The 800,000 federal workers who are not being paid or are working without pay during the partial government shutdown were the first to feel its impact. But as Anna Kook reports, other segments of the economy are also being hurt, especially in Washington, home to the largest number of federal workers in the country.
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The 800,000 federal workers who are not being paid or are working without pay during the partial government shutdown were the first to feel its impact. But as Anna Kook reports, other segments of the economy are also being hurt, especially in Washington, home to the largest number of federal workers in the country.
…

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U.S. officials expect a visit from China’s top trade negotiator this month in Washington, signaling that higher-level discussions are likely to follow this week’s talks with midlevel officials in Beijing as the world’s two largest economies try to reach a deal to end a tit-for-tat tariff war.

“The current intent is that the Vice Premier Liu He will most likely come and visit us later in the month and I would expect the government shutdown would have no impact,” U.S. Treasury Secretary Steven Mnuchin told reporters Thursday in Washington. “We will continue with those meetings just as we sent a delegation to China.”

The U.S. government is in the 20th day of a partial shutdown with President Donald Trump, a Republican, and congressional Democrats feuding over funding and Trump’s desire for a wall on the U.S.-Mexico border.

People familiar with the talks in Beijing said Thursday that hopes were mounting that Liu would continue talks with U.S. Trade Representative Robert Lighthizer and Mnuchin.

Higher level, key decisions

Talks at that level are viewed as important for making the key decisions to ease a festering trade war, which has disrupted trade flows for hundreds of billions of dollars worth of goods and roiled global markets.

Trump has demanded better terms of trade with China, with the United States pressing Beijing to address issues that would require structural change such as intellectual property theft, forced technology transfers and other non-tariff barriers.

On Thursday Trump said the United States was having “tremendous success” in its trade negotiations with China. A spokeswoman for Lighthizer’s office declined to comment.

​Few details on progress

More than halfway through a 90-day truce in the U.S.-China trade war agreed on Dec. 1 when Trump and Chinese President Xi Jinping met at the G20 summit in Argentina, there have been few details provided of any progress made.

Trump has vowed to increase tariffs on $200 billion worth of Chinese imports March 2 if China fails to take steps to protect U.S. intellectual property, end policies that force American companies to turn over technology to a Chinese partner, allow more market access for U.S. businesses and reduce other non-tariff barriers to American products.

Ambitious timeline and hope

The timeline is seen as ambitious, but the resumption of face-to-face negotiations has bolstered hopes of a deal.

“We have the two sides back at the table. That’s encouraging,” said Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs, while speaking to reporters at an event Thursday.

China’s commerce ministry said Thursday that additional consultations with the United States were being arranged after the Beijing talks addressed structural issues and helped establish a foundation to resolve U.S. and Chinese concerns.

Commerce ministry spokesman Gao Feng told reporters the two sides were “serious” and “honest.”

Asked about China’s stance on issues such as forced technology transfers, intellectual property rights, non-tariff barriers and cyber attacks, and whether China was confident it could reach agreement with the United States, Gao said these issues were “an important part” of the Beijing talks.

“There has been progress in these areas,” he said without elaborating.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfers.

‘Cordial standoff’

Discussions on those issues were an extensive part of the talks, said people in Washington familiar with the discussions.

Chinese officials listened “politely” to U.S. grievances, they said, but responded by saying that the Americans had some issues wrong and misunderstood others, but that some other issues could be addressed.

“It was a cordial standoff,” said one person familiar with the discussions. China has said it will not give ground on issues that it perceives as core.

On Wednesday, the U.S. Trade Representative’s office said officials from the two sides discussed “ways to achieve fairness, reciprocity and balance in trade relations,” and focused on China’s pledge to buy a substantial amount of agricultural, energy, manufactured, and other products and services from the United States.”

The U.S. trade agency said the talks also focused on ways to ensure enforcement and verification of Chinese follow-through on any commitments it makes to the United States.

Steps taken

U.S. and Chinese officials made more progress on straightforward issues such as working out the details of Chinese pledges to buy a “substantial amount” of U.S. agricultural, energy and manufactured goods and services, sources said.

Since the Trump-Xi meeting, China has resumed purchases of U.S. soybeans. Buying had slumped after China imposed a 25 percent import duty on U.S. shipments of the oilseed on July 6 in response to U.S. tariffs.

China has also cut tariffs on U.S. cars, dialed back on an industrial development plan known as “Made in China 2025” and told its state refiners to buy more U.S. oil.

Earlier this week, China approved five genetically modified crops for import, the first in about 18 months, which could boost its overseas grains purchases and ease U.S. pressure to open its markets to more farm goods.
…

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U.S. officials expect a visit from China’s top trade negotiator this month in Washington, signaling that higher-level discussions are likely to follow this week’s talks with midlevel officials in Beijing as the world’s two largest economies try to reach a deal to end a tit-for-tat tariff war.

“The current intent is that the Vice Premier Liu He will most likely come and visit us later in the month and I would expect the government shutdown would have no impact,” U.S. Treasury Secretary Steven Mnuchin told reporters Thursday in Washington. “We will continue with those meetings just as we sent a delegation to China.”

The U.S. government is in the 20th day of a partial shutdown with President Donald Trump, a Republican, and congressional Democrats feuding over funding and Trump’s desire for a wall on the U.S.-Mexico border.

People familiar with the talks in Beijing said Thursday that hopes were mounting that Liu would continue talks with U.S. Trade Representative Robert Lighthizer and Mnuchin.

Higher level, key decisions

Talks at that level are viewed as important for making the key decisions to ease a festering trade war, which has disrupted trade flows for hundreds of billions of dollars worth of goods and roiled global markets.

Trump has demanded better terms of trade with China, with the United States pressing Beijing to address issues that would require structural change such as intellectual property theft, forced technology transfers and other non-tariff barriers.

On Thursday Trump said the United States was having “tremendous success” in its trade negotiations with China. A spokeswoman for Lighthizer’s office declined to comment.

​Few details on progress

More than halfway through a 90-day truce in the U.S.-China trade war agreed on Dec. 1 when Trump and Chinese President Xi Jinping met at the G20 summit in Argentina, there have been few details provided of any progress made.

Trump has vowed to increase tariffs on $200 billion worth of Chinese imports March 2 if China fails to take steps to protect U.S. intellectual property, end policies that force American companies to turn over technology to a Chinese partner, allow more market access for U.S. businesses and reduce other non-tariff barriers to American products.

Ambitious timeline and hope

The timeline is seen as ambitious, but the resumption of face-to-face negotiations has bolstered hopes of a deal.

“We have the two sides back at the table. That’s encouraging,” said Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs, while speaking to reporters at an event Thursday.

China’s commerce ministry said Thursday that additional consultations with the United States were being arranged after the Beijing talks addressed structural issues and helped establish a foundation to resolve U.S. and Chinese concerns.

Commerce ministry spokesman Gao Feng told reporters the two sides were “serious” and “honest.”

Asked about China’s stance on issues such as forced technology transfers, intellectual property rights, non-tariff barriers and cyber attacks, and whether China was confident it could reach agreement with the United States, Gao said these issues were “an important part” of the Beijing talks.

“There has been progress in these areas,” he said without elaborating.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfers.

‘Cordial standoff’

Discussions on those issues were an extensive part of the talks, said people in Washington familiar with the discussions.

