YCLOAK

U.S. and European markets fell Monday as speculation over trade wars deepened worries across the globe.

U.S. stocks fell more than 1 percent at the end of the day, while European markets were down even more.

Losses were widespread but technology stocks suffered the most, dropping more than 2 percent in its biggest one-day decline since April.

U.S. President Donald Trump has announced plans to impose tariffs on Chinese goods, citing security concerns.

The U.S. is scheduled to start raising taxes on more than $30 billion in Chinese imports in two weeks.  China has promised to retaliate immediately, putting the world’s two largest economies at odds.

On Sunday, Trump issued a warning to U.S. trading partners that unless they remove restrictions placed on American goods, they will face “more than Reciprocity by the U.S.A.”

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” Trump tweeted.

Trump has already annoyed major U.S. trading partners, including China, Canada, Mexico, the European Union and India, by imposing tariffs on steel, aluminum and other products from those countries.
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U.S. Treasury Secretary Steven Mnuchin said on Monday that forthcoming investment restrictions from the department will not be specific to China but would apply “to all countries that are trying to steal our technology.”

In a Twitter message, Mnuchin said stories on investment restrictions from Bloomberg and the Wall Street Journal “are false, fake news.”

A government official told Reuters on Sunday night that the Treasury was drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology.”

Mnuchin’s tweet came amid a difference of opinion among top Trump administration officials on how aggressive an approach should be taken in challenging China’s trade practices. The administration is still debating some aspects of the new investment restrictions that are set to be announced on Friday, a government official said.

The disagreements were also about U.S. tariffs on $34 billion worth of Chinese goods that are scheduled to go into effect on July 6, which China said would trigger retaliation involving its imports of American soybeans and motor vehicles.

Mnuchin has been on the more moderate side of the debate, along with White House economic adviser Larry Kudlow, who is recovering from a heart attack. Arguing for a more aggressive approach to tariffs and investment restrictions on China are White House trade and manufacturing adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer.

Last month, Mnuchin said a trade war with China was “on hold” after officials of the world’s two largest economies held talks in Beijing that were focused on opening more sectors of China’s economy and increasing purchases of American goods.

But on May 29, the White House announced that the Trump administration would proceed with a 25 percent tariff on $50 billion of Chinese goods and China-specific investment restrictions.

“To protect our national security, the United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology,” the White House said in the statement. “The proposed investment restrictions and enhanced export controls will be announced by June 30, 2018, and they will be implemented shortly thereafter.”

Lighthizer said that getting China to open its market to more U.S. exports was significant, but that it was far more important for the United States to resolve issues with China such as forced technology transfers and cyber theft.
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Iranian merchants in the capital’s Grand Bazaar held a rare protest Monday against the plummeting value of Iran’s currency, the rial, as other demonstrators also took to the streets.

Most shop owners closed their stores Monday in Tehran’s main bazaar as thousands of people gathered in the streets. Video posted to social media showed protesters heckling those shopkeepers who refused to close their stores, shouting “cowards.”

Demonstrators later gathered in front of parliament, about 2 kilometers from the Grand Bazaar, leading to a confrontation with police in which authorities fired tear gas at the protesters.

Iran’s semi-official news agencies described the protests at the Grand Bazaar as erupting due to the fall of the Iranian rial.

Iran’s currency has plunged almost 50 percent in value in the past six months, with the U.S. dollar now buying around 90,000 rials on the black market, despite government attempts to control the currency rate.

Earlier this year, Iran’s government set an exchange rate of 42,000 rials to $1, but this action only generated a vibrant black market.

Information and Communications Technology Minister Mohammad Javad Azari-Jahromi said Grand Bazaar merchants returned to work Monday after the government promised to help them access hard currency for their imports.

Iran’s government has been struggling with a range of economic problems, including high unemployment and growing fears about the impact of the reinstatement of U.S. sanctions after U.S. President Donald Trump abandoned the nuclear deal with Iran.

Similar economic protests roiled Iran this past December and January, spreading to around 75 cities and towns. However, those protests largely were focused in Iran’s provinces as opposed to Tehran itself.
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India is fast-tracking environmental clearances for projects like power plants and coal mines in a bid to propel growth, setting off alarm bells among environmentalists and affected residents who say the decisions are being made too quickly.

In a country where state machinery typically moves slowly, the environment ministry under Prime Minister Narendra Modi has slashed the average time taken to grant clearances to 170 days from 600 days, said two government sources with direct knowledge of the matter.

