The White House on Wednesday condemned Turkey for boosting tariffs on U.S. imports, the latest confrontation between the two NATO allies.

Ankara imposed stiffer levies on U.S. cars, alcohol, coal and other products — $533 million in new tariffs — in response to U.S. President Donald Trump’s imposition of doubled tariffs on Turkish steel and aluminum exported to the United States.

The tit-for-tat tariffs came amid Turkey’s rejection of a U.S. demand that it release American pastor Andrew Brunson, detained on espionage and terrorism-related charges.

White House spokeswoman Sarah Huckabee Sanders said “the tariffs from Turkey are certainly regrettable and a step in the wrong direction. The tariffs that the United States placed on Turkey were out of national security interest. Theirs are out of retaliation.”

Sanders said even if Brunson is released, U.S. tariffs on steel would remain.

She said Turkey had treated Brunson “who we know to be a very good person and a strong Christian who has done nothing wrong, very unfairly, very badly, and it’s something that we won’t forget.”

With the dispute between the U.S. and Turkey seeming to escalate by the day, the value of Turkey’s lira currency against the dollar has plummeted, but Sanders rejected any blame on the U.S.’s part.

She said the U.S. was “monitoring the situation.” But she added that Turkey’s economic problems “are a part of a long-term trend, something of its own making and not the result of any actions the United States has taken.”

The new Turkish tariffs came a day after President Recep Tayyip Erdogan said his country would boycott U.S. electronic goods, singling out Apple’s iPhones. Erdogan has blamed the U.S. for the fall of the lira, but refused to budge on Trump’s demand for Brunson’s release.

Meanwhile, Qatar said it would make a $15 billion investment in Turkey to help the country’s ailing economy.

The investment, which will be directed to Turkey’s banks and financial markets, was announced after Qatar’s Sheikh Tamin bin Hamad Al Thani held talks in Ankara with Erdogan.

Erdogan’s economic role

Turkey’s lira has plummeted nearly 40 percent this year due to concerns over Erdogan’s growing influence on the economy. The lira has recovered somewhat from recent lows as the government cut the daily limit in the exchange of currencies with foreign countries.

Turkey and Qatar historically have been good diplomatic partners. Turkey supported Qatar after Saudi Arabia and other Arab countries cut diplomatic, trade and travel ties with Qatar last year. The Arab states accused Qatar of financing terrorism, a charge Qatar denies.
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The U.S. Securities and Exchange Commission has sent subpoenas to Tesla Inc. regarding Chief Executive Elon Musk’s plans to take the company private and his statement that funding was “secured,” Fox Business Network reported on Wednesday, citing sources.

Subpoenas typically indicate the SEC has opened a formal investigation into a matter. Tesla and the SEC declined to comment.

Musk stunned investors and sent Tesla’s shares soaring 11 percent when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal.

The electric carmaker’s shares were last down 1.9 percent at $341.00 on Wednesday. They have erased all their gains following Musk’s tweet last week.

Musk provided no details of his funding until Monday, when he said in a blog on Tesla’s website that he was in discussions with Saudi Arabia’s sovereign wealth fund and other potential backers but that financing was not yet nailed down.

The CEO’s tweet may have violated U.S. securities law if he misled investors. On Monday, lawyers told Reuters Musk’s statement indicated he had good reason to believe he had funding but seemed to have overstated its status by saying it was secured.

The SEC has opened an inquiry into Musk’s tweets, according to one person with direct knowledge of the matter. Reuters was not immediately able to ascertain if this had escalated into a full-blown investigation on Wednesday.

This source said Tesla’s independent board members had hired law firm Paul, Weiss, Rifkind, Wharton & Garrison to help handle the SEC inquiry and other fiduciary duties with respect to a potential deal.
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Corey Lewandowski, President Donald Trump’s former campaign manager, touted on Wednesday benefits he sees in federal government approval of T-Mobile US Inc’s bid to acquire Sprint Corp, while also denying that he has worked directly for the company.

Lewandowski said he remains in regular contact with the president and has daily contact with Trump’s new campaign manager Brad Parscale. He has said he does not lobby on behalf of companies, but said he does consult with some corporations about navigating the federal government.

“If the T-Mobile deal is going to move forward because it’s going to create better 5G coverage in rural areas and create more jobs in the marketplace and help grow and compete with a competitive China, then without any hesitation I say we should have more jobs, we should be more competitive,” Lewandowski said on Wednesday at an event sponsored by the Christian Science Monitor. “I have no idea what the Justice Department does on it. I haven’t spoken to anyone at the Justice Department on it.”