Chinese officials listened “politely” to U.S. grievances, they said, but responded by saying that the Americans had some issues wrong and misunderstood others, but that some other issues could be addressed.

“It was a cordial standoff,” said one person familiar with the discussions. China has said it will not give ground on issues that it perceives as core.

On Wednesday, the U.S. Trade Representative’s office said officials from the two sides discussed “ways to achieve fairness, reciprocity and balance in trade relations,” and focused on China’s pledge to buy a substantial amount of agricultural, energy, manufactured, and other products and services from the United States.”

The U.S. trade agency said the talks also focused on ways to ensure enforcement and verification of Chinese follow-through on any commitments it makes to the United States.

Steps taken

U.S. and Chinese officials made more progress on straightforward issues such as working out the details of Chinese pledges to buy a “substantial amount” of U.S. agricultural, energy and manufactured goods and services, sources said.

Since the Trump-Xi meeting, China has resumed purchases of U.S. soybeans. Buying had slumped after China imposed a 25 percent import duty on U.S. shipments of the oilseed on July 6 in response to U.S. tariffs.

China has also cut tariffs on U.S. cars, dialed back on an industrial development plan known as “Made in China 2025” and told its state refiners to buy more U.S. oil.

Earlier this week, China approved five genetically modified crops for import, the first in about 18 months, which could boost its overseas grains purchases and ease U.S. pressure to open its markets to more farm goods.
…

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Federal Reserve Chairman Jerome Powell on Thursday stressed again that the U.S. central bank can be patient in approving any further rate increases as officials gauge whether the U.S. economy will slow this year, as some in financial markets worry, or continue motoring ahead as the Fed itself expects.

Powell’s second appearance in less than a week generated a subdued response in financial markets, a sign he may have found his footing in how to describe central bank policy without surprising investors. Several of his recent appearances have generated large market swings in both directions.

With no sign of excessive inflation or outsized risk in financial markets, Powell said the Fed would be “waiting and watching” in coming months.

“Especially with inflation low and under control, we have the ability to be patient and watch patiently and carefully as we … figure out which of these two narratives is going to be the story of 2019,” Powell said at the Economic Club of Washington.

 

WATCH: Despite Volatility in Retail Stocks, US Officials Predict Continued Growth

The S&P 500 edged up 0.45 percent on Thursday, while yields on Treasury securities were unchanged. In contrast, his remarks in his three previous appearances since late November moved stocks an average of 2.4 percent in either direction, and his comments last Friday spurred the largest market reaction yet to any of his 17 public appearances since taking office last February.

The S&P gained 3.43 percent, and the yield on the 10-year Treasury note rose 11 basis points.

In that appearance Powell emphasized the Fed’s flexibility and patience in evaluating data, easing expectations of steady rate hikes in a message amplified by a half dozen other Fed officials in recent days.

Bullard is blunt

In remarks at an appearance in Little Rock, Arkansas, on Thursday, St. Louis Fed President James Bullard was blunt, saying that the central bank had reached the “end of the road” in its current rate increase cycle.

Powell and others have been less demonstrative and noted that economic data remains strong, particularly after a recent payroll report that showed more than 300,000 jobs added in December. 

The central bank’s vice chairman, Richard Clarida, said later on Thursday that if the global slowdown and tightening of financial markets persists, the Fed would take policy steps to offset that. It would not want to wait too long to see overseas weakness affect the U.S. economy, he added.

Powell on Thursday also reiterated that, separate from what happens with interest rates, the Fed would continue allowing its nearly $4 trillion portfolio of bonds to shrink each month, to a level “substantially smaller” than it is now.

The monthly reductions, effectively running on autopilot, have been criticized by some as a steady tightening of financial conditions the Fed should reconsider.

New narrative 

 Still, Powell’s comments and those of other officials “are developing a new narrative … Big picture: they don’t have that much further to go and they don’t have to go there fast,” said Robert Tipp, chief investment strategist with PGIM Fixed Income in Newark, New Jersey.

Part of that message is meant to downplay the significance of the policy projections that officials issue every three months. The latest forecasts issued in December suggested rates could rise by a median of two more times in 2019, but Powell said it was a mistake to construe that as any sort of official forecast or “plan.”

“There is no such plan,” Powell said. “That was conditional on a very strong outlook for 2019,” which may or may not materialize, with the Fed adjusting policy accordingly.

The U.S. central bank raised rates four times last year in the face of robust economic growth and unemployment that touched its lowest level in half a century.

Fed officials and many forecasters expect growth to slow in 2019, but to remain strong enough to continue generating jobs and keeping the unemployment rate near its almost 50-year low.

No evidence of recession

While markets may be concerned about global trade tensions and slower growth overseas, Powell said there is no evidence of a U.S. recession on the horizon. If conditions weaken, the Fed would react.

“There is no pre-set path for rates … particularly now,” he said. If global growth slows more, “I can assure you … we can flexibly and quickly move policy, and we can do so significantly if that’s appropriate,” he added. 

The Fed chief was also asked about the partial U.S. government shutdown. He said an “extended” shutdown would show up in economic data “pretty quickly” and, since it shutters some agencies that provide economic data, it would also make the picture of the economy less clear for the Fed.
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Federal Reserve Chairman Jerome Powell on Thursday stressed again that the U.S. central bank can be patient in approving any further rate increases as officials gauge whether the U.S. economy will slow this year, as some in financial markets worry, or continue motoring ahead as the Fed itself expects.

Powell’s second appearance in less than a week generated a subdued response in financial markets, a sign he may have found his footing in how to describe central bank policy without surprising investors. Several of his recent appearances have generated large market swings in both directions.

With no sign of excessive inflation or outsized risk in financial markets, Powell said the Fed would be “waiting and watching” in coming months.

“Especially with inflation low and under control, we have the ability to be patient and watch patiently and carefully as we … figure out which of these two narratives is going to be the story of 2019,” Powell said at the Economic Club of Washington.

 

WATCH: Despite Volatility in Retail Stocks, US Officials Predict Continued Growth

The S&P 500 edged up 0.45 percent on Thursday, while yields on Treasury securities were unchanged. In contrast, his remarks in his three previous appearances since late November moved stocks an average of 2.4 percent in either direction, and his comments last Friday spurred the largest market reaction yet to any of his 17 public appearances since taking office last February.

The S&P gained 3.43 percent, and the yield on the 10-year Treasury note rose 11 basis points.

In that appearance Powell emphasized the Fed’s flexibility and patience in evaluating data, easing expectations of steady rate hikes in a message amplified by a half dozen other Fed officials in recent days.

Bullard is blunt

In remarks at an appearance in Little Rock, Arkansas, on Thursday, St. Louis Fed President James Bullard was blunt, saying that the central bank had reached the “end of the road” in its current rate increase cycle.

Powell and others have been less demonstrative and noted that economic data remains strong, particularly after a recent payroll report that showed more than 300,000 jobs added in December. 

The central bank’s vice chairman, Richard Clarida, said later on Thursday that if the global slowdown and tightening of financial markets persists, the Fed would take policy steps to offset that. It would not want to wait too long to see overseas weakness affect the U.S. economy, he added.

Powell on Thursday also reiterated that, separate from what happens with interest rates, the Fed would continue allowing its nearly $4 trillion portfolio of bonds to shrink each month, to a level “substantially smaller” than it is now.