“We’re standardizing processes and taking decisions swiftly,” said one of the officials, who did not want to be named, citing government policy. “We know the basic issues, and merely taking more time for approvals does not mean much.” The environment ministry did not respond to requests for comment.

The push appears to be similar to U.S. President Donald Trump’s efforts to speed up infrastructure approvals — his administration has said it wants environmental reviews for major projects to take no longer than 21 months, instead of years.

India’s industrial sector grew at 4.3 percent last year but growth slowed from 4.6 percent a year ago. The speedier approvals come as some big-ticket infrastructure projects face delays, including the proposed $100 billion Delhi-Mumbai industrial corridor and the Japan-backed $17 billion bullet train.

Any loss of jobs from slowing growth could hurt Modi as he seeks a second term in 2019.

Environmental group Greenpeace says India’s construction sector and coal-fired power plants are major contributors to rising levels of particulate matter in the air. The World Health Organization says India is home to the world’s 14 most polluted cities.

The PM10 index, which measures the concentration of particulate matter of 10 microns diameter or less in the air, hit 999 in the capital New Delhi last week, the highest measure on monitoring devices. This coarse particulate matter is mostly dust, which attaches to toxic material from other emissions.

A level of 500 is considered “hazardous” and people are advised to remain indoors.

The government halted construction activities in the capital and nearby cities to ease the pollution and by Friday afternoon it was at 124, although that is still considered unhealthy.

“The way in which in the last 10 years government has allowed power plants to come up in the periphery of Delhi and its surrounding region is a major contributor to pollution,” said Sunil Dahiya, senior campaigner with Greenpeace.

Tribal protest

Projects across the country cleared by the environment ministry this year include three new thermal power plants, a carbon black manufacturing facility, two cement plants and the expansion of four coal mines, according to government data.

“Faster clearances can certainly compromise the quality of evaluation,” said Srestha Banerjee, program manager at the private Center for Science and Environment.

“By standardizing terms of references for various sectors the government has tried to reduce time in the environment clearance process. This is not a bad step. But in order to reduce time, it has exempted public hearing for some important sectors. This is extremely problematic.”

In India’s villages and smaller towns, protests are mounting against rapid industrialization because of the environmental damage.

The Lambada, a tribe in the southern state of Telangana, is opposing a 200 megawatt coal-fired power plant near the village of Pedaveedu that the environment ministry cleared in 78 days this year. Environmentalists say it usually takes at least six months to clear such projects.

The environment ministry did not respond to questions on the time taken for the approval.

“I won’t let this power plant be constructed,” said Mudavath Vui, a 60-year old Lambada woman dressed in a bright blue embroidered top with clinking bells and coins and colorful beads around her neck. “I have seen my husband die from cancer and I don’t want this plant to increase our suffering.”

Her community, which forms a major chunk of the population in three villages around the proposed site of the power plant to be built by privately held MG Power Projects, has also been opposing two large cement plants in the area that they accuse of triggering respiratory and other problems.

Groups of Lambada villagers frequently gather around Pedaveedu to shout slogans against the power plant.

They and activists said they plan to intensify protests against MG Power’s plant when construction starts. An MG official said the company is yet to firm up plans on starting construction.

Protests by villagers and local tribesmen have also erupted at Vedanta’s copper smelter in the southern state of Tamil Nadu, where 13 activists were killed in a protest last month, and at its bauxite mine in the state of Odisha.

“Fixed time-frame”

Securing faster environment clearances has become crucial for businesses that have struggled to overcome the chaotic implementation of a nationwide sales tax last year.

This year the environment ministry has cleared 38 percent of total projects within 100 days, compared with 16 percent in the same period a year ago, government data showed. The number of projects cleared has jumped 37 percent in the first five months of the year compared with the same period a year ago.

Gujarat Agrochem Pvt Ltd, an insecticides, chemical and herbicide manufacturer in the western state of Gujarat, secured approval in April to expand a plant after submitting its proposal at January-end. The speed surprised the company itself, its regional head Sunish Nair told Reuters.

Earlier this decade, the company had to wait two years to get the go-ahead to build a herbicide plant in Gujarat. By the time the approval came, in 2013, the project’s estimated cost had jumped 28 percent and demand for the particular product waned, Nair said.

“It seems they are now adhering to a fixed time-frame,” Nair said, welcoming the faster clearance process under the current government.

