punitive measure but designed to encourage good practice.

She also said discussion on the proposals could be used to help simplify some of the hurdles to applying for EU funds.

Any Commission proposal seen as too radical by governments risk being killed off by member states. 

 

 
…

The global unemployment rate is stabilizing after years in a slump due to a faltering economy, the International Labor Organization reports in “World Employment and Social Outlook: Trends 2018.”

However, unemployment — which the ILO says stands at more than 192 million people globally — is expected remain persistently high in many parts of the world.

The ILO reports that unemployment in wealthier countries is expected to drop to 5.5 percent this year, the lowest rate since 2007.

The labor situation has improved in emerging and developing economies, as well. However, the report warns that employment growth in these countries will not keep pace with the increased numbers of people entering the labor market.

ILO Director-General Guy Ryder expressed concern that low-quality employment is on the rise. He says nearly 1.4 billion people are in vulnerable jobs, meaning they work in difficult conditions for low wages with little security, and that three out of four workers in developing countries are holding down such jobs.

“Very much more effort needs to be made to improve the quality of jobs,” he said. “Despite the uptick in economic and employment growth, which is welcome, working conditions are failing to improve for a very large share of the global workforce. In addition, the projected employment growth in the service sector can be expected to make only a limited contribution to the improvement of job quality.” 

The report notes that working poverty — defined as having income below the poverty line — is falling in emerging countries, but in developing nations, progress in this area is too slow to keep up with the expanding labor force. It says the number of people living in extreme poverty — at less than $3 a day — is expected to remain at more than 114 million for the coming years.

The report’s authors say the gender gap remains wide, with women more likely to have lower-quality jobs and lower salaries than men.
…

The NAFTA trade agreement’s future hangs in the balance this week as negotiators from the United States, Canada and Mexico try to settle major differences over revamping a pact that President Donald Trump has threatened to abandon.

Senior officials from the three nations will meet in Montreal for a week starting on Tuesday in the sixth and penultimate round of talks to modernize the 1994 North American Free Trade Agreement.

Trump, who entered office last year pledging to undo what he described as disastrous trade deals, has portrayed NAFTA as grossly unfair to the United States and its workers.

Canada and Mexico, which initially dismissed most of Washington’s demands as unworkable, now say there is room to maneuver. But that still may not be enough to satisfy Trump and impatient U.S. officials.

U.S. threats to walk away from NAFTA, which underpins much of the more than $1 trillion in annual trilateral trade among the three nations, have put markets on edge. The talks are supposed to wrap up by the end of March to avoid clashing with Mexico’s general elections in July.

Trump, who blames NAFTA for killing off hundreds of thousands of U.S. manufacturing jobs and says it has led to a large U.S. trade deficit with Mexico, tweeted last Thursday that “NAFTA is a bad joke!”

Over the last 10 days the Republican president has generated confusion by indicating that he might extend the deadline for talks while saying that walking away from the table would be the best idea.

A council advising Canadian Foreign Minister Chrystia Freeland on NAFTA has concluded that Washington is most likely to announce that it wants out of the pact. It met with Freeland, who says a positive result is still quite possible, last week.

“There is still a shred of optimism, but I have to say the consensus around the room … felt like it’s not if, it’s when he’s going to pull the plug,” Rona Ambrose, a council member and former Canadian minister, told CTV television.

Canadian Trade Minister Francois-Philippe Champagne stressed that Ottawa will not compromise its economic interests.

“Canada will not accept proposals that would be harmful to our economy and to Canadians,” he said in a speech in Montreal on Monday.

Nevertheless, a large majority of economists polled by Reuters are betting the treaty will be renegotiated successfully with only marginal changes.

Freeland met Mexican Economy Minister Ildefonso Guajardo in Toronto on Monday to iron out details of the negotiations, and they agreed it will be critical to tackle some of the most complicated issues, Mexico’s Economy Ministry said in a statement.

Cautious Optimism

Canada and Mexico initially said they would not even discuss U.S. demands to set minimum levels of North American content for the auto sector, a clause that would terminate the deal if it is not renegotiated every five years, and to end the so-called Chapter 19 dispute mechanism.

Sources close to the talks say Canada and Mexico will now be more flexible on the auto content and dispute resolution issues.

“We have got areas we are going to fight for, obviously, but that doesn’t mean we can’t be creative, nimble, clever,” said one Canadian source familiar with Ottawa’s strategy.

