South Korea’s Hyundai Motor Co. and Kia Motors Corp. have slashed vehicle production in China, sources said, as diplomatic tensions and competition from Chinese brands play havoc on sales and threaten earnings.

China, the world’s biggest auto market, accounted for over a quarter of the pair’s 2016 overseas sales but their March sales there were smashed by anti-Korean sentiment and competition from the likes of Geely Automobile Holdings Ltd.

Hyundai and Kia saw their combined China sales slump by 52 percent in March from a year earlier, Yonhap news agency reported on Tuesday, endangering not only the automakers’ earnings but those of South Korean suppliers.

Political tensions have soared since late February when South Korea’s Lotte Group agreed to provide land for a U.S.

missile defense system outside Seoul. The move angered Beijing, although Seoul says the system is a response to North Korea’s nuclear threat and is not aimed at China.

South Korean firms including Lotte Group have been targeted in a Chinese backlash involving boycott calls in state media, protests and suspensions of operations.

But analysts and sources said the row was just another headache for the South Korean carmakers, whose long-term challenge has been how to compete in China and the United States where their mainstay sedans have lost market share to sport utility vehicles.

“China is not the goose that lays the golden egg for Hyundai anymore,” said Lee Hang-koo, a senior research fellow at Korea Institute for Industrial Economics & Trade.

Hyundai’s problems were a result of its “failed global strategy,” he added.

 SHIFT CUTS Kia Motors has cut production shifts at its China factories, two of the sources familiar with the matter told Reuters.

Hyundai also had eliminated a second shift from its three factories in Beijing starting mid-March, one of the people said.

The sources declined to be identified because the matter was not public. The automakers declined to comment on Tuesday.

Hyundai had already suspended output at its factory in Hebei from March 24 to April 4. It was unclear how the shift cuts would affect employment.

Hyundai Motor has four passenger car factories in China, with one more plant scheduled to commence production later this year. Kia, Hyundai’s smaller affiliate, has three.

Poor consumer sentiment towards South Korean products in China had likely dragged down overseas sales in March, the companies said on Monday without putting a number on the falls.

One source said Kia Motors’ China sales likely more than halved in March from the year prior.

In the United States, Hyundai Motor posted a sales fall of 8 percent and Kia Motors slumped 15 percent in March from a year earlier. The U.S. market declined 2 percent in March.

Hyundai Motor shares fell 2.6 percent and Kia Motors declined 0.8 percent in the wider market, which was down 0.1 percent as of 0310 GMT.
…

The U.S. Department of Homeland Security announced steps on Monday to prevent the fraudulent use of H1B visas, used by employers to bring in specialized foreign workers temporarily, which appeared to fall short of President Donald Trump’s campaign promises to overhaul the program.

Trump had promised to end the lottery system for H1B visas, which gives each applicant an equal chance at 65,000 positions each year.

Lobbyists for businesses who rely on H1B visas, commonly used by the tech sector, had expected Trump to upend the lottery in favor of a system that prioritized workers who are highly skilled and would be highly paid in the United States.

The lottery for fiscal year 2018 opened on Monday without changes.

The start of the lottery was seen by those watching the issue as the unofficial deadline for the Trump administration to enact H1B visa reform, and the failure to meet that deadline signals that Trump’s promised overhaul of the system may be off the table or long delayed.

“More oversight is a good start, but employers can still use the program legally to depress wages and replace American workers. That falls short of the promises President Trump made to protect American workers,” said Peter Robbio, a spokesman for Numbers USA, a Washington-based group that advocates for limiting immigration into the United States.

The White House could not immediately be reached for comment.

In keeping with the practice of former President Barack Obama’s administration, employers and foreign workers will enter a lottery system where 65,000 workers are permitted to enter the United States to work. An extra 20,000 H1B visas are reserved for workers with advanced degrees.

Last year, the lottery remained open less than a week before the program reached its cap.

Tech companies rely on the program to bring in workers with special skills and have lobbied for an expansion of the number of H1B visas awarded.

Proponents of limiting legal immigration, including Trump’s senior adviser Stephen Miller, have argued the program gives jobs that Americans could fill to foreign workers at a less expensive cost.

The measures announced by DHS on Monday focus on site visits by U.S. authorities to employers who use H1B visas.

In future site visits, U.S. Citizenship and Immigration Services agents will investigate incidents where an employer’s basic business information cannot be validated; businesses that have a high ratio of H1B employees compared with U.S. workers; and employers petitioning for H1B workers who work off-site.
…

The effects of the 2008 financial crisis are still being felt, says the International Monetary Fund’s Managing Director Christine Lagarde. 

She cites a new IMF study showing global productivity has slowed to 0.3 percent over the last decade, lower than the pre-crisis average of about 1 percent growth per year. Had productivity growth followed pre-crisis trends, Lagarde says the overall GDP in advanced economies would be about 5 percent higher.

Lagarde attributes the slowdown in labor productivity — the amount of goods and services produced by an average worker per hour — to three major headwinds: an aging global population, the slowdown in international trade, and the lasting impact of the 2008 financial meltdown.

The slowdown has been particularly abrupt in continental Europe, where five Eurozone member countries — Greece, Portugal, Ireland, Spain and Cyprus — required various emergency bailouts after being unable to refinance their sovereign debt. 

Lagarde says strong policy actions, such as government-backed innovation, may be required to reverse the slowdown. For example, she says ramping up research and development by 40 percent could increase the gross domestic output (GDP) in advanced economies by as much as 5 percent, significantly improving demand at the same time in developing economies. 

But to be effective, Lagarde says governments must provide clear signals about future economic policy and boost investment in education, worker training and infrastructure.

Lagarde made her comments Monday at the conservative-leaning American Enterprise Institute in Washington, just two weeks before the World Bank and IMF annual spring meeting, at which member countries discuss challenges facing the global economy and ways to ensure financial stability around the world.
…

Japanese big manufacturers’ business confidence improved for a second straight quarter to hit a one-and-a-half year high in March, a closely watched central bank survey showed, a sign the benefits of an export-driven economic recovery were broadening.

Service-sector sentiment improved for the first time in six quarters and companies remained upbeat on their capital expenditure plans, the Bank of Japan’s “tankan” survey showed, offering hope the economic recovery will gather momentum in coming months.

The data, which will be among factors the BOJ will scrutinize at its next rate review on April 26-27, reinforces a dominant market view the central bank’s next policy move would be to reduce rather than expand monetary stimulus.

“The tankan showed a balanced improvement in corporate sentiment at manufacturers and service-sector firms,” said Yuichiro Nagai, an economist at Barclays Securities. “Overall, the results support the BOJ’s rosy view on the economy.”