In Pedaveedu, however, the fast clearances have led to even more entrenched opposition.

“We will pour kerosene onto ourselves and die, but not let the power plant be set up,” said V. Koteshwar Rao, a resident and vice president of the Jana Chaitanya Society, a local activist group.
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Vietnam has been hit with a bona fide beer bonanza.  

Locals are crowding into new cavernous beer halls to imbibe the night away, expats are debuting one craft microbrewery after another.  Foreign brands from Heineken to Sapporo are relying on Vietnam for global sales growth, and investors are watering at the chance to snap up assets like the Sabeco brewery.

It would be easy to think that just about everyone is getting a buzz from the action.  Everyone, except the government officials now looking to crack down on beer ads.

The Ministry of Health has proposed a draft law that would restrict beer advertising, which it fears could soon become a threat to public health.  The rules would ban such ads in outdoor settings like billboards, in films and shows with children, and on social media.

Vietnam already bans ads for hard alcohol.  But in countries that prohibit ads for both beer and spirits, overall consumption is 11 percent lower than in countries that merely focus on liquor, according to Tran Thi Trang, deputy director of the Ministry of Health’s legislation department.

“Every year, the alcohol companies spend trillions of dong on advertising and marketing,” she was quoted as saying in a post on the government’s news site.  “If this did not stimulate consumption, would they spend so much money?”

Bonkers for beer

Fittingly, it is precisely the fact that Vietnamese have gone bonkers for beer that prompted her ministry to introduce the legislation.  Alcohol-infused recreation goes back a long ways, of course, from the peasants fermenting their own rice wine, to the U.S. soldiers who took a liking to the local 33 Beer in the Vietnam War.  

But today is different, as citizens in peace time have the growing wealth and leisure to down lager into the wee hours, often for less cost than a bottle of water.

Policymakers worry that as drinking culture rises, so will Vietnam’s rates of cirrhosis, addiction, and drunk driving.  The communist country already has a high prevalence of hepatitis B, the main cause of liver cancer, according to the World Health Organization.

“Beer and alcohol production play an important role in the development of the economy and society, contributing significantly to the state budget, with about [$2.2 billion]” Nguyen Van Viet, chairman of the Vietnam Beer, Alcohol, and Beverage Association, said in a government post.

This is despite WHO estimates that damage associated with alcoholic drinks, from worker productivity to public health expenses, can cost a country anywhere from 1.3-12 percent of gross domestic product.

Officials aim to balance those costs with the benefits to the economy, investment, and trade.  Even Australia gives beer a shout-out whenever boasting of improved trade with Vietnam, where it has become the biggest supplier of wheat and malt imports.

“Beer and snacks aren’t just fun,” said Regan Leggett, executive director for thought leadership at Nielsen, which released a report in March on increased discretionary spending in Vietnam and four other countries.  “They are lead indicators of continued buying preference outside of essentials.”

Beer is big business, and lobbyists also say further restrictions could put a dent in tourism.  Trang is unconvinced, though.

“If visitors come to Vietnam just because their country controls alcohol use, and Vietnam does not,” she said, “then we need to review these policies because they go against international practice.”

 
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President Donald Trump has issued a warning to U.S. trading partners that unless they remove restrictions placed on American goods, they will face “more than Reciprocity by the U.S.A.”

“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!” Trump tweeted Sunday.

Trump has already annoyed major U.S. trading partners, including China, Canada, Mexico, the European Union and India, by imposing tariffs on steel, aluminum and other products from those countries.

On Friday, Trump threatened to impose a 20 percent tariff on vehicles assembled in the European Union and shipped to the United States, in retaliation for European tariffs on American imports.

That threat was in response to EU tariffs on billions of dollars’ worth of American goods — including jeans, bourbon and motorcycles, which in turn were in response to trump’s tariffs on steel and aluminum.

The U.S. is scheduled to start taxing more than $30 billion in Chinese imports in two weeks.

Like the EU, China has promised to retaliate immediately, putting the world’s two largest economies at odds.

U.S. Chamber of Commerce senior Vice President John Murphy was cited by the Associated Press as saying he estimates that $75 billion in U.S. products could be subjected to new foreign tariffs by the end of the first week of July.

Separately, a spokesman for China’s Commerce Ministry said, “The U.S. is abusing the tariff methods and starting trade wars all around the world.”