The monthly reductions, effectively running on autopilot, have been criticized by some as a steady tightening of financial conditions the Fed should reconsider.

New narrative 

 Still, Powell’s comments and those of other officials “are developing a new narrative … Big picture: they don’t have that much further to go and they don’t have to go there fast,” said Robert Tipp, chief investment strategist with PGIM Fixed Income in Newark, New Jersey.

Part of that message is meant to downplay the significance of the policy projections that officials issue every three months. The latest forecasts issued in December suggested rates could rise by a median of two more times in 2019, but Powell said it was a mistake to construe that as any sort of official forecast or “plan.”

“There is no such plan,” Powell said. “That was conditional on a very strong outlook for 2019,” which may or may not materialize, with the Fed adjusting policy accordingly.

The U.S. central bank raised rates four times last year in the face of robust economic growth and unemployment that touched its lowest level in half a century.

Fed officials and many forecasters expect growth to slow in 2019, but to remain strong enough to continue generating jobs and keeping the unemployment rate near its almost 50-year low.

No evidence of recession

While markets may be concerned about global trade tensions and slower growth overseas, Powell said there is no evidence of a U.S. recession on the horizon. If conditions weaken, the Fed would react.

“There is no pre-set path for rates … particularly now,” he said. If global growth slows more, “I can assure you … we can flexibly and quickly move policy, and we can do so significantly if that’s appropriate,” he added. 

The Fed chief was also asked about the partial U.S. government shutdown. He said an “extended” shutdown would show up in economic data “pretty quickly” and, since it shutters some agencies that provide economic data, it would also make the picture of the economy less clear for the Fed.
…

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Rising global authoritarianism, trade protectionism and the weakening of global institutions threaten U.S. businesses, the head of the U.S. Chamber of Commerce warned Thursday.

In his annual address, Chamber of Commerce CEO Tom Donohue said for now the U.S. economy is strong and business owners are consistently optimistic, crediting “deregulation and tax reform.”

But Donohue also defended the system of alliances and multilateral institutions set up by the United States after World War II – an implicit criticism of U.S. President Donald Trump’s “America First” policies.

“The U.S. and our allies spent the last 70 years working to expand democracy and freedom,” Donohue said. “Today, we face the task of rebuilding domestic consensus for supporting democracy abroad.”

Donohue also warned against domestic political dysfunction, including the inability of U.S. lawmakers to pass immigration reform.

The comments come amid a prolonged partial government shutdown related to President Donald Trump’s demand for Congress to provide funds to build a wall on the southern U.S. border.

Building the wall would fulfill a key campaign promise for Trump, who regularly portrays immigrants as a threat. Though he didn’t criticize Trump directly, Donohue said immigrants are crucial to the U.S. economy.

“Employers don’t have the workers they need at every skill level in key industries such as health, agriculture, manufacturing, and transportation,” Donohue said. “Our nation must continue to attract and welcome industrious and innovative people from all over the world.”

U.S. lawmakers, he said, should reach a compromise that would provide legal protection for the so-called Dreamers, who came to the U.S. illegally as children. He also called for Congress to approve the “resources necessary to secure the border.”

Donohue also slammed Trump’s trade policies, saying tariffs on China and other countries are “taxes paid by American families and American businesses, not by foreigners.”

“Instead of undermining our own economy, let’s work with our allies to apply pressure on China and use the tools provided by the U.S. trade and international laws that we helped create,” he said.

 

WATCH: Despite Volatility in Retail Stocks, US Officials Predict Continued Growth

​
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Rising global authoritarianism, trade protectionism and the weakening of global institutions threaten U.S. businesses, the head of the U.S. Chamber of Commerce warned Thursday.

In his annual address, Chamber of Commerce CEO Tom Donohue said for now the U.S. economy is strong and business owners are consistently optimistic, crediting “deregulation and tax reform.”

But Donohue also defended the system of alliances and multilateral institutions set up by the United States after World War II – an implicit criticism of U.S. President Donald Trump’s “America First” policies.

“The U.S. and our allies spent the last 70 years working to expand democracy and freedom,” Donohue said. “Today, we face the task of rebuilding domestic consensus for supporting democracy abroad.”

Donohue also warned against domestic political dysfunction, including the inability of U.S. lawmakers to pass immigration reform.

The comments come amid a prolonged partial government shutdown related to President Donald Trump’s demand for Congress to provide funds to build a wall on the southern U.S. border.

Building the wall would fulfill a key campaign promise for Trump, who regularly portrays immigrants as a threat. Though he didn’t criticize Trump directly, Donohue said immigrants are crucial to the U.S. economy.

“Employers don’t have the workers they need at every skill level in key industries such as health, agriculture, manufacturing, and transportation,” Donohue said. “Our nation must continue to attract and welcome industrious and innovative people from all over the world.”

U.S. lawmakers, he said, should reach a compromise that would provide legal protection for the so-called Dreamers, who came to the U.S. illegally as children. He also called for Congress to approve the “resources necessary to secure the border.”

Donohue also slammed Trump’s trade policies, saying tariffs on China and other countries are “taxes paid by American families and American businesses, not by foreigners.”

“Instead of undermining our own economy, let’s work with our allies to apply pressure on China and use the tools provided by the U.S. trade and international laws that we helped create,” he said.

 

WATCH: Despite Volatility in Retail Stocks, US Officials Predict Continued Growth

​
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China’s Commerce Ministry says that the United States and Beijing made progress in discussions about structural issues such as forced technology transfers and intellectual property rights during trade talks this week. But the lack of details from both sides following the meetings highlights the uncertainty that remains, analysts say.

The talks, which were originally scheduled to wrap up on Tuesday stretched to the evening and into Wednesday.

 

U.S. officials have said the talks are going well, a point Commerce Ministry spokesman Gao Feng echoed on Thursday at a regular briefing.

 

“The length of the meetings shows that both sides were serious and sincere about the talks,” he said. “Structural issues were an important part of this round of talks and there has been progress in these areas.”

 

Gao did not comment, however, on whether he was confident that the talks could be wrapped up in the 90-day period laid out by President Donald Trump and China’s Xi Jinping.

 

Also, he did not say when the next round of talks might be held or who might attend, only that discussions between the two sides continue.

 

In early December, Washington and Beijing agreed to hold off on raising tariffs and to try and reach a deal before the beginning of March. Structural issues and concerns about barriers to investment in China are seen as some of the biggest obstacles to the deal.

 

On Wednesday, White House spokeswoman Sarah Sanders told the U.S cable news Fox Business Network that the administration is expecting something to come out of the talks.

“We are moving towards a more balanced and reciprocal trade agreement with China,” she said, adding that no one knows yet what that agreement will look like or when it will be ready.

The U.S. Trade Representative’s office gave only a few details about the talks in Beijing, noting in a statement that the discussions “focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”

At the briefing, Gao did not provide any details about what further purchases China might make.

Darson Chiu, an economist and research fellow at the Taiwan Institute of Economic Research, said the pledges China made looked similar to those it had offered earlier last year. He said it was hard to be optimistic about this first round of talks.

“It looks like short-term compromises have been made, but it remains to be seen if both superpowers are able to resolve their [structural] conflicts,” Chiu said.

 

He said that if more compromises are made when Chinese Vice Premier Liu He meets U.S. Trade Representative Robert Lighthizer, an official who is viewed as being more hawkish on trade with China, the crisis will only be halfway averted.