The headline index measuring big manufacturers’ business sentiment rose to plus 12 in March from plus 10 three months ago, the tankan showed on Monday, falling slightly short of market forecasts but marking the highest reading since December 2015.

The index gauging big non-manufacturers’ sentiment improved 2 points from plus 20, rising for the first time in six quarters and hitting the highest level since March 2016, the survey showed.

Brexit, Trump cloud outlook

Big manufacturers and non-manufacturers expect business conditions to deteriorate slightly in the coming three months, as risks to global trade such as Britain’s decision to leave the European Union and U.S. President Donald Trump’s protectionist statements cloud the outlook.

Still, the survey found big firms plan to increase capital spending by 0.6 percent in the fiscal year ending in March 2018, compared with a median market forecast for a 0.1 percent drop.

“There has been talk about the risks of protectionism, but so far Japanese companies are not taking any specific steps related to this,” said Norio Miyagawa, senior economist at Mizuho Securities.

“This tankan will reinforce expectations that the BOJ is on hold for the time being. We certainly don’t see the need to ease or tighten policy,” he said.

Signs of life

Japan’s economy has shown signs of life in recent months, with exports and factory output benefiting from a recovery in global demand.

With inflation expected to accelerate later this year, a growing number of analysts now predict the BOJ’s next move would be to start scaling back its massive monetary stimulus.

The tankan’s sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.

 
…

Training for the Boston Marathon has left Tommy Race feeling spent. His bank account, too: Race’s Boston adventure will cost about $2,000.

“It’s a lot of money, but it’s also a vacation,” said Race, a high school math teacher from Bellingham, Washington. “For a runner like myself, I’d much rather throw down money to run Boston than go to Cancun or Europe or some other travel destination.”

Race (yes, that’s his real name) has plenty of company. Thirty-thousand athletes from 94 countries will participate in this month’s 121st running of America’s most venerable footrace, and organizers say they’ll pump $192 million into the local economy.

That’s the equivalent of $311 for every man, woman and child living in the city of Boston.

Sports industry experts say Boston’s payout is part of a lucrative global trend that’s been playing out in Chicago, New York, London and other cities that stage major marathons drawing competitors and spectators from around the world.

“People want to be a part of something that Olympians run in,” said Rich Harshbarger, CEO of Running USA, a nonprofit group that promotes the sport.

“You’re not going to be able to run the bases at Fenway. But at a big marathon, you get to line up and have the same experience that the pros do,” he said.

It’s an affluent bunch: Running USA’s latest national survey, done in 2015, found that more than seven in 10 marathon runners earn more than $75,000 a year, and most are college graduates.

Many in the field for the Boston Marathon on April 17 will bring their families along. Another 10,000 runners will descend on Boston for a sister 5K race, swelling not only the size of the crowds but the amount spent on hotels, restaurants, transportation and a weekend running expo hawking expensive gear and swag.

“Nearly everyone involved … will patronize local businesses,” said Tom Grilk, CEO of the Boston Athletic Association, which manages the marathon.

Included in the $192.2 million projection is $30 million that runners will raise to benefit dozens of charities.

And the Boston Marathon’s economic impact is steadily growing. Last year’s race generated $188.8 million, and the 2015 race brought in $182 million, the Association said.

Patrick Moscaritolo, president and CEO of the Greater Boston Convention & Visitors Bureau, calls race weekend “an extraordinary kick start” for the tourist season.

Other races that are part of the World Marathon Majors – a series that includes Berlin, Boston, Chicago, London, New York City and Tokyo – have an even bigger haul.

The TCS New York City Marathon says its economic impact in 2014, the most recent year for which figures were available, was $415 million. The Bank of America Chicago Marathon had an estimated $277 million impact in 2015, organizers say.

Getting to the start line is expensive, “but it’s worth every penny,” said Malinda Ann Hill, bereavement coordinator for Children’s Hospital of Philadelphia, who’s running her first Boston together with her twin sister.

After 12 attempts to qualify, Hill doesn’t care what it costs.

“My twin won’t total it up, though,” she said. “She doesn’t want to know.”
…

 Iraq’s oil minister said on Sunday that his country plans to increase daily crude oil production to 5 million barrels by the end of this year, up from the current rate of about 4.4 million barrels per day, to secure sorely needed cash for its ailing economy.

Iraq, where oil revenues make up nearly 95 percent of the budget, has been reeling under an economic crisis since 2014, when oil prices began their descent from a high of above $100 a barrel. The Islamic State group’s onslaught, starting in 2014, has exacerbated the situation — forcing Iraq to divert much of its resources to a long and costly war.

Addressing an energy conference in Baghdad, Oil Minister Jabar Ali al-Luaibi didn’t give details on which of the country’s oil fields would supply the increased output.

Late last year, Iraq joined a deal by OPEC and non-OPEC members to lower production for six months by 1.8 million barrels a day in order to prop up global oil prices. The mutual production decrease began on Jan. 1. Iraq’s share in the deal is to reduce output by 210,000 barrels a day to 4.351 million barrels.

“There are positive elements in that deal and we achieved a lot of its targets,” al-Luaibi told reporters on the sideline of the conference. “Work and cooperation are underway … to reach the 1.8 [million barrels a day] reduction,” he added, without divulging whether Iraq is going to support an extension to that deal.

OPEC Secretary-General, Mohammed Barkindo, said the compliance among the participants was 86 percent in January and 94 percent in February. Barkindo told reporters that OPEC members would consider whether to extend the production decrease agreement at a meeting next month.

The deal propped up the crude price to around $50 per barrel.

Iraq holds the world’s fourth-largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion barrels.

Al-Luaibi also said that more 15 billion barrels are planned to be added by 2018.

Iraq’s 2017 budget stands at about 100.67 trillion Iraqi dinars, or nearly $85.17 billion, running with a deficit of 21.65 trillion dinars, or about $18.32 billion. That’s based on an estimated oil price of $42 per barrel and daily export capacity of 3.75 million barrels.

Iraq is also grappling with a major humanitarian crisis. The U.N. estimates that more than 3 million people have been forced from their homes since 2014. It also faces growing dissatisfaction among residents of areas recaptured from IS who have had their properties demolished and suffer from scarce public services.

 
…

Investors are plowing ever more into ethical funds to back their views on issues such as global warming and gender equality, but such investments can be confusingly similar to standard funds, except for higher fees and “green halo” marketing.

The $23 trillion “sustainable, responsible and impact” (SRI) investment sector has received a rush of money since the Paris climate agreement and, more recently, in protest against U.S. President Donald Trump’s plans to slash environmental regulations.

Europe is the dominant region for such investments, with $12.04 trillion, followed by the United States, with $8.72 trillion, while Asia lags some way behind.

