Former Foreign Secretary Boris Johnson is stepping up his campaign to be Britain’s next prime minister by challenging the European Union over Brexit terms.

Johnson told the Sunday Times he would refuse to pay the agreed-upon 39 billion-pound ($50 billion) divorce settlement unless the EU offers Britain a better withdrawal agreement than the one currently on the table.

 

The contest for leadership of the Conservative Party officially begins Monday. The post was vacated Friday by Prime Minister Theresa May, who will serve as a caretaker until a new leader is chosen and moves into 10 Downing Street.

 

The party expects to name its new leader in late July.

 

Johnson, the early frontrunner in a crowded field, told the newspaper he is the only contender who can triumph over the Labour Party led by Jeremy Corbyn and Nigel Farage’s Brexit Party.

 

Johnson is a hard-line Brexit advocate who vows to take Britain out of the EU on the Oct. 31 deadline even if there is no deal in place.

 

He and other contenders say they can get better terms from EU leaders in Brussels than the deal that May agreed to but was unable to push through Parliament. Those failures led to her decision to resign before achieving her goal of delivering Brexit.

 

But EU officials have said they are not willing to change the terms of the deal May agreed to.

 

One of Johnson’s main rivals for the post, Environment Secretary Michael Gove, continued to be sidetracked Sunday by questions about his acknowledged cocaine use when he was a youthful journalist.

 

He told BBC Sunday that he was “fortunate” not to have gone to prison following his admission of cocaine use. He said he was “very, very aware” of the damage drugs can cause.

 

Nominations for the leadership post close Monday afternoon.

 

 
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U.S. Treasury chief Steven Mnuchin said Sunday President Donald Trump would be “perfectly happy” to tax more imports from China if he cannot reach a trade deal with Chinese President Xi Jinping.

Both presidents are scheduled to meet later this month at the Group of 20 meeting in Japan.

“We made enormous progress, I think we had a deal that was almost 90% done,” Mnuchin told CNBC. “China wanted to go backwards on certain things” — a charge Beijing denies.

“We’ve stopped negotiating,” Mnuchin said, with the next steps depending on Trump’s meeting with Xi in Osaka at the G-20 summit of leaders of major economies June 28-29.

“The president will make a decision (on tariffs) after the meeting,” Mnuchin said. “I believe if China is willing to move forward on the terms that we were discussing, we’ll have an agreement. If they’re not, we will proceed with tariffs.”

Trump has already imposed tariffs on $200 billion worth of Chinese goods, but now is thinking about taxing an additional $325 billion worth of Chinese products. That would include nearly everything China exports to the U.S. The world’s two biggest economies have sparred for months over a trade deal, but have not been able to reach an agreement.

Trump’s threatened tariff hike came as G-20 finance ministers meeting in Fukuoka, Japan, said trade and geopolitical conflicts are risking global economic growth, but at the U.S. insistence, dropped a call to “recognize the pressing need to resolve trade tensions.”

“Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020,” the finance chiefs, including Mnuchin, said in an end-of-meeting communique. “However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action.”

The International Monetary Fund warned last week that a continuing U.S.-China standoff on tariffs could cut a half-percentage point from the global economy in 2020.

Meanwhile, China vowed Sunday to build what it calls a strong firewall against attempts to restrict its ability to technologically innovate.

“China … will never allow certain countries to use China’s technology to contain China’s development and suppress Chinese enterprise,” the main state-run newspaper declared.

China plans to announce details of its plans in the near future.

The Chinese statement did not mention any country by name, but the United States has restricted U.S. firms from selling technology to China’s Huawei, suspecting the company of building spyware into its telecommunications products.

The U.S. has also warned its allies against the alleged risk in buying Huawei technology.

 

 

 

 

 

 
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Rising trade tensions between the U.S. and China have sparked worries about the 17 exotic-sounding rare earth minerals needed for high-tech products like robotics, drones and electric cars. 

 

China recently raised tariffs to 25% on rare earth exports to the U.S. and has threatened to halt exports altogether after the Trump administration raised tariffs on Chinese products and blacklisted telecommunications giant Huawei.  

  

With names like europium, scandium and ytterbium, the bulk of rare earth minerals are extracted from mines in China, where lower wages and lax environmental standards make production cheaper and easier.  

  

But trade experts say no one should panic over China’s threats to stop exporting the elements to the U.S. 