U.S. antitrust enforcers have started reviewing T-Mobile’s plan to buy Sprint for $26 billion, and have reached no conclusions on how many wireless carriers the country needs. The two companies compete against AT&T and Verizon to provide U.S. wireless service.

Lewandowski is among those advising the No. 3 wireless company on its deal as it prepares for what should be a tough regulatory review process, the mobile provider said in a statement in May.

Lobbying by former Trump officials has received increased attention after it was made public that Michael Cohen, the president’s former attorney, was paid $1.2 million by Novartis and $600,000 by AT&T to consult about the administration.

It is not uncommon for former political officials to lobby and consult with corporations after leaving the employment of an elected official.

A T-Mobile spokeswoman declined to comment on Lewandowski.

Lewandowski insisted he simply shares office space with a lobbying shop, Turnberry Solutions LLC, which is advising T-Mobile. Lobbying disclosure reports show T-Mobile has paid Turnberry Solutions LLC $170,000 since September 2017. T-Mobile said in May that Lewandowski “is now affiliated with [Turnberry] and they have offered perspective to T-Mobile on a variety of topics, including the pending transaction.”

“T-Mobile hired Jason Osborne and Mike Rubino, which is a firm that is also housed at the same office space that I am, and I talk to these guys all the time,” Lewandowski said when asked why T-Mobile said he was consulting with them. “I haven’t made a phone call. I’ve never called a government employee or a person and asked them to look at, help, solicit, move forward, pass any transaction, and I would challenge anybody in the room to find someone in the government who said I called and asked for a favor because I’ve never done it.”
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The U.S. on Wednesday sanctioned companies in China, Russia and Singapore it says were violating the trade embargo with North Korea, Washington’s latest effort to keep pressure on Pyongyang to end its nuclear weapons development.

The U.S. Treasury accused China’s Dalian Sun Moon Star International Logistics Trading Co., along with its Singapore-based affiliate, SINSMS Ltd., of falsifying documents to ease “illicit” shipments of alcohol and cigarettes into North Korea that netted the companies more than $1 billion a year.

The U.S. also said that Profinet Ltd. in Russia violated United Nations sanctions by providing port services to already-sanctioned North Korean-flagged ships involved in oil shipments at three eastern Russia ports. The company’s director general was also blacklisted.

The sanctions freeze any assets they may have in the U.S. and blocks Americans from doing business with them.

In announcing the sanctions, Treasury Secretary Steven Mnuchin said, “Treasury will continue to implement existing sanctions on North Korea, and will take action to block and designate companies, ports and vessels that facilitate illicit shipments and provide revenue streams” to North Korea. “Consequences for violating these sanctions will remain in place until we have achieved the final, fully verified denuclearization of North Korea.”

North Korean leader Kim Jong Un agreed at a June summit in Singapore with U.S. President Donald Trump to denuclearize the Korean peninsula, but there were no details about when and how that would occur. Since then, the U.S. and North Korea have engaged in further talks about ending Pyongyang’s nuclear ambitions, but no agreements have been reached.

 
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U.S. retail sales rose more than expected in July as households boosted purchases of motor vehicles and clothing, suggesting the economy remained strong early in the third quarter.

Other data on Wednesday showed worker productivity growing at its fastest pace in more than three years in the second quarter, but a drop in labor costs pointed to moderate wage inflation. Strong domestic demand supports expectations the Federal Reserve will raise interest rates in September for the third time this year.

The Commerce Department said retail sales increased 0.5 percent last month. But data for June was revised lower to show sales gaining 0.2 percent instead of the previously reported 0.5 percent rise. Economists polled by Reuters had forecast retail sales nudging up 0.1 percent in July. Retail sales in July increased 6.4 percent from a year ago.

Excluding automobiles, gasoline, building materials and food services, retail sales advanced 0.5 percent last month after a downwardly revised 0.1 percent dip in June. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Core retail sales were previously reported to have been unchanged in June. Consumer spending is being supported by a tightening labor market, which is steadily pushing up wages. Tax cuts and higher savings are also underpinning consumption.

July’s increase in core retail sales suggested the economy started the third quarter on solid footing after logging its best performance in nearly four years in the second quarter.

Gross domestic product surged at a 4.1 percent annualized rate in the April-June period, almost double the 2.2 percent pace in the first quarter. While the economy is unlikely to repeat the second quarter’s robust performance, growth in the

July-September period is expected to top a 3.0 percent rate.

The Fed increased borrowing costs in June and forecast two more interest rate hikes by December.

Prices of U.S. Treasuries fell and the U.S. dollar added slightly to gains immediately after the release of the data. U.S. stock index futures were trading lower.