U.S. investors have poured $1.8 billion into actively managed U.S. equity funds in the socially responsible category from November to January, according to Lipper data, while other funds saw a net outflow of $133 billion.

Even in fossil-fuel-rich Australia and New Zealand, SRI investment rose from $148 billion to $516 billion between 2014 and 2016, and from $729 billion to $1.09 trillion in oil-rich Canada, according to the Global Sustainable Investment Review released Monday.

Gavin Goodhand, a portfolio manager at Sydney-based Altius Asset Management, said the company’s sustainable bond fund tripled shortly after the 2015 climate accord, where nearly 200 countries signed up to measures designed to curb greenhouse gas emissions.

“The Paris conference was the line in the sand for many of our retail customers, particularly the millennial generation, who want to do the right thing for the environment,” Goodhand said.

Green funds may be not so green

Governments are also tapping the trend, selling green bonds to fund projects such as wind farms or low-carbon transport, with Poland, France and Nigeria making their debut this year.

Some managers, however, are skeptical.

“While environmental, social and governance factors should always factor into investment decisions, this is largely a marketing exercise,” said Steve Goldman, a global portfolio manager at Sydney-based Kapstream Capital, which has A$10 billion ($7.6 billion) of fixed-income assets.

Goldman said Kapstream did not have a responsible investment fund because its clients had not asked for it.

The bond market does not have commonly agreed standards or criteria for what constitutes a green bond, and there is no guarantee the proceeds go to the low-carbon project as claimed.

There are similar concerns over equity products.

Stuart Palmer, head of ethics research at Australian Ethical Investment, said there was a danger that some marketing departments would “greenwash” their products to lure investors into funds that were little different to standard products.

Higher fees

There are no agreed definitions on what is considered ethical, sustainable and socially responsible, but ethical investors are typically expected to cough up higher fees.

For example, retail investors pay more than a third higher fees for the sustainability and ethical funds at Sydney-based BT Investment Management (BTIM) than for its standard share fund equivalent.

The three funds hold six or seven of their top-weighted stocks in common, including major banks Australia and New Zealand Banking Group, Westpac Banking Corp, National Australia Bank and miner BHP Billiton , according to December filings.

A BT spokeswoman did not return requests for comment.

Due diligence difficult

For investors, it can be a minefield.

“I find it difficult as a consumer to do the due diligence I would like to do because even the ethical funds are not always totally transparent about what they define as ethical,” said retail investor Meraiah Foley, a Sydney academic.

“One of the ethical funds I have invests very heavily in retail banks in Australia, and those banks themselves may be underwriting projects that the fund itself would not invest in.”

There is also no standard practice on what to do when an existing fund stock breaches a manager’s policies. Some investment managers will sell, but others argue they can influence behavior by retaining their shareholding.

“We believe in engagement rather than divestment,” said Sam Sicilia, chief financial officer at the A$22 billion pension fund Hostplus. “When you sell a share in a ‘bad’ company, it’s a transfer of ownership and does nothing to the company that’s causing the issue, so divestment does not really work.”
…

President Donald Trump doubled down on his tough talk on trade with a pair of executive orders Friday, which he says are designed to level the playing field and reduce the $500 billion US trade deficit, more than half of which is with China. As Mil Arcega reports, the issue of unfair trade is likely to come up when the U.S. president meets with Chinese leader Xi Jinping next week.
…

Hotels offer congee and other Chinese staples for room service. Casinos train staff members on Chinese etiquette. Restaurants, tourist sights and shopping malls translate signs, menus and information booklets into Mandarin.

The American hospitality industry is stepping up efforts to make Chinese visitors feel more welcome, since they are projected to soon surpass travelers from the United Kingdom and Japan as the single largest overseas demographic.

And it’s not just the typical tourist hubs of New York and Los Angeles, where such efforts have long been commonplace. Smaller cities like Boston, Las Vegas, Seattle and Washington, D.C., are increasingly getting into the act, industry officials say.

“Americans traditionally lag behind what other international designations do for different cultures,” said Elliott Ferguson, CEO of Destination DC, the city’s convention and tourism organization, which last year launched “Welcome China,” a certification program for local businesses. “We just kind of assume that one size fits all. Quite frankly, that’s just not welcoming.”

Local tourism associations in those and other cities have recently launched campaigns aimed at getting their member hotels, restaurants and tourism companies to better incorporate Chinese language and customs into their offerings. They’re also embarking on tourism-focused sales missions to China and opening satellite offices in Chinese cities to strengthen ties and sell their city to trendsetters.

Sheraton Boston offers creature comforts

Some companies have already embraced the message.

The Sheraton Boston in the Back Bay neighborhood started offering in 2013 simple creature comforts many Chinese travelers expect, including slippers, robes, instant noodles, an electric kettle and green tea, and have since taken other steps to cater to Chinese guests, said Angela Vento, the hotel’s general manager.

The Four Seasons in D.C.’s Georgetown neighborhood makes similar gestures, as well as offering Chinese-language television and newspapers. It’s also working on offering more traditional Chinese dishes on its room service and restaurant menus, said Liliana Baldassari, a hotel spokeswoman.

In Las Vegas, Caesars Entertainment last year started offering guests at some of its affiliated resorts the option to book and pay for hotel rooms using WeChat, China’s most popular social media app.

“It’s made a really strong statement to the Chinese that these people really welcome us and understand us,” said Bruce Bommarito, the company’s vice president for international marketing, noting the Roman-themed casino has rolled out other China-focused initiatives in recent years, including training programs for staff on basic cultural etiquette for serving Chinese guests.

Those and other small touches are a step in the right direction, but more companies need to make an effort to recognize the growing importance of the Chinese market, said Justin Minggan Wei, a 27-year-old from Beijing who came to Boston in 2008 for college, an experience that inspired him to launch a consulting company helping local restaurants and businesses better serve Chinese customers.

Chicago Hilton reaches out

Zeng Wen, a 24-year-old who works part-time as a tour guide for Chinese-speakers in Chicago, said she has noticed recent efforts to reach out to Chinese tourists, like the Hilton hotel chain’s “Hilton Huanying” program, which derives its name from the Chinese words for “welcome.”

But Zhe Zhang, a 36-year-old from Guangzhou who visited Los Angeles this year, said he didn’t see any obvious outreach to Chinese visitors, outside of Chinese-run establishments. The most intimidating part, he said, was ordering food with his basic grasp of English.

“If possible, restaurants could provide a simple Chinese menu or pictured menu,” Zhang suggested.

Cities can’t afford to be caught flat-footed as China’s growing middle class — almost nonexistent two decades ago — flexes its spending power, industry experts say.

Chinese visitors already spend more in the U.S. than other international visitors, at roughly $7,200 per person, according to the U.S. Travel Association, an industry trade group. Travelers from the country are expected to more than double from about 2.6 million visitors in 2015 to nearly 6 million by 2021, the association said.

