YCLOAK

A new set of tit-for-tat tariffs imposed by the United States and China on each other’s goods took effect Thursday.

The U.S. announced earlier this month that it would impose 25 percent tariffs on $16 billion worth of Chinese goods, on top of the 25 percent tariffs it imposed on $34 billion worth of Chinese products in early July. Beijing has followed suit in each case with an identical percentage of tariffs in retaliation.

The penalties, previously announced, apply to $16 billion of goods from both sides including automobiles and metal scrap from the United States and Chinese-made factory machinery and electronic components, according to the Associated Press.

China’s commerce ministry issued a statement Thursday criticizing the U.S. tariffs as a violation of World Trade Organization rules, and says it will file a legal challenge under the WTO’s dispute resolution mechanism.

The new round of tariffs took effect the day after delegations from both nations met in Washington for first of two days of talks aimed at resolving the dispute, the first such formal discussions since June.

U.S. President Donald Trump told Reuters in an interview this week he does not expect much progress from the discussions.

The Trump administration is demanding that Beijing change its practice of heavily subsidizing its technology sector and open its markets to more U.S. goods.

The U.S. Trade Representative’s office on Monday began six days of public hearings on the president’s plans to impose tariffs on a wider array of Chinese imports, affecting an additional $200 billion worth of Chinese goods.

Economists warn that the trade war between the world’s biggest economies would reduce global economic growth by around 0.5 percent through 2020.
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French President Emmanuel Macron will make the tough political choices needed to meet his deficit commitments, his government spokesman said, as he looked to put a bodyguard scandal behind him at his first Cabinet meeting after the summer break.

Macron and his ministers in all likelihood need to find savings in next year’s budget, to be presented to parliament next month, if they are to prevent the deficit from ballooning once again.

The president faced his first crisis in the summer when video surfaced of bodyguard Alexandre Benalla beating a protester. Macron’s own aloof response fanned public discontent.

Now the 40-year-old leader returns to work facing difficult political choices as he embarks on a new wave of reforms to reform the pensions system, overhaul public healthcare and shake-up the highly unionized public sector — tasks complicated by forecasts that economic growth is slower than expected.

“A budget is not only figures, but a strategy, and strong political choices,” Griveaux said, without giving details on the budget negotiations. “There will be [spending] increases and then we will require efforts from other sectors.”

The French economy eked out less growth than expected in the second quarter as strikes and higher taxes hit consumer spending, official data showed in July.

Macron has linked fiscal discipline to restoring France’s credibility in Europe, and while the budget deficit — forecast at 2.3 percent of GDP this year and next — should not surpass the EU-mandated 3 percent limit, it is still expected to be one of the highest in the euro zone.

“The budget equation is becoming more complicated,” Denis Ferrand, economist at COE-Rexecode told Reuters.

The Bank of France has revised 2018 growth down to 1.8 percent from 1.9 percent. Budget rapporteur Joel Giraud in July said that a revision down to 1.7 percent could see the public deficit slip by 0.2 percentage points.

Beyond raising eyebrows in Brussels and Berlin, it would also complicate Macron’s efforts to make transfers towards social policies that might help him dispel the impression among leftist critics that he is a “president of the rich.”

“It would be more difficult to find resources for social spending,” Ferrand said.

Elysee officials acknowledge growth was lower than expected in the first half, and say the housing and subsidized jobs portfolios will see sharp cuts to help finance Macron’s priorities in education, security and the environment.

Some 1 billion euros ($1.14 billion) is expected to be saved by changing rules for widely-enjoyed housing benefits, junior minister Julien Denormandie told BFM TV earlier on Wednesday.

Last year, a cut of five euros ($6) per month to the same allowance contributed to a sharp slump in the president’s popularity, which opinion polls show plumbing lows.
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Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday.

The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp., two of the sources said.

“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way — first delay then calling off,” a Saudi source familiar with IPO plans.

Saudi Aramco did not immediately respond to an emailed request for comment. The Saudi Royal Court had no immediate comment.

The proposed listing of the national champion was a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.

The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.

Stock exchanges in financial centers including London, New York and Hong Kong had been vying to host the international tranche of the share sale.

An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.

International banks JPMorgan, Morgan Stanley and HSBC, were working as global coordinators, boutique investment banks Moelis & Co and Evercore were chosen as independent advisors and law firm White & Case as legal adviser, sources had previously told Reuters.

More banks were expected to be named but no bookrunners were formally appointed despite banks pitching for the deal.

Lawyers, bankers and auditors are all essential in the drafting the prospectus, a formal document that provides essential details on the company.