“There can be very strong lines (in the sand) … it’s not to say you don’t talk around them. Sometimes you find creative ways without necessarily compromising,” said the source, who requested anonymity given the sensitivity of the situation.

In Mexico, some of the pessimism palpable in late December has given way to cautious optimism that progress towards a deal is possible in Montreal if the Trump administration is prepared to give ground on its toughest proposals.

Jaime Zabludovsky, one of the Mexican negotiators of the original NAFTA accord and an adviser to the private sector on the current talks, said the negotiations in Montreal would be a decisive test of the countries’ ability to make progress.

“I think we’re at a make-or-break moment,” he said in an interview.

One Mexican source familiar with the process said he expected further talks through March and mentioned the possibility that final discussions could, if necessary, be postponed until after the Mexican elections.
…

In Davos this week, participants can experience “a day in the life of a refugee.” Or hear about ways to uphold the Paris climate accord and promote free trade. Or rub elbows with any number of leaders of African countries.

 

Enter Donald Trump.

 

The World Economic Forum in Davos, Switzerland, is meant — pretentiously perhaps — to be a place for the world’s decision-makers to put their power to good use. The theme this year is “Creating a Shared Future in Fractured World,” an ambition not likely to turn up on the U.S. president’s Twitter feed.

Instead, Trump will bring his zero-sum message of “America First,” and will speak last among the parade of world leaders — from places like India, France and Canada — who are gathering from Tuesday to Friday in the Swiss snows.

 

As with most things Trump, there are stark contrasts between how attendees view his visit. Some are happy and hope for dialogue. Others unabashedly say they wish he would stay away and accuse him of a lack of compassion and vision for the world that are out of place in Davos.

 

“I find it quite sad he’s coming to the WEF, but I imagine nothing can be done about it,” said Buddhist monk Matthieu Ricard, a longtime disciple of the Dalai Lama.

 

While his trip — which was still on schedule despite the U.S. government shutdown — may seem incongruous, unwelcome or unexpected, he will be sticking to one key aspect of the WEF’s original ambition in starting the annual forum in Davos 47 years ago: Business. An array of Cabinet officials is also due to tag along, suggesting the U.S. is preparing a big economic and diplomatic push.

Some have suggested it’s ironic that Trump, a self-styled populist despite his penchant for the penthouse, is attending the elite Alpine event. Others speculated he could have felt a need to regain the Davos spotlight for the United States a year after Chinese President Xi Jinping stole the show by casting China as a champion of free trade and stability — and many companies responded by turning greater attention toward it.

 

An administration official said Trump is expected to tout the booming U.S. economy and measures like his recent tax overhaul, while again criticizing trade practices that he sees as unfair toward the U.S. The official, who spoke only on condition of anonymity to discuss internal plans, said Trump made the decision to go because he thinks he has a positive economic message.

 

With Wall Street surging, Trump has some cheerleaders on the economic front — even if they hope he’ll be more accommodating.

 

“I think it’s really good that he’s going,” said Bill Thomas, chairman of business services KPMG International. “The American economy is dependent on global engagement, and I think he’s in Davos because he knows that.”

 

Some wonder whether Trump can win over the Davos set, or whether they might succeed in turning his ear — and give him a chance to reboot his administration’s image abroad.

 

“Corporate America, in terms of economic policies, is very pleased with the way the administration is going,” said Andy Baldwin, a regional managing partner for financial services firm EY. But he acknowledged that Trump controversies elsewhere had “overshadowed some of the policies.”

 

Outside of business, though — whether among human rights advocates, environmentalists, peaceniks or free-trade proponents — Trump is shunned.

 

“Despite its formal name, Davos is about more than economics,” said Kenneth Roth, executive director of Human Rights Watch, in an e-mail. “So while Trump undoubtedly intends to trumpet U.S. economic progress, many Davos participants will question his racist, misogynistic, and xenophobic rhetoric and policies.”

 

“Unless he plans an unexpected apology and reversal, he will face a far colder reception than he probably anticipates,” he said.

 

Parts of the jet-set have it in for Trump. Elton John, whose song title “Rocket Man” Trump used to deride North Korean leader Kim Jong Un, will be in Davos, as will actress Cate Blanchett, who shaped chewing gum into a phallus on late-night TV to mock Trump just days after he took office. So will several African leaders whose countries Trump allegedly dismissed with a vulgarity earlier this month.

