With Venezuela’s economic crisis leaving consumers struggling to buy basic staple foods, small Caracas brewery Social Club might seem out of place selling craft beer that costs per bottle what a worker earning the minimum wage makes in two days.

But business is booming.

Demand for Social Club’s beer regularly outstrips the 3,000 liters (793 gallons) it produces a month, according to its owners. Most of it is sold on weekends at a beer garden set up in the garage of its small production facility.

Brewers like Social Club are a reminder that despite the widespread social misery caused by the country’s economic crisis, an appetite remains among well-heeled Venezuelans for high-end niche products like craft beer.

At the same time, these small brewers are carving out a market in preparation for an eventual economic rebound.

“Venezuelans continue to be vain creatures who like to be in the vanguard, who like to keep up with what’s in fashion,” said Victor Querales, 32, one of Social Club’s owners, speaking on a Friday afternoon before clients began arriving. “There’s still a premium market that isn’t very sensitive to prices.”

The country now has around 30 craft brewers with commercial operations that supply high-end liquor stores and restaurants or deliver made-to-order brews for parties or weddings, according to the Craft Beer Association of Venezuela.

Craft brew still represents less than 1 percent of the market, which remains dominated by domestic brewing giant Polar and its smaller rival Regional.

But the last five years has seen the emergence of start-ups such as Norte del Sur and Pisse Des Gottes, both of which have won medals in international brewing contests.

The fortunes of Venezuelan craft brewers contrast with those of most major industries, which operate well below capacity as triple-digit inflation and byzantine currency controls make large-scale production of almost anything nearly impossible.

Social Club offers tours of its small brew facility and an adjacent bar that sells styles ranging from bitter coffee stouts to aromatic Belgian saisons.

Its production volume is tiny, reaching about 2 percent of the 1.8 million liters per year that the Colorado-based Brewers Association describes as the maximum for the denomination “microbrewer” in the United States.

Though Social Club’s fare is exorbitant by local standards, it is among the cheapest craft brews in the world at around $0.80 for a 12-ounce (354 milliliter) glass. U.S. brewpubs would likely charge at least five times that for a similar product.

Nation of beer drinkers

Costs are nonetheless a concern.

Malt and hops must be imported because they don’t grow in Venezuela’s tropical climate, leaving brewers at the mercy of the steadily depreciating bolivar currency.

And brewers often say their biggest challenge is winning over Venezuelans unaccustomed to beers with stronger flavors and higher alcohol content than commercial alternatives.

But they believe there is room to grow, in large part because Venezuelans have always been avid beer drinkers.

In 2010, at the height of an oil-fueled economic boom, the OPEC nation had the highest per capita beer consumption in Latin America and the ninth-highest in the world, according to figures compiled by Japan’s Kirin Holdings, which owns breweries in Brazil and Australia.

But per capita beer consumption fell to 25th in the world by 2015 as the drop in oil prices pushed the economy into free-fall.

Such slumping demand means microbreweries are far from a surefire route to success.

Some young would-be entrepreneurs take brewing classes with plans to start up businesses, only to end up selling off their equipment as they raise money to emigrate, according to interviews with brewers involved in such training.

But there are unlikely success stories too.

Architect Gustavo Izarra took up home-brew after visiting his daughter in Belgium in 2012. He set up Caleta brewery in 2015, just as the demand for architectural services was collapsing along with the economy.

He has since become the go-to design consultant for breweries including Social Club that are upgrading their facilities.

“People have limited spending power, so you end up with a product that for most people is out of reach,” said Izarra, 60.

“But nonetheless, people keep getting more and more interested in trying craft beer.”

 
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A blueprint of a Republican tax overhaul plan proposes tax cuts to wealthy Americans, businesses and the middle class while protecting deductions such as those for mortgage interest and charitable contributions.

The sweeping plan was unveiled Wednesday, the beginning of negotiations to revamp the U.S. tax code. It lacks critical details about the many tax breaks the White House and Republican congressional leaders want to eliminate to offset some of the trillions of dollars in revenue that would be lost through tax cuts.

“We’re going to introduce a tax plan that’s the largest tax cut, essentially in the history of our country,” President Donald Trump said Wednesday outside the White House.  “It’s going to be something special.  You already know some of the numbers, we’re going to give you some of the additional numbers.”

Some outside budget experts estimate the blueprint could slash government tax revenue by more than $5 trillion over 10 years. To offset some of the lost revenue, Republicans must agree on the benefits to eliminate.