More direct flights from China to a wider range of U.S. cities in recent years is partly fueling the boom.

10-year visa a plus

Creation of a 10-year visa between the U.S. and China in 2014 has also made it easier for Chinese to travel more frequently to the U.S. That has allowed them to venture beyond must-see destinations like New York and Los Angeles to smaller and mid-size destinations and even the national parks, said Scott Johnson, a New York consultant working with Boston and other cities to grow their international presence.

The growing ranks of affluent Chinese are also staying longer and visiting more locations in the U.S. as they plan for their children’s college education or seek real estate and other investment opportunities.

U.S. tourism officials are working to assure partners in China that they remain welcoming even as the administration of Republican President Donald Trump tightens international travel policies and promises fundamental changes in the U.S.-China trade relationship, said Tom Norwalk, CEO of Visit Seattle, the city’s tourism organization.

“Security and travel don’t have to be mutually exclusive,” he said. “We’d hate to see us roll back the clock. We’ve been pretty loud and clear about that.”              
…

Friday marked the end of the week, the month and the first fiscal quarter of 2017.

The first-quarter statistics were pretty impressive with the NASDAQ Composite delivering the best return of the three main indices of nearly 10 percent as the index broke through another record high on Friday, led by heavyweights like Apple (AAPL) and Amazon.com (AMZN).

“The trends that are driving earnings growth in that sector —- cloud computing, internet of things, mobile and tablet adoption, increasing consumption of video, et cetera —- are all intact, and an improving global economy should allow that to continue,” said Chris Zaccarelli, chief investment officer for Cornerstone Financial Partners.

The S&P 500 closed the quarter higher by its best gain since the fourth quarter of 2015. The Dow Jones industrial average added nearly 5.5 percent, which was its sixth straight positive quarter and the longest winning streak since the fourth quarter of 2006, although March showed the first monthly loss since October.

Trading week ahead

The all-important Employment Situation Report for March will be released at 8:30 a.m. ET, April 7. The federal government’s employment data give the most comprehensive report of how many people are looking for jobs, how many have them, what they’re getting paid and how many hours they are working. These numbers provide the best way to gauge the current state, as well as the future direction, of the economy.

Other key macro events include release of the Federal Open Market Committee (FOMC) minutes from March 14-15 on Wednesday and retail same-store sales throughout the morning on Thursday. While investors do not expect a change in the minutes from the last FOMC meeting, the release could move the markets as traders pick apart each word, looking for clues to monetary policy, when the next rate hike may occur and the amount of hikes anticipated for 2017.

Second-quarter outlook

Brad McMillan, chief investment officer at Commonwealth Financial Network, believes the second quarter will get off to a good start.

“Both consumer and business confidence continue to rise, which should provide a tailwind for faster growth,” McMillan said in a research note. “Job creation remains very strong, and wage growth also continues to rise. Around the world, both Europe and Asia are seeing faster growth, marking the first synchronized global expansion since the crisis.”

McMillan believes that the second quarter isn’t likely to repeat the first, but strong economic fundamentals, along with rising corporate earnings, could continue to push markets higher. Rising confidence will support valuation levels and also offers a real possibility of upside surprises in the hard economic data, which could translate into even better than expected earnings growth.
…

President Donald Trump’s son-in-law and daughter are holding onto scores of real estate investments — part of a portfolio of at least $240 million in assets — while they serve in White House jobs, according to financial disclosures released publicly late Friday.

Jared Kushner, Trump’s senior adviser, resigned from more than 260 entities and sold off 58 businesses or investments that lawyers identified as posing potential conflicts of interest, the documents show.

But his lawyers, in consultation with the Office of Government Ethics, determined that his real estate assets, many of them in New York City, are unlikely to pose the kinds of conflicts that would trigger a need to divest.

“The remaining conflicts, from a practical perspective, are pretty narrow and very manageable,” said Jamie Gorelick, an attorney who has been working on the ethics agreements for Kushner and Ivanka Trump.

Kushner began selling off the most problematic pieces of his portfolio shortly after Trump won the election, and some of those business deals predate what is required to be captured in the financial disclosure forms.

For example, Kushner sold his stake in a Manhattan skyscraper to a trust his mother oversees. Jared Kushner, Ivanka Trump and their three minor children have no financial interest in that trust, his lawyer said.

The Kushner Companies, now run by Jared Kushner’s relatives, are seeking investment partners for a massive redevelopment.

The White House on Friday began released financial disclosure forms for more than 100 or its top administration officials — a mix of people far wealthier, and therefore more entangled in businesses that could conflict with their government duties, than people in previous administrations.

White House Press Secretary Sean Spicer described the business people who have joined the administration as “very blessed and very successful,” and said the disclosure forms will show that they have set aside “a lot” to go into public service.

The financial disclosures — required by law to be made public — give a snapshot of the employees’ finances as they entered the White House. What’s not being provided: the Office of Government Ethics agreements with those employees on what they must do to avoid potential conflicts of interest.

Those documents will never be made public, White House lawyers said, although the public will eventually have access to “certificates of divestiture” issued to employees who are seeking capital gains tax deferrals for selling off certain assets.

Kushner, for example, received certificates of divestitures for his financial interests in several assets, including several funds tied to Thrive Capital, his brother Joshua Kushner’s investment firm.

He and Ivanka Trump built up companies the documents show are worth at least $50 million each and have stepped away from their businesses while in government service. Like the president himself, however, they retain a financial interest in many of them. Ivanka Trump agreed this week to become a federal employee and will file her own financial disclosure at a later date.

Jared Kushner’s disclosure shows he took on tens of millions of dollars of bank debt in 2015 and 2016, including liabilities with several international banks whose interests could come before the Trump administration.

Financial information for members of Trump’s Cabinet who needed Senate confirmation has, in most cases, been available for weeks through the Office of Government Ethics.

The president must also file periodic financial disclosures, but he is not required to make another disclosure until next year.
…

Hundreds of ships are switching off their tracking devices and taking unexplained routes, raising concern the trafficking of arms, migrants and drugs is going undetected.

Ninety percent of the world’s trade is carried by sea. Every vessel has an identification number administered by the United Nations’ International Maritime Organization or IMO. But crews are able to change the digital identity of their ship, making it possible to conceal previous journeys.

The Israeli firm Windward has developed software to track the changes. Its CEO, Ami Daniel, showed VOA several examples of suspicious shipping activity, including one vessel that changed its entire identity in the middle of a voyage from a Chinese port to North Korea.

“It’s intentionally changing all of identification numbers. Also its name, and its size, and its flag and its owner. Everything that’s recognizable in its digital footprint. This is obviously someone who is trying to circumvent sanctions [on North Korea],” says Daniel.