 

There is a U.S. rare minerals mine in California. And Australia, Myanmar, Russia and India are also top producers of the somewhat obscure minerals. Vietnam and Brazil both have huge rare earth reserves.  

  

The sky is not falling,'' said Mary B. Teagarden, a China specialist, professor and associate dean at the Thunderbird School of Global Management in Phoenix.There are alternatives.” 

 

Simon Lester, associate director of the center for trade policy studies at the Cato Institute think tank in Washington, agreed. “Over the short term, it could be a big disruption, but companies that want to stay in business will find a way,” he said.    

Although the U.S. is among the world’s top 10 countries for rare earths production, it’s also a major importer of the minerals, looking to China for 80% of what it buys from other countries, according to the U.S. Geological Survey. China last year produced 120,000 metric tons of rare earths, while the United States produced 15,000 metric tons.  

Mountain Pass Mine

 

The United States also depends on China to separate the minerals pulled from Mountain Pass Mine, the sole rare earths mine in the U.S., which was bought two years ago by the Chicago-based JHL Capital Group LLC .  

  

“We need to develop a U.S.-based supply chain so there is no possibility we can be threatened,” said Ryan S. Corbett, managing director of JHL Capital. 

 

The mine’s top products are neodymium and praseodymium, two elements that are used together to make the lightweight magnets that help power electric cars and wind turbines and are found in electronics such as laptop hard drives. 

 

Mountain Pass, located in San Bernardino County, Calif., was once the top supplier of the world’s rare earth minerals, but China began taking over the market in the 1990s and the U.S. mine stopped production in 2002.  

  

Mountain Pass later restarted production, only to close again amid a 2015 bankruptcy. Corbett said extraction resumed last year after JHL Capital purchased the site with QVT Financial LP of New York, which holds 30%, and Shenghe Resources Holding Co. Ltd. of China, a nonvoting shareholder with 9.9%.  

  

Since then, Mountain Pass has focused on achieving greater autonomy with a $1.7 billion separation system set to go online late next year that would allow it to skip sending rare earths ore to China for that step. 

 

China could hurt itself in the long run by cutting off the U.S., specialists said.  

  

David Merriman, a rare earths analyst for Roskill commodity research in London, said that during a similar trade flap with China in 2011, Japan began looking to other countries, including Australia, for the minerals needed to manufacture electronics.   

Australian rare earths production giant Lynas Corp. Ltd. this month announced a proposed deal with Blue Line Corp. of Texas for a separation facility at an industrial site in Hondo, Texas.  

Other deposits

  

There may be other options, too. Deposits of rare earths have been detected in other U.S. states, including Wyoming and Alaska, as well in several remote areas of Canada. The Interior Department is calling for more prospecting and mining of “critical minerals,” including on public lands currently considered off-limits, and even in oceans. 

 

We have to be more forward-thinking,'' said Alexander Gysi, an assistant professor in geology and geological engineering at the Colorado School of Mines in Golden.It would be better for the U.S. to have a greater range of sources for rare earths.”
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Financial leaders of the Group of 20 gathered Saturday to brainstorm ways to adapt global finance to an age of trade turmoil and digital disruptions.

The central bank governors and other financial regulators meeting in this southern Japanese port city also flagged risks from upsets to the global economy as Beijing and Washington clash over trade and technology.

Asked if other financial leaders attending the meetings in Fukuoka were raising concerns over the impact on global markets and trade from President Donald Trump’s crusade against huge, chronic U.S. trade deficits, especially with China, U.S. Treasury Secretary Steven Mnuchin said no.

Trump and members of his administration contend that the ripple effects of the billions of dollars in tariffs imposed by Washington on Chinese exports over the past year are creating new business opportunities for other businesses in the U.S. and other countries.

But Mnuchin acknowledged that growth has been slowing in Europe, China and other regions.

“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.

The G-20 officials were expected to express their support for adjusting monetary policy, for example by making borrowing cheaper through interest rate cuts, in a communique to be issued as meetings wrap up on Sunday.

Their official agenda on Saturday was focused on longer-term, more technical issues such as improving standards for corporate governance, policing cyber-currencies and reforming tax systems to ensure they are fair for both traditional and new, online-based industries.

Ensuring that governments capture a fair share of profits from the massive growth of businesses like Google and Amazon has grown in importance over the many years the G-20 finance chiefs have been debating the reforms aimed at preventing tax evasion and modernizing policies to match a financial landscape transformed by technology.