 

“I don’t think the U.S. will easily remove tariffs that have been imposed on Chinese goods. This is what China has wished for, but I think the U.S. will wait and see,” Chiu said.

 

Issues such as intellectual property enforcement are very difficult and complex, notes Xu Chenggang, a professor of economics at Cheung Kong Graduate School of Business. China can say it will do more, but it already has laws for intellectual property protection.

 

“Really here the key is the reality,” Xu said. “It’s the enforcement of the law and the enforcement of the law is an institutional issue,” which depends on the independence of China’s judiciary system.

 

Washington has given Beijing a long list of changes that it would like to see from intellectual property rights protection enforcement to industrial subsidies and other non-tariff barriers.

The United States has said that any deal with China must be followed up with ongoing verification and enforcement.

If the two sides are unable to reach a deal by March, President Trump has threatened to raise tariffs on $200 billion in Chinese goods to 25 percent and to possibly levy additional tariffs that would extend to all imports from China.

Joyce Huang contributed to this report.
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China’s Commerce Ministry says that the United States and Beijing made progress in discussions about structural issues such as forced technology transfers and intellectual property rights during trade talks this week. But the lack of details from both sides following the meetings highlights the uncertainty that remains, analysts say.

The talks, which were originally scheduled to wrap up on Tuesday stretched to the evening and into Wednesday.

 

U.S. officials have said the talks are going well, a point Commerce Ministry spokesman Gao Feng echoed on Thursday at a regular briefing.

 

“The length of the meetings shows that both sides were serious and sincere about the talks,” he said. “Structural issues were an important part of this round of talks and there has been progress in these areas.”

 

Gao did not comment, however, on whether he was confident that the talks could be wrapped up in the 90-day period laid out by President Donald Trump and China’s Xi Jinping.

 

Also, he did not say when the next round of talks might be held or who might attend, only that discussions between the two sides continue.

 

In early December, Washington and Beijing agreed to hold off on raising tariffs and to try and reach a deal before the beginning of March. Structural issues and concerns about barriers to investment in China are seen as some of the biggest obstacles to the deal.

 

On Wednesday, White House spokeswoman Sarah Sanders told the U.S cable news Fox Business Network that the administration is expecting something to come out of the talks.

“We are moving towards a more balanced and reciprocal trade agreement with China,” she said, adding that no one knows yet what that agreement will look like or when it will be ready.

The U.S. Trade Representative’s office gave only a few details about the talks in Beijing, noting in a statement that the discussions “focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”

At the briefing, Gao did not provide any details about what further purchases China might make.

Darson Chiu, an economist and research fellow at the Taiwan Institute of Economic Research, said the pledges China made looked similar to those it had offered earlier last year. He said it was hard to be optimistic about this first round of talks.

“It looks like short-term compromises have been made, but it remains to be seen if both superpowers are able to resolve their [structural] conflicts,” Chiu said.

 

He said that if more compromises are made when Chinese Vice Premier Liu He meets U.S. Trade Representative Robert Lighthizer, an official who is viewed as being more hawkish on trade with China, the crisis will only be halfway averted.

 

“I don’t think the U.S. will easily remove tariffs that have been imposed on Chinese goods. This is what China has wished for, but I think the U.S. will wait and see,” Chiu said.

 

Issues such as intellectual property enforcement are very difficult and complex, notes Xu Chenggang, a professor of economics at Cheung Kong Graduate School of Business. China can say it will do more, but it already has laws for intellectual property protection.

 

“Really here the key is the reality,” Xu said. “It’s the enforcement of the law and the enforcement of the law is an institutional issue,” which depends on the independence of China’s judiciary system.

 

Washington has given Beijing a long list of changes that it would like to see from intellectual property rights protection enforcement to industrial subsidies and other non-tariff barriers.

The United States has said that any deal with China must be followed up with ongoing verification and enforcement.

If the two sides are unable to reach a deal by March, President Trump has threatened to raise tariffs on $200 billion in Chinese goods to 25 percent and to possibly levy additional tariffs that would extend to all imports from China.

Joyce Huang contributed to this report.
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The United States says talks in Beijing on ending a bruising trade war focused on Chinese promises to buy more American goods. But it gave no indication of progress on resolving disputes over Beijing’s technology ambitions and other thorny issues.

China’s Ministry of Commerce said Thursday the two sides would “maintain close contact.” But neither side gave any indication of the next step during their 90-day cease-fire in a tariff fight that threatens to chill global economic growth.

That uncertainty left Asian stock markets mixed Thursday. Share prices had risen Wednesday after President Donald Trump fueled optimism on Twitter about possible progress.

The U.S. Trade Representative, which leads the American side of the talks, said negotiators focused on China’s pledge to buy a “substantial amount” of agricultural, energy, manufactured goods and other products and services.

No signs of progress

However, the USTR statement emphasized American insistence on “structural changes” in Chinese technology policy, market access, protection of foreign patents and copyrights and cybertheft of trade secrets. It gave no sign of progress in those areas. 

Trump hiked tariffs on $250 billion of Chinese goods over complaints Beijing steals or pressures companies to hand over technology. 

Washington also wants changes in an array of areas including the ruling Communist Party’s initiatives for government-led creation of global competitors in robotics, artificial intelligence and other industries.

American leaders worry those plans might erode U.S. industrial leadership, but Chinese leaders see them as a path to prosperity and global influence and are reluctant to abandon them.

The two sides might be moving toward a “narrow agreement,” but “U.S. trade hawks” want to “limit the scope of that agreement and keep the pressure up on Beijing,” said Eurasia Group analysts of Michael Hirson, Jeffrey Wright and Paul Triolo in a report.

“The risk of talks breaking down remains significant,” they wrote.

​White House optimism

On Wednesday, White House press secretary Sarah Sanders expressed optimism to Fox Business Network. She said the timing was unclear but the two sides “are moving towards a more balanced and reciprocal trade agreement with China.”

The U.S. statement said negotiations dealt with the need for “ongoing verification and effective enforcement.” That reflects American frustration that the Chinese have failed to live up to past commitments.

Beijing has tried to defuse pressure from Washington and other trading partners over industrial policy promising to buy more imports and open its industries wider to foreign competitors.

Trump has complained repeatedly about the U.S. trade deficit with China, which last year likely exceeded the 2017 gap of $336 billion.

​Enthusiasm wears thin

U.S. stocks surged Wednesday on optimism higher-level U.S. and Chinese officials might meet.

That enthusiasm was wearing thin Thursday. Hong Kong’s Hang Seng index fell 0.5 percent while Tokyo’s Nikkei 225 dropped 1.4 percent.

Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.

“We can confidently say that enough progress was made that the discussions will continue at a higher level,” said Craig Allen, president of the U.S.-China Business Council. “That is very positive.”

Chinese exports to the U.S. have held up despite tariff increases, partly because of exporters rushing to fill orders before more increases hit. Forecasters expect American orders to slump this year.

China has imposed penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

U.S. companies also want action on Chinese policies they complain improperly favor local companies. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

For its part, Beijing is unhappy with U.S. export and investment curbs, such as controls on “dual use” technology with possible military applications. They say China’s companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

This week’s talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran. 
…

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The United States says talks in Beijing on ending a bruising trade war focused on Chinese promises to buy more American goods. But it gave no indication of progress on resolving disputes over Beijing’s technology ambitions and other thorny issues.