Transfers at sea

In a joint investigation with the Times of London newspaper, Windward showed that in January and February more than 1,000 cargo transfers took place at sea. Security experts fear traffickers are transporting drugs, weapons, and even people.

Suspicious activity can be highlighted by comparing a vessel’s journey with all its previous voyages. In mid-January a Cyprus-flagged ship designed to carry fish deviated from its usual route between West Africa and northern Europe to visit Ukraine, deactivating its tracking system on several occasions.

“It’s leaving Ukraine, transiting all through the Bosphorus Straits into Europe, then drifting off Malta,” explains Daniel, as the Windward system plots the route of the reefer [refrigerated] vessel on the screen. “On the way it turns off transmission a few times … then it comes into this place east of Gibraltar. This area is known for ship-to-ship transfers and smuggling, because of the proximity to North Africa.”

Under global regulations all vessels must report their last port of call when arriving in a new port.

“But as you can understand, when it does ship-to-ship transfers here, it doesn’t actually call into any port, right, because it’s the middle of the ocean. So it’s finding a way to bypass what it already has to report to the authorities,” Daniel said.

Finally the vessel sails to a remote Scottish island called Islay, but again it anchors around 400 meters off a tiny deserted bay. The specific purpose of this voyage hasn’t yet been identified.

Lack of political will

Daniel shows another example of a vessel leaving the Libyan port of Tobruk before drifting just off the Greek island of Crete, raising suspicions that it is involved in people smuggling.

But he says using information like this to investigate suspicious shipping activities requires political will as well as technological advances.

“Regulation, coordination, legislation. And then proof in the court of law. And not all of this necessarily exists. The high seas, which means 200 nautical miles onwards by definition, are not regulated right now. The U.N. is still working on it.”

Meanwhile the scale of smuggling around the United States’ coastline was underlined this month, as the Coast Guard intercepted 660 kilos of cocaine off the coast of Florida, with a street value of an estimated $420 million.

 
…

Hundreds of ships are switching off their tracking devices and taking unexplained routes, raising concern that the trafficking of arms, migrants and drugs is going undetected. New technology enables authorities to follow the routes of suspect vessels, but security experts say taking on the smugglers will require greater coordination. Henry Ridgwell reports.
…

Zambia is attempting to convert the nation to energy-saving light emitting diode (LED) lightbulbs to help plug crippling power shortages that have hit mining and agriculture and imposed daily rationing on parts of the country.

If all homes and industries switch to the longer-lasting bulbs, the country could save up to 200 megawatts of electricity annually — about 30 percent of its power deficit — according to the state-owned Zambia Electricity Supply Corporation (ZESCO).

The company is planning to distribute 5 million free LED bulbs by June in exchange for conventional ones, at a cost of $20 million. The aim is to replace every incandescent bulb in the country.

“With such initiative, we are going to save a lot of energy. Just imagine moving from 40 watts energy consumption for an ordinary bulb to … only 5 watts for LEDs,” Thomas Sinkamba, manager of the LEDs rollout at ZESCO, told Reuters.

So far, 3 million of the low-energy bulbs have been bought for $5 million, ZESCO senior manager Bessie Banda said.

The government in January banned the manufacture, sale and import of energy-hungry incandescent lightbulbs and several other inefficient devices.

It has also lifted import taxes on LED bulbs, solar panels and other energy-saving equipment, while imposing taxes on inefficient electrical devices.

Rozaia Mapika, a 53-year old a meat seller living in Lusaka, who received six LED bulbs free in December under the government scheme, said the new lightbulbs have cut her monthly electricity bill.

“We used to spend 300 Zambian kwacha [$30] monthly on electricity [for] household use,” said Mapika, who uses electricity for cooking, heating and lighting.

“Now, we are not exceeding more than 240 ZMW [$25] per month,” she told Reuters.

Some people, however, are concerned about the safe disposal of long-lasting LED bulbs and their impact on people’s health.

“[LED lightbulbs] contain mercury, which is highly toxic even in small doses,” said Robert Chimambo a board member for the Zambia Climate Change Network.

The LED bulbs are more expensive to buy than conventional bulbs, costing $5 compared to $1.50. But they last six times longer, promoters said.

Providing the bulbs free of charge is key to driving the switchover in a country where about 65 percent of the population live on less than $1.90 a day.

Powering a nation

The country’s electricity demand in the last five years has risen to 1,800 megawatts, up from 1,600 megawatts, as more areas have been electrified, putting increased pressure on the national electricity grid, according ZESCO.

The rising demand, coupled with two years of drought that lowered water levels in the country’s hydroelectric dams, have led to the country’s power shortages.

Electricity from the national grid has been rationed for up to six hours a day in parts of the country as a way to cushion the shortfall.

“Increased economic activities and [not enough] rainfall have severely impacted the power deficit,” Sinkamba said.

Insufficient investment in electricity generation has also worsened the country’s power deficits, the ministry of finance said in November.

The demand for power is likely to grow, as the government attempts to roll out electricity supplies to more people.

More than two-thirds of Zambia’s 15.5 million people have no access to any power, according to USAID, the U.S. government’s aid agency, which is working with Zambia to help improve its power supplies.

Justine Mukosa, a manager at the government’s Rural Electrification Authority, said that as demand for power increases nationally, other energy sources will be needed to reduce pressure on the national grid.

“We need to intensify other energy sources like solar mini-grid, wind energy and others,” Mukosa said.
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Several environmental groups filed lawsuits against the Trump administration on Thursday to challenge its decision to approve construction of TransCanada Corp’s controversial Keystone XL crude oil pipeline.

In two separate filings to a federal court in Montana, environmental groups argued that the U.S. State Department, which granted the permit needed for the pipeline to cross the Canadian border, relied on an “outdated and incomplete environmental impact statement” when making its decision earlier this month.

By approving the pipeline without public input and an up-to-date environmental assessment, the administration violated the National Environmental Policy Act, groups including the Center for Biological Diversity, Sierra Club and the Northern Plains Resource Council said in their legal filing.

“They have relied on an arbitrary, stale, and incomplete environmental review completed over three years ago, for a process that ended with the State Department’s denial of a cross-border permit,” the court filing says.

In the other filing, the Indigenous Environmental Network and North Coast Rivers Alliance sought injunctive relief, restraining Transcanada from taking any action that would harm the “physical environment in connection with the project pending a full hearing on the merits.”

Trump surrounded by supporters

U.S. President Donald Trump announced the presidential permit for the Keystone XL at the White House last week. TransCanada’s Chief Executive Officer Russ Girling and Sean McGarvey, president of North America’s Building Trades Unions, stood nearby.

Trump, a Republican, said the project would lower consumer fuel prices, create jobs and reduce U.S. dependence on foreign oil.

