YCLOAK

President Donald Trump is to tell American autoworkers Wednesday in the state of Michigan that he is setting aside strict fuel-economy requirements imposed by the previous administration in its waning days.

The Trump White House contends that action broke an earlier agreement with the auto industry to wait until 2018 to review the standards.

“The auto industry, rightly, cried foul,” a senior White House official told reporters Tuesday. “We’re going to get this midterm review back on track.”

Advocates of the tougher standards dispute that.

The year 2018 “was the deadline by which they were obligated to complete the review. No agreement was broken,” Therese Langer, transportation program director at the American Council for an Energy Efficient Economy (ACEEE) told VOA News.

“The agencies completed a comprehensive technical assessment report in July 2016, which made clear that the standards as adopted remained feasible and cost-effective. At that point, making the decision promptly was consistent with the goal of providing adequate lead time for manufacturer product planning.”

Setting standards

The Trump administration wants to set standards “that are technologically and economically feasible,” according to the official who briefed reporters on condition he not be named.

Some automakers argued that the tougher standards, set just prior to the January inauguration, will be too costly.

The pro-business president and his new head of the Environmental Protection Agency, Scott Pruitt, who has expressed skepticism about the scientific consensus on climate change, support rolling back the stricter standards.

But the administration cannot scrap the Corporate Average Fuel Economy (CAFE) mandate completely without Congress’ consent. Lawmakers originally approved the CAFE regulations in the mid-1970s, following the oil embargo by OPEC members.

The current issue deals with rules on fuel economy and emissions affecting automobiles that will appear in showrooms from the years 2022 through 2025.

The proposed vehicle standards for those model years “will save consumers tens of billions of dollars at the pump and help domestic automakers stay competitive in a global vehicle market that is moving steadily toward highly efficient vehicles,” ACEEE executive director Steve Nadel told VOA.

Detroit automakers

But the move to cars and trucks that do not rely on conventional fossil fuels, such as gasoline and diesel, has slowed, say those in the Trump administration and in the auto industry.

“Because we have low gas prices, consumers just aren’t buying those vehicles” that run on batteries in addition to or instead of fuel, said the Trump administration official briefing reporters at the White House.

Trump’s trip to Michigan will include meetings with Detroit automakers, suppliers and unions, and then attending a rally of automakers.

At the last event Wednesday, the president is to announce his intention to stall the goal of having a fleet average of 54.5 miles per gallon (23.2 kilometers per liter) by the year 2025.

One hitch for the industry and other proponents of the looser standards is that 13 states say they will follow California in adhering to stricter fleet fuel efficiencies – a market that makes up more than 40 percent of the U.S. automotive sales market.

“That’s an issue we’ll have to confront, but it’s farther down the road,” the senior White House official said when asked about that issue by reporters.
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China is warning about the possible impact of a trade war with the United States, even as the world’s two biggest economies take steps to map out relations under the administration of President Donald Trump.

Speaking at an annual news conference Wednesday, at the end of high-level political meetings in Beijing, Chinese Premier Li Keqiang talked up the benefits of good relations between the two countries. He said he was optimistic about ties, but also warned a trade war would hurt American businesses first.

“We do not want to see any trade war breaking out between the two countries. That would not make our trade fairer and would harm both sides,” Li said. “Our hope on the Chinese side is that no matter what bumps the China-U.S. relationship hits, we hope it will continue to move forward in a positive direction.”

Getting personal

Chinese state media this week have been releasing a steady drumbeat of opinion pieces and editorials supporting that view. Some even going so far as to highlight the personal benefits Trump’s business empire would reap through better economic relations with China.

One opinion piece in the Communist Party-backed Global Times highlighted the huge business interests Trump’s commercial empire has in China and Beijing’s recent and unprecedented “preliminary approval” of more than 30 Trump trademarks. The approval of so many trademarks at once – covering business ventures such as golf clubs, hotels and restaurants – has surprised analysts.

Much like Li did in the press conference Wednesday, the Global Times article argued that American businesses would suffer if there was a trade war. It also added a not so subtle threat: “Trump’s position as U.S. president would not offer his business immunity from a trade war with China and would be impacted just as other U.S. enterprises if Sino-U.S. relations were to suffer.”