“The message we have been given is that the IPO has been called off for the foreseeable future,” said one of the sources, a senior financial advisor.

“Even the local float on the Tadawul Stock Exchange has been shelved,” the source added.

Saudi energy minister and Aramco chairman Khalid al-Falih said in the company’s 2017 annual report, released in August, that Aramco “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement.”

Aramco had a budget which it used to pay advisors until the end of June. This has not been renewed, one of sources said.

“The advisors have been put on standby,” a third source, a senior oil industry official said.

“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on.”

Sources have previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international listing venue to be chosen had slowed down the IPO preparations.
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Disney is offering to pay full tuition for hourly workers who want to earn a college degree or finish a high school diploma.

The Walt Disney Co. said Wednesday it will pay upfront tuition to workers who want to take classes starting in the fall.

Disney initially will invest $50 million into the “Disney Aspire” program and up to $25 million a year after that.

Other large corporations have begun paying tuition for workers in a job market with low unemployment.

In May, Walmart said it will offer workers the chance to get a college degree at three universities with online programs.

Disney is rolling out its program in phases, with the first limited to online classes. It is being administered by Guild Education, the same firm operating Walmart’s program.
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The U.S. economy likely created 43,000 more jobs in the 12 months through March than previously estimated, the Labor Department said on Wednesday.

The marginal increase, which the Labor Department said represented less than a 0.05 percent gain versus current estimates, is a preliminary estimate of the government’s annual “benchmark” revision to nonfarm payrolls data.

Job growth in the U.S. economy remains relatively strong despite the labor market being near full employment.

Once a year, the government compares its nonfarm payrolls data, based on monthly surveys of a sample of employers, with a much more complete database of unemployment insurance tax records.

A final benchmark revision will be published in February along with the employment report for January. Government statisticians will use the final benchmark count to revise payrolls data for months both prior to and after March 2018.
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When reforms began in Myanmar in 2011, its tourism sector was considered as one of those most likely to take advantage of the economic opportunities as the country looked to reconnect with the outside world. 

Authorities and businesspeople were confident that foreign tourists would be drawn to Myanmar, eager to see such sites as the ancient temples of Bagan, the unique culture of Inle Lake, or the picturesque beaches overlooking the Bay of Bengal. 

For a while it worked, as Myanmar’s international reputation improved in-line with the reforms happening at the time, the country was at the top of many visitors’ wish lists. Official figures showed that more than 4.68 million tourists visited the country in 2015, up from 816,000 in 2011. In 2017, 3.4 million tourists visited. 

But the situation has changed again. The tourism sector has been heavily impacted by the crisis in Rakhine State, which has seen 700,000 Rohingya cross into Bangladesh to flee a brutal army crackdown. Myanmar’s military has been accused of ethnic cleansing the Rohingya, leading many tourists to stay away because of ethical concerns. 

Myanmar’s government recognizes the need to take action, and in early August held a meeting for stakeholders to discuss what measures can be taken to improve the situation. 

At that event, de facto leader Aung San Suu Kyi said the country should focus on measures such as improving rail and water transport, providing clean accommodation and developing more community-based tourism projects.

“Tourists can get many opportunities such as viewing the beautiful scenery and enjoying new experiences,” Aung San Suu Kyi said. “That is why roads, water ways and railways should be considered aside from air travel.” 

Tourist operators in the country welcomed the remarks, but said that there are more short-term measures that can be made, and have also called for a nationwide strategic plan to tackle the malaise the industry is currently undergoing. 

“What is needed is a comprehensive integrated approach from [the government] and the private sector to improve the tourism sector,” said Aung Kyaw Swar, former principal of the Inle Heritage Foundation. “This should include infrastructure, products, channels of communication, public relations, marketing and sales.” 

He said he welcomed Aung San Suu Kyi’s speech, particularly the calls to improve infrastructure, but said a cohesive plan should be formed, including one that ensures that the respective ministries work closely together. 

He also said that the government should invest in research teams, in order to effectively research potential clients’ expectations when they visit the country.

Foreign visitors to Myanmar have traditionally been drawn towards the major cities of Yangon and Mandalay, as well as Bagan and Inle Lake, but new destinations are emerging, and tourist development in lesser known areas could bring economic benefits. 

U Bawla, a hotelier in Kale, the gateway to Chin State, one of Myanmar’s most scenic but underdeveloped regions, said that government support for tourism development would bring huge improvements for the lives of Chin people. 