His Democratic predecessor, former president Barack Obama, rejected the pipeline, saying it would lead to an increase in greenhouse gas emissions and do nothing to reduce fuel prices for U.S. motorists.

“This tar sands pipeline poses a direct threat to our climate, our clean water, wildlife, and thousands of landowners and communities along the route of this dirty and dangerous project, and it must and will be stopped,” said Michael Brune, executive director of the Sierra Club, one of the groups that filed the lawsuit.

Earlier lawsuit targets coal leases

The lawsuits came on the heels of a lawsuit filed on Wednesday challenging other recent moves to undo Obama’s climate change regulations.

Conservation groups and the Northern Cheyenne Native American tribe of Montana sued the administration on Wednesday for violating the National Environmental Policy Act when it lifted a moratorium on coal leases on federal land.

All lawsuits have been filed in U.S. District Court in Montana’s Great Falls Division.
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Nearly all of New York City’s millionaires would receive big tax cuts under President Donald Trump’s proposed tax overhaul, while more than one-third of moderate- and middle-income families would face increases, according to a government report issued Thursday.

City Comptroller Scott Stringer said Trump’s overall plan, as proposed during the Republican president’s campaign, would give more than $5 billion of tax cuts to city dwellers. But almost two-thirds of that would go to those earning more than $500,000. That group bears just over one-half of the total tax burden.

“We already have astounding wealth gaps across the city and across the country,” Stringer said at a news conference. “The Trump tax code, if implemented, would only exacerbate it.”

The lower taxes for wealthier residents would be achieved through lower marginal tax rates on ordinary and capital gains income and the elimination of the alternative minimum tax (AMT) — a federal income tax that’s required in addition to baseline income tax for certain individuals or entities for which exemptions allow lower payments of standard income tax.

Last week, U.S. Treasury Secretary Steven Mnuchin said Trump’s objective was a tax cut for the middle class, not the top 1 percent. He said he was aiming for passage of a comprehensive tax overhaul by the time Congress takes its August recess.

Six-figure tax cut

Stringer’s office analyzed tax returns of 365,000 New York City households. It found that 92 percent of the city’s millionaires would receive, on average, a tax cut of at least $113,000.

Nearly half of single parents who make $25,000 to $50,000 would experience a tax increase, it said.

The tax cuts, which would reduce federal revenue by more than $2 trillion over 10 years, are driving proposed budget cuts that would leave the city, home to 60,000 homeless people, with a weakened social safety net, Stringer said.

“I find it incredible that this guy, who comes from New York City, who has major investments here, can’t see what his proposal will do to his hometown,” he said. “And then when you scratch the surface, you realize that part of his agenda and who benefits from it is Donald Trump himself.”

Based on the limited information available from Trump’s now-public 2005 federal tax return, his proposal to eliminate the AMT would have benefited him by $31 million that year. In contrast, under his tax plan, a single mother raising two children on less than $50,000 a year would face a tax increase of $464.
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A Native American tribe in Montana filed a lawsuit against the Trump administration Wednesday, challenging its decision to lift a moratorium on coal leases on public land without first consulting with tribal leaders.

The Northern Cheyenne Tribe, located in southern Montana, said the administration lifted the moratorium without hearing the tribe’s concerns about the impact the coal-leasing program has on the tribe, its members and lands.

Earlier this month, the tribe sent a letter to Interior Secretary Ryan Zinke, who signed the order lifting the moratorium Tuesday, asking to meet with him to discuss the issue. Zinke did not respond to the letter.

“It is alarming and unacceptable for the United States, which has a solemn obligation as the Northern Cheyenne’s trustee, to sign up for many decades of harmful coal mining near and around our homeland without first consulting with our Nation,” Tribal Chairman Jace Killsback said.

Although coal leasing can resume on federal lands, Killsback said the tribe, which filed the lawsuit in U.S. District Court in Great Falls, Montana, will bear the brunt of the impact.

“The Northern Cheyenne rarely shares in the economic benefits to the region generated by coal industry and other energy development projects,” he said.

Approximately 426 million tons of federal coal are located near the Northern Cheyenne Reservation at the Decker and Spring Creek mines in Montana, the tribe said.

Neighboring tribe, the Crow, rely on coal production to support their local economy and have called for the relaxation of coal regulations for years.

In a press call Wednesday, Zinke said the new executive orders are a boon for the Crow people, who rely on coal as their predominant industry.

“A war on coal is a war on the Crow people,” he said. He did not respond to a query about the Northern Cheyenne lawsuit.

In a separate lawsuit filed Wednesday by environmental group Earthjustice, a coalition of conservation groups challenged the administration’s moratorium decision, arguing that it imperils public health for the benefit of coal companies.

“No one voted to pollute our public lands, air or drinking water in the last election, yet the Trump administration is doing the bidding of powerful polluters as nearly its first order of business,” Earthjustice attorney Jenny Harbine said in a statement.
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Beijing’s reported economic retaliation against South Korea for deploying the U.S. Terminal High Altitude Area Defense (THAAD) missile system continues to target certain sectors, like imports of Korean cosmetics, canceling K-pop concerts, and a ban on Chinese tour groups to South Korea.

At Seoul’s Namsam Tower, smaller than usual crowds gather to watch the daily Korean cultural performances and to look out at the sprawling modern metropolis from the highest point in the city.

Buses of visitors from countries like Malaysia, Vietnam and Hong Kong still arrive at this popular site, but there are fewer visitors overall than in the past because Chinese tourists have virtually disappeared in the last month.

Fewer Chinese visitors

Chinese tourists accounted for nearly half of the 17 million visitors to South Korea last year. But the latest government figures indicate the number of tourists from China fell by nearly 20 percent in March. Local travel agencies, airlines, hotels, cruise lines, and duty-free operators have all been affected.

WATCH: Video report by Brian Padden

In Seoul, some tour groups and restaurants that cater exclusively to Chinese visitors have temporally shut down. Even travel agencies not directly affected by the abrupt decline of Chinese visitors are worried this could hurt South Korea’s image as a tourist destination.

“While it is comfortable for me to work as a tour guide because my guests do not need to line up and can avoid the inconvenience, it is always good to have many tourists visiting South Korea. It is sad,” said Kim Sun-hee, a Malaysian tour group guide.

THAAD reprisal

Chinese officials have objected to the advance weapons system as an unnecessary and provocative regional military escalation, and voiced concern that the system’s powerful radar could be used to spy on them and other countries as well. Washington and Seoul insist THAAD is needed to defend against North Korea’s increasing nuclear and missile capabilities.