China’s Ministry of Commerce said Thursday the two sides would “maintain close contact.” But neither side gave any indication of the next step during their 90-day cease-fire in a tariff fight that threatens to chill global economic growth.

That uncertainty left Asian stock markets mixed Thursday. Share prices had risen Wednesday after President Donald Trump fueled optimism on Twitter about possible progress.

The U.S. Trade Representative, which leads the American side of the talks, said negotiators focused on China’s pledge to buy a “substantial amount” of agricultural, energy, manufactured goods and other products and services.

No signs of progress

However, the USTR statement emphasized American insistence on “structural changes” in Chinese technology policy, market access, protection of foreign patents and copyrights and cybertheft of trade secrets. It gave no sign of progress in those areas. 

Trump hiked tariffs on $250 billion of Chinese goods over complaints Beijing steals or pressures companies to hand over technology. 

Washington also wants changes in an array of areas including the ruling Communist Party’s initiatives for government-led creation of global competitors in robotics, artificial intelligence and other industries.

American leaders worry those plans might erode U.S. industrial leadership, but Chinese leaders see them as a path to prosperity and global influence and are reluctant to abandon them.

The two sides might be moving toward a “narrow agreement,” but “U.S. trade hawks” want to “limit the scope of that agreement and keep the pressure up on Beijing,” said Eurasia Group analysts of Michael Hirson, Jeffrey Wright and Paul Triolo in a report.

“The risk of talks breaking down remains significant,” they wrote.

​White House optimism

On Wednesday, White House press secretary Sarah Sanders expressed optimism to Fox Business Network. She said the timing was unclear but the two sides “are moving towards a more balanced and reciprocal trade agreement with China.”

The U.S. statement said negotiations dealt with the need for “ongoing verification and effective enforcement.” That reflects American frustration that the Chinese have failed to live up to past commitments.

Beijing has tried to defuse pressure from Washington and other trading partners over industrial policy promising to buy more imports and open its industries wider to foreign competitors.

Trump has complained repeatedly about the U.S. trade deficit with China, which last year likely exceeded the 2017 gap of $336 billion.

​Enthusiasm wears thin

U.S. stocks surged Wednesday on optimism higher-level U.S. and Chinese officials might meet.

That enthusiasm was wearing thin Thursday. Hong Kong’s Hang Seng index fell 0.5 percent while Tokyo’s Nikkei 225 dropped 1.4 percent.

Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.

“We can confidently say that enough progress was made that the discussions will continue at a higher level,” said Craig Allen, president of the U.S.-China Business Council. “That is very positive.”

Chinese exports to the U.S. have held up despite tariff increases, partly because of exporters rushing to fill orders before more increases hit. Forecasters expect American orders to slump this year.

China has imposed penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

U.S. companies also want action on Chinese policies they complain improperly favor local companies. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

For its part, Beijing is unhappy with U.S. export and investment curbs, such as controls on “dual use” technology with possible military applications. They say China’s companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

This week’s talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran. 
…

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Deep in a provincial region of northwestern Turkey, it looks like a mirage — hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.

Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairy tale for their investors.

The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry — a key sector — as the country’s economy heads towards what could be a hard landing in an intensifying downturn.

After a long period of solid growth, Turkey’s economy contracted 1.1 percent in the third quarter, and many economists expect it will enter into recession this year.

The country has been hit by high inflation and a currency crisis in August. The lira lost 28 percent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.

The villas close to the town center of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group’s Burj Al Babas project.

But the development of 732 villas and a shopping center — which began in 2014 — is now in limbo as Sarot Group has sought bankruptcy protection.

It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.

Driving force 

Sarot Group filed for bankruptcy protection after some of their Gulf customers could not pay for the villas they had bought as part of the $200 million (175 million euros) project, Sarot’s deputy chairman, Mezher Yerdelen, said.

So far, $100 million has been spent on the project.

“Some of the sales had to be cancelled,” Yerdelen told AFP, after the company sold 351 villas to Arab investors.

The villas are worth between $400,000 and $500,000 each. They were designed with the Gulf buyers in mind, architect Yalcin Kocacalikoglu said.

While the drop in oil prices hurt its Gulf customers, Sarot Group was also hit by “the negative impact of the economic fluctuations on construction costs” in Turkey, Yerdelen said.

Despite a legal battle over its bankruptcy status, Yerdelen said the company can continue making sales and that he hopes the project will be inaugurated in October 2019.

Yet the Al Babas project is hardly alone. Unfinished and empty housing projects are strewn across the country, testimony to the trouble the construction sector, and the wider economy, now finds itself in. 

The construction sector has been a driving force of the Turkish economy under Erdogan, who has overseen growth consistently above the global average since he came to power in 2003.

But the sector contracted 5.3 percent on-year in the third quarter of 2018.

“Three out of four companies seeking bankruptcy protection or bankruptcy are construction companies,” said Alper Duman, associate professor at Izmir University of Economics.

Turkey’s ‘locomotive’

“Whether we call it a construction bubble or a housing bubble, there is a bubble in Turkey,” he said.

He pointed to unsold housing stock as the main indicator of this, with data showing in that over the past 16 years 10.5 million apartments have been built but only eight million have been approved for use. 

“There is a high risk this bubble will burst,” he said.

Trade Minister Ruhsar Pekcan said in mid-December that 846 companies had applied for bankruptcy protection since March 2018 but opposition daily Sozcu claimed in October the figure was more than 3,000.

Turkish Chamber of Civil Engineers head Cemal Gokce expressed pessimism, predicting “more bankruptcy protection applications, bankruptcies” among construction companies.

He said too many homes have been built in Turkey.

And most are not luxury villas like Burj Al Babas with its style reminiscent of the Sleeping Beauty Castle at Disney theme parks, but simple apartments and homes for ordinary Turks.

The construction confidence index of the Turkish Statistical Institute (TurkStat) fell 2.1 percent in December to 55.4, after 56.6 in the previous month. Anything below 100 indicates a pessimistic outlook.

However, Kerim Alain Bertrand, who previously headed up a firm that provided and analyzed data on Turkey’s real estate market, said recently he was more optimistic, partly due to the country’s growing population.

“The construction sector is this country’s locomotive sector,” he said. 

While there will be a consolidation in the sector, it will “continue to be kept alive” by the young population, he added.

The median age of the population in Turkey was 31.7 in 2017, according to TurkStat, compared to 42.8 in the European Union.
…

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Deep in a provincial region of northwestern Turkey, it looks like a mirage — hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.

Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairy tale for their investors.

The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry — a key sector — as the country’s economy heads towards what could be a hard landing in an intensifying downturn.

After a long period of solid growth, Turkey’s economy contracted 1.1 percent in the third quarter, and many economists expect it will enter into recession this year.

The country has been hit by high inflation and a currency crisis in August. The lira lost 28 percent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.

The villas close to the town center of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group’s Burj Al Babas project.

But the development of 732 villas and a shopping center — which began in 2014 — is now in limbo as Sarot Group has sought bankruptcy protection.

It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.

Driving force 

Sarot Group filed for bankruptcy protection after some of their Gulf customers could not pay for the villas they had bought as part of the $200 million (175 million euros) project, Sarot’s deputy chairman, Mezher Yerdelen, said.

So far, $100 million has been spent on the project.