In order to get the bill enacted, Republican congressional leaders will have to unite their party and possibly garner some Democratic support.

The plan calls for a cut in the corporate tax rate, from 35 percent to 20 percent. It’s a goal that has long had the support of House Republicans — although President Donald Trump has consistently pushed for a 15 percent corporate rate. The plan also proposes a one-time tax on the foreign earnings of U.S. companies.

Fewer income brackets

Individual income tax brackets would be streamlined from seven to three, and a larger number of people would qualify for the Child Tax Credit, which is aimed at helping low-income working families. The credit, currently $1,000 per child, would be expanded to higher-income families.

Other proposals, such as the elimination of the estate tax and the alternative minimum tax, would benefit upper-income earners.

The plan would maintain tax breaks for charitable giving and mortgage interest, and it also proposes amendments to the tax code that would benefit education and retirement.

Republicans control the White House and both houses of Congress, giving them a rare opportunity to revamp the tax code.

“This is our once-in-a-generation opportunity to fundamentally rethink our tax code. We can unleash the economy, promoting growth, attracting jobs and improving American competitiveness in the global market,” said Senate Majority Leader Mitch McConnell, a Kentucky Republican.

Many Democrats, however, have said they will oppose changes that will increase debt or benefit the wealthiest citizens.

The Republican plan “would result in a massive windfall for the wealthiest Americans and provide almost no relief to the middle-class taxpayers who need it most,” Senate Minority Leader Chuck Schumer, a New York Democrat, told colleagues on the Senate floor.
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Architect Kobi Karp has a vision for affordable housing in the Florida Keys: residences set at coconut-tree height to keep them dry, atop concrete columns holding them in place.

Key West clients sought out his designs before Hurricane Irma struck the island chain this month, and he thinks the two projects will continue despite Irma’s damage and debris. “It’s a more cost-efficient way of life,” the Miami-based architect said.

Such modern, planned development hasn’t always appealed to the independent spirits living in the Keys — but Irma may force the laid-back landscape to change.

Mobile homes and recreational vehicles didn’t survive the storm’s 130 mph winds and storm surge. The losses hit people crucial to Keys tourism: service industry and blue collar workers priced out of expensive Key West homes or newer structures meeting Florida’s stringent building codes.

Local officials are racing to find those workers housing to keep them in the Keys but still free up hotel rooms by Oct. 20, the opening day of the decadent Fantasy Fest and one of the biggest events on the Key West tourism calendar.

The housing crunch affects all sectors of the community: About 50 city employees may need to relocate, Key West city spokeswoman Alyson Crean said. Keys firefighters who lost everything have moved into fire stations or the homes of friends and relatives. On Duval Street, bar and tour company owners said some shell-shocked employees just quit because of the damage.

“When housing is eliminated, as it was in this storm, there’s literally no place for these people to move to. There’s no suburbs, there’s no driving for an hour and a half to find someplace to live. That’s just not possible here,” said Ed Swift, president of Key West-based Historic Tours of America, where at least a handful of employees have decided not to rebuild their lives here.

The Keys don’t function like other places: There’s only one narrow road in and out, and the isolation fosters a small-town, mom-and-pop atmosphere that has persevered amid booming numbers of tourists seeking Mardi Gras-style revelry and luxury accommodations.

As Key West rents rose over the last 20 years to $2,000 a month or more for two-bedroom units, Swift and other business owners started building housing, including dormitory-style accommodations, to keep local employees. Low-cost trailers and RVs helped fill housing gaps, but there’s already talk about replacing them altogether.

That worries people like U.S. Sen. Marco Rubio, R-Fla., who sounded wistful on the Senate floor last week about a paradise potentially lost.

“This storm threatens to fundamentally alter the character of Monroe County if we do not help the Florida Keys, because those trailer parks are on valuable land, and the owners of that land are going to be tempted to build on them — not mobile homes again, but build on them structures designed for visitors or people that can pay more money,” Rubio said. “That means you’re going to lose your housing stock, but it ultimately means you’re going to lose the character of the place.”

Irma destroyed or severely damaged up to 15,000 residential units, including vacation homes  amounting to more than a quarter of the 55,000 total homes in the Keys, according to Monroe County estimates.

That also includes nearly all the 7,500 mobile homes outside Key West, said Christine Hurley, assistant county administrator.