Beijing has also been accused of limiting some imports of Korean cosmetics and other products, and canceling K-pop concerts. Shares of the Korean cosmetics conglomerate AmorePacific dropped significantly in the wake of the reported Chinese retaliation, as did the stock value of the Korean automaker Hyundai after photos of a vandalized Hyundai car circulated widely on Chinese social media.

And the Lotte Group, the South Korean department store chain that provided the military with a plot of land for the THAAD deployment has had more than 50 of its stores closed in China.

Quiet pressure

Beijing has not acknowledged imposing a tourist ban, but travel agencies in Seoul have been told by their partners in Beijing that tours have been canceled because of pressure from the China government.

Shon Ho-kwon, the president of Modetour International Inc. in Seoul, said he was told officials from the China National Tourism Administration contacted virtually every travel agency and “made a verbal warning that there will be many disadvantages if (the agencies) continued selling South Korea tourism products.”

“There is no document to prove this, but clearly it is understood that China is making such suggestions,” Shon said.

A prolonged dispute between South Korea and China, its largest trading partner, could significantly hurt both economies in the long run.

“South Korea last year had about $4 billion in investment in China. China had about $2 billion that they invested in South Korea,” said James Kim, research fellow at the Asan Institute for Policy Studies in Seoul.

But there is no resolution in sight with some travel agencies reporting no Chinese reservations for the upcoming spring holidays, which had been the busiest tourist season of the year.

Youmi Kim contributed to this report.
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Workplaces have become less civil spaces than they once were. People don’t say please and thank you. Employees send e-mails and texts during meetings, ignoring the speaker and tuning out of the discussion. Others take too much credit for collaborative work. 

The nasty looks and belittling comments reached a point at law firm Bryan Cave, in Irvine, California, that the partners held a civility workshop.

Managing partner Stuart Price says working together toward a common goal set the right tone for the workshop, as the employees set up a code of civil behavior. The firm has the 10 points of the code displayed on a granite block in the lobby. 

“I think two items in the code really stand out for me,” Price said. “No. 3 is we treat each other equally and with respect, even if the conditions are very difficult. Then the last item in our code is we address incivility. If you don’t address incivility, then the plaque just becomes a piece of granite, but it doesn’t have life.”

He says they no longer let uncivil behavior slide. 

“The first step for us along the way is to address it with the person, privately, just talk about what happened,” he said. “If the pattern continues with that specific person, we will have further conversations and if it’s particularly problematic, we might terminate them.”

Creating a civil work environment has impacted the firm in many positive ways. 

“A year after we had this workshop, we won Best Place to Work in Orange County in the large company category,” Price said. “In terms of performance, it seems to me that when we’re most focused on how we treat each other, when were we’re most focused on civility, the financial performance is at its best.”

The High Cost of Incivility

A culture of civility helps employees feel safer, happier and better, said Georgetown University management professor Christine Porath. She incorporated results of her research and personal experiences in a new book, Mastering Civility: A Manifesto for the Workplace.

She told VOA she witnessed the consequences of incivility years before she started studying it. 

“I thought I scored my dream job after my graduating from college,” she said. “I got to work at one of the largest sports marketing organization in the world. When I took the full-time job, I learned that it was a very toxic culture. The top leaders had a bad behavior, narcissism. And they had a tendency to belittle and demean people in front of others.”

Then it became clear to her the negative effect incivility had on people. 

“It was contagious, too,” she said. “It affected their performance and motivation and mood throughout the day, but they took that into their relationships with others; clients, customers and that kind of thing. And I just saw that it was hurting the organization. And it was also hurting employees, not only their work life, but they were taking it home with them.”

And, she discovered, incivility had a physical impact. 

“Then the second thing was my dad. (He) had had two toxic bosses. Even though he tried to protect me from learning about how bad that was, he ended up in the hospital with a heart attack scare,” she said.

More Rudeness

Porath notes that civility has been declining for years.

“When I started studying it in about 1998, it was less than 25 percent (people) were affected by this on a weekly basis, and those numbers most recently hovered over 50 percent — meaning more people are experiencing or witnessing disrespectful, rude behavior in the workplace these days.”

She conducted surveys, asking people “Why are you uncivil?”

“Over 60 percent of people say, ‘Because I’m overwhelmed or stressed.’ People are asked to do more with less resources. The other thing is technology. The fact that people communicate so often now with e-mails and other forms of technology, it makes being civil tougher in a sense that you don’t have the nonverbal (cues), you don’t have the tone of voice. So typically there are more misunderstandings with technological communication,” she said.

Let’s be e-Civil

To avoid those sorts of misunderstandings, Porath recommends that you do not send an email if you’re feeling very stressed, angry or can’t solve a disagreement. If you’re not sure how your humor, sarcasm or criticism will be received, reread, rethink and resist the temptation to hit Send. And if you are uncertain about your tone, save the message and review it later with a fresh perspective before sending it. If you have to get something off your chest, write your note now but maybe send it later using delayed delivery. Finally, she suggests trying to have a phone call, or Skype, or meet face to face under those circumstances.
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El Salvador’s Congress on Wednesday approved a law prohibiting all metal mining projects in a bid to protect the poor Central American country’s environment and natural resources.

The new law, which enjoyed cross-party support from 70 lawmakers, blocks all exploration, extraction and processing of metals, whether in open pits or underground.

The legislation prohibits the use of toxic chemicals like cyanide and mercury, and makes permanent an executive order passed by former President Antonio Saca in 2009 and renewed by subsequent administrations.

Several regions of the country have attracted interest from international gold and silver mining companies.

In October, El Salvador won an arbitration at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) against the Australian-Canadian miner OceanaGold Corp, which was seeking $250 million over the 2009 denial of an extraction permit.

In its decision, the ICSID ordered the company to pay El Salvador $8 million for legal costs.
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Turkish banker Mehmet Hakan Atilla, a prominent ally of Turkish President Recep Tayyip Erdogan, came to New York this week to school investors on his state bank’s plans to sell new dollar bonds.

Instead, he was placed under arrest by U.S. authorities and accused of conspiring to violate U.S. sanctions on Iran by teaming with wealthy Turkish gold trader Reza Zarrab to funnel hundreds of millions of dollars of illegal transactions through U.S. banks to Iran’s government.

“United States sanctions are not mere requests or suggestions; they are the law,” Acting U.S. Attorney Joon Kim said in a statement in New York, where Atilla was arraigned Tuesday.

He was arrested at New York’s John F. Kennedy International Airport on Monday.

Gold, currency allegedly sent to Iran

Atilla “protected and hid Zarrab’s ability to provide access to international financial networks,” U.S. authorities said in documents filed in the U.S. court. The documents allege that gold and currency were sent to Iran, while documents were forged to disguise the transactions as food shipments so as to comply with humanitarian exceptions to the sanctions law.