One aim is to prevent a “race to the bottom” by countries trying to lure companies by offering unsustainably and unfairly low tax rates as an incentive.

Mnuchin said he disagreed with details of some of the proposals but not with the need for action.

“Everyone, we are now facing a turning point,” Japanese Finance Minister Taro Aso told the group. “This could be the biggest reform of the long established international framework in over 100 years.”

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. France and Britain have already enacted stop-gap tax systems for digital businesses, but they are not adequate, said French Finance Minister Bruno Le Maire.

“For the time being there is no fair taxation of this new economic model,” Le Maire said, adding that the hope is to have an agreement by the year’s end.

The issue is not confined to the wealthiest nations. Indonesia, a developing country of 260 million with more than 100 million internet users, is also struggling to keep up.

“The growth has been exponential but we cannot capture this growth in our GDP as well as in our tax revenue,” said Indonesian Finance Minister Mulyani Indrawati.

Mobile banking, big data, artificial intelligence and cloud computing are among many technologies that are expanding access to financial services for many people who in the past might not have even used banks.

But such innovations raise questions about protecting privacy and cybersecurity, Aso said.

“We need to stay vigilant against risks or challenges,” Aso said.

Japan, the world’s third-largest economy, is hosting the G-20 for the first time since it was founded in 1999. The venue for the annual financial meeting, Fukuoka, is a thriving regional hub and base for start-ups.

The G-20 groups include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.
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One down, still others to go. President Donald Trump claimed a victory after Washington and Mexico agreed on measures to stem the flow of Central American migrants into the United States.

Trump called off plans to impose a 5% tax on Mexican exports, and Treasury Secretary Steven Mnuchin, speaking to reporters Saturday in Fukuoka on the sidelines of a meeting of financial leaders of the Group of 20 major economies, urged China to follow suit and return to stalled negotiations.

Mnuchin said he planned to have a private conversation with the head of China’s central bank, Yi Gang. In a G-20 group meeting later in the day, the two were seen exchanging friendly remarks, but there were no fresh signs Beijing is ready to compromise in the dispute over trade and technology.

“From our perspective of where we are now, it is a result of them backtracking on significant commitments,” Mnuchin said. “I don’t think it’s a breakdown in trust or good or bad faith. … If they want to come back and complete the deal on the terms we were negotiating, that would be great.”

Mnuchin said he had no direct message to give to Yi, who has participated in the 11 rounds of talks so far on resolving the dispute between the world’s two largest economies over technology and trade.

He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are due to meet in Osaka for the G-20 summit on June 28-29.

“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin said. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

The deal with Mexico helps alleviate uncertainty over the deal Washington recently reached on revising the North American Free Trade Agreement. The new U.S.-Mexico-Canada deal has been heading toward a vote in Congress and might have been stymied by new tariffs. But the U.S. is still negotiating new trade deals with Japan after withdrawing from a Pacific Rim arrangement, the Obama-era proposed Trans-Pacific Partnership.

America’s huge trade deficit with China — a record $379 billion last year — is one factor driving Trump’s frustrations with Beijing.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.

“As the president has said, if we can get the right agreement, that’s great. If we can’t, we will proceed with tariffs,” he said.

 
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In May, Arkansas became the latest state to cash in on the sale of medical marijuana. Lines of people wrapped around a newly opened dispensary, drawing in customers from all four corners of the Southern U.S. state.

“I see them standing outside the window with a big smile on their face,” said Bud Watkins, manager of Doctor’s Orders RX in Hot Springs. “They love it.”

In the first week of business, Arkansan dispensaries sold more than 22.6 kg (50 pounds) of cannabis in nearly 5,000 transactions.

According to Marijuana Business Daily, that revenue will contribute to a growing national market of retail medical and recreational cannabis that is expected to eclipse $12 billion in sales by the end of 2019.

​Business good, money managing isn’t

Passed in the 2016 general election by popular vote, the Arkansas Medical Marijuana Amendment made the state one of only a few in the South to allow legal purchase of the drug. It joined, however, a majority of U.S. states that had passed similar legislation.

While business is doing well, managing the money is difficult. Despite more states coming on board, plant-touching businesses are still operating as mostly cash-only enterprises.

Plant-touching businesses handle the cannabis plant itself, either cultivating, distributing or processing it. These tend to be the businesses most people think of when they imagine the cannabis industry. Plant-touching businesses are generally subject to the strictest regulations and licensing processes in the industry, as well.