“Some of the sales had to be cancelled,” Yerdelen told AFP, after the company sold 351 villas to Arab investors.

The villas are worth between $400,000 and $500,000 each. They were designed with the Gulf buyers in mind, architect Yalcin Kocacalikoglu said.

While the drop in oil prices hurt its Gulf customers, Sarot Group was also hit by “the negative impact of the economic fluctuations on construction costs” in Turkey, Yerdelen said.

Despite a legal battle over its bankruptcy status, Yerdelen said the company can continue making sales and that he hopes the project will be inaugurated in October 2019.

Yet the Al Babas project is hardly alone. Unfinished and empty housing projects are strewn across the country, testimony to the trouble the construction sector, and the wider economy, now finds itself in. 

The construction sector has been a driving force of the Turkish economy under Erdogan, who has overseen growth consistently above the global average since he came to power in 2003.

But the sector contracted 5.3 percent on-year in the third quarter of 2018.

“Three out of four companies seeking bankruptcy protection or bankruptcy are construction companies,” said Alper Duman, associate professor at Izmir University of Economics.

Turkey’s ‘locomotive’

“Whether we call it a construction bubble or a housing bubble, there is a bubble in Turkey,” he said.

He pointed to unsold housing stock as the main indicator of this, with data showing in that over the past 16 years 10.5 million apartments have been built but only eight million have been approved for use. 

“There is a high risk this bubble will burst,” he said.

Trade Minister Ruhsar Pekcan said in mid-December that 846 companies had applied for bankruptcy protection since March 2018 but opposition daily Sozcu claimed in October the figure was more than 3,000.

Turkish Chamber of Civil Engineers head Cemal Gokce expressed pessimism, predicting “more bankruptcy protection applications, bankruptcies” among construction companies.

He said too many homes have been built in Turkey.

And most are not luxury villas like Burj Al Babas with its style reminiscent of the Sleeping Beauty Castle at Disney theme parks, but simple apartments and homes for ordinary Turks.

The construction confidence index of the Turkish Statistical Institute (TurkStat) fell 2.1 percent in December to 55.4, after 56.6 in the previous month. Anything below 100 indicates a pessimistic outlook.

However, Kerim Alain Bertrand, who previously headed up a firm that provided and analyzed data on Turkey’s real estate market, said recently he was more optimistic, partly due to the country’s growing population.

“The construction sector is this country’s locomotive sector,” he said. 

While there will be a consolidation in the sector, it will “continue to be kept alive” by the young population, he added.

The median age of the population in Turkey was 31.7 in 2017, according to TurkStat, compared to 42.8 in the European Union.
…

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Cuban President Miguel Diaz-Canel replaced his transport and finance ministers this week in his first Cabinet reshuffle since forming his own government in July and amid a cash crunch and growing discontent with the island’s transport sector.

Cuban state media said Wednesday that Transport Minister Adel Yzquierdo, 73, and Finance Minister Lina Pedraza, 63, had been “freed from their roles” without explaining why, adding they would be given “other responsibilities.”

Both had been originally been named by former President Raul Castro during his 10-year mandate and reconfirmed in their roles by Diaz-Canel, who took office from the 87-year-old in April.

They will be replaced by the respective vice ministers in each ministry, Eduardo Rodriguez, 52, and Meisi Bolanos, 48.

​Public transport mess

Some Cubans questioned the logic of promoting those who had also overseen strategies they deemed had failed.

Transport is one of the top complaints of Cubans living in the capital, with new regulations vastly reducing the number of private collective taxis on the road that had supplemented the creaking public transport system.

Many Cubans say they are struggling to get around and it is taking them far longer and costing more to do so.

“Transport is awful,” said Maritza Carrion, waiting for a bus in the business district of Vedado.

In one of his last public appearances, Yzquierdo announced on state television in December that Cuba was importing hundreds of microbuses and buses to alleviate the transport shortage.

The government has periodically done so in the past, only partly resolving the chronic transport shortage for a short while.

​National airline

Meanwhile Cuba’s national airline Cubana has had to slash flights over the last year because of a lack of planes that it blamed partly on the decades-old U.S. trade embargo.

It also faced a plane crash that killed 112, its deadliest in nearly 30 years, just weeks after Diaz-Canel took office.

“What we need are real solutions because it’s been nearly 60 years that we’ve been behind on transport,” said Yadier Osorio, 41. “The government still hasn’t found a solution.”

Under the article on state-run website Cuba debate about the Cabinet changes, many readers called for greater transparency over such decisions. Growing internet access is fostering greater public debate online and accountability from officials.
…

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Cuban President Miguel Diaz-Canel replaced his transport and finance ministers this week in his first Cabinet reshuffle since forming his own government in July and amid a cash crunch and growing discontent with the island’s transport sector.

Cuban state media said Wednesday that Transport Minister Adel Yzquierdo, 73, and Finance Minister Lina Pedraza, 63, had been “freed from their roles” without explaining why, adding they would be given “other responsibilities.”

Both had been originally been named by former President Raul Castro during his 10-year mandate and reconfirmed in their roles by Diaz-Canel, who took office from the 87-year-old in April.

They will be replaced by the respective vice ministers in each ministry, Eduardo Rodriguez, 52, and Meisi Bolanos, 48.

​Public transport mess

Some Cubans questioned the logic of promoting those who had also overseen strategies they deemed had failed.

Transport is one of the top complaints of Cubans living in the capital, with new regulations vastly reducing the number of private collective taxis on the road that had supplemented the creaking public transport system.

Many Cubans say they are struggling to get around and it is taking them far longer and costing more to do so.

“Transport is awful,” said Maritza Carrion, waiting for a bus in the business district of Vedado.

In one of his last public appearances, Yzquierdo announced on state television in December that Cuba was importing hundreds of microbuses and buses to alleviate the transport shortage.

The government has periodically done so in the past, only partly resolving the chronic transport shortage for a short while.

​National airline

Meanwhile Cuba’s national airline Cubana has had to slash flights over the last year because of a lack of planes that it blamed partly on the decades-old U.S. trade embargo.

It also faced a plane crash that killed 112, its deadliest in nearly 30 years, just weeks after Diaz-Canel took office.

“What we need are real solutions because it’s been nearly 60 years that we’ve been behind on transport,” said Yadier Osorio, 41. “The government still hasn’t found a solution.”

Under the article on state-run website Cuba debate about the Cabinet changes, many readers called for greater transparency over such decisions. Growing internet access is fostering greater public debate online and accountability from officials.
…

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Young people from around the world who provided low-cost child care for American families will share in a proposed $65.5 million settlement of a lawsuit brought by a dozen former au pairs against the companies that bring the workers to the United States. 

 

Nearly 100,000 au pairs, mostly women, who worked in American homes over the past decade will be entitled to payment under the proposed settlement filed in Denver federal court Wednesday, a month before the case brought by a dozen former au pairs from Colombia, Australia, Germany, South Africa and Mexico was set to go to trial.  

 

They claimed 15 companies authorized to bring au pairs to the United States colluded to keep their wages low, ignoring overtime and state minimum wage laws and treating the federal minimum wage for au pairs as a maximum amount they can earn. In some cases, the lawsuit said, families pushed the limits of their duties, requiring au pairs to do things like feed backyard chickens, help families move and do gardening, and not allowing them to eat with the family. 

