Turkey’s currency this month has suffered heavy falls triggered by U.S.-Turkish tensions over the ongoing detention of an American pastor. Washington’s threat to impose new economic sanctions sparked another steep currency drop Friday. Dorian Jones reports on the economic fall out for people in Istanbul.
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Tesla shares dropped nearly 9 percent in value Friday, amid reports of CEO and co-founder Elon Musk meeting with the U.S. Securities and Exchange Commission (SEC).

Musk wrote on Twitter last week of his plans to take the company private for a price of $420 per share, writing that he had “funding secured.” On Monday, in a blog post, Musk admitted that was not true, as he was still waiting on a finalized deal with his investors, a Saudi Arabian foreign investment fund.

“I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base,” Musk wrote.

Since Musk’s original tweet, the company’s shares have dropped 12 percent overall, and reports of subpoenas being issued by the SEC have sent the company into turmoil.

In a New York Times interview Thursday, Musk said, “This past year has been the most difficult and painful year of my career.” The Times also reported that members of Tesla’s board are concerned with Musk’s drug use, notably his use of the sleep aid Ambien, which some believe have contributed to Musk’s controversial Twitter statements.

Last month, Musk came under fire for calling one of the cave divers who rescued 12 Thai soccer players and their coach a pedophile, citing no evidence. He later apologized for that remark.
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Stocks rose late in the day Friday as investors welcomed signs of progress in resolving the trade dispute between the U.S. and China. The Wall Street Journal reported that the countries hope to have a resolution by November.

Industrial, health care and basic materials companies made some of the biggest gains. The report came a day after China said it will send an envoy to Washington for the first talks between the countries since early June.

Marina Severinovsky, an investment strategist at Schroders, said stocks could jump if the U.S. and China make real progress toward a trade agreement. But stocks in emerging markets might make even bigger gains.

“The rally that could come, if there is a better outcome, would be in emerging markets,” she said. “China has suffered pretty greatly … the U.S. has held up pretty well.”

The late gains came in spite of weak results for several chipmakers. Electric car maker Tesla took its biggest drop in two years on reports of a wider government investigation into the company and concerns about CEO Elon Musk’s health.

The S&P 500 index rose 9.44 points, or 0.3 percent, at 2,850.13. The Dow Jones Industrial Average added 110.59 points, or 0.4 percent, to 25,669.32. The Nasdaq composite edged up 9.81 points, or 0.1 percent, to 7,816.33. The Russell 2000 index of smaller-company stocks gained 7.19 points, or 0.4 percent, to 1,692.95.

The Wall Street Journal cited officials in both the U.S. and China as it said negotiators want to end the trade war before U.S. President Donald Trump and Chinese President Xi Jinping meet at multilateral events in November.

Industrial companies made some of the biggest gains after agricultural equipment maker Deere posted stronger than expected sales. Its stock rose 2.4 percent to $140.59.

Construction equipment maker Caterpillar rose 2.3 percent to $139.34 and engine maker Paccar added 2.3 percent to $67.16.

Chipmakers fell after two companies gave weaker forecasts for the third quarter. Nvidia said it no longer expects much revenue from products used in mining digital currencies, and its stock fell 4.9 percent to $244.82. Applied Materials slumped 7.7 percent to $43.77.

While big names like Netflix, Facebook and Amazon slipped, Apple led technology companies slightly higher overall. Apple stock rose 2 percent to $217.58.

Nordstrom jumped 13.2 percent to $59.18 after raising its annual profit and sales forecasts and posting better earnings and sales than analysts expected. It’s been a mostly difficult week for department stores as Macy’s and J.C. Penney both plunged after issuing their quarterly reports.

The S&P 500 finished this week with a solid gain of 0.6 percent, but it took a difficult path to get there. Stocks fell early this week due to worries about Turkey’s currency crisis, and later investors fretted about China’s economic growth.

The recovery started Thursday as investors hoped the upcoming talks between the U.S. and China will help end the impasse that has resulted in higher tariffs from both countries.