Productivity rises

Last month, auto sales rose 0.2 percent after edging up 0.1 percent in June. Sales at clothing stores rebounded 1.3 percent after declining 1.6 percent in June. Receipts at service stations increased 0.8 percent.

Online and mail-order retail sales increased 0.8 percent, likely boosted by Amazon.com Inc’s “Prime Day” promotion. That followed a 0.7 percent rise in June. Americans

spent more at restaurants and bars, lifting sales 1.3 percent.

But receipts at furniture stores fell 0.5 percent and sales at building material stores were unchanged last month. Spending at hobby, musical instrument and book stores declined further in July, falling 1.7 percent.

In a separate report on Wednesday, the Labor Department said nonfarm productivity, which measures hourly output per worker, rose at a 2.9 percent annualized rate in the April-June quarter.

That was the strongest rate since the first quarter of 2015.

Data for the first quarter was revised lower to show productivity increasing at a 0.3 percent pace instead of the previously reported 0.4 percent rate. Economists had forecast productivity growing at a 2.3 percent rate in the second increased at a rate of 1.3 percent.

The government also revised data going back to 1947, which did not materially change the picture of lackluster productivity growth, though unit labor costs were stronger than previously estimated in 2017 because of upward revisions to hourly compensation.

The annual rate of productivity growth from 2007 to 2017 was revised up 0.1 percentage point to a rate of 1.3 percent.

Unit labor costs, the price of labor per single unit of output, fell at a 0.9 percent pace in the second quarter. That was the weakest pace since the third quarter of 2014.

First-quarter growth in unit labor costs was revised up to a 3.4 percent rate from the previously reported 2.9 percent pace.

Labor costs increased at a 1.9 percent rate compared to the second quarter of 2017, pointing to moderate wage inflation.

 
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Turkey on Wednesday announced tariff hikes on a range of U.S. goods in the latest back-and-forth move amid a deteriorating relationship between the two countries.

The extra tariffs apply to imports of vehicles, alcohol, coal, rice and cosmetics.

Turkish Vice President Fuat Oktay said on Twitter the increases were being done “within the framework of the principle of reciprocity in retaliation for the conscious economic attacks by the United States.”

President Recep Tayyip Erdogan is accusing the United States of waging a targeted economic war on his country, and on Tuesday he proposed a boycott of U.S. electronic goods.

“If they have the iPhone, there is Samsung elsewhere. In our own country we have Vestel,” said Erdogan.

Asked how U.S. President Donald Trump’s administration would react to any such Turkish boycott, White House Press Secretary Sarah Huckabee Sanders replied during Tuesday afternoon’s briefing, “I certainly don’t have a policy announcement on that at this point.” 

Trump administration sources say further sanctions against Turkey are under active consideration. But Sanders declined to say how the U.S. government plans to apply more pressure on Ankara, which repeatedly has ignored calls from Trump and others to free Christian pastor Andrew Brunson. 

Turkey accuses Brunson of espionage and is holding him under house arrest pending his trial. 

The chargé d’affaires at the U.S. embassy in Turkey, Jeffrey Hovenier, visited Brunson on Tuesday and called for his case — and those of others detained in Turkey — to be resolved “without delay” and in a “fair and transparent manner.”

National Security Adviser John Bolton met at the White House on Monday with Turkish ambassador Serdar Kilic, but the discussion reportedly did not result in any substantive progress.

Trump, who has called Brunson’s detention a “total disgrace,” last Friday doubled tariffs on Turkish steel and aluminum exports in order to increase pressure on Erdogan. 

Earlier this month, the U.S. Treasury Department sanctioned Turkey’s ministers of Justice and Interior in response to the continued detention of the pastor, who has lived in the country for 20 years and heads an evangelical congregation of about two dozen people in the port city of Izmir. 

The escalating dispute between the two countries has exacerbated Turkey’s economic crisis, pushing the lira to record lows. The Turkish currency has lost about 40 percent of its value this year against the U.S. dollar.

Erdogan has called on Turks to exchange their dollars for lira in order to shore up the domestic currency.

In a joint statement Tuesday, Turkish business groups called on the government to institute tighter monetary policy in order to combat the currency crisis. They also said Turkey should work to resolve the situation with the United States diplomatically while also improving relations with another major trading partner, the European Union.

The Turkish central bank has pledged to take “all necessary measures” to stabilize the country’s economy to make sure the banks have all the money they need. But world stock traders were dismayed the bank did not raise interest rates, which is what many economists believe is necessary to ease the crisis.

The United States and Turkey also have diverging interests over Syria, which is enmeshed in a protracted civil war. 