The county has asked the Federal Emergency Management Agency for 7,500 temporary mobile homes, as well as at least 1,700 travel trailers to park outside individual homes being repaired or rebuilt. It could be months before those units reach everyone who needs them, because of low inventory after Hurricane Harvey in Texas and other disasters, county and FEMA officials say.

About two dozen families have been approved so far for temporary trailers from vendors, FEMA Federal Coordinating Officer Willie Nunn said in a county statement released Monday.

Local officials also have asked FEMA to allow vacation homes typically listed on home-sharing websites to be used as temporary housing, Hurley said. Federal officials also are exploring ways to repair or improve existing multi-family homes for temporary housing.

The county also is asking mobile home park owners to allow FEMA to set up temporary housing on their properties, once cleared of debris and reconnected to power and water lines. Those mobiles homes would eventually need permanent replacements. It would be safer to build houses or apartment buildings, but that would change the lifestyle that appeals to many Keys residents, Hurley said.

Nine of Hurley’s employees were made homeless by Irma, but even those who faced significant financial challenges before the hurricane are making their way home, she said.

“I haven’t heard yet of people that don’t want to come back,” she said.

At Sunshine Key RV Resort and Marina on Big Pine Key, Richard Lessig said he wouldn’t mind new neighbors, even in government-issued trailers. He currently doesn’t have any, not since Irma flipped or crushed all the other trailers in the park.

Lessig’s own trailer home isn’t quite level, its air conditioning runs off a rumbling generator, and there was still no running water last week.

He’s gotten by in the Keys for nine months each year with his benefits and whatever money he makes in seasonal jobs as a boat captain and a magician for children’s birthday parties. He applied for disaster aid, wondering if he would have to spend more time living with his sister in New Jersey than in the Keys. He worried some friends won’t return for the potluck lunches and happy hours that made the park a vibrant community.

“Hopefully most of them will come back, but I’m sure there’s some that won’t,” Lessig said. “I figured, worst case, I’d have to borrow money and buy another trailer, because this is where I want to be.”

 
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The 220 percent tariff imposed by the United States on Bombardier Inc’s CSeries jet is an “attack” on Quebec and Canada, the province’s Premier Philippe Couillard said on Wednesday.

“Quebec has been attacked. And Quebec will resist. And Quebec will unite. All together, we will protect our workers. All together, we will be proud of our engineering,” he told reporters at a news conference.

The government of Quebec has taken a $1 billion stake in Bombardier’s CSeries jet. But Couillard said Wednesday the company had received “not a cent” in government subsidies.

The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.
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Orders for long-lasting manufactured goods rose a modest 1.7 percent in August, reflecting a rebound in the volatile aircraft sector. A gauge of business investment was up for a second month, providing hope that a revival in manufacturing is gaining strength.

Last month’s advance in orders for durable goods followed a 6.8 percent plunge in July, the Labor Department reported Wednesday. Both months were heavily influenced by swings in orders for commercial aircraft, which surged 44.8 percent in August after having plunged 71.1 percent in July.

A closely watched category that serves as a proxy for business investment posted a 0.9 percent gain in August after a 1.1 percent increase in July. Economists believe that U.S. factory output should continue rising in coming months, reflecting a rebound in the global economy.

Manufacturing has been improving since the middle of 2016, following a two-year slump caused by cutbacks in the energy industry and a strong dollar that made U.S. goods costlier overseas. Prospects are brighter now with the dollar weakening in value this year, which makes U.S. exports more competitive on overseas markets, and a rebound in energy drilling.

The overall economy, as measured by the gross domestic product, expanded at a solid 3 percent rate in the April-June quarter after a tepid 1.2 percent gain in the first three months of the year. Analysts believe activity in the current July-September quarter will likely slow a bit, in part because of the devastation caused by hurricanes Harvey and Irma.

For August, orders excluding transportation were up 0.2 percent after a stronger 0.8 percent rise in July.

Demand for machinery rose 0.3 percent while orders for computers and related products fell 2.3 percent. Orders for autos and auto parts rose 1.5 percent after a 2.1 percent drop in July.

 
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The Commerce Department slapped duties of nearly 220 percent on Canada’s Bombardier C Series aircraft Tuesday in a victory for Boeing that is likely to raise tensions between the United States and its allies Canada and Britain.

Commerce ruled that Montreal-based Bombardier used unfair government subsidies to sell jets at artificially low prices in the U.S.