The Hang Seng index in Hong Kong has fallen 13 percent since early June as the dispute has dragged on, and other emerging market indexes have also taken a hit. The S&P 500 has risen over that time.

Tesla was hit with a series of reports that concerned shareholders. The Wall Street Journal reported that the Securities and Exchange Commission started investigating the electric car maker last year to determine if it made false statements about production of its Model 3 sedan.

The SEC is also reportedly looking into CEO Elon Musk’s comment on Twitter about possibly taking the company private.

Tesla stock rose from about $345 a share to about $380 following Musk’s tweet last week, which said Tesla could go private for $420 a share. On Friday it dropped 8.9 percent to $305.50.

Musk also gave an emotional interview to the New York Times, published Friday, about the stress he’s experienced as the company tries to ramp up production. He said this year has been “excruciating” and described working up 120 hours a week, raising concerns about his health.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86 percent from 2.87 percent.

U.S. crude picked up 0.7 percent to $65.91 a barrel in New York. Brent crude, the standard for international oil prices, added 0.6 percent to $71.83 per barrel in London.

Wholesale gasoline dipped 0.3 percent to $1.98 a gallon. Heating oil inched up 0.1 percent to $2.10 a gallon. Natural gas rose 1.3 percent to $2.95 per 1,000 cubic feet.

Gold was little changed at $1,184.20 an ounce. Silver fell 0.6 percent to $14.63 an ounce. Copper added 0.5 percent to $2.63 a pound.

The dollar dipped to 110.60 yen from 110.88 yen. The euro rose to $1.1443 from $1.1365.

The German DAX lost 0.2 percent and France’s CAC 40 fell 0.1 percent. The FTSE 100 in Britain was little changed.

Japan’s Nikkei 225 index added 0.4 percent and Hong Kong’s Hang Seng gained 0.4 percent. In South Korea, the Kospi gained 0.3 percent.
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Unions at Air France-KLM voiced concern after the company appointed Benjamin Smith as the new CEO with the support of the French state.

The company said Thursday that Smith, who is 46 and was previously Air Canada’s chief operating officer, will fill the role by Sept. 30.

Vincent Salles, unionist at CGT-Air France union, said on France Info radio that unions fear Smith’s mission is to implement plans that would “deteriorate working conditions and wages.”

The previous CEO, Jean-Marc Janaillac, resigned in May after Air France employees held 13 days of strike over pay and rejected the company’s wage proposal, considered too low.

Finance Minister Bruno Le Maire welcomed an “opportunity” for Air France-KLM and expressed his confidence in Smith’s ability to “re-establish social dialogue.”
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President Donald Trump says he’s asking federal regulators to look into the effectiveness of the quarterly financial reports that publicly traded companies are required to file.

In a tweet early Friday, Trump said that after speaking with “some of the world’s top business leaders,” he’s asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense.

The SEC requires such companies to share profit, revenue and other figures publicly every three months.

Some believe executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies.

There are also tremendous expenses tied to preparing quarterly and annual reports.
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As summer comes to a close and kids prepare to head back to school, retailers are counting on novelty items such as scented markers and glitter glue to help win back some of the market share they’ve lost to iPads and popular electronic gadgets. VOA’s Jill Craig takes a look at retailers back to school strategy.
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A potential ban on the popular herbicide glyphosate in Brazil over concerns it may cause cancer in humans would be a “disaster” for the country’s agricultural industry, Agriculture Minister Blairo Maggi said on Thursday.

A Brazilian court ruled on Aug. 3 that new products containing the chemical could not be registered in the country and existing registrations would be suspended starting from September, until health authority Anvisa issues a decision on its re-evaluation of glyphosate’s safety.

Maggi said that glyphosate is used on around 95 percent of soy, corn and cotton harvested in the country and that there is no readily available substitute. Brazil is the world’s top exporter of soy and a major producer and exporter of corn.

“Glyphosate makes it viable for us to plant and grow crops.

What is the alternative?” Maggi said at an event in Rio de Janeiro.

Brazil’s Solicitor General’s office has said it is preparing an appeal to the court decision with the Agriculture Ministry’s backing. Maggi said he is confident the ruling will be overturned on appeal.