Atilla’s arrest and the case of Zarrab — arrested last year in Florida — drew a sharp rebuke from the Turkish government, which said it planned to raise the matter with U.S. Secretary of State Rex Tillerson when he visits Ankara this week, Turkish Foreign Minister Mevlut Cavusoglu told Turkish media.

Relations between the U.S. and Turkey are frayed over the Syrian civil war and Turkish demands for the extradition of Islamic cleric Fethullah Gulen, whom the Turkish leadership blames for July’s failed coup in Turkey.

Diplomatic dispute?

In terms of the impact of the recent development on the U.S. Turkish relationship, some analysts suggest it could potentially be an issue as the two sides view the case through different lenses.

“For the U.S., it is a case of sanctions law violation,” said Ihan Tani, a journalist who follows U.S.-Turkish relations. “But some people close to the Turkish president seem to be involved with Reza Zarrab.”

Tani added that because of the involvement of close aides of the Turkish president, the issue could escalate into a diplomatic dispute.

But Tani said Atilla knew that U.S authorities viewed him as a potential suspect.

“He knew that he was part of the U.S. investigation here. So why did he come to this country? It is hard to understand. If he took a risk, now he is paying for it,” Tani said.

The U.S. attorney’s office in Manhattan declined to comment on his motives to travel to the U.S.

Lender’s shares drop

The arrest could have major financial implications for Turkish state lender Halkbank. Bank shares posted their biggest one-day fall on Wednesday.

Halkbank, Turkey’s fifth-largest bank in terms of assets, vowed to investigate.

“Our bank and relevant state bodies are conducting the necessary work on the subject, and information will be shared with the public when it is obtained,” Halkbank said in a statement.
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Britain has formally notified Brussels of its intention to leave the European Union, triggering a two-year period of negotiations over its departure and future relations. London financiers are concerned that Britain’s withdrawal from the European Single Market will put the city’s pre-eminence as the continent’s financial hub at risk. As Henry Ridgwell reports from London, other European capitals and financial hubs in Asia and America are looking to benefit.
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South Korean economic reforms, made in part to minimize the impact of a potential international financial crisis, make it a likely target for charges of unfair currency manipulation by the United States.

There is growing concern in South Korea and in other emerging markets that the administration of U.S. President Donald Trump will use allegations of currency manipulation to force trade concessions as part of his economic agenda to give American manufactures a greater competitive advantage in international markets.

“So who is the most likely target of a manipulation charge? Obviously South Korea,” said economist Benn Steil with the Council on Foreign Relations in New York.

Why South Korea?

President Trump has indicated his intention to renegotiate what he considers unfair trade deals that put American industries at a global competitive disadvantage. After taking office in January he immediately pulled out of the multilateral Trans Pacific Partnership (TPP) free trade agreement, and U.S. trade officials are looking for ways to revise the North American Free Trade Agreement (NAFTA.)

Trump has also been highly critical of the U.S., South Korea bilateral free trade agreement (KORUS FTA) as a “job killing deal” that “doubled our trade deficit with South Korea and destroyed nearly 100,000 American jobs.”

The U.S. Trade Representative (USTR) recently recommended reconsideration of the KORUS FTA due to the rising trade deficit between the South Korea and the U.S. The report noted that U.S. exports to South Korea in 2016 were down $1.2 billion from 2011, the year before the free trade agreement went into effect, while imports of South Korean goods increased by $13 billion.

Currency manipulation conditions

As for South Korean currency manipulation charges, the U.S. may have a legal case that it could use to pressure changes to the bilateral free trade agreement.

After the 1997 Asian financial crisis, South Korea implemented reforms endorsed by the International Monetary Fund to make the national economy less vulnerable to another sudden global economic downturn. The government in Seoul complied with the IMF recommendations to establish a large current account surplus (trade surplus,), large U.S. dollar foreign exchange reserves, and a low level of foreign ownership of domestic assets. These economic assets helped South Korea minimize the impact of the financial crisis of 2008.

However, these same conditions are the key criteria listed by the U.S. Congress for determining the existence of currency manipulation. Economists say it creates a fundamental contradiction in the dollar based international financial system to urge countries to protect themselves, then to accuse them of protectionism.

“If an emerging market does exactly what the IMF identifies as being the key steps they could take to prevent a financial crisis in their country, they will be the most likely to be targeted for currency manipulation charges by the U.S. Congress,” said Steil.

Bargaining chip

Advocates for South Korea argue that Seoul has intervened in international exchanges by buying or selling substantial sums of foreign currency, only to stabilize the value its Won, not to undervalue it. And despite the large trade deficit with the U.S., South Korean companies like Hyundai and Samsung are investing heavily in the U.S., more so than American companies are investing in South Korea.

Fair or not, South Korea’s current situation, with a bilateral trade deal that the Trump has labeled unfair and possibly meeting the legal definition of currency manipulation, leaves it politically and legally vulnerable. Such a complaint could be made to the World Trade Organization, but it is hard to prove and the resolution process would involve extensive negotiations.

James Nolt, an international political economy analyst with the World Policy Institute says the Trump administration would most likely use the threat of currency manipulation as leverage to force South Korea to reduce non-tariff related regulations that have reportedly been imposed to undermine the intent of the KORUS FTA and to open up new markets to American products.

“It will probably be in the context of a bilateral negotiation where he will use that as one of the bargaining chips,” said Nolt.

Why not China?

Trump had repeatedly attacked China as a currency manipulator, and even said on day one in his administration he would formally charge China as a currency manipulator. But he has not acted on that promise because Beijing has been intervening in currency exchanges to increase the value of its currency the Yuan to maintain investor confidence. And a stronger Chinese Yuan benefits American exporters by making their products somewhat cheaper.

Youmi Kim contributed to this report.
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Westinghouse Electric Company filed for Chapter 11 bankruptcy protection Wednesday, saying it needed to restructure because of “certain financial and construction challenges” from its nuclear power plant projects.

The company has struggled with cost overruns and delays with the plants.

Parent company Toshiba warned in February it would need to take a $6 billion write-down on its estimated value of Westinghouse.

Toshiba said in a statement about the bankruptcy filing that it and the Westinghouse unit are working with the owners of two nuclear power plant sites on arrangements to continue construction of those projects.

Westinghouse lists eight of its AP1000 plants under construction in the U.S. and China.  The company said Wednesday it has agreements with the owners at each site to continue working.

The bankruptcy filing does not affect Westinghouse’s operations in Asia, Europe, the Middle East and Africa, according to a company statement.

During the restructuring period, Westinghouse will rely on $800 million in financing it has secured to operate power plants, manufacture nuclear fuel and components, and carry out decommissioning and decontamination efforts.

“We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader,” said Westinghouse Interim President and CEO Jose Emeterio Gutierrez.
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