The piece ended by arguing that one tough test of Trump’s political wisdom will be how he manages following through on his pledge to put “America First” while avoiding setbacks in U.S.-China relations.

Tough talk

On the campaign trail and since his election, President Trump’s blunt criticisms of China have unnerved leaders in Beijing. Trump has talked and Tweeted about a wide range of issues from trade to the South China Sea, as well as Beijing’s handling of North Korea.

But it is his threats on the campaign trail to label China a currency manipulator and to impose huge tariffs on Chinese goods that worry Beijing the most. So far, he has not followed through on either of those pledges, but the U.S. Treasury will issue a semi-annual currency report in April.

 

That continues to unnerve Beijing despite recent signs that the two sides are beginning to engage.

 

Reports this week have suggested that Trump and Xi could meet in early April in Florida. On Saturday, Secretary of State Rex Tillerson will make his first trip to Beijing.

 

Fairer trade

 

In an interview with CNBC earlier this week, Acting Assistant Secretary of State Susan Thornton said Tillerson’s visit would help set up the relationship going forward and lay out a framework for issues on which Washington wants to see progress.

 

And one of the key issues for that visit that she highlighted in that interview was fairer trade.

 

“While we have a very important economic relationship with China, it hasn’t been a level playing field vis a vis U.S. companies and U.S. interests,” Thornton said. “We are going to be insisting that there be fair trade measures that be put in place and that be observed and implemented.”

 

Concerns about the lack of a level-playing field for American businesses in China and the impact of trade on U.S. jobs persist. Last year, the United States trade deficit with China was $347 billion, down only slightly from the previous year.

 

At his press conference, Li pledged that China would continue to open up its economy and argued that American companies and others were already seeing benefits.

 

 “We may have different statistical methods, but I believe whatever differences we may have, we can always sit down and talk to each other, and work together to reach consensus,” Li said.

 

China’s premier also added that statistics show that trade and investment between the two countries created over one million jobs in the United States last year.
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Asia needs to make extra efforts to defeat hunger after progress has slowed in the last five years, including promoting so-called “smart crops” as an alternative to rice, the head of the U.N. food agency in the region said.

Kundhavi Kadiresan, representative of the Food and Agriculture Organization (FAO) in Asia, said the region needs to focus on reaching the most marginalized people, such as the very poor or those living in mountainous areas.

The Asia-Pacific region halved the number of hungry people from 1990 to 2015 but the rate of progress slowed in many countries – such as Afghanistan, Bangladesh, India and Cambodia – in the last five years, according to a December FAO report.

“The last mile is always difficult.. so extra efforts, extra resources and more targeted interventions are needed,” she told the Thomson Reuters Foundation on the sidelines of a business forum on food security in Jakarta on Tuesday.

She said government and businesses needed to develop policies to help make food more affordable, while changing Asians’ diets that rely heavily on rice.

“We have focused so much on rice that we haven’t really looked at some of those crops like millets, sorghum and beans,” she said.

A campaign is underway to promote these alternatives as “smart crops” to make them more attractive, Kadiresan said.

“We are calling them smart crops to get people not to think about them as poor people’s food but smart people’s food,” she said, adding that they are not only nutritious but also more adaptable to climate change.

Soaring rice prices, slowing economic expansion and poorer growth in agricultural productivity have been blamed for the slowdown in efforts to tackle hunger.

More than 60 percent of the world’s hungry are in Asia-Pacific, while nearly one out of three children in the region suffers from stunting, according to the FAO.

Achieving zero hunger by 2030 is one of the U.N.’s Sustainable Development Goals adopted by member states in 2015.
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Niagara Falls, whose most famous thrill-seekers have gone over the brink in barrels, wants to be the place the rest of us go for outdoor adventure, too.

 

A new marketing effort launched Tuesday rebrands the American shore of the falls as a natural playground to be explored on foot, bike, boat or helicopter.

 

U.S. tourism officials, ever in competition with their counterparts on the heavily developed Canadian side of the binational attraction, say their new focus embraces the American side’s less commercial feel in a way they hope will attract more visitors for longer stays.