The Brazilian court case is part of a global pushback against the chemical. A U.S. judge ruled last week that Monsanto must pay $289 million in damages to a man who alleged its glyphosate-based products like Roundup caused his cancer.

Monsanto, taken over earlier this year by Bayer AG , said in a statement that more than 800 reviews, including those by the U.S. environmental and health authorities, support that glyphosate does not cause cancer. The company is appealing the U.S. court ruling.

Brazil federal prosecutors brought the case to force Anvisa to make a decision in its re-evaluation of glyphosate, which it started in 2008, said Marco Antonio Delfino de Almeida, a member of a prosecutors’ working group on pesticides.

A 2015 assessment by the World Health Organization’s International Agency for Research on Cancer determined glyphosate probably causes cancer in humans, which provides a basis for reconsidering its safety, Almeida said.

If the Brazil ban on existing product registrations goes into effect, it could disrupt farmers who are set to begin planting soy in September.

The sale of glyphosate products would be halted and farmers who use products with suspended registrations could face legal risks, said Brazil-based agribusiness lawyer Frederico Favacho.

Anvisa told Reuters it is prioritizing its re-evaluation of glyphosate but did not give a timeframe for announcing its findings.
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Finance Minister Berat Albayrak assured international investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting its banks were healthy and signalling it could ride out a dispute with the United States.

In a conference call with thousands of investors and economists, Albayrak — who is President Tayyip Erdogan’s son-in-law — said Turkey fully understood and recognised all its domestic challenges but was dealing with what he described as a market anomaly.

With Ankara locked in a complex rift with Washington, he also played down a decision by President Donald Trump to double tariffs on imports of Turkish metals. Washington later said it was ready to impose further economic sanctions on Turkey.

Many countries had been the target of similar U.S. trade measures, Albayrak said, and Turkey would navigate this period with other parties such as Germany, Russia and China.

Turkey, he said, has no plans to seek help from the International Monetary Fund or impose capital controls to stop money flowing abroad in response to the recent collapse of its lira currency.  Before he spoke, the lira strengthened more than 3 percent, despite signs that the dispute with the United States is as wide as ever.

The lira held steady during Albayrak’s conference call but later weakened when Treasury Secretary Steven Mnuchin said the United States was prepared to levy more sanctions on Turkey if detained American pastor Andrew Brunson was not freed.

The Turkish currency was trading at 5.85 at 1740 GMT, more than 1 percent stronger on the day. Turkey’s sovereign dollar bonds extended their gains.

The lira hit a record low of 7.24 to the dollar earlier this week, down 40 percent this year, as investors fretted over Erdogan’s influence over monetary policy and the row with the United States.

Turkey’s foreign minister said Ankara did not want any problems with Washington.

“We can solve issues with the United States very easily, but not with the current approach,” Mevlut Cavusoglu told a news conference in Ankara late on Thursday.

Facing Turkey’s gravest currency crisis since 2001 in his first month in the job, Albayrak has the daunting task of persuading investors that the economy is not hostage to political interference.

Albayrak, a 40-year-old former company executive with a doctorate in finance, said Turkey would not hesitate to provide support to the banking sector. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.

Qatari pledge

Economists gave Albayrak’s comments a qualified welcome, and praised his ambition to get inflation down into single figures next year from above 15 percent now. But his father-in-law’s opposition to higher interest rates may complicate that quest.

“He said all the right things, but it’s one thing saying them and another thing doing them,” said Sailesh Lad at AXA Investment Managers. “He said capital controls weren’t part of the agenda, and never will be. I think a lot of the market liked hearing that.”

The lira gained some support from the announcement late on Wednesday of a Qatari pledge to invest $15 billion in Turkey. Trump has used trade tariffs in a series of disputes ranging from with Turkey and China to the European Union.

In a sign that Turkey may hope to make common cause with other affected countries, Erdogan and French President Emmanuel Macron spoke by phone on Thursday, discussing developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said.

Albayrak will also meet his German counterpart Olaf Scholz in Berlin on Sept. 21.