During his presidential campaign, Trump promised to apply tariffs because he said countries around the world had been exploiting the U.S.

 
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A British minister accused Airbus and other major companies of issuing “completely inappropriate” threats and undermining Prime Minister Theresa May in a sign of growing tensions with businesses leaders over Brexit.

Aircraft manufacturer Airbus last week issued its strongest warning over the impact of Britain’s departure from the European Union, saying a withdrawal without a deal would force it to reconsider its long-term position and put thousands of British jobs at risk.

Other European companies with major operations in Britain have also started to speak out two years on from the Brexit vote, voicing concerns over a lack of clarity on the terms of trade when Britain leaves next March.

“It was completely inappropriate for businesses to be making these kinds of threats for one very simple reason — we are in an absolutely critical moment in the Brexit discussions and what that means is that we need to get behind Theresa May,” Health Secretary Jeremy Hunt told the BBC.

“The more that we undermine Theresa May the more likely we to end up with a fudge which will be absolute disaster for everyone,” he added.

German carmaker BMW has warned the company would have to make contingency plans within months if the government did not soon clarify its post-Brexit position and German

industrial group Siemens said it urgently needs clarity on how its operations would have to be organized.

The leaders of five major business lobby groups also warned the prime minister over the weekend that the ongoing uncertainty about Brexit could cost the economy billions of pounds.

Hunt, a senior figure in the government who is viewed as a potential future prime minister, dismissed “siren voices” who say Brexit negotiations are not going well and said people should ignore them.

With only nine months until Britain is due to leave the EU on March 29, little is clear about how trade will flow as May, who is grappling with a divided party, is still trying to strike a deal with the bloc.

Business leaders are increasingly concerned that their concerns are being ignored and are stepping up their contingency plans in case Britain crashes out of the EU without a deal.

The foreign minister Boris Johnson was quoted in the Telegraph newspaper by two sources over the weekend as dismissing business leaders’ concerns about the impact of Brexit, using foul language in a meeting with EU diplomats.

A spokesperson for the foreign office disputed whether Johnson had used bad language and said he had been attacking business lobbyists.

Around 100,000 supporters of the EU marched through central London on Saturday to demand that the government hold a final public vote on the terms of Brexit, organizers said.
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U.S. Energy Secretary Rick Perry will meet Russia’s energy minister next week in Washington, a person familiar with the situation said Friday, as the two countries compete to supply global markets with natural gas and crude.

Perry will meet Russia’s Energy Minister Alexander Novak on Tuesday, in the context of the World Gas Conference in Washington, the source said.

Meetings between top energy officials from Russia and the United States, two of the world’s largest oil and gas producers, have been rare in recent years.

Relations between Moscow and Washington have cooled over Russia’s annexation of Crimea in 2014 and as the Trump administration blames the Russian government for cyber attacks that targeted the U.S. power grid over the last two years.

The two countries are competing to sell natural gas to Europe. Russia’s Gazprom, the European Union’s biggest gas supplier, and several Western energy companies hope to open Nord Stream 2, a pipeline to bring Russian gas under the Baltic Sea to Germany.

The United States, meanwhile, has begun some sales of liquefied natural gas, or LNG, to Poland and Lithuania, though LNG shipments can be more expensive than gas sent via pipeline.

The United States says the advantage of its LNG is dependability and stable pricing.

The administration of U.S. President Donald Trump opposes the Nord Stream 2 pipeline, as did the administration of former President Barack Obama. Washington believes that the pipeline would give Russia, which has at times frozen deliveries to parts of Europe over pricing disputes, more power over the region.

The meeting comes as U.S. national security adviser John Bolton plans to visit Moscow next week to prepare for a possible meeting between Trump and Russian President Vladimir Putin.

Perry and Novak will also likely talk about oil markets. On Friday, the Organization of the Petroleum Exporting Countries agreed in Vienna to raise oil output by a modest amount after consumers had called for producers to curb rising fuel prices.

Russia, which is not an OPEC member, began cooperating last year with the group for the first time, holding back production to support global oil prices. Before the Vienna OPEC meeting, Novak said Moscow would propose a gradual increase in output from oil-producing countries, starting in July.
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U.S. President Donald Trump is threatening to impose a 20 percent tariff on vehicles assembled in the European Union and shipped to the United States, in retaliation for European tariffs on American imports.

On Friday, the day new EU tariffs went into effect, Trump tweeted, “…if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!”