 

“What people are wanting to have on a getaway or a vacation is a time of experience and not just to come and witness or see and hear, but actually experience and touch and feel and do,” said John Percy, president and chief executive of Niagara Tourism & Convention Corp., which has been renamed Destination Niagara USA.

 

“Niagara Falls is the embodiment of America’s adventurous spirit,” he said.

 

The refocusing, coming just in time for the busy season, followed interviews, focus groups and visitor surveys that found that those who visit and live in the region most value its scenic, historical and natural attributes and are drawn to outdoor adventure, officials said.

 

The findings align with support in recent years for the ongoing removal of a highway that was built along the Niagara River, which will increase access to the water’s edge, as well as strong opposition to a proposal to build a lodge on rustic Goat Island inside Niagara Falls State Park. Opponents of the lodge cite renowned landscape architect Frederick Law Olmsted’s declaration more than 100 years ago that the area should be off-limits to developers.

 

It’s a marked contrast to Niagara Falls, Ontario, where neon-lit museums, rides and restaurants offer a carnival-like atmosphere at the water’s edge.

 

Niagara Falls State Park sees about 8 million visitors every year from all over the world, a number that has been steadily rising, Percy said, along with hotel visits and dollars spent.
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Brazil’s top public prosecutor asked the Supreme Court to open 83 new investigations into senior politicians on Tuesday, reportedly including five ministers and leading lawmakers, in a dramatic escalation of a graft probe threatening the government.

Prosecutor General Rodrigo Janot also requested that the Court send 211 other requests to lower courts based on much-anticipated testimony by dozens of executives of engineering group Odebrecht SA in Brazil’s biggest-ever corruption scandal.

Brazilian newspapers reported that Janot called for an investigation of five members of President Michel Temer’s cabinet, along with his most senior allies in Congress, raising concerns about the stability of his administration and the fate of fiscal reforms cheered by investors.

Temer said last month that he would suspend any cabinet member who is placed under investigation and would dismiss them only if they are indicted for corruption.

Under Brazilian law, cabinet ministers, federal senators and lower house lawmakers can be tried only in the Supreme Court, where cases often take years to come to trial.

Janot could not disclose the names of the politicians and others covered by his request as the Odebrecht testimony and related investigations are still under seal. He asked Supreme Court Justice Edson Fachin to lift the judicial secrecy on the case for the sake of transparency and the public interest.

In a letter to explain the operation, Janot said his actions on Tuesday will remind Brazilians “of the sad reality of a democracy under attack by the corruption and the abuse of political and economical powers.”

President Temer himself has not been directly implicated in illicit party funding and has denied any wrongdoing in the sprawling three-year corruption scandal centered on overpriced contacts at state-run oil company Petroleo Brasileiro SA.

Dozens of politicians reportedly named for taking kickbacks in the testimony by Odebrecht executives included senators in Temer’s Brazilian Democratic Movement Party (PDMB) and the allied Brazilian Social Democracy Party (PSDB), which led the impeachment of leftist Dilma Rousseff last year.

Janot called for lower courts to investigate Rousseff and her predecessor and political mentor Luiz Inacio Lula da Silva, according to newspapers O Globo, O Estado de S.Paulo and Folha de S.Paulo. Both former presidents have repeatedly denied any involvement or knowledge of alleged corruption.

Test for Temer

The new investigations will be a test for Temer as he strives to pull Latin America’s largest nation out of its worst recession in more than a century.

Temer succeeded Rousseff in May, vowing to eliminate corruption and restore fiscal discipline, but he has already lost several ministers to bribery allegations.

His chief of staff, Eliseu Padilha, a key organizer of political support in Congress for a crucial reform of Brazil’s costly pension system, is on thin ice after an Odebrecht executive was reported to have said he asked for a cash donation for Temer’s 2014 campaign.

Newspapers Globo, Folha and Estado reported that Padilha and four other members of Temer’s cabinet were on Janot’s list: Foreign Minister Aloysio Nunes, Science Minister Gilberto Kassab, Cities Minister Bruno Araújo and Wellington Moreira Franco, the head of Temer’s high-profile infrastructure privatization program.