“The U.S. values its relationships with Canada, but even our closest allies must play by the rules,” Commerce Secretary Wilbur Ross said.

Canada ‘strongly disagrees’

Canada responded by saying it “strongly disagrees” with the U.S. move.

“This is clearly aimed at eliminating Bombardier’s C Series aircraft from the U.S. market,” said Chrystia Freeland, Canada’s minister of foreign affairs.

Bombardier, meanwhile, called the decision “absurd … U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition.”

In April, Boeing charged that Bombardier had received at least $3 billion in subsidies from the governments of Britain, Canada and the province of Quebec. The Chicago-based aircraft manufacturer asked the Commerce Department and the U.S. International Trade Commission to investigate the alleged “predatory pricing.”

Specifically, Boeing said that Bombardier last year sold Delta Air Lines 75 CS100 aircraft for less than it cost to build them.

“Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing’s global supply chain,” Boeing said Tuesday.

Boeing upset with Delta deal

But Delta has said Boeing didn’t even make the 100-seat jets it needed.

“Boeing has no American-made product to offer because it canceled production of its only aircraft in this size range — the 717 — more than 10 years ago,” Delta said in a statement Tuesday.

President Donald Trump campaigned on a promise to get tough on trade. He has repeatedly criticized Canada, saying it unfairly blocks U.S. dairy products and subsidizes its softwood lumber industry. Trump also has threatened to pull out of the North American Free Trade Agreement if he can’t negotiate a better version with Canada and Mexico.

Boeing’s complaint against Bombardier drew a backlash even before Tuesday’s decision. Canadian Prime Minister Justin Trudeau threatened this month to stop doing business with Boeing, which is in talks to sell Canada 18 Super Hornet jet fighters. British Prime Minister Theresa May has discussed the case with Trump. Her concern: Bombardier employs more than 4,000 workers in Northern Ireland.

Connecticut lawmakers concerned

Connecticut Democratic Sens. Richard Blumenthal and Christopher Murphy last week wrote a letter urging U.S. government officials to “refrain from taking action that will endanger the many jobs in Connecticut that depend upon Bombardier.” Engines for the C Series aircraft are made by Pratt & Whitney, based in East Hartford, Connecticut.

Commerce’s findings Tuesday aren’t the end of the matter. The department is expected to announce its findings in another case against Bombardier early next month. Then the International Trade Commission — an independent federal agency that rules on trade cases — will decide early next year whether to uphold Commerce’s duties.

Bombardier could appeal any sanctions to a U.S. court or to a dispute-resolution panel created under NAFTA. The Canadian government could also take the case to the World Trade Organization in Geneva.

 
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It is not quite going back to the horse, even if the bicycle was the first contraption to replace beasts as a means of personal transport.

This is a new two-wheeled animal, though, that millions of consumers in Beijing, Taipei, Singapore and cities across Asia are renting via phone apps to cover the last mile of journeys, leaving cars and motorcycles at home, and forgoing taxis.

The two-year bike-share boom has put over 16 million bikes in China alone, according to its Ministry of Transport, with more than 100 million riders registered, eating into car use and gasoline demand growth already expected to stagnate by 2025.

“I often use bike-sharing services because it’s very convenient. I can find it anywhere and will not worry about losing the bike,” said life-long Beijing native Wei Zhang, 36, who uses a shared bike several times a week on her commute, riding 5 km or more.

Analysts can’t keep up with bike numbers, let alone estimate how much gasoline consumption growth has dropped off due to the rapid rise in bike-sharing. But it is clear from industry estimates, government reports and a Reuters survey that bike services are resulting in fewer trips by motor vehicles.

“Bike-sharing has been crazy since late last year. … The general belief is that [it] boosts the utilization of public transport as shared bikes help to complete the journey,” said Harry Liu, downstream consultant with IHS Markit.

Even before the number of bike-share units began growing by multiples, analysts had already been saying greater fuel efficiency in autos and the rising use of electric cars meant gasoline’s big growth story was over.

China’s gasoline demand growth is expected to slow to nearly 4 percent this year, compared with 6.5 percent growth last year, said Sri Paravaikkarasu, head of East of Suez oil at FGE.

And Chinese demand for gasoline is expected to peak as early as 2025, according to state-owned China National Petroleum Corp.

“There used to be long queues of taxis waiting for customers outside train stations, but I don’t see them anymore,” said a Beijing analyst, who took part in a Reuters survey of bike-share users and wanted to be known only by her surname Wang.