Auto industry experts say such tariffs could negatively impact the U.S. economy, as well as Europe’s.

“It’s really a tangle; it’s not a simple question” of cars being made in one place and sold in another, Kasper Peters, communications manager of ACEA, the European Automobile Manufacturers Association, said Friday in an interview with VOA.

In March, ACEA Secretary General Erik Jonnaert noted the impact European carmakers with plants in the United States have on local economies. “EU manufacturers do not only import vehicles into the U.S. They also have a major manufacturing footprint there, providing significant local employment and generating tax revenue,” Jonnaert said in a statement.

U.S. Commerce Secretary Wilbur Ross said earlier this week that his department plans to wrap up by July or August an investigation into whether imported cars and car parts are a threat to national security. But Daniel Price, a former senior economic adviser to President George W. Bush, told The Washington Post that Trump’s threat of new tariffs “short-circuited the … process and conclusively undercut the stated national security rationale of that investigation.”

The new EU tariffs enacted Friday apply to billions of dollars’ worth of American goods — including jeans, bourbon and motorcycles.

The action is the latest response to Trump’s decision to tax imported steel and aluminum.

The U.S. is scheduled to start taxing more than $30 billion in Chinese imports in two weeks.

Like the EU, China has promised to retaliate immediately, putting the world’s two largest economies at odds. 

A U.S. Chamber of Commerce senior vice president, John Murphy, was cited by the Associated Press as saying he estimates that $75 billion in U.S. products could be subjected to new foreign tariffs by the end of the first week of July.

Separately, a spokesman for China’s Commerce Ministry said, “The U.S. is abusing the tariff methods and starting trade wars all around the world.”

“Clarity [is] still lacking about how far things will ultimately go between [the] U.S. and China and the potential ripple effect for world trade,” said financial analyst Mike van Dulken.

During his presidential campaign, Trump promised to apply tariffs, saying countries around the world had been exploiting the U.S.

A former White House trade adviser says Trump “has been so belligerent that it becomes almost impossible for democratically elected leaders — or even a non-democratic leader like [Chinese President] Xi Jinping — to appear to kowtow and give in.”

Phillip Levy, a senior fellow at the Chicago Council on Global Affairs, said, “The president has made it very hard for other countries to give him what he wants.”
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Retaliating against the Trump administration’s tariffs on steel and aluminum imports, India has raised duties on 29 U.S. goods worth about $240 million.

New Delhi made the announcement Thursday after Washington ignored its request to be exempted from the tariffs because its exports were tiny compared to others, such as China and the European Union. India accounts for about 2 percent of American imports of steel and aluminum, or $1.5 billion in sales.

India is the latest country to hit back against U.S. President Donald Trump’s tariff increases on steel and aluminum imports.

Among the items on which India will impose higher tariffs are agricultural products such as almonds, apples, walnuts, chickpeas and lentils, as well as some stainless steel products. India is the world’s biggest buyer of U.S. almonds and among the biggest importers of apples. The new tariffs will go into effect August 4.

New Delhi imposed the retaliatory tariffs amid worries that the U.S. might target India’s more significant exports, such as pharmaceuticals.

“It is an appropriate signal,” said Rajiv Kumar of the government’s policy research organization, NITI Aayog. “I am hopeful that all this will die down.”

Although the Indian levies on American products are small compared with those involved in the U.S.-China spat, the trade friction between the two democracies signals discord and uncertainty at a time when they are developing a closer strategic partnership.

India is among the countries named by Trump as following trade practices unfair to the U.S.

Speaking at the Group of Seven summit in Canada earlier this month, he said, “This isn’t just G-7. I mean, we have India, where some of the tariffs are 100 percent. A hundred percent. And we charge nothing. We can’t do that.”

Trump has repeatedly said India imposes a punitive import duty on Harley-Davidson motorcycles whereas the U.S. has much lower duties on motorcycles imported from India. His complaint prompted New Delhi to cut the import duty from 75 percent to 50 percent on high-end bikes earlier this year.

For the time being, India has kept high-end motorcycles off the list of items selected for higher tariffs.

The U.S. tariffs and counter-tariffs are “opening a Pandora’s box whereby countries will impose, retaliate, somebody will act, somebody will react. This is going to be a process that will pull everybody down,” said economist Ram Upendra Das, who heads the Center for Regional Trade in New Delhi, a research organization of India’s Commerce Ministry. He calls it “a race to the bottom.”