Janot also called for the investigation of key Temer allies in Congress, according to the newspapers, including lower House Speaker Rodrigo Maia and the three most senior PMDB senators: Senate President Eunicio Oliveira and senators Romero Juca and Renan Calheiros.

Foreign Minister Aloysio Nunes said he required access to Janot’s accusations and will only comment when he is aware of the content. Cities Minister Araújo said he has asked for campaign donations from Odebrecht in the past, but did so in accordance with the law.

Senator Romero Jucá said he is available to collaborate with investigations and believes facts will be clarified.

Reuters was not able to confirm the media reports. The other politicians cited were not immediately available for comment, but they all have consistently denied wrongdoings.

The PMDB released a statement on Tuesday expressing support for the investigations and calling for “the clarification of the facts of the matter.”

PSDB said it has always defended the Car Wash investigation, believing that it is the only way to separate guilty from innocent.

Finance Minister Henrique Meirelles said news of the investigation should not hurt progress on the government’s pension reform.

Janot first opened investigations of seated politicians implicated in the kickback scandal in March 2015, but only five have been indicted and none convicted.

The new round of investigations fueled by the Odebrecht testimony follows 10 months of negotiations with the family-owned firm, Latin America’s largest engineering group.

In December, Odebrecht signed a leniency accord with prosecutors, agreeing to pay 6.7 billion reais ($1.9 billion), admit guilt and offer details of bribes it paid.

Seventy-seven of its executives, including family patriarch and Chairman Emilio Odebrecht and his jailed son and former Chief Executive Marcelo Odebrecht, made some 950 statements to a team of 116 prosecutors across the country, Janot’s office said.
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Airline industry group IATA said it remains concerned about protectionist rhetoric from the United States and other governments, but also sees the new U.S. administration’s plans to invest in infrastructure as positive for the industry.

IATA’s Director General Alexandre de Juniac told reporters in Abu Dhabi on Tuesday that the group had recently held a meeting with U.S. President Donald Trump’s administration, which he described as “positive”. However, he also said the group was “heavily concerned” about plans by governments “to raise barriers on borders for trade and for travel.”

He did not say when the meeting took place.

“It was the opportunity for us to meet the new administration, to express our view and to understand what the new administration had in mind for aviation,” de Juniac said, adding that U.S. plans looked positive in terms of investment in infrastructure and regulation.

IATA and its members were critical of President Trump’s Jan. 27 executive order that blocked refugees and nationals of seven Muslim majority countries from traveling to the United States.

Many in the industry have said the ban was rolled out haphazardly without clear communication, causing chaos and confusion at airports globally. The Trump administration’s revised travel ban is due to come into effect on Thursday.

As well as in the United States, IATA is still concerned about “significant” protectionist rhetoric in Europe and other parts of the world, although it would take time before protectionist measures are felt in the industry, De Juniac said.

This year has started off better than expected, he said.

Passenger demand reached a five-year high in January.

However, IATA said in December that it expects profit in the airline industry to fall this year after a five-year rally and de Juniac said that view remained unchanged.
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Most analysts predict the U.S. central bank will boost interest rates slightly on Wednesday as the economy nears full employment and inflation rises modestly.

Leaders of the U.S. Federal Reserve are gathered in Washington through Wednesday to debate interest rate policy.  

Experts at Moody’s Investor Service say the Fed will raise rates a quarter of a percent and predicts a couple of similar increases later this year.  Moody’s says even with several increases, rates will still be low enough to encourage growth.

The Fed slashed the benchmark interest rate nearly to zero during the recession to bolster growth and fight unemployment.  Many economists say declines in unemployment mean the economy no longer needs such help.

If officials keep interest rates too low for too long, they risk sparking an abrupt inflationary jump that could force the Fed to raise rates high and fast, disrupting the economy.  Officials raise interest rates to cool the economy and fend off inflation.  Overall, the Fed is trying to guide the economy toward full employment while keeping prices increases around two percent a year.

More evidence of economic strength was published Tuesday, as leaders of many of the largest U.S. companies raised their outlook for hiring, sales, and investment for the next six months.  The Business Roundtable represents companies that employ 15 million people and generate $6 trillion in annual revenues.  