“When people come to Chin State, [they say] it is an amazing, and beautiful place,” he said, adding that only a handful of tourists visit each month. “I think that if the government concentrates on [developing tourism] in Chin State, that will bring many improvements for the Chin people, including improvements in roads and transportation.” 

Bertie Lawson, managing director of Yangon-based Sampan Travel, said that Aung San Suu Kyi’s recommendations were “a good start”, but that much more needed to be done. 

As examples, he highlighted the practice by domestic airlines of charging foreigners double the price of Myanmar citizens, and the fact that buses to tourist destinations are often scheduled to arrive in the middle of the night, rather than at times more convenient for visitors. 

“This might seem small and petty, but they add up and make people wonder if Myanmar is really worth it, when they could go elsewhere and not have to deal with this,” he told VOA. 

“People aren’t complaining about the lack of CBT projects, or waterways. They’re complaining about the price, or about the issues they have traveling around the county. Those things can be changed, and should be looked at first,” he said. 

Lawson said he believed the impact of the Rakhine crisis on tourism would likely be long-term, but said there was still reason to be optimistic. 

“Repairing that reputation will take quite a long time,” he said. “I don’t think that means that tourism can’t do well, I just don’t think it will grow quite at the rate many were previously expecting.” 
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Mexico risks losing long-term passenger growth and billions of dollars if it fails to go through with building a new hub in the capital to alleviate congestion, an executive with the International Air Transport Association (IATA) said on Tuesday.

Mexico’s incoming government last week postponed a decision on whether to complete a partially constructed new airport in Mexico City, saying the public should be consulted on the fate of the $13-billion hub, which the next president initially opposed.

President-elect Andres Manuel Lopez Obrador said the project was tainted by corruption prior to his July 1 landslide election victory, and had pressed for an existing military airport north of the capital to be expanded instead.

Without the new airport, around 20 million fewer passengers would fly to Mexico City starting in 2035, year over year, said Peter Cerda, regional vice president in the Americas for IATA.

It would also mean a long-term loss of $20 billion from Mexico’s GDP and cost the country 200,000 jobs, according to an airline-industry study on the financial impact of not building the new airport, Cerda said.

IATA, the Montreal-based trade association, has 290 member airlines which together transport about 82 percent of global air traffic.

Passenger traffic is expected to double by 2035 on a global basis, including Latin America, Cerda said in an interview.

“If you don’t build an airport that’s able to meet the needs of the next 50 years you just cannot continue to grow,” Cerda said on the sidelines of the International Aviation Forecast Summit in Denver. “And that has financial implications for the country.”

Work began on the new airport, which is a few miles northeast of the current one, in 2015. The present airport, located in the east of Mexico City, has become increasingly saturated by rising air traffic and has no room to expand.

“This is an airport that was built for 32 million passengers a year and currently we have 45 million passengers traveling through,” Cerda said.

Cerda urged Mexico to make any decision on “technical justifications” rather than “public outcry that may not fully understand the consequences.”
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For Mazen Rahhal, a shop owner in a bustling district of Beirut, Lebanon’s economy has seldom felt more precarious. In one store, he sells clothes at a fraction of their previous price. Another, which he rented to a rival business, now lies empty.

Years of gradual stagnation have in 2018 merged with several newer trends: high interest rates, falling house prices and questions about the currency at a moment of profound uncertainty as politicians wrangle over forming a new government.

For Lebanese businesses and people, economic unease and the lack of a government to take firm control over policy — some three months after they voted in a general election — have become ceaseless sources of worry.

“We are struggling just to manage the costs we have to pay: from electricity, employee wages, everything,” said Rahhal. His family has owned shops on Hamra Street, the main business thoroughfare of west Beirut, since the 1970s.

As Lebanon rebuilt after its 15-year civil war ended in 1990, there was a period of economic growth, and as in its 1950s and 60s heyday, it drew Gulf Arab tourists ready to open their wallets as they escaped the stifling summer heat of home.

But problems were never far away.

In 2005 prime minister Rafik al-Hariri was assassinated, opening up wide divisions over the roles of the Iran-backed Hezbollah group, and of powerful neighbor Syria.

Syria’s own war since 2011 has aggravated those rifts, while cutting off much of Lebanon’s overland trade and scaring off the mostly Sunni Muslim Gulf tourists, who feared the growing power of the heavily armed Shi’ite Hezbollah movement.

Sclerosis ensued. After Hariri’s death, the government did not pass another state budget until last year. Parliamentary elections in 2009 were not held again until this May.