A trade deficit in New Delhi’s favor of about $30 billion in their annual bilateral trade of approximately $125 billion has long been an irritant for Washington. India is on the Trump administration list of countries with which it had a large deficit.

Officials from New Delhi and Washington are expected to hold trade talks next week to try to bridge their differences.

But amid growing fears that the rising wave of protectionism signaled by the U.S. tariffs threatens emerging economies like India, economists are confident that the trade disputes will be short-lived. “It has to get corrected. We will have to see how long it takes,” said economist Das.
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In comments at odds with his home state’s whiskey distillers, Kentucky’s Republican governor is downplaying fears that the European Union’s retaliatory tariffs could disrupt the booming market for the Bluegrass state’s iconic bourbon industry.

“There’s always the potential for some type of impact, but I don’t think it will be a tremendous impact,” Governor Matt Bevin said when asked about tariffs during a TV interview this week with Bloomberg.

Bevin, a regular at bourbon industry events celebrating new or expanded facilities, called the tariffs that took effect Friday a “money grab” by the EU, but sounded confident that Kentucky bourbon will expand its share of the vast European whiskey market.

“Europeans are still going to drink more bourbon this year than they did last year; they’re just going to pay more for it because their government is going to take some of it,” he said this week during an interview on CNBC’s “Squawk Box.”

Bevin referred to Europe as a “small portion” of the bourbon market, but the Kentucky Distillers’ Association said EU countries accounted for nearly $200 million of the more than $450 million in total exports of Kentucky bourbon and other distilled spirits in 2017.

Kentucky whiskey exports to EU countries have grown more than 10 percent annually in the past five years, said the Kentucky Distillers’ Association, which represents dozens of distillers, large and small. Kentucky whiskey exports overall rose by a whopping 23 percent last year, it said.

The governor’s comments downplaying the effect of tariffs stood in stark contrast to the distillers’ group, which warned that duties on American whiskey would have a “significant impact” on investment and employment in the state’s $8.5 billion bourbon sector.

“As we have said for the past few months, there are no winners in a trade war, only casualties and consequences,” the Kentucky Distillers’ Association said in its statement, which was released shortly after Bevin’s comments but did not directly refer to the governor.

Tariffs will drive up the price of Kentucky whiskey in EU markets where customers have plenty of spirits to choose from.

If a trade war breaks out, bourbon wouldn’t be the state’s biggest casualty, said University of Kentucky economics professor Ken Troske.

Kentucky’s auto parts sector could be hit hard, since many of its products are shipped to auto assembly plants in Canada and Mexico, he said Friday. Many of those vehicles are sent to the U.S. for sale. “Kentucky is a big, big player in that,” Troske said.

As for the bourbon sector, he said: “I don’t think tariffs are going to slow the growth down that much.”

The EU’s tariff action comes in response to Republican President Donald Trump’s decision to slap tariffs on European steel and aluminum. Its retaliatory move targets other American goods including Harley Davidson bikes, cranberries, peanut butter and playing cards.

Kentucky produces about 95 percent of the world’s bourbon, with such brands as Jim Beam, Evan Williams, Wild Turkey, Maker’s Mark, Woodford Reserve and Four Roses. The industry supplies about 17,500 Kentucky jobs, according to the Kentucky Distillers’ Association.

The industry is in the midst of a building boom, with more than $1.1 billion in projects planned, under way or completed in the past five years, it said. The construction includes expanded production facilities and new tourism centers.

Bevin, who routinely lavishes praise on Trump, said this week that the back-and-forth trade actions reflect “a certain amount of posturing that’s going on. It’s part of the negotiation process.” The governor said the EU has more to lose in a trade dispute.

“If they want to play this game with the United States, ultimately they’re going to lose,” he said during the Bloomberg interview. “So I don’t see that this will have long-term implications on trade between the EU and the U.S. I really don’t, but especially as it relates to bourbon. People in Europe still love bourbon, they’re still going to buy it and the European Union will just make money off it.”

Other trade disputes

Bevin’s downplaying of tariffs ran counter to comments by Senate Majority Leader Mitch McConnell, a Kentucky Republican who said during a recent speech in Louisville that tariffs “will not be good for the economy” and expressed hope that “we pull back from the brink.”

American spirits makers are being targeted for duties in other trade disputes. Mexico imposed tariffs on U.S. whiskey in response to Trump administration duties on Mexican steel and aluminum, while other countries including China and Canada are taking aim at American spirits.