 

“This settlement, the hard-fought victory of our clients who fought for years on behalf of about 100,000 fellow au pairs, will be perhaps the largest settlement ever on behalf of minimum wage workers and will finally give au pairs the opportunity to seek higher wages and better working conditions,” said David Seligman, director of Denver-based Towards Justice, which filed the lawsuit in 2014. It was later litigated by New York-based firm Boies Schiller Flexner. 

Companies deny wrongdoing 

 

Under the settlement, which still must be approved by a judge, the companies agreed to make sure au pairs are informed about their legal rights in the future, but they denied any wrongdoing. 

 

Lawyers now need to track down au pairs who came to the U.S. on J-1 visas between Jan. 1, 2009, and Oct. 28, 2018, and have set up a website to help spread the word about the deal. 

 

While sometimes confused with nannies, au pairs have much less experience and earn a lot less.   

 

The program, overseen by the U.S. State Department, was launched as a cultural exchange program in 1986 as demand for child care grew. At first there were only 3,000 participants as part of a pilot, but last year there were over 20,000. The program occupies a gray area between work and an international relations effort, and critics say that makes it ripe for abuse.  

 

The sponsors said they were just following regulations from the State Department — which last adjusted au pair pay to $195.75 for a 45-hour work week in 2009 after the federal minimum wage rose to $7.25. Their hourly wage has actually been $4.25 though: Families were told to deduct 40 percent of their pay to cover the room and board they’re required to provide the au pairs, a practice challenged by the lawsuit. 

Too costly

 

In court filings, the sponsors argued requiring families to pay more in states with higher minimum wages would destroy the program by making au pairs unaffordable, hurting foreign policy goals. 

 

According to a 2016 report on U.S. child care by the Washington-based think tank New America, the average cost of full-time care in a child care center for children up to 4 years old is $9,589 a year for each child, more than the average cost of in-state college tuition. The average cost of full-time care at home with a nanny was $28,353 — 53 percent of the median U.S. household income and nearly three times the annual pay for an au pair.   

 

The practice of having au pairs — French for “on par with” — developed in postwar Europe, where young people lived with families in other countries to learn a language in exchange for helping with child care and some housework. In Europe, au pairs generally are limited to working 30 hours a week. 

 

Sarah Azuela said the ad she saw her final year of college in Mexico promised coming to the United States to work as an au pair would be the best year of her life, full of travel, meeting new people and becoming part of an American family. But she says what grew into a two-year stay turned out to be the worst time of her life, with her feeling more like a slave subject to the whims of her host families than a member of the household.  

 

At her last placement — working for a single mother in Virginia — Azuela said that in addition to helping care for three children, she cooked all the meals, cleaned, planted flowers and packed the family’s belongings and helped move them twice, first to an interim apartment and then to a permanent home. 

Positives

 

Nevertheless, Azuela was grateful her host mother gave her time to study for a business certificate at a university, which led her to extend her stay, and for not yelling or threatening to hit her as a previous host had done. 

 

“I don’t wish anyone to experience anything like this,” Azuela, who is from Hermosillo, Mexico, but now lives in Wisconsin, said about why she joined in the lawsuit.

 

Meanwhile, a related case challenging whether Massachusetts had the right to protect au pairs in its domestic workers’ bill of rights, since they are regulated by the federal government, is pending in federal appeals court. The State Department said in a court filing in September that federal law requires only that au pairs are paid the federal minimum wage, arguing federal law specifically states when other international guest workers, like camp counselors and teachers, are entitled to make more.  
…

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Young people from around the world who provided low-cost child care for American families will share in a proposed $65.5 million settlement of a lawsuit brought by a dozen former au pairs against the companies that bring the workers to the United States. 

 

Nearly 100,000 au pairs, mostly women, who worked in American homes over the past decade will be entitled to payment under the proposed settlement filed in Denver federal court Wednesday, a month before the case brought by a dozen former au pairs from Colombia, Australia, Germany, South Africa and Mexico was set to go to trial.  

 

They claimed 15 companies authorized to bring au pairs to the United States colluded to keep their wages low, ignoring overtime and state minimum wage laws and treating the federal minimum wage for au pairs as a maximum amount they can earn. In some cases, the lawsuit said, families pushed the limits of their duties, requiring au pairs to do things like feed backyard chickens, help families move and do gardening, and not allowing them to eat with the family. 

 

“This settlement, the hard-fought victory of our clients who fought for years on behalf of about 100,000 fellow au pairs, will be perhaps the largest settlement ever on behalf of minimum wage workers and will finally give au pairs the opportunity to seek higher wages and better working conditions,” said David Seligman, director of Denver-based Towards Justice, which filed the lawsuit in 2014. It was later litigated by New York-based firm Boies Schiller Flexner. 

Companies deny wrongdoing 

 

Under the settlement, which still must be approved by a judge, the companies agreed to make sure au pairs are informed about their legal rights in the future, but they denied any wrongdoing. 

 

Lawyers now need to track down au pairs who came to the U.S. on J-1 visas between Jan. 1, 2009, and Oct. 28, 2018, and have set up a website to help spread the word about the deal. 

 

While sometimes confused with nannies, au pairs have much less experience and earn a lot less.   

 

The program, overseen by the U.S. State Department, was launched as a cultural exchange program in 1986 as demand for child care grew. At first there were only 3,000 participants as part of a pilot, but last year there were over 20,000. The program occupies a gray area between work and an international relations effort, and critics say that makes it ripe for abuse.  

 

The sponsors said they were just following regulations from the State Department — which last adjusted au pair pay to $195.75 for a 45-hour work week in 2009 after the federal minimum wage rose to $7.25. Their hourly wage has actually been $4.25 though: Families were told to deduct 40 percent of their pay to cover the room and board they’re required to provide the au pairs, a practice challenged by the lawsuit. 

Too costly

 

In court filings, the sponsors argued requiring families to pay more in states with higher minimum wages would destroy the program by making au pairs unaffordable, hurting foreign policy goals. 

 

According to a 2016 report on U.S. child care by the Washington-based think tank New America, the average cost of full-time care in a child care center for children up to 4 years old is $9,589 a year for each child, more than the average cost of in-state college tuition. The average cost of full-time care at home with a nanny was $28,353 — 53 percent of the median U.S. household income and nearly three times the annual pay for an au pair.   

 

The practice of having au pairs — French for “on par with” — developed in postwar Europe, where young people lived with families in other countries to learn a language in exchange for helping with child care and some housework. In Europe, au pairs generally are limited to working 30 hours a week. 

 

Sarah Azuela said the ad she saw her final year of college in Mexico promised coming to the United States to work as an au pair would be the best year of her life, full of travel, meeting new people and becoming part of an American family. But she says what grew into a two-year stay turned out to be the worst time of her life, with her feeling more like a slave subject to the whims of her host families than a member of the household.  

 

At her last placement — working for a single mother in Virginia — Azuela said that in addition to helping care for three children, she cooked all the meals, cleaned, planted flowers and packed the family’s belongings and helped move them twice, first to an interim apartment and then to a permanent home. 

Positives

 

Nevertheless, Azuela was grateful her host mother gave her time to study for a business certificate at a university, which led her to extend her stay, and for not yelling or threatening to hit her as a previous host had done. 

 

“I don’t wish anyone to experience anything like this,” Azuela, who is from Hermosillo, Mexico, but now lives in Wisconsin, said about why she joined in the lawsuit.