 

Small protests have started, and others are expected in Zurich on Tuesday and possibly in Davos on Thursday. A Swiss anti-Trump petition has garnered more than 16,000 supporters online, calling on him to stay away. Authorities are boosting security for only the second visit by a serving U.S. president to Davos, after Bill Clinton in 2000.

 

Some might even see a snub in French President Emmanuel Macron’s decision to not stick around to see Trump even though the White House initially had announced a face-to-face meeting in Davos.

 

In his speech Wednesday, Macron is expected to offer a “lucid” diagnosis about globalization, and raise environmental concerns, an adviser said. Macron’s speech could shape up as a counter narrative, and though he wasn’t expected to mention Trump by name “you can read between the lines,” the adviser said, on condition of anonymity because he was not authorized to speak publicly about the matter.

 

“It’s good to have the president here, if the snow conditions and the situation in Washington allow us,” WEF founder Klaus Schwab told The Associated Press on Monday, alluding to the U.S. government shutdown that could spoil Trump’s plans to attend. The White House has said it’s monitoring the situation day to day, and Schwab said: “At the moment we cannot make a comment on that [Trump’s attendance].”

 

Trump has, in a way, already been on hand in Davos. During last year’s event, which coincided with his inauguration, many attendees gawked at TV sets as Trump declared “America First” from the Capitol steps.

 

When he arrives this year, discretion may be the order of the day: Zurich airport, the closest big hub, has announced a lockdown on press access for the arrival of Air Force One.

 

Switzerland’s Young Socialists party is revving up to protest to register pent-up anger about how Trump lost the popular vote in 2016, but won the election, and suspicions of Russian meddling in that contest.

 

“He’s sexist, he’s racist,” said Tamara Funiciello, the group’s president. “And I don’t think it’s responsible to speak with him.”

 

 

 
…

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

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

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

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

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

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

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

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

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

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

 

 

 

 
…

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

Cooperation ‘here to stay’

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

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

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

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

$70 a barrel oil

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

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

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

Afghanistan’s arts and architecture were once the pride of Asia. However, more than four decades of war have left many of the country’s traditional crafts on the verge of extinction. Now a Britain-based organization, Turquoise Mountain, is working to preserve Afghan heritage in the capital’s still surviving commercial district, Murad Khani. VOA Deewa service’s Munaza Shaheed reports from a recent trip to Kabul.
…

Donald Trump, the presidential candidate, would not like the way Trump, the president, is crowing about today’s unemployment rate. He’d be calling the whole thing a “hoax.”

Trump raised a red flag about declining jobless numbers during his campaign, denying President Barack Obama any credit. Trump noted that the jobless rate masks the true employment picture by leaving out the millions who have given up looking for work.

But Trump is seeing red no more. The same stats he assailed in 2015 and 2016 now are his proof of “fantastic,” “terrific” economic progress, for which he wants the credit.

That disconnect is part of why Trump’s statements about the economy this past week, some accurate on their face, fall short of the whole truth.

Trump also made the far-fetched claim that the economy is better than it has ever been. And in a week consumed with the dustup over a government shutdown, Trump’s doctor stepped forward with a testament to the president’s health that other physicians found to be too rosy.

A look at some recent remarks away from the din of the budget battle:

Black unemployment

TRUMP: “Black unemployment is the best it’s ever been in recorded history. It’s been fantastic. And it’s the best number we’ve had with respect to black unemployment. We’ve never seen anything even close.” — remarks from Oval Office Tuesday.

THE FACTS: Yes, the black unemployment rate of 6.8 percent is the lowest on record. No, it’s not far and away superior to any time in the past. In 2000, it was within 1 point of today’s record for six months, and as low 7 percent.

As Trump was quick to note as a candidate, the unemployment rate only measures people without jobs who are searching for work. Like other demographic groups, fewer African-Americans are working or looking for work than in the past. Just 62.1 percent of blacks are employed or seeking a job, down from a peak of 66.4 percent in 1999.

The black unemployment rate would be much higher if the rate of black labor force participation was near its levels before the Great Recession.

During the campaign, Trump claimed that real unemployment then was a soaring 42 percent. It’s not quite clear, but he could have been referring to the percentage of the U.S. population without jobs — a figure that includes retirees, stay-at-home parents and students. At the time, he considered the official jobless rate a “phony set of numbers … one of the biggest hoaxes in modern politics.”