Just in the past month, Chinese bike-sharing startup Mobike introduced its services in Kuala Lumpur, Malaysia, and Bangkok, Thailand, as well as in U.S. capital Washington, D.C. Mobike, which launched in April 2016, and China-owned rival Ofo have attracted combined funding of more than $2 billion from venture capital and private equity firms that include Temasek Holdings, Tencent Holdings, DST Global and Ant Financial.

Ofo — which has more than 10 million bikes globally to Mobike’s 7 million — says it is on track to increase its global bike units to 20 million over the next three months.

The investments “demonstrate investors’ confidence in the global bike-sharing industry,” said Lawrence Cao, head of Asia Pacific business for Ofo.

Consultancy Roland Berger said the “unforeseeable” amounts of venture capital put into bike schemes made it almost impossible to estimate the growth potential of bike operators, particularly in China, over the last two years.

Taiwan, where the government backs a bike-sharing scheme, is aiming to have bikes account for a 12 percent share in trips to work by 2020, up from about 5 percent now.

The Taipei city government is expanding bike-sharing program Youbike — which uses docking stations — to have a bike station within a 10-minute walk of every citizen by 2018.

Singapore-owned Obike and U.S.-based VBikes — both free-range systems — are also operating in Taiwan.

Four wheels bad

A survey done by Mobike of 100,000 customers across 36 cities in China found that car trips among the respondents had more than halved since its service was introduced.

A report from the Transport Commission of Shenzhen, one of China’s richest cities, said more than 500,000 bike-share units there had replaced nearly 10 percent of travel by private car or 13 percent of gasoline consumption.

Bike-sharing could pose a risk to gasoline consumption “if a stronger state push to reduce carbon intensity and improve air quality translates to more drivers replacing shorter-distance driving with bike rides,” said Peter Lee, an oil and gas analyst at BMI research.

Chinese growth of passenger car sales, which grew an average annual rate of 10.1 percent over 2011 to 2016, is expected to slow to 2.5 percent over the next five years, said BMI’s Lee.

Still, mismanagement of bike numbers and misuse of some bicycles may attract legislation that could curb their use. New shared bikes were recently banned in some areas in the Chinese cities of Wuhan, Shanghai and Guangzhou, because of bicycles being discarded in public spaces.
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Despite concerns about low inflation in the United States, the head of the U.S. central bank says raising interest rates gradually would be the most appropriate policy stance for the Federal Reserve.

“It would be imprudent to keep monetary policy on hold until inflation is back to two percent,” Fed Chair Janet Yellen said Tuesday, while speaking to the National Association for Business Economists (NABE) in Cleveland, Ohio.

Inflation, a sustained increase in the price of goods and services, has remained consistently below the Fed’s target rate of 2 percent. But even with uncertainty about the possible reasons for the low rate of inflation — from misjudging the strength of the labor market to the impact of foreign competition on the global supply chain — Yellen said the Fed “should be wary of moving too gradually.”

The Federal Reserve has kept its benchmark lending rate near record lows since the 2008 financial crisis to stimulate the U.S. economy. It has raised its interest rate three times since last December. The federal funds rate, the interest rate the central bank charges banks on overnight loans, currently sits in a range between one and one-and-one-quarter percent.

Ellen Zentner, chief economist at Morgan Stanley, says her biggest takeaway from the Cleveland speech was Yellen’s confidence that “a strong U.S. labor market would ultimately drive inflation closer to the Fed’s two percent goal over the next few years.”

Equity markets, which have benefited from low borrowing costs, anticipate a fourth rate hike in December, and possibly three more next year. Starting next month, the Fed says it will begin the process of “unwinding,” or selling off, the massive holdings of bonds and securities it has acquired since 2008.

But Yellen’s longer-term goals may be subject to change. Her four-year term as the nation’s top banker ends in February. President Donald Trump has not said whether he plans to re-appoint Yellen or overhaul the central bank’s seven-member board of governors.

Zentner believes there is a 60 percent chance Yellen will be named to serve a second term. “The longer the president waits, the greater the probability that Yellen will be re-appointed,” the bank economist said.  

Yellen spoke in Cleveland as the Conference Board released a survey that showed consumer confidence declined in September. The global business research group reported consumers’ views about the strength of the U.S. labor market have weakened and home sales have dropped to an eight-month low due to Hurricanes Harvey and Irma in the states of Texas and Florida. 
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