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U.S. President Donald Trump, who campaigned against economic agreements he considered unfair to America has his first trade deal.

The United States and South Korea have agreed to revise their sweeping six-year-old trade pact which was completed during the administration of Trump’s predecessor, Barack Obama.

The agreement “will significantly strengthen the economic and national security relationships between the United States and South Korea,” according to a senior administration official in Washington.

Trump had threatened to scrap the Korea-US Free Trade Agreement (KORUS FTA), calling it “horrible.” But officials of his administration on Tuesday confirmed key aspects of the agreement which officials in Seoul had announced the previous day.

“When this is finalized it will be the first successful renegotiation of a trade agreement in U.S. history,” according to a senior U.S. official.

The tentative agreement between the United States and its sixth largest trading partner and a critical security ally in Asia comes at a time of fast-moving developments on the Korean peninsula.

In exchange for terms more favorable to American automakers, South Korea — the third largest steel exporter to the United States — is being exempted for recently announced heavy tariffs on steel rolled out by Trump. South Korea will also limit to about 2.7 tons per year shipments of steel to the United States.

“This is a huge win,” a senior U.S. official, speaking on condition of anonymity, told reporters on a conference call Tuesday evening.

Trump last week also temporarily excluded other trade partners, including Canada, the European Union and Mexico from the announced import duties of 25 percent on steel and 10 percent on aluminum, which came into effect on Friday.

Under the revisions to be made the KORUS FTA, South Korea is to allow American carmakers to double to 50,000 the number of vehicles that meet U.S. safety standards to Korea annually even though they do not comply with various local standards.

“The revisions to the KORUS FTA benefit both countries as they addressed the United States’ primary concern in autos trade, opening the South Korean market to additional exports of U.S. autos,” Troy Stangarone, the senior director of congressional affairs and trade at the Korea Economic Institute in Washington, tells VOA. “For South Korea, they addresses concerns in the dispute settlement process, while the overall revisions remained relatively narrow in scope. The agreement also takes a potentially contentious issue off of the table as the United States and South Korea prepare for critical talks with North Korea.”

Vehicle emissions standards will also be eased for U.S. vehicles imported from 2021 to 2025.

The Korea Automobile Manufacturers Association immediately called on Seoul to also ease environmental and safety standards for domestic vehicle manufacturers “to offer a level playing field.”

The balance is heavily in favor of South Korea. According to U.S. government statistics, Americans bought $16 billion  worth of passenger cars while such purchases made by South Koreans totaled just $1.5 billion.

The United States, under the revised deal, will also maintain tariffs on exports of South Korean pick-up trucks until 2041, an extension from the previously agreed 2021. However, no South Korean manufacturer is currently exporting such vehicles to the U.S. market.

U.S. officials also say that South Korea has agreed to recognize U.S. standards for auto parts.

“They will reduce some of the burdensome labeling requirements when it comes to auto parts,” a senior U.S. official told reporters.

The apparent settlement of the trade dispute comes before a planned meeting between the leaders of rival South and North Korea. Trump has also accepted an invitation relayed by the South from the North’s leader, Kim Jong Un, to meet with the U.S. president. The White House on Tuesday said planning for such a summit is still proceeding but no location or date has been decided. State Department official say they are unsure it will happen by May as previously announced.

The rival Koreas have no diplomatic relations and technically remain at war since a 1953 armistice signed by armies of China and North Korea with the United Nations Command, led by the United States.
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Europe’s bailout fund on Tuesday approved a 6.7 billion-euro ($8.32 billion) loan installment to Greece as part of its third international rescue program, with payment of the first 5.7 billion euros expected this week.

The European Stability Mechanism said the approval came after the Greek government completed a series of required reforms. The funds will be used to service public debt and clear domestic arrears.

“Today’s decision … acknowledges the hard work by the Greek government and Greek people in completing an extensive set of reforms,” said ESM head Klaus Regling. The reforms were in tax policy, privatizations and the resolution of nonperforming loans, among others.

The ESM said the initial 5.7 billion euros were to be disbursed Wednesday. The remaining 1 billion euros, to be used for clearing arrears, may be disbursed after May 1 if the country “makes progress in reducing its stock of arrears.”

Greece has depended on billions of euros from international rescue loans since 2010, and its third bailout is due to end this summer. In exchange for the money, successive governments have had to implement often painful economic and structural reforms, including tax increases and severe cuts to pensions and public spending.