Economic growth, which averaged 8-10 percent before the Syria war, has averaged 1-2 percent since it began, and a purchasing managers’ index for Blom Bank has shown business activity in decline every month since 2013.

The state owes about 150 percent of the gross domestic product, much of it to local banks, whose own business is partly based on remittances paid into them by Lebanese working abroad, in turn partly drawn by attractive interest rates.

Difficulties 

Khoury Home is a major business in Lebanon. Its shops, a familiar sight across the country, sell home appliances. 

Romen Mathieu said he had told his staff every year since becoming the company’s chairman in 2013 that the coming year would be more difficult than the last.

“Now we reached 2018, and this year is disastrous, and I think we still didn’t see the tough part of this year,” he said. “If I have to say it in 2019, there won’t be anyone listening to me any more.”

Compounding Mathieu’s difficulties, the government last year scaled back a series of incentives to banks for home loans, which contributed to a dip in the housing market. As fewer people bought houses, fewer wanted new fridges or televisions.

“Let’s not make fools of each other. There is no money in the market and we need to adapt to this situation and get used to it,” said Mathieu.

Not all businesses are suffering. Supermarket chain Spinneys has increased sales volumes because many of its goods are imported from Europe, and currency fluctuation has brought prices down, said chief executive Michael Wright.

“We are selling more, our volumes are going up. But that’s balanced by a price drop,” he said.Since May’s election the rival political parties have squabbled over forming a new national unity government — one that contains enough of the major parties to ensure political backing across the country.

Without a new government, Lebanon cannot institute the fiscal reforms needed to get its debt under control or unlock billions of dollars in pledged foreign investment in infrastructure to get the economy moving.

Everybody Reuters interviewed said it was critical for Lebanon to form a government soon.

Meanwhile, interest rates have risen as the authorities increasingly try to attract higher levels of the bank deposits on which government debt relies.

Those high rates are hurting too.

Jessy Kojababian has been engaged for two years. Her wedding was fixed for September. But as interest rates rose, and the government incentives for banks to offer housing loans were scaled back, she and her fiance could no longer afford to buy a house.

They have now cancelled the wedding.

“We were already booking everything for the wedding. The roses, the restaurant, the church. Everything. We paid a deposit of $6,000, so how can we get it back?” she said.
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U.S. and Mexican trade ministers were set to resume talks over the North American Free Trade Agreement in Washington on Tuesday in a final push for a deal on autos that would open the door for Canada to return to negotiations this week.

If Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer can resolve remaining bilateral issues, “the plan is to try to incorporate Canada into the discussions,” possibly as early as Thursday, said a Mexican source close to the talks.

Though NAFTA is a trilateral trade deal, “there are issues that are really bilateral issues between Mexico and the United States,” said the source. In rules of origin for autos “Mexico clearly had to look for flexibilities because Canada was relatively comfortable with the original [U.S.] proposal.”

In the meantime, Canada has remained sidelined from the talks.

“We are making progress in the chapters that will modernize our agreement, and Mexico will continue working constructively on all fronts,” Mexico’s chief NAFTA negotiator Kenneth Smith said Tuesday on Twitter.

The United States and Mexico are close to a deal to increase North American automotive content thresholds, with substantial requirements for content produced in high-wage areas, namely the United States and Canada, said the source.

The deal is expected to lift the requirement for North American content in regionally made vehicles to at least 70 percent from the current 62.5 percent. It will also likely require that some 40 percent of the value come from high-wage locations paying at least $16 an hour, meaning the United States and Canada.

Mexican and U.S. negotiators were also close to agreeing on a 5-year phase-in period for implementing the changes in the auto industry, the source said.

Opposition

Still, foreign-brand automakers with U.S. plants oppose the move to raise the amount of local content in North American-made vehicles and could throw a monkey wrench in negotiators’ plans to secure a bilateral deal this week.

The carmakers, including Toyota, Volkswagen AG and Hyundai, sent a letter to top trade-focused members of U.S. Congress expressing their concern.

The letter could spark resistance to a revamped NAFTA from lawmakers in southern states, where foreign manufacturers have built auto plants.

U.S. President Donald Trump, who launched the renegotiation of the 1994 pact a year ago, has said he wants the reworked deal to bring manufacturing jobs back to the United States, particularly in autos and auto parts.

Other key unresolved issues include the dispute settlement mechanism and a U.S. demand for a “sunset” clause that forces a renegotiation every five years, which critics argue would make long-term investment decisions more difficult.

Guajardo last month expressed hope that there could be a preliminary NAFTA deal by the end of August, but he has since appeared to pull back from that position.
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