 

Meanwhile, a related case challenging whether Massachusetts had the right to protect au pairs in its domestic workers’ bill of rights, since they are regulated by the federal government, is pending in federal appeals court. The State Department said in a court filing in September that federal law requires only that au pairs are paid the federal minimum wage, arguing federal law specifically states when other international guest workers, like camp counselors and teachers, are entitled to make more.  
…

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With the March deadline approaching for Britain to depart the European Union, there are concerns that Britain’s exit could undermine Western sanctions against countries like Iran, Syria and North Korea. Analysts note that Britain has been influential in persuading the EU to take action, saying there are risks Britain will seek a different path as it carves out new economic and strategic partnerships.

“Some estimates hold that up to 80 percent of the EU’s sanctions that are in place have been put forward or suggested by the UK,” said Erica Moret, chair of the Geneva International Sanctions Network.

She says Britain’s future absence from EU meetings will impact the bloc’s future relations. “The UK is also a very important player of course as a leading economic and political power, a soft power player in the world. Also the City of London means that financial sanctions are rendered much stronger through the UK’s participation.”

Britain was quick to coordinate expulsions of Russian diplomats among EU allies following the nerve agent attack in the city of Salisbury last year against a former double agent, an incident London blamed on Moscow.

Through EU membership, Britain enforces common sanctions against several other states and individuals, such as Syrian officials accused of war crimes.

After the Brexit deadline day on March 29, Britain will be free to implement its own sanctions.

“I wouldn’t see this happening in the short term, especially because again both sides have said they are committed to EU sanctions and they are also committed to projecting some political values that both EU and UK agree to,” says Anna Nadibaidze of the policy group Open Europe.

Britain, however, could seek a competitive advantage over Europe by diverging its sanctions policy, says Moret.

“It’s very unlikely that the UK would deliberately seek to gain commercial advantage over EU partners. But when you think about the tensions that will come into play post-Brexit, when it comes down to trying to negotiate new trade deals, seeking new foreign investment into the country. There will be pressure, a balance to be made between alignment with EU sanctions and domestic interests.”

That pressure could be felt first over Iran. Alongside European allies, Britain backs the 2015 Iran nuclear deal known as the Joint Comprehensive Plan of Action or JCPOA, which lifted some Western sanctions on Tehran in return for a suspension of its atomic enrichment program. U.S. President Donald Trump pulled out of the deal last year, saying Iran has violated the spirit of the agreement.

Britain urgently wants a trade deal with the United States after Brexit. Will the price be alignment with Washington’s policy on Iran?

“That is a key risk and it’s a very important one that will be in the forefront of policymakers’ minds,” adds Moret.

Britain was among EU nations backing sanctions against an Iranian intelligence unit this week, accusing Tehran of plotting attacks and assassinations in Europe. Both Brussels and London say they will continue to work together to counter common threats through a range of policy tools including sanctions.

 

 

 

 
…

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Concerns have arisen that European sanctions against countries like Iran, Syria and North Korea could be undermined by Britain’s upcoming departure from the European Union. Britain will be free to implement its own sanctions regime — and while both Brussels and London insist they will continue to work together, analysts say there are risks that Britain will seek a different path as it carves out new economic and strategic partnerships after Brexit. Henry Ridgwell reports from London.
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Another clutch of U.S. Federal Reserve officials said Wednesday they would be cautious about any further increases in interest rates so that the central bank could assess growing risks to an otherwise solid U.S. economic outlook.

The presidents of three of the 12 Fed regional banks, from Chicago, St. Louis and Atlanta, all pointed to a need for greater clarity on the state of the economy before extending the central bank’s rate hike campaign into a fourth year.

Two of the three, Charles Evans of Chicago and James Bullard of St. Louis, are voting members this year on the Federal Open Market Committee, the bank’s policy-setting panel. Bullard has long been critical of the Fed’s rate increases, begun in December 2015, but the caution from Evans is new, even if he still asserted that rates probably need to rise more.

The remarks from the three come less than a week after Fed Chairman Jerome Powell eased market concerns that policymakers were ignoring signs of an economic slowdown. Powell said he was aware of the risks and would be patient and flexible in policy decisions this year.

The new tone of caution comes after the U.S. stock market dropped precipitously in the fourth quarter of 2018, suffering its worst December performance since the Great Depression. Other signs of tightening financial conditions surfaced as well, including a sharp slowdown in issuance of corporate bonds.

Evans has been among the most vocal backers of gradually tightening U.S. monetary policy. In a speech in Riverwoods, Illinois, his first public comments since November, he nodded to an array of “tough-to-read” factors highlighted by the recent market sell-off, but penciled in a forecast for reasonably good U.S. growth and employment in 2019 and beyond.

His prepared remarks gave no hard timeline for further rate hikes, but they hinted he could agree to stand pat until around midyear to see how factors like global growth and U.S. trade and fiscal policy pan out.

Bullard, meanwhile, told the Wall Street Journal that while the Fed had “a good level of the policy rate today,” there was no rush to push them higher.

Latest hike

The Fed last raised rates in December, to a range of 2.25 percent to 2.50 percent, to conclude a full year of quarterly increases in its benchmark lending rate.

Minutes from that meeting will be released later Wednesday and could shed more light on how policymakers assessed the economy as they agreed to raise rates and, at that time, projected two more increases in 2019.

Overall, that marked the ninth increase of a quarter percentage point since December 2015, when the Fed began lifting interest rates from near zero, where they had been since the financial crisis in 2008.

Defensive decisions

Atlanta Fed President Raphael Bostic, who earlier this week said the Fed was likely to need at most a single rate increase this year, on Wednesday elaborated on that view as driven by conversations with business executives, who say they have become more defensive in preparing for slower growth by paying down debt and holding off on new plans.

Those conversations “are not consistent with the business sector ramping up,” Bostic said in remarks prepared for delivery to the Chattanooga Area Chamber of Commerce. Bostic, who backed all four rate hikes in 2018 as an FOMC voter, does not have a policy vote on the panel this year.

Meanwhile, back in November, Evans had said raising rates to about 3.25 percent would be a “reasonable assumption.” Powell and other top officials in recent weeks have stressed that they are listening to the concerns implied by the stock market sell-off that began in early October, and traders are very skeptical of much more tightening this year.

“A case can be made for a reasonably good 2019 economic outcome,” Evans said. “But I do not want to downplay the risks too much.”
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Amazon.com Inc. Chief Executive Jeff Bezos and wife MacKenzie Bezos have decided to divorce after a long trial separation, Bezos said on Wednesday in a joint statement by the couple on Twitter.

Amazon.com again became Wall Street’s most valuable company this week, surpassing Microsoft Inc. Bezos’ fortune has soared to more than $160 billion, thanks to his stake in Amazon.

From modest beginnings as an online bookseller, Bezos and Amazon branched out into almost every product category available, ending up taking on established retail giants such as Wal-Mart Stores Inc. Bezos founded Amazon in 1994.

Under Bezos, Amazon launched the Kindle e-reader and revolutionized the way books are distributed and read. The company has also been a pioneer in cloud computing.

 

In November, Amazon picked America’s financial and political capitals for massive new offices, branching out from its home base in Seattle with plans to create more than 25,000 jobs in both New York City and an area just outside Washington, D.C.

 

 

 
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