Regling said he was “confident that Greece is on track to successfully exit the ESM program in August 2018, provided that the remaining reforms are implemented by the Greek government.”

Greece’s financial crisis has wiped out a quarter of the economy and led to persistently high unemployment, which continues to hover above 20 percent. The frequently unpopular reforms have also led to street protests.
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U.S. stocks sank in late trading on Tuesday, with faltering technology shares reversing a global stock rally that had swept through Asia and Europe.

Trading sessions in Asia and Europe had ended on a high note as trade fears ebbed, while U.S. equities sold off sharply in the afternoon just a day after turning in their best performance since August 2015. Tech shares tumbled partly on concerns about regulation of social media.

MSCI’s gauge of stocks across the globe shed 0.55 percent after solid gains for much of the day.

“In the absence of earnings data between last quarter and this, the market has allowed its imagination to get the best of it,” said Steve Chiavarone, portfolio manager at Federated Investors Inc.

“What we’ve done is we’ve restored the skepticism that has been the keystone of the wall of worry that the market’s been climbing.”

The S&P 500 is down 2.3 percent this year, in price terms, with investors burdened by the prospect of trade conflict undermining growth but also by fear that strong economic growth could spark inflation and harsh action by the Federal Reserve.

The S&P 500 spent most of the day above Monday’s closing prices, sometimes barely, but then deteriorated sharply in the afternoon. Once high-flying, technology stocks were the worst-performing sector, leaving a market led by defensive utilities shares.

Facebook led technology stocks lower, down 4.9 percent as the scandal over the use of data by political consultants widened after a whistleblower said Canadian company AggregateIQ had developed a program to target Republican voters in the 2016 U.S. election.

Other developments weighed on Alphabet, Nvidia, Tesla and Twitter, and the U.S. Conference Board’s consumer confidence data released on Tuesday was also weaker than expected.

The Dow Jones Industrial Average fell 344.89 points, or 1.43 percent, to 23,857.71, the S&P 500 lost 45.93 points, or 1.73 percent, to 2,612.62 and the Nasdaq Composite dropped 211.74 points, or 2.93 percent, to 7,008.81.

The day had started on better footing.

Reports of behind-the-scenes talks between Washington and Beijing spurred optimism that U.S. President Donald Trump’s protectionist shift is more about gaining leverage in trade talks than isolating the world’s biggest economy with tariff barriers that would stifle global growth.

White House officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors, Reuters reported, citing a person familiar with the discussions.

The Asian trading session left Japan’s Nikkei share index with a 2.7 percent gain for its best day in almost three months. A stronger Chinese currency against the U.S. dollar showed signs of optimism on trade. Emerging market stocks rose 0.3 percent, and copper gained 0.8 percent.

During European trading, currencies pivoted, with the yuan snapping back lower.

Data showed lending to eurozone companies slowed last month, and European Central Bank Governing Council member Erkki Liikanen said underlying eurozone inflation may remain lower than expected even if growth is robust. Those factors helped the euro lower but pushed exporters’ stocks in the region higher.

The pan-European FTSEurofirst 300 index rose 1.2 percent.

The dollar index rose 0.4 percent, with the euro moving lower on a relative basis. The yuan fell 0.2 percent against the greenback while the Japanese yen was flat.

Even with U.S. government bond investors facing a record $294 billion of new supply this week, strong buying lifted safe-haven Treasuries, with the 10-year yield hitting its lowest levels in over six weeks as stocks turned negative.

The yield on 10-year Treasury notes was down to 2.775 percent, from 2.841 percent late on Monday.

Spot gold dropped 0.6 percent to $1,344.82 an ounce, while benchmark Brent oil was last at $69.49 per barrel, down 0.9 percent.
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While China and the United States seem to be negotiating in an effort to avert a trade war, Washington is unlikely to relent in its determination to stop advanced technology from leaving America for China.

“I think there is a growing consensus in the United States that Chinese firms should be blocked from certain types of acquisitions of U.S. firms, of getting certain types of U.S. technology,” said AlexCapri, an international trade scholar at the National University of Singapore.

China has come up with a list of U.S. products it will target as part of a retaliatory action against Washington’s plan to raise tariffs on Chinese products. But it has been silent about restricting technology companies.

International action

The European Union already is considering a law that would scrutinize and block Chinese purchases of local firms for the purpose of acquiring new technology. China is worried any U.S. action would embolden European politicians and hasten the process of prohibiting Chinese acquisitions.