Wall Street has been closely monitoring threats of a trade war. Vivien Azer, an analyst at Cowen & Co., said in a recent note that tariffs could affect a “notable piece” of international sales for Kentucky-based Brown-Forman Corp. The producer of such brands as Jack Daniel’s Tennessee Whiskey and Woodford Reserve tried to hedge against tariff-related price increases by stockpiling inventories overseas.

Small and mid-sized distilleries often don’t have the financial wherewithal to stockpile supplies. But even for the biggest distillers, stockpiling offers “only a short-term fix, as there’s only so much excess inventory” they could ship, Azer said.

But if the trade dispute drags on, “we would generally expect the tariff impact to subside over time as pricing and consumer purchase behavior adjusts,” Azer wrote.
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OPEC ministers agreed Friday to increase oil output, a move that could ease supply fears and lower world prices, but uncertainties remain about the durability of the outcome.

The agreement theoretically sees OPEC raising crude oil production by a million barrels a day, but analysts say the output will be quite a bit less because some member states have production constraints.

Saudi Arabian Oil Minister Khalid al-Falih confirmed as much to reporters at the Vienna OPEC meeting.

“We know that not all 24 countries can produce above their targets, and which is the reason the cut has increased from 1.8 to 2.8 [million barrels per day],” he said. “So what the actual volumes are released into the market is going probably to be less than a million, but the nominal figure we’re talking about is a million barrels.”

While the production increase is small compared to OPEC’s overall output, the cartel’s decision to boost supplies is a first since 2017, when it started withholding oil to prop up faltering prices. But strong oil demand this year has given a big boost to prices — sparking calls by consumers for more output.

That sentiment was echoed by U.S. President Donald Trump, who tweeted Friday that he hoped OPEC would increase output substantially.

But it’s unclear just how effective OPEC’s decision will be in lowering prices in the longer term. U.S. investment bank Jeffries Group was reported as saying the supply boost could help offset declining production and exports by Venezuela and Iran, but it also would leave spare supply capacity at its lowest level in decades. Possible Chinese tariffs against U.S. oil imports, as part of an escalating trade war, is another uncertainty.

The OPEC meeting was marked by disagreement, with Iran’s minister reportedly storming out of a meeting on Thursday. Iran opposed the output increase, while Russia and Saudi Arabia were for it. But Iran’s oil minister, Bijan Zanganeh, told reporters the ministers had agreed to a compromise.

He said they agreed to manage the market so Iran didn’t face difficulties and not to send the wrong signals to the international market.

Experts, however, believe the output increase will not benefit Iran, because the country is already exporting close to its maximum capacity. And the expected drop in oil prices will actually mean lower Iranian oil revenue.
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Turkey announced Thursday that it would impose tariffs on $1.8 billion worth of U.S. goods in retaliation for U.S. President Donald Trump’s tariffs on steel and aluminum imports.

The World Trade Organization said the new Turkish tariffs would amount to $266.5 million on products including cars, coal, paper, rice and tobacco.

Economy Minister Nihat Zeybekci said in a statement that Turkey would not allow itself “to be wrongly blamed for America’s economic challenges.”

He continued, “We are part of the solution, not the problem.”

On Wednesday, the EU announced that it had compiled a list of U.S. products on which it would begin charging import duties of 25 percent, a move that could escalate into a full-blown trade war, especially if U.S. President Donald Trump follows through with his threat to impose tariffs on European cars.

“We did not want to be in this position. However, the unilateral and unjustified decision of the U.S. to impose steel and aluminum tariffs on the EU means that we are left with no other choice,” EU Trade Commissioner Cecilia Malmstrom said in a statement.

The commission, which manages the daily business of the EU, adopted a law that places duties on $3.2 billion worth of U.S. goods, including aluminum and steel products, agricultural products, bourbon and motorcycles.

Malmstrom said that the EU response was consistent with World Trade Organization rules and that the tariffs would be lifted if the U.S. rescinded its metal tariffs, which amount to $7.41 billion.

Trump slapped tariffs of 25 percent on steel and 10 percent on aluminum on the EU, Canada and Mexico, which went into effect at the beginning of June.

Canada said it would impose retaliatory tariffs on $12.5 billion worth of U.S. products on July 1.

Mexico imposed tariffs two weeks ago on a range of U.S. products, including steel, pork and bourbon.
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