Women’s unemployment

TRUMP: “We’re making incredible progress. The women’s unemployment rate hit the lowest level that it’s been in 17 years. Well, that’s something. And women in the workforce reached a record high. … That’s really terrific, and especially since it’s on my watch.” — at women’s event Tuesday.

THE FACTS: Again — yes, but. The 4 percent jobless rate for women is at a 17-year low, just as it is for the overall population. But the labor force participation rate by women is lower today than in 2000. The proportion of women in the workforce is not at a record high.

Overall economy

TRUMP: “Our country is doing very well. Economically, we’ve never had anything like it.” — from Oval Office on Tuesday.

THE FACTS: Never say never. The U.S. economy had better employment stats during the 2000 tech boom, for one example. It’s enjoyed stock market surges before. It’s had blazing, double-digit annual growth, a far cry from the 3.2 percent achieved during the second and third quarters of 2017. That was the best six-month pace since 2014 — hardly the best ever.

The economy added about 170,000 new jobs a month during Trump’s first year. That was slightly below the average of 185,000 in Obama’s last year.

Trump checkup

DR. RONNY JACKSON, White House physician, on his examination of Trump: “I think he’ll remain fit for duty for the remainder of this term and even for the remainder of another term if he’s elected. … His cardiac health is excellent.” — White House briefing Tuesday.

THE FACTS: Physicians not connected with the White House have widely questioned that prediction of seven more years of healthy living and that conclusion about his heart. Cardiac functioning was indeed normal in the tests, according to the readings that were released. But Trump is borderline obese and largely sedentary, with a “bad” cholesterol reading above the norm despite taking medication for it. He’ll be 72 in June. It’s doubtful that most men that age with similar histories and findings would get such a glowing report from their doctors.

Trump has some things in his favor: “incredible genes, I just assume,” said his doctor, and no history of tobacco or alcohol use.

But “by virtue of his age and his gender and the fact he has high cholesterol and that he is in the overweight-borderline obese category, he is at a higher risk for cardiovascular disease,” said Dr. Ranit Mishori, a primary care physician and professor of family medicine at Georgetown University. “The physician was saying, yes he’s in excellent health — but yes he does have risk factors for cardiovascular disease. Which is why the comment he will remain healthy for the remainder of his term makes little sense to me. How you can make that kind of assessment from a one-point-in-time examination? Just from those four factors he is at a higher risk.”

Trump’s LDL, the bad cholesterol, registered at 143, a number his doctor wants below 120.

Jackson also said Trump has nonclinical coronary atherosclerosis, commonly known as hardening of the arteries from plaque, which is a combination of calcium and cholesterol.

That’s common in people older than 65 and can be a silent contributor to coronary heart disease. Jackson’s conclusion was based on a coronary calcium score of 133, which Mishori called “a little bit concerning” because it could show mild coronary artery disease, although how to interpret these scores isn’t clear-cut. Jackson said he consulted a variety of cardiologists about that calcium score and the consensus was reassuring.

Abortion viewpoints

TRUMP: “Americans are more and more pro-life. You see that all the time. In fact, only 12 percent of Americans support abortion on demand at any time.” — remarks Friday to opponents of abortion rights.

THE FACTS: Neither side of the abortion debate is scoring breakaway support in public opinion research. Gallup said in conjunction with its poll in June: “The dispersion of abortion views today, with the largest segment of Americans favoring the middle position, is broadly similar to what Gallup has found in four decades of measurement.” In short, half said abortion should be “legal only under certain circumstances,” identical to a year earlier, while 29 percent said it should be legal in all circumstances. The smallest proportion, 18 percent, said it should always be illegal.

Americans’ positions on abortion are sufficiently nuanced that both sides of the debate can find polling that supports their point of view. Polling responses on abortion are also highly sensitive to how the questions are asked.

But in the main, the public is not clamoring for abortion to be banned or to be allowed in all cases.

Trump’s claim that only 12 percent support abortion “on demand” may come from a Marist poll sponsored by the Knights of Columbus, which opposes abortion rights. In that poll, 12 percent said abortion should be “available to a woman any time during her entire pregnancy.”

Most polls have found that a distinct minority, though more than 12 percent, think the procedure should be legal in all cases. The percentage was 25 percent in an AP-NORC poll, 21 percent in a Quinnipiac poll, both done in December.
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