However, in a potential complication, a foreign ministry source in Berlin said Turkish police had arrested a German citizen. ARD TV reported the man was accused of “terrorist propaganda” after criticising the government on social media.

In another element of the row with Washington, a U.S. court sentenced a senior executive of state-owned Turkish lender Halkbank to 32 months in prison in May for taking part in a scheme to help Iran evade U.S. sanctions. That case has increased speculation that the bank itself could be fined for sanctions-busting.

Halkbank has said all of its transactions were lawful and Albayrak played down the risk. “We are not expecting any fines on Halkbank for sure,” he said. “But hypothetically speaking, …if one of our public banks need help, the government will stand strong by it for sure.”

The White House said on Wednesday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Brunson, a pastor on trial in Turkey on terrorism charges.

Washington wants the evangelical Christian freed but Turkish officials say the case is a matter for the courts.

The pastor row is one of several between the NATO allies, including diverging interests in Syria and U.S. objections to Ankara’s ambition to buy Russian defence systems, that have contributed to instability in Turkish financial markets.

Economic war

Erdogan has repeatedly told Turks to exchange gold and hard currency into lira, saying the country was involved in an economic war with enemies.

However, Turks appeared not to be heeding his appeal. Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier.

Erdogan has called for a boycott of U.S. electronic goods and Turkish media have given extensive coverage to anti-U.S. protests, including videos on social media showing Turks apparently burning dollar bills and destroying iPhones.
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A federal court in New York has charged 22 Chinese importers with smuggling nearly half-a-billion dollars in counterfeit goods into the United States from China.

The fake products include such popular luxury items as Louis Vuitton bags, Michael Kors wallets, and Chanel perfume.

Twenty-one of the defendants were arrested Thursday.

U.S. attorneys say the suspects allegedly smuggled the China-made counterfeit goods in large shipping containers disguised as legitimate products and brought them into ports in New York and New Jersey.

The defendants apparently intended to sell the fake products across the United States with a street value of nearly $500 million.

Along with smuggling and trafficking in counterfeit goods, the suspects are also charged with money laundering and immigration fraud.

“The illegal smuggling of counterfeit goods poses a real threat to honest business,” assistant attorney general Brian Benczkowski said. “The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”
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Russia says the latest U.S. sanctions imposed on Russian, Chinese, and Singaporean companies are “destructive” and “useless.”  

The U.S. penalized the three companies Wednesday, accusing them of helping North Korea avoid international sanctions.

The Russian Foreign Ministry said Thursday the new U.S. sanctions come when “joint international efforts” are needed toward a settlement in North Korea. Moscow said the sanctions could undermine denuclearization talks.

The U.S. has accused a Chinese trading company and its affiliate in Singapore of falsifying documents aimed at easing illegal shipments of alcohol and cigarettes into North Korea. The companies are said to have earned more than $1 billion.

A Russian company was also sanctioned for providing port services to North Korean-flagged ships engaged in illegal oil shipments.

The sanctions freeze any assets the companies may have in the United States and bars Americans from doing business with them.
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The United States economy, the world’s largest, is “crushing it,” White House economic adviser Larry Kudlow declared Thursday.

“This is the hottest business economic environment in the world today,” Kudlow told reporters at the White House.

“President [Donald] Trump completely changed the business environment here for the better,” Kudlow said. “And that’s why we’re crushing it on the economy. My message today is very simple, the biggest political event this year is an economic boom that virtually no one expected could happen. We’re growing. Three percent in the first half, 4 percent in the second quarter.”

Trump has made a tax cut and sharply curtailed government regulation a cornerstone of his 17-month presidency.

Kudlow predicted that “the boom is sustainable. The workforce is growing,” and “business and consumer confidence is high and rising.”

He defended Trump’s imposition of tariffs on an array of imports from across the world.

“People like to go at him” on tariffs, Kudlow said. “That’s silly. Don’t blame Trump. Blame the breakdown of the world trading system. That’s a point I love to make. I make it all the time. China being the biggest culprit, but not the only culprit.”