“I don’t know that is unique just in the United States. I think there are other European countries, Australia … so, I expect to see a lot more interference, a lot more blockage of acquisitions by either Chinese-owned funds or Chinese-owned tech firms that are looking to grow through acquisitions,” said Capri.

That has been evident in recent months as the U.S. put limits on China’s Huawei technology company and clamped down on Singapore-based Broadcom because it is connected with Chinese companies and can work as a conduit to supply technology information.

“Even in situations where you have tech firms that may not be flying a Chinese flag, if these companies are in fact doing business with other companies, then those acquisitions may be blocked,” Capri said.

It is this concern that led to Chinese Premier Li Keqiang’s announcement last week that foreign companies no longer are obliged to share their technology with local partners when they invest in China. Obligatory knowledge-sharing by foreign companies has been the bulwark of China’s technological development in past decades, and also a sore point with western companies and governments.

“China needs some foreign inputs, and to attract … high-end foreign companies,” said Xu Bin, CEIBS (China Europe International Business School) professor of finance. The country also “needs to open more in the areas where China has not been open that much,” he added.

Li’s offer also is colored by the Chinese parliament’s recent decision to remove presidential term limits, which could give President Xi Jinping perpetual rule, Xu said.

Negligible effect

For Beijing, the situation is particularly bad because it has fewer opportunities to retaliate against the U.S. tech companies like Facebook and Google (Alphabet). Twitter already faces closed doors in China.

Speaking on CNBC, Daniel Ives, head of technology at GBH Insights, said the company strongly believes that “Facebook, Amazon, Netflix and Google are ‘primarily insulated’ from tariff worries and a potential retaliatory trade war with China. Ultimately, the bark is much worse than the bite.”

Beijing also will find it extremely difficult to restrict foreign manufacturing companies and their partners in China, like Apple, which is using a Taiwanese company, Foxconn, to assemble products in Chinese cities. Such a move would hurt local firms and the domestic economy.

“For [Apple CEO Tim] Cook and company, given the tightly-woven integration between Apple and Foxconn in China, we believe there is minimal risk to this relationship,” said Ives. “… And the last thing China is going to do is tinker with the Apple machine and impact its significant billions [of dollars] of investments in the country and major consumer sales within China, despite fears.”

There is another dimension to Li’s seemingly generous offer. Many Chinese companies now want to protect their own intellectual property rights (IPR) as they venture into the U.S. and other countries. These firms have moved up the innovation value chain after starting with borrowed knowledge and are now capable of producing their own set of technologies.

“China positions itself at the forefront of world innovation. So China needs also to protect their own IPR,” said Lourdes Casonova, director at Cornell’s Emerging Markets Institute. “The initial fear that China had when they opened their economy long ago is not there as it was. So they need to protect their own IP.”

At the same time, Beijing is hoping for support from an unlikely quarter —  American multinationals that derive a substantial part of their revenues by doing business with China. That was evident last week during a conference attended by American CEOs in Beijing.

“Countries that embrace openness, trade, diversity are the countries that do exceptionally well; and countries that don’t, don’t,” Apple CEO Tim Cook said, adding, “The pie gets larger [when we are] working together. It’s not just a matter of carving it up between sides.”

Investment company Black Rock CEO Laurence Fink gave it a fine point.

“The world needs a strong China and a  strong U.S.,” he said. “The world does not need a public fight in which we reduce mutual opportunities.”
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OPEC and Russia are working on a long-term deal to cooperate on oil supply curbs that could extend controls over world oil supplies by major exporters for

many years to come.

Saudi Crown Prince Mohammed bin Salman told Reuters that Riyadh and Moscow were considering extending an alliance on oil curbs that began in January 2017 after oil prices crashed.

“We are working to shift from a year-to-year agreement to a 10-20 year agreement,” the crown prince told Reuters in an interview in New York. ”We have agreement on the big picture, but not yet on the detail.” 

Saudi Arabia recruited Russia and other producers to collaborate on oil supply curbs in 2017 after oil prices crashed and the Saudi oil minister said last week Riyadh hoped to extend that deal into 2019.

The crown prince said a flotation of 5 pct of state Saudi oil company Aramco could take place at the end of 2018 or early 2019, depending on market conditions.
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Uber Technologies has agreed to sell its Southeast Asian business to bigger regional rival Grab, the ride-hailing firms said on Monday, marking the U.S. company’s second retreat from an Asian market.