“The vast majority of the businesses that touch the plant have a very difficult time finding banking partners,” said Sal Barnes, a director at Marijuana Policy Group. “The majority of those that do (bank) are going to be through credit unions and state banks, especially in California and Colorado, where we have what we like to call an adult-use market, and that is essentially just a glorified checking account.”

​Federally outlawed since 1970

Since 1970, cannabis has been officially outlawed at a federal level for any use, including medical. This means that federally insured banks operate under prohibitive restrictions about doing any business with any plant-touching businesses, which affects everyone along the supply chain, from the growth of the plant to the production or sale of a cannabis gummy.

In spite of this, states have increasingly passed legislation to allow for the legal purchase, putting them at odds with the federal government.

“The industry is hindered. Right now, the current as-is method is not safe. You literally have companies hiring ex-Marines to guard their cash, and that just doesn’t fly,” Barnes said.

Not having access to banking services means that cannabis businesses must pay for everything in cash, from salaries to taxes. And, because the cash is usually stored on-site, robberies are very common.

“We have one of the most secure buildings in the state,” said Watkins, who didn’t want to go into too many details.

Marijuana in the mainstream

Legalizing marijuana is no longer considered a fringe issue. According to a 2018 Gallop poll, two-thirds of Americans support legalizing marijuana.

There is also bipartisan traction in Congress. In March, a U.S. House of Representatives committee passed the Secure and Fair Enforcement Banking Act of 2019, more commonly known as the SAFE Banking Act. It would provide legal protection from persecution for banks and federally regulated creditors that do business with state-legal cannabis businesses.

State attorneys, including Arkansas’ Leslie Rutledge, are now also applying pressure to see changes in federal law.

“After careful consideration and speaking with members of the banking industry, as well as our state regulatory authority, the attorney general felt that it was important for the office to support the SAFE Banking Act to help minimize fraud, tax evasion and money laundering that arises from cash only businesses,” said Rutledge’s office in an emailed statement.

Earlier this month, 38 Republican and Democratic state attorneys general sent a letter in support of the SAFE Banking Act.

“This is not just an issue facing Arkansans, but affects a majority of states,” Rutledge’s office stated. “If passed, this legislation will help Arkansas minimize the dangerous problems seen by other states, such as burglaries and robberies of dispensaries who can maintain a large quantity of cash, while at the same time, allowing legitimate businesses and service providers to also conduct business within the regulated banking system.”

As for whether the SAFE Banking Act eventually makes it to a vote, or future federal bills attempt to change banking regulations, Barnes said it’s only a matter of time.

“Next year, no. Next two to three years, possibly. Within the next four to five, definitely,” he said.
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U.S. Treasury Secretary Steven Mnuchin said Saturday that he plans to speak privately with China’s central bank governor about trade on the sidelines of annual Group of 20 finance talks in southern Japan, but has no direct message to give him.

Mnuchin and Yi Gang, chairman of the People’s Bank of China, are to hold routine talks on various issues and then break away for their discussion on trade. Yi, he noted, has participated in now-stalled talks between Washington and Beijing over the trade and technology dispute between the two largest economies.

“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin told reporters in the Japanese city of Fukuoka. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”

He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are to meet in Osaka for the G-20 summit June 28-29.

​Trump tariffs

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

Trump has also complained repeatedly about America’s huge trade deficit with China, a record $379 billion last year.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.

​‘Hearing concerns’

Asked if other financial leaders attending the meetings in Fukuoka were raising the issue, Mnuchin said no. But he acknowledged the slowdown in Europe, China and other regions.

“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.

Mnuchin and other officials in the Trump administration assert that the winners from the tariffs standoff, including the United States, will benefit from investments by companies moving their operations out of China to avoid the tariffs.

Countries were welcoming news that after a flurry of negotiations, Trump said he would refrain from imposing 5% tariffs on products from Mexico after it “agreed to take strong measures” to stem the flow of Central American migrants into the United States.

The tariffs that had been scheduled for Monday were “indefinitely suspended” after the two sides signed an agreement, he said in a tweet.

“It’s a good thing,” Japan’s central bank governor, Haruhiko Kuroda, told reporters.

On the agenda: taxes and crime

The agenda for the G-20 talks in Fukuoka on Saturday were mainly concerned with reforms of tax policies, combatting money laundering and cybercrimes, and innovations in financial technologies.

Japan is hosting the G-20 for the first time since it was founded in 1999.
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