These CEOs are eager to see promised cuts in taxes and regulation carried out in ways that help their businesses grow.
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Aspiring property moguls take note – the town of Tiller, Oregon, is for sale, asking price just $3.5 million. For an extra $350,000, you can have the old school too.

The mostly uninhabited, unincorporated town about 225 miles (362 km) south of Portland originally went up for sale in 2015, but that did not include the building that used to house the school, said Garrett Zoller, the owner of Land and Wildlife, the real estate firm selling the 250-acre (100-hectare) town.

The current deal, at a reduced price, includes six houses and an apartment, industrial and commercial lots, and a building that once housed a gas station and general store. Adding the school, on an adjacent parcel, swing sets and all, would set a buyer back about $3.85 million.

About 250 people live in the surrounding area. But aside from the family that owns and is now selling the town, only two residents remain in Tiller itself, a former teacher who lives next to the school, and the pastor of the local church. Neither of their parcels is for sale, Zoller said in a phone interview on Monday.

The emptying out of the town came as timber harvesting declined in the region and the town’s mill closed, he said.

“When the federal money started dwindling away for timber, basically the mill shut down,” Zoller said. “And when the mill shut down, a lot of the loggers started having to go away.”

The family that owns Tiller now, he said, accumulated the town lot by lot as other families left.

Daydreamers aside, a complete town could also be an opportunity for a developer, Zoller said, since part of the town has already been divided for a 13-acre (5-hectare) subdivision.

He said he had fielded calls from would-be buyers ranging from Chinese investors to people interested in starting medical facilities and hemp-growing operations.
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China is witnessing a rare protest from heads of some major Chinese companies who say government controls on the outflow of funds are hurting their ability to strike business deals overseas. Starting late last year, the government began imposing strict controls on currency transfers in a desperate bid to curb outbound investments and stop the yuan from weakening. 

 

Last year alone, Chinese companies struck deals overseas worth $225 billion; but according to data compiled by Bloomberg, there have only been $19 billion in acquisitions abroad, announced by Chinese companies so far this year, a 74 percent drop from the previous year. 

Beijing asked banks to closely scrutinize money transfers, and reject requests from certain companies to move funds to foreign countries for investments in late 2016, a year when Chinese companies struck deals overseas worth $225 billion. China feels that massive fund outflows put pressure on the Chinese Yuan, which has been steadily devaluing against the U.S. dollar since early last year. 

The government clampdown has had a significant effect. According to Bloomberg’s data, there has only been $19 billion in acquisitions abroad announced by Chinese companies so far this year, a 74 percent drop from the previous year. 

Feeling the pinch

 

On the sidelines of high-level political meetings in Beijing, a time typically seen as an opportunity to build consensus and not air dissent, business leaders who attended the talks were blunt in their criticism of the controls.

 

Zhang Yichen, chief executive officer of investment firm Citic Capital Holdings, told reporters that it is almost impossible to use the yuan to invest overseas.

 

“To say that capital controls don’t have any impact – it’s a lie,” said Zhang.

 

Zheng Yuewen, chairman of Chinese drugmaker Creat Group, said, “The foreign exchange management is so strict now that it’s almost impossible to move funds out.”

 

Investments plunge 

 

Over the past two months, China’s outbound investments have nearly been cut in half and government controls are a key reason for this, Julian Evans-Pritchard, China economist for Capital Economics, told VOA.

 

“It has certainly hurt a lot of Chinese companies who are active in the overseas market,” he said. “But I don’t think the government is going to ease controls until outbound flows come down to the level it is comfortable with.”

 

According to China’s Ministry of Commerce, outbound investments plunged by 39.5 percent in December 2016 and 35.7 percent in January of this year as the government began applying the brakes. The drop was dramatic when compared to the surge seen in the previous two months when outbound investments increased 48.4 percent in October and 76.5 percent in November of last year. 

 

The government’s control of fund outflows could become even more stringent as the U.S. Federal Reserve is expected to review interest rates this week. A rate increase would make it more lucrative to invest in the United States, and make it increasingly difficult for Beijing to stem the exodus of money, analysts said. 