Kudlow said the World Trade Organization “is broken. People have been raising tariffs and non-tariff barriers, violating rules we thought had been in place for over 20 years. The president believes that it’s in the American interest, both workers, farmers, the whole economy — we have got to clear away all the existing protectionism that he inherited and start over and turn a new leaf.”

Trade with Turkey

He said that in the newest tariff dispute with Turkey, Trump imposed higher levies on Turkish steel and aluminum exports irrespective of Washington’s ongoing dispute with Ankara over its detention of an American pastor, Andrew Brunson, who is awaiting trial on espionage and terrorism-related charges. Trump has unsuccessfully demanded Brunson’s release.

“I think that basically the president is dissatisfied with Turkey on trade,” Kudlow said. But he said trade and the Brunson case were not linked.

“I can just tell you policy-wise, they are not connected,” he said. “Personally, I think they ought to release the pastor, but that is not part of the discussion.”
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A Chinese delegation will travel to the United States later this month to resume negotiations as a trade war intensifies between the world’s two biggest economies.

China’s Commerce Ministry says Vice Minister Wang Shouwen will meet with David Malpass, an assistant U.S. Treasury secretary for international affairs.

The ministry issued a statement saying Beijing welcomes dialogue, but “will not accept any unilateral trade restriction measures.”

China and the United States have engaged in a round of reciprocal tariffs since July 6, when Washington officially imposed 25 percent tariffs on more than 800 Chinese products worth $34 billion. Beijing retaliated by imposing the same percentage of retaliatory tariffs on 545 U.S. items, also worth $34 billion.

The two sides will impose an additional round of tariffs on $16 billion worth of goods from each country effective August 23.
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Mexico’s economy minister on Wednesday said that Mexico and the United States may not meet an August goal to finish bilateral talks to revamp the NAFTA trade deal, which is beset by disagreements over automobile trade rules and other issues.

Top Mexican officials started their fourth week of talks with U.S. Trade Representative Robert Lighthizer in Washington over a new North American Free Trade Agreement.

Asked if the August goal was still viable, Guajardo said, “That is why we are here. We are fully engaged. We don’t know if there will be a successful conclusion.”

The U.S.-Mexico talks resumed in July, without Canada, after negotiations involving all three members of the $1.2 trillion trade bloc stalled in June.

Guajardo said on Wednesday that he had spoken with Canadian Foreign Minister Chrystia Freeland on the telephone and was “hopeful” Canada could soon hold trilateral NAFTA talks with the United States and Mexico.

Guajardo was joined by Foreign Minister Luis Videgaray, Mexico’s chief NAFTA negotiator Kenneth Smith, and Jesus Seade, the designated chief trade negotiator of incoming Mexican President Andres Manuel Lopez Obrador.

Smith said Mexico and the United States were “working well” on the most difficult issues.

Mexico and Washington have been discussing rules for the automotive sector, which has been a major point of contention between the two countries.

The United States has sought tougher rules on what percentage of a vehicle’s components need to be built in the NAFTA region to avoid tariffs, as well as demanding that a certain number of cars and trucks be made in factories paying at least $16 an hour.

New sticking points emerged last week over President Donald Trump’s threat to impose steep automotive tariffs.

Guajardo said the teams had not yet touched the issue of a U.S. proposed sunset clause that would kill NAFTA after five years if it is not renegotiated again. Both Mexico and Canada have said they reject the measure.
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Singapore is the setting for new Hollywood movie ‘Crazy Rich Asians’ – an adaptation of a best-selling novel that explores the insatiable consumerism of new money and old-world opulence in a continent producing more billionaires than anywhere else.

While the low-tax financial hub is often called a playground for the rich, Singapore’s wealthy tend to live a more conservative, low-key life than Hong Kong’s showy socialites or Macau’s high-rollers.

In step with the film’s release in the United States on Wednesday and ahead of its release in the city-state next week, here are five ways to spend your cash in Singapore.

1. Orchid-shaped supercars

Cars in Singapore are some of the most expensive in the world, owing to huge government taxes aimed at limiting their number in the tiny island-state.