The differences are drawing Turkey closer to Russia, they key adversary of NATO but a country supplying more than half of Turkey’s gas.

Turkey has agreed to buy S-400 surface-to-air missiles from Russia, an unprecedented move by a NATO member, which has raised objections from members of both parties of the U.S. Congress and the Trump administration. 

Russia’s foreign minister, Sergey Lavrov, voiced support for Turkey during a joint news conference with his Turkish counterpart in Ankara on Tuesday, stating both countries plan to switch from dollars to national currencies for their mutual trade.

“We view the policy of sanctions as unlawful and illegitimate, driven mostly by a desire to dominate everywhere and in everything, dictate policies and call shots in international affairs,” said Lavrov, predicting “such a policy can’t be a basis for normal dialogue and can’t last long.

Lavrov, alongside Turkish Foreign Minister Mevlut Cavusoglu, also declared, “We are at a turning point, without exaggeration, in world history” from dominance by a single power toward a multipolar environment. 
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New Zealand school teachers went on strike on Wednesday for the first time in more than 20 years, challenging the Labor government’s plans to balance promised fiscal responsibility against growing demands to increase public sector salaries.

The government’s first budget in May was stretched to fulfill its promise to juggle investing in much-needed infrastructure with a self-imposed rule to pay down debt and insulate the economy from potential shocks.

Almost 30,000 primary school teachers did not turn up to work on Wednesday and held protests across the country, leaving parents of children aged 5 to 13 at public schools scrambling to find childcare.

“Teachers and principals voted for a full day strike…to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching,” said Louise Green, lead negotiator at NZEI, the union that represents teachers, in a statement.

NZEI said it has asked for a 16 percent pay increase for teachers over two years, whereas the government has offered between 6.1 and 14.7 percent pay rises, depending on experience, over three years.

“Our view is that we need to have those discussions around the negotiating table but…there isn’t an endless amount that we have available to us in order to meet those expectations,” Prime Minister Jacinda Ardern said at her weekly news conference on Monday.

​The action comes in the wake of a one-day nationwide nurses’ strike in July and a series of smaller actions by government workers, challenging Ardern’s center-left government, which ended almost a decade of center-right National Party rule in October.

The stand-off with its traditional union support base comes nine months after Labor formed a coalition government, promising to pour money into social services and rein in inequality, which has increased despite years of strong growth.

Wage growth has remained sluggish in the island nation for years, despite soaring housing costs, which labour groups and economists say has left workers struggling despite robust growth.

The government is also struggling with gloomy business confidence, which has sunk to decade lows and contributed to a surprise signal from the central bank on Thursday that it planned to keep rates on hold into 2020 and saw downside risks to its growth forecasts.
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Tonga Prime Minister Akalisi Pohiva has called for China to write-off debts owed by Pacific island countries, warning that repayments impose a huge burden on the impoverished nations.

Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank.

Tonga has run-up enormous debts to China, estimated at more than US$100 million by Australia’s Lowy Institute think tank, and Pohiva said his country would struggle to repay them.

He said the situation was common in the Oceania region and needed to be addressed at next month’s Pacific Island Forum summit in Nauru.

“We need to discuss the issue,” he told the Samoa Observer in an interview published on Tuesday.

“All the Pacific Island countries should sign this submission asking the Chinese government to forgive their debts.”

“To me, that is the only way we can all move forward, if we just can’t pay off our debts.”

Tonga took out the Chinese loans to rebuild in the wake of deadly 2006 riots that razed the center of the capital Nuku’alofa.

Beijing has previously refused to write-off the loans by turning them into aid grants but did give Tonga an amnesty on repayments.

Pohiva said China now wanted the debts repaid.

“By September 2018, we anticipate to pay $14 million, which cuts away a huge part of our budget,” he said.

Tonga’s ability to pay has been further dented this year by another massive rebuilding effort in Nuku’alofa, this time after a category five cyclone slammed into the capital in February.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings,” Pohiva said.

“That is why the only option is to sign a submission asking the Chinese government to forgive our debts.”

His comments come as Australia and New Zealand ramp up aid efforts in the Pacific to counter China’s growing presence in the region.

Australia has raised fears in recent months Pacific nations’ debts to China leaves them susceptible to Beijing’s influence.

It has resulted in a race to win hearts and minds in the region.

Canberra recently announced plans to negotiate a security treaty with Vanuatu, while also funding and building an underseas communications cable to the Solomon Islands and Papua New Guinea.

Meanwhile, Chinese company Huawei has agreed to build PNG’s domestic internet network with funds supplied by Exim Bank.
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