The industry’s first big consolidation in Southeast Asia, home to about 640 million people, puts pressure on Indonesia’s Go-Jek, which is backed by Alphabet’s Google and China’s Tencent Holdings Ltd.

A shake-up in Asia’s fiercely competitive ride-hailing industry became likely earlier this year when Japan-based SoftBank Group Corp’s Vision Fund made a multibillion-dollar investment in Uber. SoftBank owns stakes in most major global ride services companies, and executives have indicated they favored consolidation.

SoftBank already had investments in Grab and India’s Ola, and Vision Fund Chief Executive Rajeev Misra had urged Uber to focus less on Asia and more on profitable markets such as Latin America, a person familiar with the matter said.

Grab President Ming Maa told Reuters that SoftBank CEO Masayoshi Son was “highly supportive” of the deal, which he called “a very independent decision by both” Grab and Uber.

Uber will take a 27.5 percent stake in Singapore-based Grab and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at $6 billion after a financing round in July.

“It will help us double down on our plans for growth as we invest heavily in our products and technology,” Khosrowshahi said in a statement.

The Competition Commission of Singapore (CCS) said it has the mandate to review whether any mergers will result in a “substantial lessening of competition” and take any action to intervene in the deal, but it has yet to receive notice from the companies.

The deal will help bolster Grab’s meal-delivery service, which will merge with Uber Eats, compete with Go-Jek. Go-Jek has become a dominant player and powerful rival in Indonesia, the region’s biggest economy, and it has rapidly expanded beyond ride hailing to digital payments, food delivery and on-demand cleaning and massage.

Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins and increasing pressure for consolidation.

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion last year and is facing fierce competition at home in the United States and across Asia, as well as a regulatory crackdown in Europe.

Uber invested $700 million in its Southeast Asia business.

Uber previously sold operations in China and Russia to local rivals under former CEO Travis Kalanick. The deal with Grab is the first operations sale by Khosrowshahi, who started in September.

More consolidation

But Uber’s CEO does not want to make these mergers a pattern, and said he has no plans to do another sale in which it consolidates its operations in exchange for a minority stake in a rival.

“It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind…The answer is no,” Khosrowshahi said in a note to employees that was shared with Reuters. “One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors.”

SoftBank is also an investor in India’s Ola, another competitive and costly market where rivals have heavily subsidized rides in an effort to gain market share. But a source familiar with Uber’s strategy said the company was going to step up its battle with Ola in India, where Uber has close to 60 percent of the market, by some estimates, but is losing money.

SoftBank’s Misra sees opportunities for mergers and joint ventures between SoftBank-backed ride-hailing companies, particularly for collaborating on research and development, but the investor would never get actively involved with management decisions, the person familiar with the matter said.

Uber includes the United States, Australia, New Zealand and Latin America among its core markets — regions where it has more than 50 percent market share and is profitable or sees a path to profitability.
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White House officials are looking into whether $500 million in loans that went to Trump administration senior adviser Jared Kushner’s family real estate company may have spurred ethics or criminal law violations, according to the head of the federal government’s ethics agency.

David J. Apol, acting director of the Office of Government Ethics, said in a letter sent late last week to Rep. Raja Krishnamoorthi that the White House Counsel’s office told him that officials were probing the loans to Kushner Cos. and whether “additional procedures are necessary to avoid violations in the future.”

Krishnamoorthi, an Illinois Democrat, had asked Apol on March 1 about a New York Times report in February that Kushner Cos. accepted $184 million in loans from Apollo Global Management and $325 million from Citigroup last year over a span of several months after Kushner met with officials from the two firms. As President Donald Trump’s son-in-law and key adviser, Kushner plays an influential role in domestic and foreign policy decisions.

Both companies have insisted their officials did nothing wrong in meeting with Kushner. Both firms had financial interests overseen by the federal government at the time and both firms – either independently or through industry groups – backed elements of the tax reform legislation that passed Congress last year with support from Trump.

In one case cited by the Times, Citigroup lent $325 million to Kushner Cos. in spring 2017 shortly after Kushner met with Citi’s chief executive, Michael Corbat. Last week, Citigroup’s general counsel told several Democratic lawmakers in a letter that the loan was “completely appropriate.”

In a second case, Kushner met several times with Apollo co-founder Joshua Harris and discussed a possible White House job – followed by Apollo’s loan of $184 million to the Kushner family firm. An Apollo spokesman previously told The Associated Press that Harris “never discussed with Jared Kushner a loan, investment, or any other business arrangement or regulatory matter involving Apollo.”