That doesn’t stop the super-rich – Ferrari, Maserati and Lamborghini are commonly sighted. When a Singaporean character in Kevin Kwan’s book, Goh Peik Lin, moves to America to study she immediately buys a Porsche saying they are “such a bargain.”

For the super-rich patriot, Singapore-based firm Vanda Electrics has designed an electric supercar – Dendrobium. Its roof and doors open in sync to resemble the orchid that is native to Singapore and after which the vehicle is named.

A show car, built by the technology arm of the Williams Formula One team, was unveiled last year. It was originally estimated to cost around 3 million euros ($3.44 million) before tax, although Vanda Electrics advised the final price will likely be lower.

1. Yachts with submarines

Yachts are an affordable alternative to such supercars.

“Impulse buys of luxury items such as yachts are becoming more common” said Phill Gregory, the Singapore head of yacht dealers Simpson Marine, who sell everything from sports boats to super yachts costing tens of millions of dollars.

Gregory said Singapore-based clients have some of the most sophisticated tastes and an eye for style: sometimes he flies them to Europe to deck out their yacht with luxury furniture from the artisans of Milan or world-famous Carrara marble straight from the quarries in Tuscany.

Others have more unusual requests. These include a bespoke ‘beach club style’ lounge area set underneath a shimmering swimming pool, helipads or even a space to park a small submarine or sea-plane.

1. 999 roses

The iconic Marina Bay Sands hotel – which resembles a giant surfboard perched on three tall columns – features prominently in the film’s trailer.

The hotel features the invitation-only Chairman’s suite – the largest in Singapore – which has its own gym, hair salon, and karaoke room, and according to some media reports costs over $15,000 a night. There is no publicly available price.

The likes of former British soccer star David Beckham and Bollywood actor Shah Rukh Khan have stayed at the hotel.

George Roe, director of hotel operations at Marina Bay Sands, said he has had some unusual requests from his guests including organizing the delivery of 999 roses to a residential address in Singapore as a surprise.

1. Rare beef

“You do realize Singapore is the most food obsessed country on the planet?,” Nick Young, the very well-heeled protagonist of ‘Crazy Rich Asians’ tells his girlfriend Rachel Chu ahead of their trip to the city-state.

Even hawker stalls hold Michelin stars in Singapore but there’s no shortage of places for the super-rich to get their fix.

The restaurant CUT by Wolfgang Puck is the only one in Singapore to offer Hokkaido snow beef – which is even scarcer than Kobe beef – through an exclusive arrangement with a private reserve in Japan.

Only two cattle are harvested from the reserve every month, with CUT receiving about 20-30 steaks a month – a chunk of which goes to regulars who visit the restaurant every time it comes on the menu, said general manager Paul Joseph. The current price is S$330 ($240) for a modest 170 gram serving.

1. Gold tea

Forget wearing gold – in Singapore you can drink it. 

Boutique Singaporean tea company TWG Tea claims to sell one of the world’s most expensive teas – a white tea plated with 24-karat gold which retails at S$19,000 ($14,000) a kilo.

The Grand Golden Yin Zhen is described as a “glimpse of the divine in a teacup”, and the gold is said to have anti-oxidant properties that revitalize and rejuvenate the skin.
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Toyota is likely to make 120,000 more cars a year in the Chinese port city  of Tianjin as part of a medium-term strategy that’s gathering pace as China-Japan ties improve, said four company insiders with knowledge of the matter.

The Japanese auto maker’s plan to boost annual production capacity by about a quarter in the port city will lay the foundation to increase sales in China to two million vehicles per year, a jump of over 50 percent, the four sources said.

The Tianjin expansion signals Toyota’s willingness to start adding significant manufacturing capacity in China with the possibility of one or two new assembly plants in the world’s biggest auto market, the sources said. Car imports could also increase, they said.

The move comes at a time when China’s trade outlook with the United States appears fraught and uncertain.

Toyota plans to significantly expand its sales networks and focus more on electric car technologies as part of the strategy, the sources said, declining to be identified as they are not authorised to speak to the media.

Toyota sold 1.29 million vehicles in China last year and while sales are projected at 1.4 million this year, “capacity constraints” have restricted stronger growth, the sources said.