 

Standing firm

 

Although the blunt remarks from CEOs were aimed at persuading officials such as the head of the People’s Bank of China and others to loosen restrictions, the government is showing little sign of budging.

At a press conference on the sidelines of the Beijing meetings, People’s Bank of China Chairman Zhou Xiaochuan stuck to the government’s view that curbs were necessary to manage the currency. He also blamed “irresponsible investments” made by Chinese companies in foreign markets for causing the problems.

 

Zhong Shan, China’s minister of commerce, said a small number of companies was investing “blindly and irrationally overseas” and running into a range of financial problems. He said that is hurting the image of Chinese investors overseas; but, he did assure investors that what he called “normal investments” would not be impacted.

 

“There are clearly some who are of the view that China is cooling down, that it is not encouraging investments overseas, but this view is incorrect,” said Zhong.

 

Analysts agree that not all investments are off limits, but the government’s statements downplay the impact controls are having. A quick glance at the numbers reveals that clearly there are some types of investments authorities are looking to slow.

 

No superheroes

 

Right now, there is a big focus on property developers looking to invest overseas, said Andrew Collier, managing director of Orient Capital Research. Media and entertainment investments are also facing challenges, he said, but adds the government is being very selective about just who it is saying no to.

 

“They are focusing most of their opposition on deals where they feel have no value to the Chinese country,” Collier said. In some cases, the government is saying, “It might be nice for you and your business to expand your business overseas, but we don’t think that making films about superheroes is going to benefit the Chinese economy.”

 

Chinese companies such as Dalian Wanda have been ramping up investments in Hollywood and entertainment over the past year. Last Friday, however, a $1 billion deal for the Chinese conglomerate to purchase Dick Clark Productions – which produces the Golden Globe Awards – fell through.

 

At the same time, however, a $43 billion deal between ChemChina and Swiss crop protection and seed group Syngenta is moving forward.

 

“That is a very large deal, and so far there has been no opposition to it,” Collier said. “If you have a deal for a-half-a-billion or a billion dollars it might get a lot of attention in the press, but it is actually not that much money compared to some of the other stuff that is still committed to be going forward.

 
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Political tension between China and Taiwan has affected cooperation on safety standards leading to a large number of cosmetic and food imports being stopped from entering China, the head of China’s quality watchdog said on Tuesday.

China deems Taiwan a wayward province to be taken back by force if necessary, though proudly democratic Taiwan has shown no interest in being ruled by autocratic China.

China is deeply suspicious of Taiwan President Tsai Ing-wen, who took office last May, believing she wants to push for the island’s independence, a red line for Beijing. Tsai says she wants to maintain peace with China.

Beijing has cut off official communication with Taipei because Tsai has refused to accept China’s view that the island is a part of China, and has put pressure on the trade-reliant island diplomatically and economically.

China’s quality chief Zhi Shuping told reporters on the sidelines of China’s annual meeting of parliament that, although cosmetic and food imports do not account for a large percentage of China’s imports from Taiwan, a large number of imports of those products were substandard.

“Originally we had lots of cooperation, but now certainly it has been obstructed. Some information is not as smooth as it had been in the past,” Zhi said, referring to the period after Tsai took office.

Things would get better if Taiwan recognized the “1992 consensus”, he said.

The “1992 consensus”, agreed with Taiwan’s previous China-friendly Nationalist government, acknowledges Taiwan and China are part of a single China, but allows both sides to interpret who is the ruler.

“Communication would be a lot smoother,” Zhi said. “We all belong to one China, and blood is thicker than water.”

Defeated Nationalist forces fled to Taiwan in 1949 after losing a civil war with the Communists.

Some Taiwanese companies also don’t really understand China’s standards, Zhi said, and Taiwan’s own quality standards have weak points and loopholes.

“We give feedback on each batch, but rectification is not good enough,” he said.

“We treat everyone in the world the same when it comes to safety. Brothers are brothers, but principles are principles.

Just because you’re a brother doesn’t mean we make things easier for you,” he Zhi said.

There have been repeated safety scandals over made-in-China goods, from tainted baby milk formula and rotten meat to fake rice and toxic toothpaste, unsettling consumers around the world, including in Taiwan.
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