In the letter to Krishnamoorthi, Apol responded to several of her questions about Kushner’s conduct during the period when his family’s real estate firm received the two loans. Apol was careful not to offer legal opinions on Kushner’s behavior, instead noting that “the White House is in a position to ascertain the relevant facts related to possible violations and is responsible for monitoring compliance with ethics requirements.”

Apol said he raised those questions with White House officials “to ensure that they have begun the process of ascertaining to determine whether any law or regulation has been violated.” During the conversations, “the White House informed me that they had already begun this process,” he said.

A spokeswoman for Kushner Cos. said Monday night that the firm had not received any correspondence or other notifications from the White House or OGE.

A spokesman for Jared Kushner at the White House was not immediately available to comment on Apol’s confirmation of the probe.
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World markets edged higher but remained jittery Monday, a result of a feared trade war between two economic powerhouses — the U.S. and China, following U.S. President Donald Trump’s announcement last week of stiff tariffs on imported Chinese steel and aluminum.

However, Chinese Foreign Ministry spokesperson Hua Chunying said Monday that China would be willing to meet with U.S. officials to work out the two countries’ trade issues. while China’s foreign ministry urged the U.S. to “stop economic intimidation” over tariffs.

Monday the Wall Street Journal reported that the U.S. asked China in a letter last week to cut the tariff on U.S. autos, buy more U.S.-made semiconductors and give U.S. firms greater access to the Chinese financial sector.

The Journal also reported U.S. Treasury Secretary Steven Mnuchin may travel to Beijing to negotiate a deal with China.  

The U.S. has accused China of unfair trade practices, including intellectual property theft and dumping Chinese goods on the global marketplace to make U.S. goods appear more expensive.

China has denied the U.S. charges, and Vice Premier Liu He told Treasury Secretary  Mnuchin in a telephone call Saturday that China is ready to defend its interests.

Meanwhile South Korea announced Monday that it has won an exemption from the stiff steel tariffs as it negotiates its trade differences with the U.S.

A senior Chinese official warned Sunday that a trade war would hurt all sides and set off a “greater conflict.”

“A trade war serves the interests of none. It will only lead to serious consequences and negative impact,” Vice Premier Han Zheng said at a development forum in Beijing. “We believe trade protectionism, against the trend, will lead to nowhere.”

Han did not mention the United States or President Donald Trump by name, whose announcement of stiff tariffs on imported Chinese steel and aluminum was answered with tariffs and duties on a list of U.S. imports.

Han appealed to all global trading partners to “cooperate with each other like passengers in the same boat… make economic globalization more open, inclusive, balanced and beneficial for all.”

 
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U.S. firearms and ammunition manufacturer Remington has filed for bankruptcy protection in order to reorganize its operations and put in place a debt reduction deal with its creditors.

The company filed its petition for the so-called Chapter 11 bankruptcy Sunday, six weeks after announcing an agreement to reduce its $950 million in debts while transferring ownership.

Remington’s filing listed both its debts and assets between $500 million and $1 billion.

The company is one of the largest firearms makers in the United States and has been in business for 200 years.

But its sales have been slumping, dropping from $865 million in 2016 to $602 million last year. In 2013, it reported more than $1.2 billion in total sales. 

A February document describing the restructuring plan estimated sales will rebound in the coming years, returning to more than $800 million by 2021.

A company report released in October of last year said the decline was due to a number of factors, including “reduced consumer demand and excess inventories,” as well as changes in buying behaviors and a rise in imported products.

It also discussed various government proposals to increase gun regulations, warning that if they were to become law “the cost to the company and its customers could be significant.”

That report, and Remington’s restructuring plan, came before the most recent mass shooting in the United States, a February attack at a Florida high school that left 17 people dead. 

Since that shooting, there has been an increase in calls for more gun control. Several major retailers have instituted changes in gun sales policies that range from stopping gun sales to raising the minimum age of those eligible to purchase firearms. 

Banking giant Citigroup also announced it would require new retail clients to insist on background checks for gun purchases as well as a ban on sales to people under the age of 21. The state of Florida similarly enacted a new law limiting gun purchases to those age 21 and older.

Many Americans believe current gun laws are appropriate or too strict, while a new poll indicates growing support for stricter measures.

The poll by the The Associated Press and NORC Center for Public Affairs Research released Friday said 69 percent of Americans support stricter gun control, up from 61 percent in October 16 and 55 percent when the poll first asked the question in October 2013.
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