Over 500,000 vehicles a year

Toyota’s manufacturing hub in Tianjin currently has the capacity to produce 510,000 vehicles a year, while Toyota as a whole, between two joint ventures, has overall capacity to churn out 1.16 million vehicles a year.

Manufacturing capacity numbers provided by automakers are called straight-time capacity without overtime. With overtime, a given assembly plant can produce 20 to 30 percent more than its capacity.

According to two Tianjin government websites last week, Toyota has been given regulatory approval by the municipal government’s Development and Reform Commission to pursue its expansion.

The two websites — including the official website for the Tianjin development district where Toyota’s production hub is based — said the Japanese automaker plans to expand its Tianjin base to be able to manufacture 10,000 all-electric battery cars and 110,000 so-called plug-in electric hybrids annually. It wasn’t immediately clear when Toyota will be able to start producing those additional cars.

A Beijing-based Toyota spokesman declined to comment. The Tianjin facilities, which produces cars such as the Toyota Corolla and Vios cars, are owned and operated by one of Toyota’s joint ventures in China.

The venture with FAW in Tianjin plans to invest 1.76 billion yuan ($257 million) for the expansion, according to the two Tianjin websites.

Historical backlash 

China is sometimes a market difficult to operate for Japanese companies because of historical reasons.

In 2012, cars sold by Toyota and other Japanese automakers were battered when protests erupted across China after diplomatic spats over disputed islets known as Diaoyu in China and Senkaku in Japan.

Since then, Toyota has emphasised steady growth rather than taking on risky expansion projects.

According to the four sources, Toyota’s attitude towards China began changing markedly after an official visit to Japan by Chinese Premier Li Keqiang in May.

During the visit, Li toured Toyota’s facilities on the northern island of Hokkaido, and was escorted by Toyota’s family scion and chief executive Akio Toyoda.

Toyoda has since sought to boost his company’s presence in China, a vision that had culminated in an active effort to identify specific ways to do just that, according to the four sources.

They said aside from boosting capacity, Toyota is also looking at the possibility to significantly expand its distribution networks for the mainstream Toyota and premium Lexus brands.

Timing is perfect for Toyota

It wasn’t immediately clear how significant a distribution network expansion Toyota is planning for both brands. Currently, Toyota has more than 1,300 stores for the Toyota brand and nearly 190 for its Lexus luxury cars.

The timing for the China expansion couldn’t be better. Earlier this year, Toyota was able to finally launch a couple of much anticipated, potentially high-volume subcompact sport-utility vehicles (SUVs) — two China-market versions of the Toyota C-HR crossover SUV which hit showrooms in the United States last year.

The C-HR variants are relatively small crossover SUVs that other manufacturers, most notably Japan’s Honda, have leveraged to grow sales rapidly and sell more cars in China than its much bigger rival Toyota. Honda sold 1.44 million vehicles in China last year.

Benefit for Lexus

Lexus is also deemed likely to benefit from a windfall from growing trade tensions between China and the United States.

In retaliation for U.S. trade actions, China raised tariffs on automobiles imported from the United States in early July to 40 percent, which, among other things, has forced Tesla, BMW, as well as Daimler AG’s Mercedes-Benz to raise prices on certain U.S. — built vehicles, such as the hot-selling BMW X5 and X6 crossover sport-utility vehicles.

One likely consequence for those brands is a sales fall, a profit squeeze, or both.

By contrast, all Lexus cars Toyota sells in China are brought in from Japan and benefit from a much lower tariff rate of 15 percent levied on non-U.S. produced car imports.
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The White House on Wednesday condemned Turkey for boosting tariffs on U.S. imports, the latest confrontation between the two NATO allies.

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

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

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

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

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

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

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

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

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

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

Erdogan’s economic role

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A T-Mobile spokeswoman declined to comment on Lewandowski.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Productivity rises

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The government is also struggling with gloomy business confidence, which has sunk to decade lows and contributed to a surprise signal from the central bank on Thursday that it planned to keep rates on hold into 2020 and saw downside risks to its growth forecasts.
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